EXHIBIT 10
FINANCING AGREEMENT
Dated as of April 20, 2001
by and among
SUNTERRA CORPORATION,
as debtor and debtor-in-possession,
CERTAIN OF ITS SUBSIDIARIES,
as debtors and debtors-in-possession,
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THE FINANCIAL INSTITUTIONS FROM TIME TO TIME PARTY HERETO
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and
GREENWICH CAPITAL MARKETS, INC.,
as Agent
TABLE OF CONTENTS
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ARTICLE I. DEFINITIONS; CERTAIN TERMS.............................................................................2
SECTION 1.01 DEFINITIONS..................................................................................2
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SECTION 1.02 TERMS GENERALLY.............................................................................27
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SECTION 1.03 ACCOUNTING AND OTHER TERMS..................................................................27
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SECTION 1.04 TIME REFERENCES.............................................................................28
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SECTION 1.05 AMOUNTS IN FOREIGN CURRENCY.................................................................28
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ARTICLE II. THE LOANS............................................................................................28
SECTION 2.01 TERM LOAN COMMITMENTS.......................................................................28
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SECTION 2.02 REVOLVING CREDIT COMMITMENTS................................................................29
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SECTION 2.03 MAKING THE LOANS............................................................................30
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SECTION 2.04 TERM LOAN NOTES; REPAYMENT OF LOANS.........................................................33
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SECTION 2.05 REVOLVING CREDIT NOTES; REPAYMENT OF LOANS..................................................33
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SECTION 2.06 LIMITATION ON TYPES OF LOANS; ILLEGALITY....................................................33
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SECTION 2.07 REPAYMENT OF LOANS; EVIDENCE OF DEBT........................................................34
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SECTION 2.08 INTEREST....................................................................................35
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SECTION 2.09 PREPAYMENT OF TERM LOANS....................................................................36
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SECTION 2.10 REDUCTION OF COMMITMENT; PREPAYMENT OF REVOLVING LOANS......................................37
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SECTION 2.11 FEES........................................................................................39
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SECTION 2.12 SECURITIZATION..............................................................................41
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SECTION 2.13 TAXES.......................................................................................41
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SECTION 2.14 EXIT FINANCING..............................................................................44
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ARTICLE III. SECURITY AND ADMINISTRATIVE PRIORITY................................................................44
SECTION 3.01 COLLATERAL; GRANT OF LIEN AND SECURITY INTEREST.............................................44
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SECTION 3.02 ADMINISTRATIVE PRIORITY.....................................................................45
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SECTION 3.03 GRANTS, RIGHTS AND REMEDIES.................................................................45
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SECTION 3.04 NO FILINGS REQUIRED.........................................................................46
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SECTION 3.05 SURVIVAL....................................................................................46
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ARTICLE IV. PAYMENTS AND OTHER COMPENSATION......................................................................47
SECTION 4.01 PAYMENTS; COMPUTATIONS AND STATEMENTS.......................................................47
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SECTION 4.02 SHARING OF PAYMENTS, ETC....................................................................48
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SECTION 4.03 APPORTIONMENT OF PAYMENTS...................................................................48
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SECTION 4.04 INCREASED COSTS AND REDUCED RETURN..........................................................49
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SECTION 4.05 JOINT AND SEVERAL LIABILITY OF THE BORROWERS................................................50
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ARTICLE V. CONDITIONS TO LOANS...................................................................................51
SECTION 5.01 CONDITIONS PRECEDENT TO FINAL FACILITY EFFECTIVENESS........................................51
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SECTION 5.02 CONDITIONS PRECEDENT TO ALL LOANS...........................................................54
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SECTION 5.03 CONDITIONS PRECEDENT TO TRANCHE B TERM LOANS................................................55
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SECTION 5.04 CONDITIONS PRECEDENT TO MAY BORROWINGS......................................................56
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SECTION 5.05 CONDITIONS PRECEDENT TO JUNE BORROWINGS.....................................................57
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ARTICLE VI. REPRESENTATIONS AND WARRANTIES.......................................................................57
SECTION 6.01 REPRESENTATIONS AND WARRANTIES..............................................................57
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ARTICLE VII. COVENANTS OF THE BORROWER...........................................................................66
SECTION 7.01 AFFIRMATIVE COVENANTS.......................................................................66
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SECTION 7.02 NEGATIVE COVENANTS..........................................................................78
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ARTICLE VIII. EVENTS OF DEFAULT..................................................................................85
SECTION 8.01 EVENTS OF DEFAULT...........................................................................85
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ARTICLE IX. AGENT................................................................................................89
SECTION 9.01 APPOINTMENT.................................................................................89
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SECTION 9.02 NATURE OF DUTIES............................................................................90
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SECTION 9.03 RIGHTS, EXCULPATION, ETC....................................................................90
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SECTION 9.04 RELIANCE....................................................................................91
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SECTION 9.05 INDEMNIFICATION.............................................................................91
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SECTION 9.06 AGENT INDIVIDUALLY..........................................................................92
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SECTION 9.07 SUCCESSOR AGENT.............................................................................92
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SECTION 9.08 COLLATERAL MATTERS..........................................................................93
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ARTICLE X. MISCELLANEOUS.........................................................................................94
SECTION 10.01 NOTICES, ETC................................................................................94
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SECTION 10.02 AMENDMENTS, ETC.............................................................................96
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SECTION 10.03 NO WAIVER; REMEDIES, ETC....................................................................97
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SECTION 10.04 EXPENSES; TAXES; ATTORNEYS' FEES............................................................97
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SECTION 10.05 RIGHT OF SET-OFF............................................................................98
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SECTION 10.06 SURVIVAL....................................................................................99
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SECTION 10.07 SEVERABILITY................................................................................99
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SECTION 10.08 ASSIGNMENTS AND PARTICIPATIONS..............................................................99
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SECTION 10.09 COUNTERPARTS...............................................................................102
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SECTION 10.10 GOVERNING LAW..............................................................................103
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SECTION 10.11 WAIVER OF JURY TRIAL, ETC..................................................................103
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SECTION 10.12 CONSENT BY THE AGENT AND LENDERS...........................................................103
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SECTION 10.13 NO PARTY DEEMED DRAFTER....................................................................103
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SECTION 10.14 SUNTERRA CORPORATION AS AGENT FOR BORROWERS................................................104
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SECTION 10.15 INDEMNIFICATION............................................................................104
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SECTION 10.16 RECORDS....................................................................................105
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SECTION 10.17 BINDING EFFECT.............................................................................105
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SECTION 10.18 ACKNOWLEDGMENT REGARDING SUNTERRA SECURITIZATIONS..........................................105
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SCHEDULES AND EXHIBITS
Schedule 1.01(A)....................Borrowers
Schedule 1.01(B)....................Finova Loans
Schedule 1.01(C)....................Intercompany Notes
Schedule 1.01(D)....................Existing Indebtedness
Schedule 1.01(E)....................Lenders and Lenders' Commitments
Schedule 3.01(a)....................Excluded Property
Schedule 6.01(e)....................Subsidiaries
Schedule 6.01(f)....................Litigation
Schedule 6.01(i)....................ERISA
Schedule 6.01(j)....................Taxes
Schedule 6.01(o)....................Real Property
Schedule 6.01(q)....................Environmental Matters
Schedule 6.01(r)....................Insurance
Schedule 6.01(u)....................Bank Accounts
Schedule 6.01(x)....................Place of Business; Chief Executive Office
Schedule 6.01(z)....................Existing Financing Agreement Assets
Schedule 6.01(aa)...................Finova Assets
Schedule 7.01(b)(ii)................Mortgaged Properties
Schedule 7.01(b)(iii)...............Notice Properties
Schedule 7.02(b)....................Existing Liens
Schedule 7.02(f)....................Existing Investments
Schedule 7.02(k)....................Sunterra Europe Intercompany Note Conversion
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Exhibit A...........................Form of Notice of Borrowing
Exhibit B...........................Form of Final Bankruptcy Court Order
Exhibit C...........................Form of Assignment and Acceptance
Exhibit D...........................Equity Interest Value Methodology
Exhibit E...........................Inventory Value Methodology
Exhibit F...........................Mortgage Receivables Value Methodology
Exhibit G...........................Noncore Assets Value Methodology
Exhibit H...........................Other Assets Value Methodology
Exhibit I...........................[Reserved]
Exhibit J...........................[Reserved]
Exhibit K...........................Collateral Coverage Ratio
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FINANCING AGREEMENT
Financing Agreement, dated as of April 20, 2001, by and among Sunterra
Corporation, as a debtor and a debtor-in-possession, a Maryland corporation (the
"Parent"), the subsidiaries of the Parent listed on Schedule 1.01(A) hereto,
each as a debtor and a debtor-in-possession (together with the Parent,
individually a "Borrower" and collectively, the "Borrowers"), the financial
institutions from time to time party hereto (individually a "Lender" and
collectively, the "Lenders") and Greenwich Capital Markets, Inc., a Delaware
corporation, as agent for the Lenders (in such capacity, the "Agent").
RECITALS
WHEREAS, on May 31, 2000, certain of the Borrowers commenced
cases (the "Chapter 11 Cases") under Chapter 11 of Title 11 of the United States
Code (the "Bankruptcy Code") in the United States Bankruptcy Court for the
District of Maryland, Baltimore Division (the "Bankruptcy Court"), and the
Borrowers have retained possession of their assets and are authorized under the
Bankruptcy Code to continue the operation of their businesses as
debtors-in-possession;
WHEREAS, by an order dated May 31, 2000, the Bankruptcy Court
authorized the joint administration of the bankruptcy estate of each Borrower;
WHEREAS, the Borrowers, Ableco Finance LLC, as agent, and
certain financial institutions are parties to an Amended and Restated Financing
Agreement dated as of August 9, 2000 (as so amended, the "Existing Financing
Agreement"), pursuant to which the Borrowers have certain financing available to
them including a revolving credit commitment of $45,000,000;
WHEREAS, the Existing Financing Agreement was approved by the
Bankruptcy Court on August 3, 2000 pursuant to the Final Order, Pursuant to
Sections 105 and 364(c) of the Bankruptcy Code and Bankruptcy Rules 2002, 4001
and 9014, (I) Approving Debtors' Motion for Order Authorizing Debtors to Incur
Post-Petition Secured Indebtedness on an Interim and Final Basis, and (II)
Granting Security Interests and Superpriority Claims;
WHEREAS, the Borrowers and Finova Capital Corporation are
parties to certain financial arrangements including the agreements set forth on
Schedule 1.01(B) (collectively, the "Finova Loans"); and
WHEREAS, the Borrowers, the Lenders and the Agent wish to
enter into an agreement to provide replacement debtor-in-possession financing to
the Borrowers (i) to
refinance the Existing Financing Agreement, (ii) pursuant to terms to be agreed
upon, to refinance the Finova Loans and certain other obligations as may be
agreed by the parties from time to time and (iii) to provide the Borrowers with
funds for working capital and other general corporate purposes;
NOW, THEREFORE, the Borrowers, the Lenders and the Agent
hereby agree as follows:
ARTICLE I.
DEFINITIONS; CERTAIN TERMS
SECTION 1.01 Definitions. As used in this Agreement, the following
terms shall have the respective meanings indicated below, such meanings to be
applicable equally to both the singular and plural forms of such terms:
"Action" has the meaning specified therefor in Section 10.12.
"Administrative Borrower" means Sunterra Corporation or any
Borrower designated as such by the Borrowers in a written notice to the Agent.
"Advance Rate" means 85%.
"Affiliate" means, as to any Person, any other Person that
directly or indirectly through one or more intermediaries, controls, is
controlled by, or is under common control with, such Person. For purposes of
this definition, "control" of a Person means the power, directly or indirectly,
either to (i) vote 10% or more of the Capital Stock having ordinary voting power
for the election of directors of such Person or (ii) direct or cause the
direction of the management and policies of such Person whether by contract or
otherwise. Notwithstanding anything herein to the contrary, in no event shall
the Agent or any Lender be considered an "Affiliate" of any Loan Party.
"Agent" has the meaning specified therefor in the preamble
hereto.
"Agent Advances" has the meaning specified therefor in Section
9.08(a).
"Agent's Account" means an account at a bank designated by the
Agent from time to time as the account into which the Borrowers shall make all
payments to the Agent for the benefit of the Agent and the Lenders under this
Agreement and the other Loan Documents.
"Agreed Administrative Expense Priorities" shall mean that
administrative expenses with respect to the Borrowers entitled to priority
pursuant to Sections 503 and 507 of
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the Bankruptcy Code and, with respect to sub-clause (ii) of clause "first", any
official committee appointed by the Bankruptcy Court shall have the following
order of priority:
first, (i) amounts payable pursuant to 28 U.S.C. ss.
1930(a)(6) and (ii) allowed fees and expenses of attorneys, accountants
and other professionals retained in the Chapter 11 Cases pursuant to
Sections 327 and 1103 of the Bankruptcy Code, but the amount entitled
to priority under sub-clause (ii) of this clause first ("Priority
Professional Expenses") shall not exceed $4,000,000 outstanding and
unpaid in the aggregate at any time (inclusive of any holdbacks
required by the Bankruptcy Court) (the "Professional Expense Cap");
provided, however, that (A) after the Agent has provided written
by-hand or facsimile notice to the Administrative Borrower of the
occurrence of an Event of Default hereunder or a default by the
Borrowers in any of their obligations under the Final Bankruptcy Court
Order, any payments actually made to such professionals after the
occurrence and during the continuance of such Event of Default or
default, under Sections 330 and 331 of the Bankruptcy Code or
otherwise, shall reduce the Professional Expense Cap on a
dollar-for-dollar basis and (B) for the avoidance of doubt, any payment
actually made to such professionals prior to the notice described in
subclause (A) above may be retained by such professionals and not
reduce the Professional Expense Cap,
second, all Obligations, and
third, all other allowed administrative expenses.
"Agreement" means this Financing Agreement, including all
amendments, modifications and supplements and any exhibits or schedules to any
of the foregoing, and shall refer to the Agreement as the same may be in effect
at the time such reference becomes operative.
"Assignment and Acceptance" means an assignment and acceptance
entered into by an assigning Lender and an assignee, and accepted by the Agent,
in accordance with Section 10.08 hereof and substantially in the form of Exhibit
C hereto.
"Authorized Officer" means the chief financial officer,
president or executive vice president of the Administrative Borrower.
"Bankruptcy Code" has the meaning specified therefor in the
recitals hereto.
"Bankruptcy Court" has the meaning specified therefor in the
recitals hereto.
"Blocked Account" has the meaning specified therefor in
Section 2.09(b)(iii).
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"Board" means the Board of Governors of the Federal Reserve
System of the United States.
"Book Value" means, the lower of (i) cost and (ii) market
value, in each case determined in accordance with GAAP.
"Borrower" and "Borrowers" have the meanings specified
therefor in the preamble hereto.
"Budget" means the monthly cash flow forecast for the period
through June 2002, prepared by the Borrowers and delivered to the Agent prior to
the Final Facility Effective Date, which shall be in form and substance
acceptable to the Agent, as such forecast may from time to time be supplemented
or revised in a manner acceptable to the Agent.
"Business Day" means any day other than a Saturday, Sunday or
other day on which commercial banks in New York City are authorized or required
to close; provided, however, that when used in connection with the calculation
of the LIBO Base Rate, the term "Business Day" shall also exclude any day on
which banks are not open for dealings in dollar deposits in the London interbank
market.
"Capital Expenditures" means, with respect to any Person for
any period, the sum of (i) the aggregate of all expenditures by such Person and
its Subsidiaries during such period that in accordance with GAAP are or should
be included in "property, plant and equipment" or similar fixed asset account on
its balance sheet, whether such expenditures are paid in cash or financed and
including all Capitalized Lease Obligations paid or payable during such period,
and (ii) to the extent not covered by clause (i) above, the aggregate of all
expenditures by such Person and its Subsidiaries to acquire by purchase or
otherwise the business or fixed assets of, or the Capital Stock of, any other
Person.
"Capital Guideline" means any law, rule, regulation, policy,
guideline or directive (whether or not having the force of law and whether or
not the failure to comply therewith would be unlawful) (i) regarding capital
adequacy, capital ratios, capital requirements, the calculation of a bank's
capital or similar matters, or (ii) affecting the amount of capital required to
be obtained or maintained by the Lenders any Person controlling any Lender, or
the manner in which the Lenders, any Person controlling any Lender allocate
capital to any of their contingent liabilities (including letters of credit),
advances, acceptances, commitments, assets or liabilities.
"Capitalized Lease" means, with respect to any Person, any
lease of real or personal property by such Person as lessee which is required
under GAAP to be capitalized on the balance sheet of such Person.
"Capitalized Lease Obligations" means, with respect to any
Person, obligations of such Person and its Subsidiaries under Capitalized
Leases, and, for purposes hereof, the amount
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of any such obligation shall be the capitalized amount thereof determined in
accordance with GAAP.
"Capital Stock" means (i) with respect to any Person that is a
corporation, any and all shares, interests, participations or other equivalents
(however designated and whether or not voting) of corporate stock, and (ii) with
respect to any Person that is not a corporation, any and all partnership,
membership or other equity interests of such Person.
"Carve-Out Expenses" means those amounts, fees, expenses and
claims set forth in clause "first" of the definition of the term "Agreed
Administrative Expense Priorities."
"Chapter 11 Cases" shall have the meaning given that term in
the recitals to this Agreement.
"Club" means Club Sunterra, Inc., a Florida corporation and
wholly-owned subsidiary of the Parent.
"Collateral" has the meaning specified therefor in Section
3.01(a).
"Collateral Coverage Ratio" means the ratio of the Collateral
Value to the aggregate principal amount of all outstanding Loans.
"Collateral Value" means (a) the sum of the following: (i) the
Inventory Collateral Value, (ii) the Mortgage Receivables Collateral Value,
(iii) the Equity Interest Collateral Value, (iv) the Other Assets Collateral
Value, and (v) the Noncore Assets Collateral Value, less (b) the sum of (x) the
Professional Expense Cap, (y) the value of any Indebtedness or other claims
secured by Liens arising after the date hereof on any Collateral, other than
Permitted Liens referred to in clauses (a), (b), (c), (e), (f), (g), (l) and (m)
of the definition of such term and (z) the value of any Indebtedness or other
claims secured by Liens existing on the Final Facility Effective Date to the
extent that they exceed the sum of (A)$5,000,000 and (B) the aggregate amount of
cash escrowed for the purpose of satisfying such Liens; provided, however, that,
if at any time on or after the earlier of (1) the Finova Loan Take-out Date and
(2) September 30, 2001, the Equity Interest Collateral Value exceeds 35% of the
Collateral Value (the "Original Collateral Value"), then the Collateral Value
shall equal the Original Collateral Value less the amount by which the Equity
Interest Collateral Value exceeds 35% of the Original Collateral Value; and
provided, further, that any Collateral subject to Liens referred to in clause
(n) of the definition of Permitted Liens that have not been discharged prior to
such date shall be excluded from the calculation of Collateral Value unless
otherwise agreed to by the Agent in its sole discretion. The calculation of
Collateral Value shall be delivered to the Agent on each Determination Date and
shall be calculated as of the end of the previous month.
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"Commitment" means, with respect to each Lender, the sum of
such Lender's Revolving Credit Commitment and Term Loan Commitment, as such
amount may be terminated or reduced from time to time in accordance with the
terms of this Agreement.
"Comprehensive Plan of Reorganization" means a comprehensive
plan of reorganization, including a business plan, financial projections and a
liquidation analysis, in such detail as is required for the approval of such a
plan of reorganization and which, in the Borrowers' good faith belief, is
reasonably capable of being confirmed.
"Contingent Obligation" means, with respect to any Person, any
obligation of such Person guaranteeing or intended to guarantee any
Indebtedness, leases, dividends or other obligations ("primary obligations") of
any other Person (the "primary obligor") in any manner, whether directly or
indirectly, including, without limitation, (i) the direct or indirect guaranty,
endorsement (other than for collection or deposit in the ordinary course of
business), co-making, discounting with recourse or sale with recourse by such
Person of the obligation of a primary obligor, (ii) the obligation to make
take-or-pay or similar payments, if required, regardless of nonperformance by
any other party or parties to an agreement, (iii) any obligation of such Person,
whether or not contingent, (A) to purchase any such primary obligation or any
Property constituting direct or indirect security therefor, (B) to advance or
supply funds (1) for the purchase or payment of any such primary obligation or
(2) to maintain working capital or equity capital of the primary obligor or
otherwise to maintain the net worth or solvency of the primary obligor, (C) to
purchase Property, assets, securities or services primarily for the purpose of
assuring the owner of any such primary obligation of the ability of the primary
obligor to make payment of such primary obligation or (D) otherwise to assure or
hold harmless the holder of such primary obligation against loss in respect
thereof; provided, however, that the term "Contingent Obligation" shall not
include any products warranties extended in the ordinary course of business. The
amount of any Contingent Obligation shall be deemed to be an amount equal to the
stated or determinable amount of the primary obligation with respect to which
such Contingent Obligation is made (or, if less, the maximum amount of such
primary obligation for which such Person may be liable pursuant to the terms of
the instrument evidencing such Contingent Obligation) or, if not stated or
determinable, the maximum reasonably anticipated liability with respect thereto
(assuming such Person is required to perform thereunder), as determined by such
Person in good faith.
"Creditors Committee" means the Official Committee of
Unsecured Creditors appointed by the United States Trustee for the District of
Maryland on June 15, 2000, in the Chapter 11 Cases.
"Custodial Agreement" means the Custodial Agreement by and
between the Custodian and the Agent, in form and substance satisfactory to the
Agent, as amended, restated or replaced from time to time.
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"Custodial Bi-Party Agreement" means the Custodial Bi-Party
Agreement, dated as of the date hereof, by and among the Agent, the Borrowers
and the Guarantors, in form and substance satisfactory the Agent.
"Custodian" means LaSalle Bank National Association or such
other custodian mutually agreeable to the Agent and the Administrative Borrower.
"Default" means an event which, with the giving of notice or
the lapse of time or both, would constitute an Event of Default.
"Determination Date" means, for any month, the 15th day of
such month or, if such date is not a Business Day, the next succeeding Business
Day.
"Disposition" means any transaction, or series of related
transactions, pursuant to which any Loan Party or any of its Subsidiaries sells,
assigns, transfers or otherwise disposes of any Property or assets (whether now
owned or hereafter acquired) to any other Person, in each case whether or not
the consideration therefor consists of cash, securities or other assets owned by
the acquiring Person, excluding Permitted Dispositions.
"Dollar," "Dollars" and the symbol "$" each means lawful money
of the United States of America.
"Eligible Mortgage Receivables" means those duly authorized
Time Share Mortgages secured by and that arise in connection with the purchase
of Time Share Interests for which a Borrower is the mortgagee: (i) that have
cleared escrow on or after January 1, 2001; (ii) for which (a) the applicable
Time Share Interest sale from which it arises has not been canceled by the
applicable mortgagor or any Borrower, (b) any statutory or other applicable
cancellation or rescission period has expired, (c) the Time Share Interest
purchased by the applicable mortgagor has not been surrendered in accordance
with the applicable terms of the relevant Purchase Document and (d) the related
Time Share Interest sale fully complies with the terms, provisions and
conditions of this Agreement, the other Loan Documents and all applicable laws;
(iii) as to which the applicable mortgagor is not an Affiliate of any Borrower,
or related to or employed by any Borrower or any Affiliate of any Borrower; (iv)
as to which the applicable mortgagor is as of the date of determination
delinquent (without giving effect to any applicable grace period) no more than
two monthly payments; (v) with respect to Time Share Mortgages originated on or
after February 1, 2001, that meet all of the Underwriting Guidelines; (vi) that
is denominated and payable only in United States Dollars in the United States;
(vii) that does not contravene any laws, rules or regulations applicable thereto
(including, without limitation, laws, rules and regulations relating to the sale
of the Time Share Interests, usury, truth in lending, fair credit billing, fair
credit reporting, equal credit opportunity, fair debt collection practices and
privacy and with respect to which no party to the applicable mortgage related
thereto is in violation of any such law, rule or regulation if such violation
would impair the collectability of
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such mortgage receivable); (viii) with respect to which neither the purchaser
nor the applicable mortgagor has any bona fide claim against any Borrower or any
Affiliate of any Borrower or any defense, setoff or counterclaim; (ix) for which
the applicable mortgagor was not 30 or more days late in making the first
scheduled monthly payment, unless such applicable mortgagor has thereafter made
on a timely basis six consecutive monthly payments; (x) for which the aggregate
amount owing from any applicable mortgagor with respect to all such mortgages
does not exceed $100,000 in the aggregate, excluding any Securitizations; (xi)
for which the mortgage, the mortgage note, federal truth-in-lending disclosure
statement, certificate of title, Time Share Interest purchase agreement and
other documents and instruments related to the Time Share Interest transaction
giving rise thereto, are genuine, valid, and legally enforceable in accordance
with their respective terms, and the applicable Borrower has not assigned or
otherwise transferred any right, title, or interest in and to any such document
or instrument other than to the Agent and the Lenders; and (xii) for which there
are no Material Exceptions (as defined in the Custodial Bi-Party Agreement) or
exceptions (as defined in any successor Custodial Agreement).
"Employee Plan" means an employee benefit plan (other than a
Multiemployer Plan) covered by Title IV of ERISA and maintained (or was
maintained at any time during the six (6) calendar years preceding the date of
any borrowing hereunder) for employees of any Borrower or any of its ERISA
Affiliates.
"Environmental Actions" means any complaint, summons,
citation, notice, directive, order, claim, litigation, investigation, judicial
or administrative proceeding, judgment, letter or other communication from any
Governmental Authority involving violations of Environmental Laws or Releases of
Hazardous Materials (i) from any assets, properties or businesses of any Loan
Party or any of its Subsidiaries or any predecessor in interest; (ii) from
adjoining properties or businesses; or (iii) onto any facilities which received
Hazardous Materials generated by any Loan Party or any of its Subsidiaries or
any predecessor in interest.
"Environmental Laws" means the Comprehensive Environmental
Response, Compensation and Liability Act (42 ▇.▇.▇.▇▇. 9601, et seq.), the
Hazardous Materials Transportation Act (49 U.S.C.ss.1801, et seq.), the Resource
Conservation and Recovery Act (42 ▇.▇.▇.▇▇. 6901, et seq.), the Federal Clean
Water Act (33 ▇.▇.▇.▇▇. 1251 et seq.), the Clean Air Act (42 ▇.▇.▇.▇▇. 7401 et
seq.), the Toxic Substances Control Act (15 ▇.▇.▇.▇▇. 2601 et seq.) and the
Occupational Safety and Health Act (29 ▇.▇.▇.▇▇. 651 et seq.), as such laws may
be amended or otherwise modified from time to time, and any other present or
future federal, state, local or foreign statute, ordinance, rule, regulation,
order, judgment, decree, permit, license or other binding determination of any
Governmental Authority imposing liability or establishing standards of conduct
for protection of the environment.
"Environmental Liabilities and Costs" means all liabilities,
monetary obligations, Remedial Actions, losses, damages, punitive damages,
consequential damages, treble damages, costs and expenses (including all
reasonable fees, disbursements and expenses of counsel,
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experts and consultants and costs of investigations and feasibility studies),
fines, penalties, sanctions and interest incurred as a result of any claim or
demand by any Governmental Authority or any third party, and which relate to any
environmental condition or a Release of Hazardous Materials from or onto (i) any
Property presently or formerly owned by any Loan Party or any of its
Subsidiaries or (ii) any facility which received Hazardous Materials generated
by any Loan Party or any of its Subsidiaries.
"Environmental Lien" means any Lien in favor of any
Governmental Authority for Environmental Liabilities and Costs.
"Equity Interest Collateral Value" means the value of the
Borrowers' interests in Sunterra Europe, the Hawaiian Partnerships and other
equity interests as agreed by the Agent and the Administrative Borrower,
determined pursuant to the methodology provided for on Exhibit D hereto.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended, and any successor statute of similar import, and regulations
thereunder, in each case as in effect from time to time. References to sections
of ERISA shall be construed also to refer to any successor sections.
"ERISA Affiliate" means, with respect to any Person, any trade
or business (whether or not incorporated) which is a member of a group of which
such Person is a member and which would be deemed to be a "controlled group"
within the meaning of Sections 414(b), (c), (m) and (o) of the Code.
"Event of Default" means any of the events set forth in
Section 8.01.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Existing Financing Agreement" has the meaning specified
therefor in the recitals to this Agreement.
"Existing Financing Agreement Assets" means all assets of the
Loan Parties which secure the Existing Financing Agreement.
"Facility Fee" has the meaning specified therefor in Section
2.11(a).
"Federal Funds Rate" means, for any period, a fluctuating
interest rate per annum equal for each day during such period of the weighted
average of the rates on overnight Federal funds transactions with members of the
Federal Reserve System arranged by Federal funds brokers, as published on the
next succeeding Business Day by the Federal Reserve Bank of New York, or, if
such rate is not so published for any day which is a Business Day, the average
of the
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quotations for such day on such transactions received by the Agent from three
Federal funds brokers of recognized standing selected by it.
"Filing Date" means, with respect to Design Internationale -
RMI, Inc., June 30, 2000, with respect to Resorts Development International,
Inc., November 1, 2000, and, with respect to all other Borrowers, May 31, 2000.
"Final Bankruptcy Court Order" means the order of the
Bankruptcy Court approving the Loans made and to be made to the Borrowers in
accordance with this Agreement, substantially in the form of Exhibit B hereto,
as the same may be amended, modified or supplemented from time to time with the
express written joinder or consent of the Agent, the Lenders and the Borrowers.
"Final Facility Effective Date" means the date on which all of
the conditions precedent set forth in Section 5.01 are satisfied.
"Final Maturity Date" means the date which is the earliest of
(i) the date of the substantial consummation (as defined in Section 1101(2) of
the Bankruptcy Code) of a plan of reorganization in the Chapter 11 Cases that
has been confirmed by an order of the Bankruptcy Court, (ii) June 30, 2002, or
(iii) such earlier date on which either (A) all Loans shall become due and
payable, in whole, in accordance with the terms of this Agreement and the other
Loan Documents or (B) all Loans and all other Obligations for the payment of
money shall be paid in full and the Total Commitment and this Agreement are
terminated.
"Financial Statements" means (i) the audited consolidated
balance sheet of the Parent and its Subsidiaries for the Fiscal Year ended
December 31, 1999 and the related consolidated statement of operations,
shareholders' equity and cash flows for the Fiscal Year then ended and (ii) the
unaudited consolidated balance sheet of the Parent and its Subsidiaries for the
three (3) months ended March 31, 2000 and the related consolidated statement of
operations, shareholder's equity and cash flows for the three (3) months then
ended.
"Finova Assets" means all assets of the Loan Parties which
secure the Finova Loans.
"Finova Loans" has the meaning specified therefor in the
recitals to this Agreement.
"Finova Loan Take-out Date" means the date on which all of the
conditions precedent set forth in Section 5.03 of this Agreement are satisfied
and the Finova Loans are retired with the proceeds of Tranche B Term Loans in
accordance with Section 2.01(b) of this Agreement.
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"Fiscal Year" means the fiscal year of the Parent and its
Subsidiaries ending on December 31 of each year.
"GAAP" means generally accepted accounting principles in
effect from time to time in the United States, applied on a consistent basis,
provided that for the purpose of Section 7.02 hereof and the definitions used
therein, "GAAP" shall mean generally accepted accounting principles in effect on
the date hereof and consistent with those used in the preparation of the
Financial Statements (to the extent possible after giving effect to the filing
of the Chapter 11 Cases), provided, further, that if there occurs after the date
of this Agreement any change in GAAP that affects in any respect the calculation
of any covenant contained in Section 7.02 hereof, the Agent and the Parent shall
negotiate in good faith amendments to the provisions of this Agreement that
relate to the calculation of such covenant with the intent of having the
respective positions of the Lenders and the Parent after such change in GAAP
conform as nearly as possible to their respective positions as of the date of
this Agreement and, until any such amendments have been agreed upon, the
covenants in Section 7.02 hereof shall be calculated as if no such change in
GAAP has occurred.
"Governmental Authority" means any nation or government, any
Federal, state, city, town, municipality, county, local or other political
subdivision thereof or thereto and any department, commission, board, bureau,
instrumentality, agency or other entity exercising executive, legislative,
judicial, taxing, regulatory or administrative powers or functions of or
pertaining to government.
"Guaranties" means each guaranty, in form and substance
satisfactory to the Agent, made by a Guarantor in favor of the Agent for the
benefit of the Lenders pursuant to Section 7.01(b) or otherwise.
"Guarantor" means each Person which guarantees, pursuant to
Section 7.01(b) or otherwise, all or any part of the Obligations.
"Hawaiian Partnerships" shall mean each of the following
entities: Poipu Resort Partners, L.P. and West Maui Resort Partners, L.P.
"Hazardous Materials" means (a) any element, compound or
chemical that is defined, listed or otherwise classified as a contaminant,
pollutant, toxic pollutant, toxic or hazardous substances, extremely hazardous
substance or chemical, hazardous waste, special waste, or solid waste under
Environmental Laws; (b) petroleum and its refined products; (c) polychlorinated
biphenyls; (d) any substance exhibiting a hazardous waste characteristic,
including but not limited to, corrosivity, ignitability, toxicity or reactivity
as well as any radioactive or explosive materials; and (e) any raw materials,
building components, including but not limited to asbestos-containing materials
and manufactured products containing hazardous substances.
-11-
"Hedging Agreement" means any interest rate, foreign currency,
commodity or equity swap, collar, cap, floor or forward rate agreement, or other
agreement or arrangement designed to protect against fluctuations in interest
rates or currency, commodity or equity values (including, without limitation,
any option with respect to any of the foregoing and any combination of the
foregoing agreements or arrangements), and any confirmation executed in
connection with any such agreement or arrangement.
"Indebtedness" means, without duplication, with respect to any
Person, (i) all indebtedness of such Person for borrowed money; (ii) all
obligations of such Person for the deferred purchase price of Property or
services (other than trade payables or other account payables incurred in the
ordinary course of such Person's business and not past due for more than 90 days
after the date such payable was due); (iii) all obligations of such Person
evidenced by bonds, debentures, notes or other similar instruments or upon which
interest payments are customarily made; (iv) all obligations and liabilities of
such Person created or arising under any conditional sales or other title
retention agreement with respect to Property used and/or acquired by such
Person, even though the rights and remedies of the lessor, seller and/or lender
thereunder are limited to repossession or sale of such Property; (v) all
Capitalized Lease Obligations of such Person; (vi) all obligations and
liabilities, contingent or otherwise, of such Person, in respect of letters of
credit, acceptances and similar facilities; (vii) all obligations and
liabilities, calculated on a basis satisfactory to the Agent and in accordance
with accepted practice, of such Person under Hedging Agreements; (viii) all
Contingent Obligations; (ix) liabilities incurred under Title IV of ERISA with
respect to any plan (other than a Multiemployer Plan) covered by Title IV of
ERISA and maintained for employees of such Person or any of its ERISA
Affiliates; (x) withdrawal liability incurred under ERISA by such Person or any
of its ERISA Affiliates to any Multiemployer Plan; (xi) all obligations of such
Person under any synthetic lease, tax retention operating lease, off-balance
sheet loan or similar off-balance sheet financing, if the transaction giving
rise to such obligation is considered indebtedness for borrowed money for tax
purposes but is classified as an operating lease in accordance with GAAP; and
(xii) all obligations referred to in clauses (i) through (xi) of this definition
of another Person secured by (or for which the holder of such Indebtedness has
an existing right, contingent or otherwise, to be secured by) a Lien upon
Property owned by such Person, even though such Person has not assumed or become
liable for the payment of such Indebtedness. The Indebtedness of any Person
shall include the Indebtedness of any partnership of or joint venture in which
such Person is a general partner or a joint venturer.
"Indemnified Matters" has the meaning specified therefor in
Section 10.15.
"Indemnitees" has the meaning specified therefor in Section
10.15.
"Intercompany Notes" means the promissory notes owing by the
Subsidiaries of the Parent to any Loan Party, which promissory notes are listed
on Schedule 1.01(C) hereto.
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"Interest Period" means each period commencing on each
Remittance Date and ending on the day prior to the next succeeding Remittance
Date.
"Internal Revenue Code" means the Internal Revenue Code of
1986, as amended (or any successor statute thereto) and the regulations
thereunder.
"Inventory Collateral Value" means the value of the Borrowers'
Time Share Interest inventory, determined pursuant to the methodology provided
for on Exhibit E hereto.
"Key Personnel" means the employees, officers and consultants
set forth on that certain separate writing delivered to the Agent prior to the
Final Facility Effective Date.
"Lender" has the meaning specified therefor in the preamble
hereto.
"Liabilities" has the meaning specified therefor in Section
2.12.
"LIBO Base Rate" means for any Loan, with respect to each
Interest Period, the rate per annum equal to the rate appearing at page 3750 of
the Telerate Screen as the one-month LIBOR (i) with respect to the Interest
Period beginning on the Final Facility Effective Date, on the Business Day prior
to the Final Facility Effective Date, and (ii) with respect to all other
Interest Periods, on the last Business Day of the immediately preceding Interest
Period, and if such rate shall not be so quoted, the rate per annum at which the
Reference Banks are offered Dollar deposits at or about 11:00 a.m., New York
time, on such date by prime banks in the interbank eurodollar market where the
eurodollar and foreign currency exchange operations in respect of their loans
are then being conducted for delivery on such day for a period of one month, and
in an amount comparable to the amount of the Loans then being requested and to
be outstanding on such day.
"LIBO Rate" means, at any time, a rate per annum determined by
the Agent in accordance with the following formula (rounded upwards to the
nearest 1/100th of one percent), which rate as determined by the Agent, shall be
conclusive absent manifest error by the Agent, equal to (i) the LIBO Base Rate
divided by (ii) 1 minus the LIBO Reserve Requirements.
"LIBO Reserve Requirements" shall mean for any calendar month
and for any Lender as to which LIBO Reserve Requirements are actually required
to be maintained, the aggregate (without duplication) of the rates (expressed as
a decimal fraction) of reserve requirements in effect on such day or during such
calendar month, as applicable (including, without limitation, basic,
supplemental, marginal and emergency reserves under any regulations of the Board
or other Governmental Authority having jurisdiction with respect thereto),
dealing with reserve requirements prescribed for eurocurrency funding (currently
referred to as "Eurocurrency Liabilities" in Regulation D of the Board)
maintained by a member bank of such Governmental Authority.
-13-
"Lien" means any mortgage, deed of trust, pledge, lien
(statutory or otherwise), security interest, lease, easement, title defect,
restriction, levy, execution, seizure, attachment, charge or other encumbrance
or security or preferential arrangement of any nature, including, without
limitation, any conditional sale or title retention arrangement, any Capitalized
Lease and any assignment, deposit arrangement or financing lease intended as, or
having the effect of, security.
"Loan" means a Revolving Loan or a Term Loan.
"Loan Account" means an account maintained hereunder by the
Agent on its books of account, at the Payment Office and with respect to the
Borrowers, in which the Borrowers will be charged with all Loans made to, and
all other Obligations incurred by, the Borrowers.
"Loan Documents" means this Agreement, the Notes, the Final
Bankruptcy Court Order, the Guaranties, the Security Agreements, the Pledge
Agreements, the Mortgages, the Custodial Bi-Party Agreement and all other
agreements, instruments, and other documents executed and delivered pursuant
hereto or thereto or otherwise evidencing or securing any Loan or other
Obligation.
"Loan Parties" means the Borrowers and the Guarantors.
"Material Adverse Effect" means a material adverse effect on
any of the following: (i) the operations, business, assets, properties,
condition (financial or otherwise) or prospects of any Loan Party (either
individually, in the case of the Parent, Sunterra Europe, Sunterra Pacific,
Inc., Marc Hotels and Resorts, Inc., RPM Management, Inc. and Club, or taken as
a whole) (other than as a result of the filing of the Chapter 11 Cases and other
than matters disclosed in filings made in the Bankruptcy Court with respect to
the Chapter 11 Cases prior to the date of this Agreement), (ii) the ability of
the Loan Parties, taken as a whole, to perform their obligations under the Loan
Documents to which they are parties or of any of the Parent, Sunterra Europe,
Sunterra Pacific, Inc., Marc Hotels and Resorts, Inc., RPM Management, Inc. and
Club, taken individually, to perform any of its obligations under any Loan
Document to which it is a party, (iii) the legality, validity or enforceability
of this Agreement or any other Loan Document, (iv) the rights and remedies of
the Agent and the Lenders under any Loan Document, (v) the validity, perfection
or priority of a Lien in favor of the Agent for the benefit of the Lenders on
any material part of the Collateral or (vi) the value of any material part of
the Collateral.
"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc. and any
successor thereto.
"Mortgage" means each mortgage, deed of trust, deed to secure
debt, or other similar instrument, in form and substance satisfactory to the
Agent, made by any Loan Party in favor of the Agent for the benefit of the
Lenders, securing the Obligations and delivered to the Agent pursuant to Section
7.01(b).
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"Mortgage Receivables Collateral Value" means the value of the
Mortgage Receivables described on Exhibit F hereto, determined pursuant to the
methodology provided for on such Schedule.
"Multiemployer Plan" means a "multiemployer plan" as defined
in Section 4001(a)(3) of ERISA for which any Borrower or any ERISA Affiliate has
contributed to, or has been obligated to contribute to, at any time during the
preceding six (6) years.
"Net Cash Proceeds" means, (i) with respect to any Disposition
by any Person, the amount of cash received (directly or indirectly) from time to
time (whether as initial consideration or through the payment of deferred
consideration) by or on behalf of such Person or any of its Subsidiaries, in
connection therewith after deducting therefrom only (A) the principal amount of
any Indebtedness secured by any Lien permitted by Section 7.02(b) on any asset
(other than Indebtedness assumed by the purchaser of such asset) and interest,
fees and expenses in respect thereof which is (x) required to be, and is, repaid
in connection with such Disposition (other than Indebtedness under this
Agreement) or (y) in escrow in connection with such Person contesting such
Indebtedness or the Lien securing such Indebtedness in connection with such
Disposition, (B) reasonable costs, fees and expenses related to such Disposition
reasonably incurred by such Person in connection therewith, (C) transfer taxes
paid by such Person in connection therewith, and (D) so long as no Default or
Event of Default shall have occurred and be continuing, net income taxes to be
paid in connection with such Disposition (after taking into account any tax
credits or deductions and any tax sharing arrangements), in each case, to the
extent approved (to the extent such approval is required) by the Bankruptcy
Court, and (ii) with respect to the sale or issuance by any Person of any shares
of its Capital Stock, the aggregate amount of cash received (directly or
indirectly) from time to time (whether as initial consideration or through the
payment of deferred consideration) by or on behalf of such Person or any of its
Subsidiaries in connection therewith after deducting therefrom only reasonable
brokerage commissions, underwriting fees and discounts, legal fees and similar
fees and commissions paid or payable by such Person in connection therewith and,
so long as no Default or Event of Default shall have occurred and be continuing,
net income taxes to be paid in connection with such sale or issuance (after
taking into account any tax credits or deductions and any tax sharing
arrangements).
"Noncore Assets Collateral Value" means the value of the
Borrowers' interests in certain assets held for sale and certain other assets
set forth on Exhibit G, determined pursuant to the methodology provided for on
such Exhibit.
"Non-Debtor Subsidiaries" means the Subsidiaries of the Loan
Parties that have not commenced Chapter 11 Cases.
"Non-Excluded Taxes" has the meaning specified therefor in
Section 2.13(a).
-15-
"Notes" means the Term Loan Notes and the Revolving Credit
Notes.
"Notice of Borrowing" has the meaning specified therefor in
Section 2.03.
"Obligations" means (i) the obligations of each Borrower to
pay, as and when due and payable (by scheduled maturity, required prepayment,
acceleration, demand or otherwise), all amounts from time to time owing by it in
respect of the Loan Documents, whether for principal, interest, fees,
indemnification payments, expense reimbursements or otherwise, and (ii) the
obligations of each Borrower and each other Loan Party to perform or observe all
of its obligations from time to time existing under the Loan Documents.
"Operating Lease Obligations" means all obligations for the
payment of rent for any real or personal property under leases or agreements to
lease, other than Capitalized Lease Obligations.
"Operating Margin" means, with respect to the Budget and any
calendar month included therein, the positive or negative amount set forth for
such month under the heading "Total Operating Margin (DIP Calculation)."
"Other Assets Collateral Value" means the value of the assets
described on Exhibit H hereto, determined pursuant to the methodology provided
for on such Exhibit.
"Parent" has the meaning specified therefor in the preamble
hereto.
"Participant Register" has the meaning specified therefor in
Section 10.08(b)(v).
"Payment Office" means the Agent's office located at ▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, or at such other office or offices
of the Agent as may be designated in writing from time to time by the Agent to
the Administrative Borrower.
"PBGC" means the Pension Benefit Guaranty Corporation or any
successor thereto.
"Permitted Dispositions" means (i) any sales of Time Share
Interests and other inventory in the ordinary course of business on ordinary
business terms, (ii) any disposition to a Borrower, provided that the Agent
receives 30 days prior written notice of such disposition, (iii) any lease or
license in the ordinary course of business, (iv) any disposition permitted by
clause (B) or (D) of Section 7.02(d)(ii) hereof and (v) any disposition that
results in gross sales proceeds of less than $50,000 to the extent that the
gross sales proceeds for all such dispositions do not exceed $1,000,000 in the
aggregate.
-16-
"Permitted Indebtedness" means:
(a) any Indebtedness owing to the Agent and the
Lenders under this Agreement and the other Loan Documents;
(b) any Indebtedness existing on the Final Facility
Effective Date and set forth in Schedule 1.01(D) hereto;
(c) in addition to Indebtedness set forth on Schedule
1.01(D) hereto, Indebtedness of Non-Debtor Subsidiaries for which such
Non-Debtor Subsidiaries are liable solely as a result of such Subsidiaries being
(i) a general partner or joint venturer in a partnership or joint venture that
has incurred such Indebtedness or (ii) a developer or owner of a resort, in each
case in an aggregate principal amount acceptable to the Agent;
(d) in addition to Indebtedness set forth on Schedule
1.01(D) hereto, Indebtedness for the purpose of financing time share receivables
of Non-Debtor Subsidiaries (other than the Hawaiian Partnerships) in an
aggregate principal amount not to exceed $10,000,000 or, with the consent of the
Required Lenders, such consent not to be unreasonably withheld, an agreed upon
greater amount at any time outstanding;
(e) Indebtedness of the Hawaiian Partnerships;
provided, that none of the Loan Parties nor any of their Subsidiaries (other
than (i) the Hawaiian Partnerships and (ii) Subsidiaries that are corporations,
limited partnerships or limited liability companies with assets (other than
their interests as partners of a Hawaiian Partnership) with a value less than,
for any such Subsidiary, $100,000) has any liability, directly or indirectly, in
respect of such Indebtedness (other than liability that could result solely from
its status as a general partner or, in the case of Argosy/KGI Poipu Investment
Partnership, L.P., from the Guaranty (Receivables) dated June 28, 1995 in favor
of ▇▇▇▇▇▇ Financial, Inc.) and no assets of any Loan Party or any Subsidiary of
any Loan Party (other than the Hawaiian Partnerships) secures any such
Indebtedness, except as provided in such Guaranty;
(f) any Indebtedness evidencing loans permitted under
Section 7.02(d)(iii) or Section 7.02(f);
(g) any Indebtedness incurred to finance insurance
premiums in an aggregate amount not to exceed $9,100,000 at any time
outstanding;
(h) reimbursement, chargeback and similar obligations
related to processing credit card accounts and receivables to any financial
institution that processes credit card accounts or receivables in the ordinary
course of the Loan Parties' and their Subsidiaries' business in an aggregate
amount not to exceed $5,500,000 at any time outstanding;
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(i) Indebtedness secured by Liens permitted by clause
(j) of the definition of Permitted Liens; and
(j) in addition to Indebtedness set forth on Schedule
1.01(D) hereto, other unsecured Indebtedness in an aggregate principal amount
not to exceed $5,000,000 at any time outstanding.
"Permitted Investments" means (i) marketable direct
obligations issued or unconditionally guaranteed by the United States Government
or issued by any agency thereof and backed by the full faith and credit of the
United States, in each case maturing within six months from the date of
acquisition thereof; (ii) commercial paper, maturing not more than 270 days
after the date of issue rated P-1 by Moody's or A-1 by Standard & Poor's; (iii)
certificates of deposit maturing not more than 270 days after the date of issue,
issued by commercial banking institutions and money market or demand deposit
accounts maintained at commercial banking institutions, each of which is a
member of the Federal Reserve System and has a combined capital and surplus and
undivided profits of not less than $500,000,000; (iv) repurchase agreements
having maturities of not more than 90 days from the date of acquisition which
are entered into with major money center banks included in the commercial
banking institutions described in clause (iii) above and which are secured by
readily marketable direct obligations of the Government of the United States of
America or any agency thereof; (v) money market accounts maintained with mutual
funds having assets in excess of $2,500,000,000; and (vi) tax exempt securities
rated A or better by Moody's or A+ or better by Standard & Poor's.
"Permitted Liens" means:
(a) Liens securing the Obligations;
(b) Liens for taxes, assessments and governmental
charges the payment of which is not required under Section 7.01(c);
(c) Liens imposed by law, such as carriers',
warehousemen's, mechanics', materialmen's and other similar Liens arising in the
ordinary course of business and securing obligations (other than Indebtedness
for borrowed money) that are not overdue by more than 30 days or are being
contested in good faith and by appropriate proceedings promptly initiated and
diligently conducted, and a reserve or other appropriate provision, if any, as
shall be required by GAAP shall have been made therefor;
(d) Liens existing on the Final Facility Effective
Date, as set forth on Schedule 7.02(b), but not the extension of coverage
thereof to other Property or the extension of maturity, refinancing or other
modification of the terms thereof or the increase of the principal amount of the
Indebtedness secured thereby (other than the capitalized amount of any interest,
fees or expenses to the extent permitted by the Bankruptcy Court);
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(e) deposits and pledges securing (i) obligations
incurred in respect of workers' compensation, unemployment insurance or other
forms of governmental insurance or benefits, (ii) the performance of bids,
tenders, leases, contracts (other than for the payment of money) and statutory
obligations or (iii) obligations on surety or appeal bonds, but only to the
extent such deposits or pledges are incurred or otherwise arise in the ordinary
course of business and secure obligations not past due;
(f) easements, right-of-way, zoning restrictions,
home owners association documents, covenants and restrictions, declarations of
condominium, declarations of timeshare project, and similar encumbrances on the
use of real property and minor irregularities in the title thereto that do not
(i) secure obligations for the payment of money or (ii) materially impair the
value of such property or its use by any Loan Party or any of its Subsidiaries
in the normal conduct of such Person's business;
(g) Liens securing the payment of fees, dues and
other obligations of such Person to a homeowners, timeshare, condominium or
property owners association in which such Person owns time share Units, provided
that the aggregate amount of past due fees, dues or other obligations for the
payment of money secured by such Liens does not exceed an amount acceptable to
the Agent at any time;
(h) Liens perfected subsequent to the Filing Date
pursuant to Sections 362(b)(18) or 546(b) of the Bankruptcy Code, to the extent
permitted by such sections, in an aggregate amount not to exceed $1,000,000;
(i) adequate protection Liens granted by the
Bankruptcy Court in favor of a pre-petition lender to a Loan Party that has been
granted a pre-petition Lien on time share inventory or mortgage notes
receivables, provided that (A) such adequate protection Lien is limited to the
mortgage notes arising from the sale of such time share inventory, mortgage
notes receivable and the proceeds thereof and (B) any deficiency claim in
connection with such adequate protection Lien is subject to the administrative
expense priority of the Obligations granted in favor of the Agent and the
Lenders in this Agreement and the Final Bankruptcy Court Order;
(j) Liens with respect to equipment leases,
Capitalized Leases of equipment, other equipment financing arrangements and
other contractual obligations (other than Indebtedness), in each case, entered
into in the ordinary course of business;
(k) Liens on the Property of Non-Debtor Subsidiaries
granted by such Non-Debtor Subsidiaries securing Indebtedness permitted by
clause (f) of the definition of Permitted Indebtedness;
(l) Liens on unearned premiums, loss payments that
reduce the unearned premiums, subject to any mortgagee or loss payee interest,
and interests arising under a
-19-
state guarantee fund securing Indebtedness permitted by clause (g) of the
definition of Permitted Indebtedness;
(m) Liens securing obligations permitted by clause
(h) of the definition of Permitted Indebtedness; and
(n) Liens identified pursuant to the title searches
and UCC searches obtained pursuant to Section 5.04(b).
"Person" means an individual, corporation, limited liability
company, partnership, association, joint-stock company, trust, unincorporated
organization, joint venture or Governmental Authority.
"Pledge Agreement" means (i) each Pledge and Security
Agreement, dated as of April 20, 2001, made by a Borrower in favor of the Agent
for the benefit of the Lenders and delivered to the Agent on the Final Facility
Effective Date, and (ii) each Pledge and Security Agreement, in form and
substance satisfactory to the Agent, made by any Loan Party in favor of the
Agent pursuant to Section 7.01(b), securing the Obligations and delivered to the
Agent.
"Post-Default Rate" has the meaning specified therefor in
Section 2.08(b).
"Priority Professional Expenses" has the meaning specified
therefor in the definition of the term "Agreed Administrative Expense
Priorities."
"Property" means any right or interest in or to property of
any kind whatsoever, whether real, personal or mixed and whether tangible or
intangible.
"Pro Rata Share" means, with respect to the Total Commitment,
the Total Revolving Credit Commitment and the Total Term Loan Commitment, the
percentage obtained by dividing (i) such Lender's Commitment, such Lender's
Revolving Credit Commitment or such Lender's Term Loan Commitment, as
applicable, by (ii) the Total Commitment, the Total Revolving Credit Commitment
or the Total Term Loan Commitment, as applicable, provided, that, if the Total
Commitment, the Total Revolving Credit Commitment or the Total Term Loan
Commitment, as applicable, has been reduced to zero, the numerator shall be the
aggregate unpaid principal amount of such Lender's Loans, Revolving Loans or
Term Loans (including Agent Advances), as applicable, and the denominator shall
be the aggregate unpaid principal amount of all of the Loans, Revolving Loans or
Term Loans (including Agent Advances), as applicable.
"Purchase Documents" means any purchase agreement and related
sale and escrow documents executed and delivered by a purchaser of a Time Share
Interest to any Borrower with respect to a purchase of a Time Share Interest.
-20-
"Rating Agencies" has the meaning specified therefor in
Section 2.12.
"Reference Banks" means three major banks that are engaged in
the London interbank market, as selected by Agent.
"Reference Rate" means the rate of interest publicly announced
by The Chase Manhattan Bank, N.A., its successors or any other commercial bank
designated by the Agent to the Borrowers from time to time, in New York, New
York from time to time as its prime rate or base rate. The prime rate or base
rate is determined from time to time by such bank as a means of pricing some
loans to its borrowers and neither is tied to any external rate of interest or
index nor necessarily reflects the lowest rate of interest actually charged by
such bank to any particular class or category of customers. Each change in the
Reference Rate shall be effective from and including the date such change is
publicly announced as being effective.
"Register" has the meaning specified therefor in Section
10.08(b)(ii).
"Registered Loan" means each Revolving Loan that is recorded
on the Register.
"Registered Note" means a promissory note in registered form
evidencing a Registered Loan.
"Regulation T", "Regulation U" and "Regulation X" mean,
respectively, Regulations T, U and X of the Board or any successor, as the same
may be amended or supplemented from time to time.
"Release" means any spilling, leaking, pumping, pouring,
emitting, emptying, discharging, injecting, escaping, leaching, seeping,
migrating, dumping or disposing of any Hazardous Material (including the
abandonment or discarding of barrels, containers and other closed receptacles
containing any Hazardous Material) into the indoor or outdoor environment,
including ambient air, soil, surface or ground water, provided that the term
"Release" shall not include the use of normal commercial or residential cleaning
products by any Loan Party or its Subsidiaries in the ordinary course of its
business.
"Remedial Action" means all actions taken to (i) clean up,
remove, remediate, contain, treat, monitor, assess, evaluate or in any other way
address Hazardous Materials in the indoor or outdoor environment; (ii) prevent
or minimize a Release or threatened Release of Hazardous Materials so they do
not migrate or endanger or threaten to endanger public health or welfare or the
indoor or outdoor environment; (iii) perform pre-remedial studies and
investigations and post-remedial operation and maintenance activities; or (iv)
any other actions authorized by 42 U.S.C. 9601.
"Remittance Date" means, for April 2001, the Final Facility
Effective Date and, for any other month, the third (3rd) Business Day after the
Determination Date for such month.
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"Reportable Event" means an event described in Section 4043 of
ERISA (other than an event not subject to the provision for 30-day notice to the
PBGC under the regulations promulgated under such Section).
"Required Collateral Coverage Ratio" means, with respect to
any date during the term hereof, the Collateral Coverage Ratio as set forth on
Exhibit K applicable to such date.
"Required Lenders" means Lenders whose Pro Rata Shares
aggregate at least 50% of each of the Total Commitment, the Total Revolving
Credit Commitment and the Total Term Loan Commitment.
"Requirement of Law" means, as to any Person, the certificate
of incorporation and by-laws or other organizational or governing documents of
such Person, and any law, treaty, rule or regulation or determination of an
arbitrator or a court or other Governmental Authority, in each case applicable
to or binding upon such Person or any of its Property or the Property of its
bankruptcy estate or to which such Person or any of its Property is subject;
provided, that the foregoing shall not include the organizational or governing
documents of the Lenders.
"Resort" means the time share residential real estate projects
listed on Schedule 6.01(o) hereto in which a Loan Party sells or has sold Time
Share Interests, including, without limitation, the land on which such project
is located, all buildings and other improvements thereon, all fixtures located
at or used in connection with such project, all whether now or hereafter
existing.
"Revolving Credit Borrowing Base" means, subject to the
Revolving Credit Commitments, $15,000,000 (or $20,000,000 for so long as the
Collateral Coverage Ratio exceeds 2.35:1 and the Borrowers have not entered into
cash collateral arrangements or received a cash collateral order allowing for
the Borrowers' use of cash collateral in an aggregate amount equal to or greater
than $5,000,000) plus the product of Eligible Mortgage Receivables and the
Advance Rate.
"Revolving Credit Commitment" means, subject to the Revolving
Credit Borrowing Base, with respect to each Lender, the commitment of such
Lender to make Revolving Loans to the Borrowers in the amount set forth opposite
such Lender's name in Schedule 1.01(E) hereto, as such amount may be terminated
or reduced from time to time in accordance with the terms of this Agreement.
"Revolving Credit Note" means each promissory note of the
Borrowers, if any, made jointly and severally payable to the order of a Lender,
evidencing the Indebtedness resulting from the making by such Lender to the
Borrowers of Revolving Loans and delivered to such Lender, as such promissory
note may be amended, supplemented, restated, modified or extended from time to
time, and any promissory note or notes issued in exchange or replacement
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therefor. The term "Revolving Credit Note" shall include any Registered Note
evidencing the Revolving Loans and delivered pursuant to Section 2.05(a).
"Revolving Lender" means a Lender that has a Revolving Credit
Commitment.
"Revolving Loan" means a loan made by a Lender to the
Borrowers pursuant to Section 2.02(a).
"SEC" means the Securities and Exchange Commission or any
other similar or successor agency of the Federal government administering the
Securities Act.
"Securities Act" means the Securities Act of 1933, as amended,
or any similar Federal statute, and the rules and regulations of the SEC
thereunder, all as the same shall be in effect at the time.
"Securitization" has the meaning specified therefor in Section
2.12.
"Securitization Parties" has the meaning specified therefor in
Section 2.12.
"Security Agreement" means a Security Agreement made by a Loan
Party in favor of the Agent for the benefit of the Lenders, in form and
substance satisfactory to the Agent, securing the Obligations and delivered to
the Agent.
"Senior Management and Advisors" means the chief executive
officer, the chief financial officer, the financial advisor and such other
officers of the Loan Parties and their Subsidiaries as reasonably designated by
the Agent.
"Settlement Period" has the meaning specified therefor in
Section 2.03(d)(i) hereof.
"Solvent" means, with respect to any Person on a particular
date, that on such date (i) the fair value of the Property of such Person is not
less than the total amount of the liabilities of such Person, (ii) the present
fair salable value of the assets of such Person is not less than the amount that
will be required to pay the probable liability of such Person on its existing
debts as they become absolute and matured, (iii) such Person is able to realize
upon its assets and pay its debts and other liabilities, contingent obligations
and other commitments as they mature in the normal course of business, (iv) such
Person does not intend to, and does not believe that it will, incur debts or
liabilities beyond such Person's ability to pay as such debts and liabilities
mature, and (v) such Person is not engaged in business or a transaction, and is
not about to engage in business or a transaction, for which such Person's
Property would constitute unreasonably small capital.
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"Standard & Poor's" means Standard & Poor's Ratings Services,
a division of The ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc., and any successor thereto.
"Subsidiary" means, with respect to any Person at any date,
any corporation, limited or general partnership, limited liability company,
trust, association or other entity (i) the accounts of which would be
consolidated with those of such Person in such Person's consolidated financial
statements if such financial statements were prepared in accordance with GAAP or
(ii) of which more than 50% of (A) the outstanding Capital Stock having (in the
absence of contingencies) ordinary voting power to elect a majority of the board
of directors of such corporation, (B) the interest in the capital or profits of
such partnership or limited liability company or (C) the beneficial interest in
such trust or estate is, at the time of determination, owned or controlled
directly or indirectly through one or more intermediaries, by such Person.
Notwithstanding the foregoing the term Subsidiary shall not include (i) any
homeowners, timeshare, condominium or property owners association or (ii) any
Subsidiary organized for the sole purpose of facilitating a securitization or
financing of mortgage notes receivable and which performs no business and has no
other assets other than those necessary to consummate such securitization or
financing.
"Sunterra Europe" means the Parent's European timeshare
business consisting of the entire business and assets of Sunterra Europe (Group
Holdings) plc and its Subsidiaries.
"Sunterra Securitization" means each of the following
transactions involving the securitization of mortgage loans, mortgage notes or
other installment obligations (collectively, "Mortgage Notes"):
(i) the sale of Mortgage Notes to Sunterra Finance L.L.C., a
limited liability company organized and existing under the laws of the State of
Georgia ("Finance L.L.C."), by (a) Signature Resorts, Inc, a Maryland
corporation (now known as Sunterra Corporation), (b) All Seasons Resorts, Inc.,
an Arizona corporation, (c) All Seasons Resorts, Inc., a Texas corporation, (d)
Port Royal Resort, L.P., a South Carolina limited partnership, (e) Lake Tahoe
Resort Partners, LLC, a California limited liability company, and (f) Grand
Beach Resort, L.P., a Georgia limited partnership, and/or the issuance of the
Signature Resorts Vacation Ownership Receivables-Backed Notes 1998-A pursuant to
the Indenture, dated as of May 1, 1998, among Finance L.L.C., Signature Resorts,
Inc. (now known as Sunterra Corporation) and LaSalle National Bank (now known as
LaSalle Bank, N.A.);
(ii) the sale of Mortgage Notes by TerraSun Holding, Inc., a
Nevada corporation ("TerraSun Holding"), to TerraSun, L.L.C., a limited
liability company organized and existing under the laws of the State of Nevada
("TerraSun L.L.C."), and/or the issuance of the Vacation Ownership
Receivables-Backed Notes 1999-A pursuant to the Indenture, dated as of March 31,
1999, among TerraSun L.L.C., Sunterra Financial Services, Inc. and LaSalle
National Bank (now known as LaSalle Bank, N.A.); and
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(iii) the sale of Mortgage Notes by Dutch Elm Holdings, Inc.,
a Nevada corporation ("DE Holdings"), to Dutch Elm, LLC, a limited liability
company organized and existing under the laws of the State of Nevada ("Dutch
Elm, LLC"), and/or the issuance of the Vacation Ownership Receivables-Backed
Notes 1999-B pursuant to the Indenture dated as of December 1, 1999, among Dutch
Elm, LLC, Sunterra Financial Services, Inc. and LaSalle Bank, National
Association (now known as LaSalle Bank, N.A.).
"Termination Event" means (i) a Reportable Event with respect
to any Employee Plan other than the commencement of the Chapter 11 Cases, (ii)
any event that causes any Borrower or any of its ERISA Affiliates to incur
liability under Section 409, 502(i), 502(l), 515, 4062, 4063, 4064, 4069, 4201,
4204 or 4212 of ERISA or Section 4971 or 4975 of the Code, (iii) the filing of a
notice of intent to terminate an Employee Plan or the treatment of an Employee
Plan amendment as a termination under Section 4041 of ERISA, (iv) the
institution of proceedings by the PBGC to terminate an Employee Plan, or (v) any
other event or condition which might constitute grounds under Section 4042 of
ERISA for the termination of, or the appointment of a trustee to administer, any
Employee Plan.
"Term Lender" means a Lender that has a Term Loan Commitment.
"Term Loan" means a Tranche A Term Loan or a Tranche B Term
Loan.
"Term Loan Commitment" means with respect to each Lender, its
Tranche A Term Loan Commitment and its Tranche B Term Loan Commitment.
"Term Loan Note" means each Tranche A Term Loan Note and
Tranche B Term Loan Note.
"Time Share Interest" means a timeshare interest or vacation
interval as such term is defined in the applicable timeshare declaration,
together with all rights, benefits, privileges and interests appurtenant
thereto, including, but not limited to the right to use and occupy a Unit within
the Resort and the common areas and common furnishings appurtenant to such Unit
and/or for a specified length of time, on an annual or a biennial basis, as more
specifically described in the recorded declaration pursuant to which such Time
Share Interest is created.
"Time Share Mortgage" means a mortgage or deed of trust on a
timeshare fee estate in real property at any Resort.
"Title Insurance Policy" means an ALTA loan policy, together
with all endorsements and documents referenced therein made from time to time
thereto, issued by or on behalf of a title insurance company with whom the
Borrowers currently conduct title insurance business or another title insurance
company acceptable to Agent, satisfactory in form and substance to the Agent,
insuring the Lien created by a Mortgage, in an amount and on terms satisfactory
to the Agent, delivered to the Agent pursuant to Section 7.01(b) hereof.
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"Total Commitment" means the sum of the Total Revolving Credit
Commitment and the Total Term Loan Commitment but in any event not to exceed
$160,000,000 in the aggregate.
"Total Revolving Credit Commitment" means the sum of the
amounts of the Lenders' Revolving Credit Commitments set forth in Schedule
1.01(E) hereto, as may be reduced from time to time pursuant to the terms of
this Agreement or as may be limited by order of the Bankruptcy Court.
"Total Term Loan Commitment" means the sum of the Total
Tranche A Term Loan Commitment and the Total Tranche B Term Loan Commitment.
"Total Tranche A Term Loan Commitment" means the sum of the
amounts of the Lenders' Tranche A Term Loan Commitments set forth in Schedule
1.01(E) hereto, as may be reduced from time to time pursuant to the terms of
this Agreement or as may be limited by order of the Bankruptcy Court.
"Total Tranche B Term Loan Commitment" means the sum of the
amounts of the Lenders' Tranche B Term Loan Commitments set forth in Schedule
1.01(E) hereto, as may be reduced from time to time pursuant to the terms of
this Agreement or as may be limited by order of the Bankruptcy Court.
"Tranche A Term Loan" means a loan made by a Lender to the
Borrowers pursuant to Section 2.01(a).
"Tranche A Term Loan Commitment" means with respect to each
Lender, the commitment of such Lender to make Tranche A Term Loans to the
Borrowers in the amount set forth opposite such Lender's name in Schedule
1.01(E) hereto, as such amount may be terminated or reduced from time to time in
accordance with the terms of this Agreement.
"Tranche A Term Loan Note" means each promissory note of the
Borrowers, if any, made jointly and severally payable to the order of a Lender,
evidencing the Indebtedness resulting from the making by such Lender to the
Borrowers of Tranche A Term Loans and delivered to such Lender, as such
promissory note may be amended, supplemented, restated, modified or extended
from time to time, and any promissory note or notes issued in exchange or
replacement therefor.
"Tranche B Term Loan" means a loan made by a Lender to the
Borrowers pursuant to Section 2.01(b).
"Tranche B Term Loan Commitment" means with respect to each
Lender, the commitment of such Lender to make Tranche B Term Loans to the
Borrowers in the amount set
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forth opposite such Lender's name in Schedule 1.01(E) hereto, as such amount may
be terminated or reduced from time to time in accordance with the terms of this
Agreement.
"Tranche B Term Loan Note" means each promissory note of the
Borrowers, if any, made jointly and severally payable to the order of a Lender,
evidencing the Indebtedness resulting from the making by such Lender to the
Borrowers of Tranche B Term Loans and delivered to such Lender, as such
promissory note may be amended, supplemented, restated, modified or extended
from time to time, and any promissory note or notes issued in exchange or
replacement therefor.
"Underwriting Guidelines" means the credit criteria applicable
to mortgage receivables adopted by the Borrower and effective as of February 1,
2001 set forth on that certain separate writing delivered to the Agent prior to
the Final Facility Effective Date, as the same shall be amended, supplemented or
replaced with the consent of the Agent, such consent not to be unreasonably
withheld and which consent shall not be required to the extent that such
amendment or supplement is not material.
"Unit" means a residential unit in a timeshare Resort.
"Unused Line Fee" has the meaning specified therefor in
Section 2.11(b).
"WARN" has the meaning specified therefor in Section 6.01(i).
SECTION 1.02 Terms Generally. The definitions of terms herein shall
apply equally to the singular and plural forms of the terms defined. Whenever
the context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words "include", "includes" and "including" shall
be deemed to be followed by the phrase "without limitation". The word "will"
shall be construed to have the same meaning and effect as the word "shall".
Unless the context requires otherwise, (a) any definition of or reference to any
agreement, instrument or other document herein shall be construed as referring
to such agreement, instrument or other document as from time to time amended,
supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein), (b) any reference
herein to any Person shall be construed to include such Person's successors and
assigns, (c) the words "herein", "hereof" and "hereunder", and words of similar
import, shall be construed to refer to this Agreement in its entirety and not to
any particular provision hereof, (d) all references herein to Articles,
Sections, Exhibits and Schedules shall be construed to refer to Articles and
Sections of, and Exhibits and Schedules to, this Agreement and (e) the words
"asset" and "property" shall be construed to have the same meaning and effect
and to refer to any and all tangible and intangible assets and properties,
including cash, securities, accounts and contract rights.
SECTION 1.03 Accounting and Other Terms. Unless otherwise expressly
provided herein, each accounting term used herein shall have the meaning given
it under GAAP
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applied on a basis consistent with those used in preparing the Financial
Statements. All terms used in this Agreement which are defined in Article 8 or
Article 9 of the Uniform Commercial Code in effect in the State of New York on
the date hereof and which are not otherwise defined herein shall have the same
meanings herein as set forth therein.
SECTION 1.04 Time References. Unless otherwise indicated herein, all
references to time of day refer to Eastern standard time or Eastern daylight
saving time, as in effect in New York City on such day. For purposes of the
computation of a period of time from a specified date to a later specified date,
the word "from" means "from and including" and the words "to" and "until" each
means "to but excluding"; provided, however, that with respect to a computation
of fees or interest payable to the Agent or any Lender, such period shall in any
event consist of at least one full day.
SECTION 1.05 Amounts in Foreign Currency. For the purposes of
calculations required by Section 7.02 (other than subsections (o), (p), (q) and
(r)), with respect to any amount denominated in currency other than that of the
United States, such amount shall be calculated utilizing the exchange rate in
effect at the time such amount was incurred or expended, as applicable.
ARTICLE II.
THE LOANS
SECTION 2.01 Term Loan Commitments.
(a) Tranche A.
(i) Subject to the terms and conditions and relying
upon the representations and warranties herein set forth and subject to the
Final Bankruptcy Court Order, each Term Lender severally agrees to make Tranche
A Term Loans to the Borrowers on the Final Facility Effective Date in an
aggregate principal amount not to exceed such Term Lender's Tranche A Term Loan
Commitment. The proceeds of the Tranche A Term Loans shall be used to repay in
full the Existing Financing Agreement.
(ii) Notwithstanding the foregoing, the aggregate
principal amount of Tranche A Term Loans outstanding at any time to the
Borrowers shall not exceed the Total Tranche A Term Loan Commitment as in effect
at such time. The Tranche A Term Loan Commitment of each Lender and the Total
Tranche A Term Loan Commitment shall automatically and permanently be reduced to
zero on the Final Maturity Date. Once repaid, the Tranche A Term Loans may not
be reborrowed.
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(b) Tranche B.
(i) Subject to the terms and conditions and relying
upon the representations and warranties herein set forth and subject to the
Final Bankruptcy Court Order, each Term Lender severally agrees to make Tranche
B Term Loans to the Borrowers on the Finova Loan Take-out Date in an aggregate
principal amount not to exceed such Term Lender's Tranche B Term Loan
Commitment. The proceeds of the Tranche B Term Loans shall be used to repay the
Finova Loans and, upon certain conditions and as agreed by the parties from time
to time, certain other obligations in an amount to be agreed upon by the
Administrative Borrower and the Agent.
(ii) Notwithstanding the foregoing, the aggregate
principal amount of Tranche B Term Loans outstanding at any time to the
Borrowers shall not exceed the Total Tranche B Term Loan Commitment as in effect
at such time. The Tranche B Term Loan Commitment of each Lender and the Total
Tranche B Term Loan Commitment shall automatically and permanently be reduced to
zero on the Final Maturity Date. Once repaid, the Tranche B Term Loans may not
be reborrowed.
SECTION 2.02 Revolving Credit Commitments.
(a) Subject to the terms and conditions and relying upon the
representations and warranties herein set forth and subject to the Final
Bankruptcy Court Order, each Lender severally agrees to make Revolving Loans to
the Borrowers on each Remittance Date and on such other dates as otherwise
agreed by the Agent (it being understood that it is the intent of the parties
that the Borrowers plan to make one borrowing per month but may make additional
borrowings in accordance with this Agreement) from the Final Facility Effective
Date to the Final Maturity Date, or until the earlier reduction of its Revolving
Credit Commitment to zero in accordance with the terms hereof, in an aggregate
principal amount of Revolving Loans at any time outstanding not to exceed the
lesser of (i) the amount of such Lender's Revolving Credit Commitment and (ii)
such Lender's pro rata share of the Revolving Credit Borrowing Base. The
proceeds of the Revolving Loans shall be used for working capital and other
general corporate purposes.
(b) Notwithstanding the foregoing, the aggregate principal
amount of Revolving Loans outstanding at any time to the Borrowers shall not
exceed the lesser of (i) the Total Revolving Credit Commitment as in effect at
such time and (ii) the Revolving Credit Borrowing Base. The Revolving Credit
Commitment of each Lender and the Total Revolving Credit Commitment shall
automatically and permanently be reduced to zero on the Final Maturity Date.
Within the foregoing limits, the Borrowers may borrow, repay and reborrow, on or
after the Final Facility Effective Date and 21 days prior to the Final Maturity
Date, subject to the terms, provisions and limitations set forth herein.
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SECTION 2.03 Making the Loans.
(a) The Administrative Borrower shall give the Agent prior
telephone notice (immediately confirmed in writing, in substantially the form of
Exhibit A hereto (a "Notice of Borrowing"), not later than 12:00 noon (New York
City time) on the date which is three (3) Business Days prior to the date of the
proposed Loan. Such Notice of Borrowing shall be irrevocable and shall specify
(i) the principal amount of the proposed Revolving Loan, and, in the case of the
Loans to be made on the Final Facility Effective Date and the Finova Loan
Take-out Date, the principal amount of the proposed Term Loan, (ii) the use of
the proceeds of such proposed Revolving Loan (if made within 60 days prior to
June 30, 2002 or if otherwise requested by the Agent), and, in the case of the
Loans to be made on the Final Facility Effective Date and the Finova Loan
Take-out Date, the use of the proceeds of such proposed Term Loan, and (iii) the
proposed borrowing date, which must be a Business Day. The Agent and the Lenders
may act without liability upon the basis of written, telecopied or telephonic
notice believed by the Agent in good faith to be from the Administrative
Borrower (or from any Authorized Officer thereof designated in writing
purportedly from the Administrative Borrower to the Agent). The Borrowers hereby
waive the right to dispute the Agent's record of the terms of any such
telephonic Notice of Borrowing. The Agent and each Lender shall be entitled to
rely conclusively on any Authorized Officer's authority to request a Term Loan
or a Revolving Loan on behalf of the Borrowers until the Agent receives written
notice to the contrary. The Agent and the Lenders shall have no duty to verify
the authenticity of the signature appearing on any written Notice of Borrowing.
Except as otherwise provided in this Section 2.03, Loans shall be made ratably
by the Lenders in accordance with their respective Revolving Credit Commitments
and Term Loan Commitments.
(b) Each Notice of Borrowing pursuant to this Section 2.03
shall be irrevocable and the Borrowers shall be bound to make a borrowing in
accordance therewith. Each Revolving Loan shall be made in a minimum amount of
$1,000,000 and shall be in an integral multiple of $500,000.
(c)
(i) Except as otherwise provided in this subsection
2.03(c), all Revolving Loans under this Agreement shall be made by the Lenders
simultaneously and proportionately to their Pro Rata Shares of the Total
Revolving Credit Commitment, it being understood that no Lender shall be
responsible for any default by any other Lender in that other Lender's
obligations to make a Revolving Loan requested hereunder, nor shall the
Revolving Credit Commitment of any Lender be increased or decreased as a result
of the default by any other Lender in that other Lender's obligation to make a
Revolving Loan requested hereunder, and each Lender shall be obligated to make
the Revolving Loans required to be made by it by the terms of this Agreement
regardless of the failure by any other Lender.
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(ii) Notwithstanding any other provision of this
Agreement, and in order to reduce the number of fund transfers among the
Borrowers, the Agent and the Lenders, the Borrowers, the Agent and the Lenders
agree that the Agent may (but shall not be obligated to), and the Borrowers and
the Lenders hereby irrevocably authorize the Agent to, fund, on behalf of the
Lenders, Revolving Loans pursuant to Section 2.02, subject to the procedures for
settlement set forth in subsection 2.03(d); provided, however, that (a) the
Agent shall in no event fund such Revolving Loans if the Agent shall have
received written notice from the Required Lenders on the Business Day prior to
the day of the proposed Revolving Loan that one or more of the conditions
precedent contained in Section 5.02 will not be satisfied on the day of the
proposed Revolving Loan, and (b) the Agent shall not otherwise be required to
determine that, or take notice whether, the conditions precedent in Section 5.02
have been satisfied. If the Administrative Borrower gives a Notice of Borrowing
requesting a Revolving Loan and the Agent elects not to fund such Revolving Loan
on behalf of the Lenders, then promptly after receipt of the Notice of Borrowing
requesting such Loan, the Agent shall notify each Lender of the specifics of the
requested Revolving Loan and that it will not fund the requested Revolving Loan
on behalf of the Lenders. If the Agent notifies the Lenders that it will not
fund a requested Revolving Loan on behalf of the Lenders, each Lender shall make
its Pro Rata Share of the Revolving Loan available to the Agent, in immediately
available funds, at the Payment Office no later than 3:00 p.m. (New York City
time) (provided that the Agent requests payment from such Lender not later than
1:00 p.m.) on the date of the proposed Revolving Loan. The Agent will make the
proceeds of such Revolving Loans available to the Borrowers on the day of the
proposed Revolving Loan by causing an amount, in immediately available funds,
equal to the proceeds of all such Revolving Loans received by the Agent at the
Payment Office or the amount funded by the Agent on behalf of the Lenders to be
deposited in an account designated by the Administrative Borrower.
(iii) If the Agent has notified the Lenders that the
Agent, on behalf of the Lenders, will fund a particular Revolving Loan pursuant
to subsection 2.03(c)(ii), the Agent may assume that such Lender has made such
amount available to the Agent on such day and the Agent, in its sole discretion,
may, but shall not be obligated to, cause a corresponding amount to be made
available to the Borrowers on such day. If the Agent makes such corresponding
amount available to the Borrowers and such corresponding amount is not in fact
made available to the Agent by such Lender, the Agent shall be entitled to
recover such corresponding amount on demand from such Lender together with
interest thereon, for each day from the date such payment was due until the date
such amount is paid to the Agent, at the Federal Funds Rate for three Business
Days and thereafter at the Reference Rate. During the period in which such
Lender has not paid such corresponding amount to the Agent, notwithstanding
anything to the contrary contained in this Agreement or any other Loan Document,
the amount so advanced by the Agent to the Borrowers shall, for all purposes
hereof, be a Revolving Loan made by the Agent for its own account. Upon any such
failure by a Lender to pay the Agent, the Agent shall promptly thereafter notify
the Administrative Borrower of such
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failure and the Borrowers shall immediately pay such corresponding amount to the
Agent for its own account.
(iv) Nothing in this subsection 2.03(c) shall be
deemed to relieve any Lender from its obligations to fulfill its Revolving
Credit Commitment hereunder or to prejudice any rights that the Agent or the
Borrowers may have against any Lender as a result of any default by such Lender
hereunder.
(d)
(i) With respect to all periods for which the Agent
has funded Revolving Loans pursuant to subsection 2.03(c), on Friday of each
week, or if the applicable Friday is not a Business Day, then on the following
Business Day, or such shorter period as the Agent may from time to time select
(any such week or shorter period being herein called a "Settlement Period"), the
Agent shall notify each Lender of the unpaid principal amount of the Revolving
Loans outstanding as of the last day of each such Settlement Period. In the
event that such amount is greater than the unpaid principal amount of the
Revolving Loans outstanding on the last day of the Settlement Period immediately
preceding such Settlement Period (or, if there has been no preceding Settlement
Period, the amount of the Revolving Loans made on the date of such Lender's
initial funding), each Lender shall promptly (and in any event not later than
2:00 p.m. if the Agent requests payment from such Lender not later than 12:00
noon on such day) make available to the Agent its Pro Rata Share of the
difference in immediately available funds. In the event that such amount is less
than such unpaid principal amount, the Agent shall promptly pay over to each
Lender its Pro Rata Share of the difference in immediately available funds. In
addition, if the Agent shall so request at any time when a Default or an Event
of Default shall have occurred and be continuing, or any other event shall have
occurred as a result of which the Agent shall determine that it is desirable to
present claims against the Borrowers for repayment, each Lender shall promptly
remit to the Agent or, as the case may be, the Agent shall promptly remit to
each Lender, sufficient funds to adjust the interests of the Lenders in the then
outstanding Revolving Loans to such an extent that, after giving effect to such
adjustment, each Lender's interest in the then outstanding Revolving Loans will
be equal to its Pro Rata Share thereof. The obligations of the Agent and each
Lender under this subsection 2.03(d) shall be absolute and unconditional. Each
Lender shall only be entitled to receive interest on its Pro Rata Share of the
Revolving Loans which have been funded by such Lender.
(ii) In the event that any Lender fails to make any
payment required to be made by it pursuant to subsection 2.03(d)(i), the Agent
shall be entitled to recover such corresponding amount on demand from such
Lender together with interest thereon, for each day from the date such payment
was due until the date such amount is paid to the Agent, at the Federal Funds
Rate for three Business Days and thereafter at the Reference Rate. During the
period in which such Lender has not paid such corresponding amount to the Agent,
notwithstanding anything to the contrary contained in this Agreement or any
other Loan
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Document, the amount so advanced by the Agent to the Borrowers shall, for all
purposes hereof, be a Revolving Loan made by the Agent for its own account. Upon
any such failure by a Lender to pay the Agent, the Agent shall promptly
thereafter notify the Administrative Borrower of such failure and the Borrowers
shall immediately pay such corresponding amount to the Agent for its own
account. Nothing in this subsection 2.03(d)(ii) shall be deemed to relieve any
Lender from its obligation to fulfill its Revolving Credit Commitment hereunder
or to prejudice any rights that the Agent or the Borrowers may have against any
Lender as a result of any default by such Lender hereunder.
SECTION 2.04 Term Loan Notes; Repayment of Loans.
(a) If requested in writing by such Lender, all Tranche A Term
Loans made by a Lender to the Borrowers shall be evidenced by a single Tranche A
Term Loan Note, duly executed on behalf of the Borrowers, dated the Final
Facility Effective Date, and delivered to and made jointly and severally payable
to the order of such Lender in a principal amount equal to the amount of such
Lender's Tranche A Term Loan Commitment.
(b) If requested in writing by such Lender, all Tranche B Term
Loans made by a Lender to the Borrowers shall be evidenced by a single Tranche B
Term Loan Note, duly executed on behalf of the Borrowers, dated the Finova Loan
Take-out Date, and delivered to and made jointly and severally payable to the
order of such Lender in a principal amount equal to the amount of such Lender's
Tranche B Term Loan Commitment.
(c) Subject to Section 2.09, the outstanding principal of all
Term Loans, together with accrued and unpaid interest thereon, shall be due and
payable on the Final Maturity Date.
SECTION 2.05 Revolving Credit Notes; Repayment of Loans.
(a) If requested in writing by such Lender, all Revolving
Loans made by a Lender to the Borrowers shall be evidenced by a single Revolving
Credit Note, duly executed on behalf of the Borrowers, dated the Final Facility
Effective Date, and delivered to and made jointly and severally payable to the
order of such Lender in a principal amount equal to the maximum amount of such
Lender's Revolving Credit Commitment.
(b) The outstanding principal of all Revolving Loans shall be
due and payable on the Final Maturity Date.
SECTION 2.06 Limitation on Types of Loans; Illegality. Anything herein
to the contrary notwithstanding, if, on or prior to the determination of any
LIBO Base Rate, (a) the Agent determines, in good faith, which determination
shall be conclusive, that quotations of interest rates for the relevant deposits
referred to in the definition of "LIBO Base Rate" in Section 1.01 hereof are not
being provided in the relevant amounts or for the relevant maturities
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for purposes of determining rates of interest for Loans as provided herein or
(b) it becomes unlawful for any Lender to honor its obligation to make or
maintain Loans hereunder using a LIBO Rate, then the Agent shall give the
Administrative Borrower prompt notice thereof and, so long as such condition
remains in effect, the Lenders shall, following discussions with the
Administrative Borrower, select in good faith an index that approximates as
closely as reasonably practicable the LIBO Base Rate.
SECTION 2.07 Repayment of Loans; Evidence of Debt. Each Borrower hereby
unconditionally promises to pay to the Agent for the account of the appropriate
Revolving Lender or Term Lender, as the case may be, (i) the then unpaid
principal amount of each Revolving Loan made to it by such Revolving Lender on
the Final Maturity Date (or such earlier date on which the Loans become due and
payable pursuant to the terms of this Agreement), (ii) the then unpaid principal
amount of each Tranche A Term Loan made to it by such Term Lender on the Final
Maturity Date (or on such earlier date on which the Loans become due and payable
pursuant to the terms of this Agreement) and (iii) the then unpaid principal
amount of each Tranche B Term Loan made to it by such Term Lender on the Final
Maturity Date (or on such earlier date on which the Loans become due and payable
pursuant to the terms of this Agreement). Each Borrower hereby further agrees to
pay interest on the unpaid principal amount of the Loans made to it from time to
time outstanding from the date hereof until payment in full thereof at the rates
per annum, and on the dates set forth in Section 2.08.
(b) Each Lender shall maintain in accordance with its
usual practice an account or accounts evidencing indebtedness of the Borrowers
to such Lender resulting from each Loan of such Lender from time to time,
including the amounts of principal and interest payable and paid to such Lender
from time to time under this Agreement.
(c) The Agent, on behalf of the Borrowers, shall
maintain the Register pursuant to Section 10.08, and a subaccount therein for
each Lender, in which shall be recorded (i) the amount of each Loan made
hereunder and any Note evidencing such Loan and the type thereof, (ii) the
amount of any principal or interest due and payable or to become due and payable
from the Borrowers to each Lender hereunder and (iii) both the amount of any sum
received by the Agent hereunder from the Borrowers and each Lender's share
thereof.
(d) The entries made in the Register and the accounts
of each Lender maintained pursuant to this Section 2.07 shall, to the extent
permitted by applicable law, be prima facie evidence of the existence and
amounts of the obligations of the Borrowers therein recorded; provided, however,
that the failure of any Lender or the Agent to maintain the Register or any such
account, or any error therein, shall not in any manner affect the obligation of
the relevant Borrower to repay (with applicable interest) the Loans made to the
Borrowers by such Lender in accordance with the terms of this Agreement.
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(e) Each Borrower agrees that, upon the request to
the Agent by any Lender, such Borrower will execute and deliver to such Lender a
promissory note of such Borrower evidencing any Term Loans or Revolving Loans,
as the case may be, of such Lender, with appropriate insertions as to date and
principal amount, as set forth in Section 2.04 and Section 2.05.
SECTION 2.08 Interest.
(a) Loans. Each Loan shall bear interest on the
principal amount thereof from time to time outstanding, from the date of such
Loan until such principal amount becomes due, at a rate per annum equal to the
LIBO Rate plus 3.5%.
(b) Default Interest. To the extent permitted by law,
upon the occurrence and during the continuance of an Event of Default, the
principal of, and all accrued and unpaid interest on, all Loans and all fees,
indemnities or any other Obligations of the Borrowers under this Agreement, the
Term Loan Notes, the Revolving Credit Notes and other Loan Documents shall bear
interest, from the date such Event of Default occurred until such Event of
Default is cured or waived in writing in accordance herewith, at a rate per
annum equal to the LIBO Rate plus 5.5% (the "Post-Default Rate").
(c) Interest Payment. Interest on each Loan shall be
payable with respect to each Interest Period, in arrears, on each Remittance
Date, commencing on the first Remittance Date following the Remittance Date on
which such Loan is made and at maturity (whether upon demand, by acceleration or
otherwise). Interest at the Post-Default Rate shall be payable on demand. The
Borrowers hereby authorize the Agent to, and the Agent may, from time to time,
charge the Loan Account pursuant to Section 4.01 with the amount of any interest
payment due hereunder.
(d) General. All interest shall be computed on the
basis of a year of 360 days for the actual number of days, including the first
day but excluding the last day, elapsed.
SECTION 2.09 Prepayment of Term Loans.
(a) Optional Prepayment. The Borrowers may, without
penalty or premium, prepay the principal of any Term Loan, in whole or in part
and together with accrued and unpaid interest thereon, on three (3) Business
Days prior written notice.
(b) Mandatory Prepayment.
(i) Monthly Payment. By each Remittance Date
(other than the April 2001 Remittance Date), the Borrowers shall prepay the
outstanding principal of the Term Loans, together with accrued and unpaid
interest thereon, such payments to be applied first
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to prepay the Tranche A Term Loans until they are paid in full and then to
prepay the Tranche B Term Loans, in an amount equal to (x) 25% of the aggregate
retail sales price of Time Share Interests sold in the ordinary course of
business for which escrow has been broken and funds released to the Borrowers in
the previous month minus (y) 25% of the retail sales value, based on the average
realized retail sale price over the preceding three months of comparable Time
Share Interests at the same resort, of Time Share Interests that are added to
inventory in the previous month; provided, however, that if for any month the
value of clause (y) is greater than the value of clause (x), then the Borrowers
shall not be required to prepay the Term Loans under this Subclause (i) and the
surplus (the value of clause (y) minus the value of clause (x)) may be added to
clause (y) for each succeeding month until such surplus is utilized.
(ii) Dispositions. Until the Term Loans
shall have been paid in full, immediately upon any Disposition by any Loan Party
resulting in Net Cash Proceeds greater than or equal to $1,000,000 and within
five (5) Business Days after any Disposition by any Loan Party resulting in Net
Cash Proceeds less than $1,000,000, the Borrowers shall prepay the outstanding
principal of the Term Loans, together with accrued and unpaid interest thereon,
such payments to be applied first to prepay the Tranche A Term Loans until they
are paid in full and then to prepay the Tranche B Term Loans, in an amount equal
to 50% or, if a Default or Event of Default has occurred and is continuing,
100%, of the Net Cash Proceeds received by such Loan Party in connection with
such Disposition.
(iii) Casualty and Condemnation. Upon the
loss, destruction or taking by condemnation of any Collateral, the Borrowers
shall prepay the outstanding principal of the Term Loans, together with accrued
and unpaid interest thereon, such payments to be applied first to prepay the
Tranche A Term Loans until they are paid in full and then to prepay the Tranche
B Term Loans, in an amount equal to 100% of the proceeds received by any Loan
Party in connection therewith, net of any reasonable expenses incurred in
collecting such net proceeds; provided that (x) except during the continuance of
a Default or an Event of Default, (A) proceeds from insurance covering loss or
destruction or from any taking of any Collateral not in excess of $1,000,000 for
any one occurrence shall not be required to be so prepaid on such date to the
extent such insurance proceeds are used to replace or restore the properties or
assets in respect of which such proceeds were paid, and (B) proceeds from
insurance covering loss or destruction or from any taking of any Collateral in
excess of $1,000,000 for any one occurrence shall not be required to be so
prepaid on such date to the extent that such insurance proceeds are deposited
into a bank account maintained at a bank satisfactory to Agent and subject to a
blocked account agreement in form and substance satisfactory to Agent, granting
a perfected first priority security interest in such account to the Agent for
the benefit of itself and the Lenders (a "Blocked Account") and used to replace
or restore the properties or assets in respect of which such proceeds were paid,
and if, in each case, the Administrative Borrower delivers a certificate to the
Agent within five (5) Business Days of receipt of such proceeds stating that
such proceeds shall be used to replace or restore any such properties or assets
within a period specified in such certificate not to exceed 180 days after the
date of receipt of such proceeds (which certificate
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shall set forth estimates of the proceeds to be so expended) and (y) if all or
any portion of such proceeds not so applied to the repayment of the Term Loans
are not so used within the period specified in the relevant certificate
furnished pursuant to clause (x) above, such remaining portion shall be prepaid
on the last day of such specified period.
(iv) Third-Party Finova Take-out.
Immediately upon the repayment of all or a portion of the Finova Loans with the
proceeds of Indebtedness or other financing from any source other than the
Tranche B Term Loans, the Borrowers shall prepay the entire outstanding balance
of the Term Loans (including all principal and all accrued and unpaid interest
and fees and expenses). For purposes of this paragraph, use of proceeds of
assets that constitute collateral for Finova Loans shall not be deemed a
financing.
(c) Cumulative Prepayments. Except as otherwise
expressly provided in this Section 2.09, payments with respect to any subsection
of this Section 2.09 are in addition to payments made or required to be made
under any other subsection of this Section 2.09.
SECTION 2.10 Reduction of Commitment; Prepayment of Revolving Loans.
(a) Reduction of Revolving Credit Commitments. The
Total Revolving Credit Commitment shall terminate on the Final Maturity Date.
The Borrowers may, without premium or penalty, reduce the Total Revolving Credit
Commitment to an amount (which may be zero) not less than the sum of (A) the
aggregate unpaid principal amount of all Revolving Loans then outstanding and
(B) the aggregate principal amount of all Revolving Loans not yet made as to
which a Notice of Borrowing has been given by the Administrative Borrower under
Section 2.03. Each such reduction shall be in an amount which is an integral
multiple of $1,000,000 (unless the Total Revolving Credit Commitment in effect
immediately prior to such reduction is less than $1,000,000) and shall be made
by providing not less than three (3) Business Days' prior written notice to the
Agent and shall be irrevocable. Once reduced the Total Revolving Credit
Commitment may not be increased. Each such reduction (other than reductions
pursuant to paragraph (c) of this Section 2.10) of the Total Revolving Credit
Commitment shall reduce the Revolving Credit Commitment of each Lender
proportionately in accordance with its Pro Rata Share thereof.
(b) Optional Prepayment. The Borrowers may prepay
without penalty or premium the principal of any Revolving Loan, in whole or in
part and together with accrued and unpaid interest thereon.
(c) Mandatory Prepayment.
(i) Monthly Payment. By each Remittance Date
(other than the April 2001 Remittance Date), the Borrowers shall prepay the
outstanding principal of the Revolving Loans, together with accrued and unpaid
interest thereon, in an amount equal to the
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Borrowers' month-end book cash balance for the previous month (excluding
amounts, if any, then on deposit in the Blocked Accounts described in this
Section 2.10(c)(i) and in Sections 2.09(b)(iii) and 2.10(c)(iii)) in excess of
$10,000,000 (the "Revolving Loan Monthly Payment Amount"); provided, that, if
the Revolving Loan Monthly Payment Amount is greater than the aggregate
principal amount of Revolving Loans then outstanding, then the Borrowers shall
deposit the remainder of the Revolving Loan Monthly Payment Amount after
prepayment in full of the then outstanding Revolving Loans) into a Blocked
Account. So long as no Default or Event of Default shall have occurred and be
continuing, the Borrowers may from time to time withdraw funds from such Blocked
Account for purposes for which Revolving Loans may be borrowed hereunder,
subject to the borrowing procedures set forth in the applicable blocked account
agreement.
(ii) Dispositions. After the Term Loans have
been paid in full, immediately upon any Disposition by any Loan Party resulting
in Net Cash Proceeds greater than or equal to $1,000,000 and within five (5)
Business Days after any Disposition by any Loan Party resulting in Net Cash
Proceeds less than $1,000,000, the Borrowers shall prepay the outstanding
principal of the Revolving Loans, together with accrued and unpaid interest
thereon, in an amount equal to 50% or, if a Default or Event of Default has
occurred and is continuing, 100%, of the Net Cash Proceeds received by such Loan
Party in connection with such Disposition.
(iii) Casualty and Condemnation. After the
Term Loans have been paid in full, upon the loss, destruction or taking by
condemnation of any Collateral, the Borrowers shall prepay the outstanding
principal of the Revolving Loans, together with accrued and unpaid interest
thereon, in an amount equal to 100% of the proceeds received by any Loan Party
in connection therewith, net of any reasonable expenses incurred in collecting
such net proceeds; provided that (x) except during the continuance of a Default
or an Event of Default, (A) proceeds from insurance covering loss or destruction
or from any taking of any Collateral not in excess of $1,000,000 for any one
occurrence shall not be required to be so prepaid on such date to the extent
such insurance proceeds are used to replace or restore the properties or assets
in respect of which such proceeds were paid and (B) proceeds from insurance
covering loss or destruction or from any taking of any Collateral in excess of
$1,000,000 for any one occurrence shall not be required to be so prepaid on such
date to the extent that such insurance proceeds are deposited into a Blocked
Account and used to replace or restore the properties or assets in respect of
which such proceeds were paid, and if, in each case, the Administrative Borrower
delivers a certificate to the Agent on or prior to such date stating that such
proceeds shall be used to replace or restore any such properties or assets
within a period specified in such certificate not to exceed 180 days after the
date of receipt of such proceeds (which certificate shall set forth estimates of
the proceeds to be so expended) and (y) if all or any portion of such proceeds
not so applied to the repayment of the Revolving Loans are not so used within
the period specified in the relevant certificate furnished pursuant to clause
(x) above, such remaining portion shall be prepaid on the last day of such
specified period.
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(iv) In the event that the aggregate
principal amount of Revolving Loans outstanding at any time exceeds the
Revolving Credit Borrowing Base, the Borrowers shall prepay the outstanding
principal of the Revolving Loans in an amount equal to such excess plus accrued
and unpaid interest thereon.
(v) Third-Party Finova Take-out. Immediately
upon the repayment of all or a portion of the Finova Loans with the proceeds of
Indebtedness or other financing from any source other than the Tranche B Term
Loans, the Total Revolving Credit Commitment shall permanently reduce to zero
and the Borrowers shall prepay the outstanding balance of the Revolving Credit
Loans (including all principal and all accrued and unpaid interest and fees and
expenses) in full. For purposes of this paragraph, use of proceeds of assets
that constitute collateral for Finova Loans shall not be deemed a financing.
(d) Cumulative Prepayments. Except as otherwise
expressly provided in this Section 2.10, payments with respect to any subsection
of this Section 2.10 are in addition to payments made or required to be made
under any other subsection of this Section 2.10.
SECTION 2.11 Fees.
(a) Facility Fee. On the Final Facility Effective
Date, the Borrowers shall pay to the Agent for the account of the Lenders, in
accordance with a written agreement among such Lenders, a non-refundable
facility fee (the "Facility Fee") equal to $2,600,000.
(b) Unused Line Fee. From and after the Final
Facility Effective Date and until the Final Maturity Date, the Borrowers shall
pay to the Agent for the account of the Lenders in accordance with their Pro
Rata Shares an unused line fee (the "Unused Line Fee"), which shall accrue at
the rate per annum of 0.5% on the excess, if any, of the Revolving Credit
Borrowing Base over the average daily principal amount of Revolving Loans
outstanding from time to time and shall be payable monthly in arrears on each
Remittance Date (other than the April 2001 Remittance Date).
(c) Finova Take-out Fee. On the Finova Loan Take-out
Date, the Borrowers shall pay to the Agent for the account of the Lenders an
additional fee as agreed between the Borrowers and the Agent. In the event that
the Finova Loans are repaid in whole or in part with funds from any source other
than the Tranche B Term Loans, then the Borrowers shall prepay the Loans in
accordance with Section 2.09(b)(iv) and Section 2.10(c)(v) of this Agreement and
shall pay to the Agent for the account of the Lenders an early termination fee
(the "Early Termination Fee") equal to 3% of the amount outstanding under the
Finova Loans prior to their repayment, including accrued and unpaid interest
thereon. If the Borrowers pay the Loans in full and repay the Finova Loans
within 120 days of repayment of the Loans, the Borrowers shall pay to the Agent
for the account of the Lenders the Early Termination Fee. This provision shall
survive repayment of the Loans and termination of this Agreement. For purposes
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of this subsection, use of proceeds of assets that constitute collateral for
Finova Loans shall not be deemed a use of funds borrowed from another source.
For purposes of clarification, it is understood that any repayment or other
treatment of the Finova Loans pursuant to the consummation of a plan of
reorganization in the Chapter 11 Cases shall not be deemed a use of funds from
another source.
(d) Additional Fees.
(i) If the Borrowers have failed to formally
present to the Creditors Committee by December 31, 2001 a draft plan of
reorganization, including a business plan, financial projections and a
liquidation analysis (a "Draft Plan of Reorganization"), then at the Final
Maturity Date the Borrowers shall pay to the Agent for the account of the
Lenders a fee equal to the product of (x) $750,000 and (y) the number of months
(including any partial months), measured on a calendar basis, from January 1,
2002 until the earlier of (A) the date on which the Borrowers formally present a
Draft Plan of Reorganization and (B) the Final Maturity Date.
(ii) If the Borrowers have failed to file
with the Bankruptcy Court by March 31, 2002 a Comprehensive Plan of
Reorganization, then at the Final Maturity Date the Borrowers shall pay to the
Agent for the account of the Lenders a fee equal to the product of (x) $750,000
and (y) the number of months (including any partial months), measured on a
calendar basis, from April 1, 2002 until the earlier of (A) the date on which
the Borrowers file a Comprehensive Plan of Reorganization and (B) the Final
Maturity Date.
Notwithstanding the foregoing, the maximum fee payable by the Borrowers pursuant
to this Section 2.11(d) shall not exceed $750,000 for any one month.
SECTION 2.12 Securitization. The Borrowers hereby acknowledge that the
Lenders and any of their Affiliates may, sell or securitize the Loans (a
"Securitization") through the pledge of the Loans as collateral security for
loans to the Lenders or their Affiliates or through the sale of the Loans or the
issuance of direct or indirect interests in the Loans, which loans to the
Lenders or their Affiliates or direct or indirect interests will be rated by
▇▇▇▇▇'▇, Standard & Poor's or one or more other rating agencies (the "Rating
Agencies"). The Borrowers shall cooperate with the Lenders and their Affiliates
to effect the Securitization including, without limitation, by (a) amending this
Agreement and the other Loan Documents, and executing such additional documents
(which, if required by the terms of the Final Bankruptcy Court Order, shall be
approved by the Bankruptcy Court), as reasonably requested by the Lenders in
connection with the Securitization, provided that (i) any such amendment or
additional documentation does not impose material additional costs on the
Borrowers; and (ii) any such amendment or additional documentation does not
materially adversely affect the rights, or materially increase the obligations,
of the Borrowers under the Loan Documents or change or affect in a manner
adverse to the Borrowers the financial terms of the Loans,
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(b) providing such information as may be reasonably requested by the Lenders in
connection with the rating of the Loans or the Securitization, and (c) providing
in connection with any rating of the Loans a certificate (i) agreeing to
indemnify the Lenders and any of their Affiliates, any of the Rating Agencies,
or any party providing credit support or otherwise participating in the
Securitization (collectively, the "Securitization Parties") for any losses,
claims, damages or liabilities (the "Liabilities") to which the Lenders, their
Affiliates or such Securitization Parties may become subject insofar as the
Liabilities arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in any Loan Document or in any
writing delivered by or on behalf of any Loan Party to the Lenders in connection
with any Loan Document or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein, or
necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading and such indemnity shall survive any
transfer by the Lenders or their successors or assigns of the Loans and (ii)
agreeing to reimburse the Lenders and any of their Affiliates for any legal or
other expenses reasonably incurred by such Persons in connection with defending
the Liabilities.
SECTION 2.13 Taxes.
(a) All payments made by the Borrowers hereunder,
under the Notes or under any other Loan Document shall be made without set-off,
counterclaim, deduction or other defense. All such payments shall be made free
and clear of and without deduction for any present or future income, franchise,
sales, use, excise, stamp or other taxes, levies, imposts, deductions, charges,
fees, withholdings, restrictions or conditions of any nature now or hereafter
imposed, levied, collected, withheld or assessed by any jurisdiction (whether
pursuant to United States Federal, state, local or foreign law) or by any
political subdivision or taxing authority thereof or therein, and all interest,
penalties or similar liabilities, excluding net income taxes and franchise taxes
(imposed in lieu of net income taxes) of, and branch profit taxes of, the Agent
or any Lender imposed by the jurisdiction in which the Agent or such Lender is
organized or any political subdivision thereof or taxing authority thereof or
any jurisdiction in which such Person's principal office or relevant lending
office is located or any political subdivision thereof or taxing authority
thereof (such nonexcluded taxes being hereinafter collectively referred to as
"Non-Excluded Taxes"). If the Borrowers shall be required by law to deduct or to
withhold any Non-Excluded Taxes from or in respect of any amount payable
hereunder,
(i) the amount so payable shall be increased
to the extent necessary so that after making all required deductions and
withholdings (including Non-Excluded Taxes on amounts payable to the Lenders
pursuant to this sentence) the Lenders receive an amount equal to the sum they
would have received had no such deductions or withholdings been made,
(ii) the Borrowers shall make such
deductions or withholdings, and
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(iii) the Borrowers shall pay the full
amount deducted or withheld to the relevant taxing authority in accordance with
applicable law. Whenever any Non-Excluded Taxes are payable by the Borrowers, as
promptly as possible thereafter, the Administrative Borrower shall send the
Lenders and the Agent an official receipt (or, if an official receipt is not
available, such other documentation as shall be satisfactory to the Lenders or
the Agent, as the case may be) showing payment. In addition, the Borrowers agree
to pay any present or future taxes, charges or similar levies which arise from
any payment made hereunder or from the execution, delivery, performance,
recordation or filing of, or otherwise with respect to, this Agreement, the
Notes or any other Loan Document other than the foregoing excluded taxes
(hereinafter referred to as "Other Taxes").
(b) If the Borrowers fail to pay any Non-Excluded
Taxes or Other Taxes, the Borrowers will indemnify the Lenders for the amount of
Non-Excluded Taxes or Other Taxes (including, without limitation, any
Non-Excluded Taxes or Other Taxes imposed by any jurisdiction on amounts payable
under this Section 2.13) paid by any Lender and any liability (including
penalties, interest and expenses for nonpayment, late payment or otherwise)
arising therefrom or with respect thereto, whether or not such Non-Excluded
Taxes or Other Taxes were correctly or legally asserted. This indemnification
shall be paid within 30 days from the date on which such Lender makes written
demand which demand shall identify the nature and amount of Non-Excluded Taxes
or Other Taxes for which indemnification is being sought and the basis of the
claim.
(c) Each Lender that is organized in a jurisdiction
other than the United States, a State thereof or the District of Columbia hereby
agrees that:
(i) it shall, no later than the Final
Facility Effective Date (or, in the case of a Lender which becomes a party
hereto pursuant to Section 10.08 hereof after the Final Facility Effective Date,
the date upon which such Lender becomes a party hereto), deliver to the
Administrative Borrower and the Agent two accurate, complete and signed
originals of U.S. Internal Revenue Service Form W-8ECI or Form W-8BEN or other
applicable or successor form indicating that such Lender is on the date of
delivery thereof entitled to receive payments of principal, interest and fees
for the account of its lending office under this Agreement free from withholding
of United States Federal income tax;
(ii) it shall deliver to the Administrative
Borrower and the Agent two further properly completed and duly executed copies
of such Form W-8 ECI or Form W-8 BEN or any successor or applicable form on or
before the date that any such Form W-8 ECI or Form W-8 BEN expires or becomes
obsolete or invalid and after the occurrence of any event (including, without
limitation, a change in a lending office or an addition of a lending office by a
Lender) requiring a change in the most recent form previously delivered by it to
the Administrative Borrower and the Agent or upon the reasonable request of the
Administrative Borrower or the Agent;
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(iii) it shall, promptly upon the
Administrative Borrower's reasonable request to that effect, deliver to the
Administrative Borrower such other forms or similar documentation as may be
required from time to time by any applicable law, treaty, rule or regulation in
order to establish such Lender's tax status for withholding purposes; and
(iv) it shall obtain such extensions of time
for filing and completing such forms or certifications as may be reasonably
requested by the Administrative Borrower.
(d) If a Lender shall become aware that it is
entitled to claim a refund from a taxing authority in respect of Non-Excluded
Taxes or Other Taxes as to which it has been indemnified by the Borrowers, or
with respect to which the Borrowers have paid increased amounts pursuant to this
Section 2.13, it shall promptly notify the Administrative Borrower of the
availability of such refund claim and shall make the appropriate claim to such
taxing authority for such refund. If a Lender receives a refund (including
pursuant to a claim for refund made pursuant to the preceding sentence) in
respect of any Non-Excluded or Other Tax as to which it has been indemnified by
the Borrowers, or with respect to which the Borrowers have paid increased
amounts pursuant to this Section 2.13, it shall within 30 days from the date of
such receipt pay over such refund (but only to the extent of indemnity payments
made or additional amounts paid by the Borrowers pursuant to this Section 2.13)
to the Borrowers, net of all out-of-pocket expenses of such Lender; provided,
that, the Borrowers, upon the request of such Lender, agree to repay the amount
paid over to the Borrowers (plus any penalties, interest or other charges
imposed by the relevant Governmental Authority) to such Lender in the event that
such Lender is required to repay such refund to such Governmental Authority.
(e) If the Borrowers fail to perform their
obligations under this Section 2.13, the Borrowers shall indemnify the Lenders
for any taxes, interest or penalties that may become payable as a result of any
such failure.
SECTION 2.14 Exit Financing. If the Borrowers propose to
effect secured inventory or receivables financing in connection with the
consummation of a plan of reorganization in the Chapter 11 Cases (an "Exit
Financing"), and if the Agent provides a commitment (an "Exit Commitment") to
provide such proposed financing in an amount equal to at least $100,000,000 on
terms that are at least as favorable to the Borrowers as the terms of this
Agreement and the other Loan Documents, then the Agent shall have the right
within a reasonable period of time to match the terms and amount, but not to
exceed the amount of the Exit Commitment, of any Exit Financing proposed by
another financing source and, in such event, the Borrowers shall accept, subject
to the approval of the Bankruptcy Court, the financing so proposed by the Agent.
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ARTICLE III.
SECURITY AND ADMINISTRATIVE PRIORITY
SECTION 3.01 Collateral; Grant of Lien and Security Interest.
(a) Pursuant to and as provided in the Final
Bankruptcy Court Order, as security for the full and timely payment and
performance of all of the Obligations, each Borrower hereby as of the Final
Facility Effective Date assigns, pledges, transfers and grants to the Agent, for
the benefit of the Agent and the Lenders, a security interest in and to and Lien
on all of the Property, assets or interests in Property or assets of such
Borrower, of any kind or nature whatsoever, real or personal, now existing or
hereafter acquired or created (including, without limitation, all Property of
the estate (within the meaning of the Bankruptcy Code) all mortgage notes,
accounts, inventory, Time Share Interests, servicing rights, contract rights,
instruments, documents, chattel paper, general intangibles, machinery and
equipment, real property and investment property, and all causes of action
arising under the Bankruptcy Code or otherwise (other than under Sections 542,
544, 545, 547, 548, 550, 551, 553(b) or 724(a) of the Bankruptcy Code)), and all
proceeds, rents, products and profits of any of the foregoing other than
property, if any, described on Schedule 3.01(a) (all Property of the Borrowers
subject to the security interest referred to in this Section 3.01(a) being
hereafter referred to as the "Collateral").
(b) Upon entry of the Final Bankruptcy Court Order
and pursuant to its terms, the Liens and security interests in favor of the
Agent referred to in Section 3.01(a) hereof shall be valid, binding, enforceable
and perfected Liens and security interests in the Collateral, prior to all other
Liens and security interests in the Collateral except for Permitted Liens (to
the extent that such Permitted Liens are accorded priority as a matter of law or
pursuant to agreement). Such Liens and security interests and their priority
shall remain in effect until the Term Loan Commitments and the Revolving Credit
Commitments have been terminated and all Obligations have been repaid in cash in
full.
(c) Notwithstanding anything herein to the contrary
(i) all proceeds received by the Agent and the Lenders from the Collateral
subject to the Liens granted in this Section 3.01 and in each other Loan
Document and by the Final Bankruptcy Court Order shall be subject to the prior
payment of the Carve-Out Expenses having priority over the Obligations to the
extent set forth in the definition of Agreed Administrative Expense Priorities,
(ii) no Person entitled to Carve-Out Expenses shall be entitled, as a result of
being entitled to such Carve-Out Expenses, to sell or otherwise dispose, or seek
or object to the sale or other disposition, of any Collateral, and (iii) the
administrative expense claim status of the Obligations granted in the Final
Bankruptcy Court Order and described in Section 3.02 of this Agreement shall not
apply to any causes of action arising under Sections 542, 544, 545, 547, 548,
550, 551, 553(b) or 724(a) of the Bankruptcy Code.
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SECTION 3.02 Administrative Priority. Pursuant to Section 364(c)(1) of
the Bankruptcy Code and as provided for in the Final Bankruptcy Court Order,
each of the Borrowers agrees that the Obligations of the Borrowers shall
constitute allowed administrative expenses in the Chapter 11 Cases having
priority over all administrative expenses of and unsecured claims against the
Borrowers now existing or hereafter arising, of any kind or nature whatsoever,
including without limitation all administrative expenses of the kind specified
in Sections 503(b) and 507(b) of the Bankruptcy Code, subject, as to priority,
only to Carve-Out Expenses having priority over the Obligations to the extent
set forth in the definition of Agreed Administrative Expense Priorities, but
excluding any causes of action arising under Sections 542, 544, 545, 547, 548,
550, 551, 553(b) or 724(a) of the Bankruptcy Code.
SECTION 3.03 Grants, Rights and Remedies. The Liens and security
interests granted pursuant to Section 3.01(a) hereof and administrative priority
granted pursuant to Section 3.02 hereof are independently granted by the Loan
Documents and by other Loan Documents hereafter entered into. This Agreement,
the Final Bankruptcy Court Order and such other Loan Documents supplement each
other, and the grants, priorities, rights and remedies of the Agent and the
Lenders hereunder and thereunder are cumulative.
SECTION 3.04 No Filings Required. The Liens and security interests
referred to herein shall be deemed valid and perfected by entry of the Final
Bankruptcy Court Order, and entry of the Final Bankruptcy Court Order shall have
occurred on or before the date of the initial Loans hereunder. The Agent shall
not be required to file any financing statements, Mortgages, notices of Lien or
similar instruments in any jurisdiction or filing office or to take any other
action in order to validate or perfect the Lien and security interest granted by
or pursuant to this Agreement, the Final Bankruptcy Order or any other Loan
Document.
SECTION 3.05 Survival. The Liens, lien priority, administrative
priorities and other rights and remedies granted to the Agent and the Lenders
pursuant to this Agreement, the Final Bankruptcy Court Order and the other Loan
Documents (specifically including, but not limited to, the existence, perfection
and priority of the Liens and security interests provided herein and therein,
and the administrative priority provided herein and therein) shall not be
modified, altered or impaired in any manner by any other financing or extension
of credit or incurrence of debt by any Borrower (pursuant to Section 364 of the
Bankruptcy Code or otherwise), or by any dismissal or conversion of any of the
Chapter 11 Cases, or by any other act or omission whatever. Without limitation,
notwithstanding any such order, financing, extension, incurrence, dismissal,
conversion, act or omission:
(a) except for the Carve-Out Expenses having priority
over the Obligations to the extent set forth in the definition of Agreed
Administrative Expense Priorities, no costs or expenses of administration which
have been or may be incurred in the Chapter 11 Cases or any conversion of the
same or in any other proceedings related thereto, and no priority
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claims, are or will be prior to or on a parity with any claim of any Lender
against the Borrowers in respect of any Obligation,
(b) the Liens in favor of the Agent and the Lenders
set forth in Section 3.01(a) hereof shall constitute valid and perfected Liens
and security interests, subject only to Permitted Liens (to the extent that such
Permitted Liens are accorded priority as a matter of law or pursuant to
agreement), and shall be prior to all other Liens and security interests, now
existing or hereafter arising, in favor of any other creditor or any other
Person whatever, and
(c) the Liens in favor of the Agent and the Lenders
set forth herein and in the Loan Documents shall continue to be valid and
perfected without the necessity that the Agent file financing statements,
Mortgages or otherwise perfect its Lien under applicable nonbankruptcy law.
ARTICLE IV.
PAYMENTS AND OTHER COMPENSATION
SECTION 4.01 Payments; Computations and Statements.
(a) The Borrowers will make each payment under the
Notes not later than 12:00 noon (New York City time) on the day when due, in
lawful money of the United States of America and in immediately available funds,
to the Agent at the Payment Office. All payments received by the Agent after
12:00 noon (New York City time) on any Business Day will be credited to the Loan
Account on the next succeeding Business Day. All payments shall be made by the
Borrowers without defense, set-off or counterclaim to the Agent and the Lenders.
Except as provided in Section 2.03, after receipt, the Agent will promptly
thereafter cause to be distributed like funds relating to the payment of
principal ratably to the Lenders in accordance with their Pro Rata Shares and
like funds relating to the payment of any other amount payable to any Lender to
such Lender, in each case to be applied in accordance with the terms of this
Agreement, provided that the Agent will cause to be distributed all interest and
fees received from or for the account of the Borrowers not less than once each
month and in any event promptly after receipt thereof. The Lenders and the
Borrowers hereby authorize the Agent to, and the Agent may, from time to time
charge the Loan Account of the Borrowers with any amount due and payable by the
Borrowers under any Loan Document. Each of the Lenders and the Borrowers agree
that the Agent shall have the right to make such charges whether or not any
Event of Default or Default shall have occurred and be continuing or whether any
of the conditions precedent in Section 5.02 have been satisfied. Any amount
charged to the Loan Account of the Borrowers shall be deemed a Revolving Loan
hereunder made by the Lenders to the Borrowers, funded by the Agent on behalf of
the Lenders and subject to Section 2.03 of this Agreement. The Lenders and the
Borrowers confirm that any charges which the Agent may so make to the Loan
Account of the Borrowers as herein provided will be made as an
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accommodation to the Borrowers and solely at the Agent's discretion, provided
that the Agent shall from time to time, charge the Loan Account of the Borrowers
with any amount due and payable under any Loan Document. Whenever any payment to
be made under any such Loan Document shall be stated to be due on a day other
than a Business Day, such payment shall be made on the next succeeding Business
Day and such extension of time shall in such case be included in the computation
of interest or fees, as the case may be. All computations of fees shall be made
by the Agent on the basis of a year of 360 days for the actual number of days
(including the first day but excluding the last day) occurring in the period for
which such fees are payable. Each determination by the Agent of an interest rate
or fees hereunder shall be conclusive and binding for all purposes in the
absence of manifest error.
(b) The Agent shall provide the Administrative
Borrower, promptly after the end of each calendar month, a summary statement (in
the form from time to time used by the Agent) of the opening and closing daily
balances in the Loan Account of the Borrowers during such month, the amounts and
dates on all Loans made to the Borrowers during such month, the amounts and
dates of all payments on account of the Loans to the Borrowers during such month
and the Loans to which such payments were applied, the amount of interest
accrued on the Loans to the Borrowers during such month, and the amount and
nature of any charges to such Loan Account made during such month on account of
fees, commissions, expenses and other Obligations. All entries on any such
statement shall, unless objected to by the Administrative Borrower within 30
days after the same is sent, be presumed to be correct and shall be final and
conclusive absent manifest error.
SECTION 4.02 Sharing of Payments, Etc. Except as provided in
Section 2.03 hereof, if any Lender shall obtain any payment (whether voluntary,
involuntary, through the exercise of any right of set-off, or otherwise) on
account of any Obligation in excess of its ratable share of payments on account
of similar obligations obtained by all the Lenders, such Lender shall forthwith
purchase from the other Lenders such participations in such similar obligations
held by them as shall be necessary to cause such purchasing Lender to share the
excess payment ratably with each of them; provided, however, that if all or any
portion of such excess payment is thereafter recovered from such purchasing
Lender, such purchase from each Lender shall be rescinded and such Lender shall
repay to the purchasing Lender the purchase price to the extent of such recovery
together with an amount equal to such Lender's ratable share (according to the
proportion of (i) the amount of such Lender's required repayment to (ii) the
total amount so recovered from the purchasing Lender of any interest or other
amount paid by the purchasing Lender in respect of the total amount so
recovered). The Borrowers agree that any Lender so purchasing a participation
from another Lender pursuant to this Section 4.02 may, to the fullest extent
permitted by law, exercise all its rights (including the Lender's right of
set-off) with respect to such participation as fully as if such Lender were the
direct creditor of the Borrowers in the amount of such participation.
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SECTION 4.03 Apportionment of Payments.
(a) Subject to Section 2.03 hereof and to any written
agreement among the Agent and the Lenders, all payments of principal and
interest in respect of outstanding Loans, all payments of fees (other than the
fees set forth in Sections 2.11 hereof to the extent set forth in a written
agreement among the Agent and the Lenders) and all other payments in respect of
any other Obligations, shall be allocated by the Agent among such of the Lenders
as are entitled thereto, in proportion to their respective Pro Rata Shares or
otherwise as provided herein or, in respect of payments not made on account of
Loans as designated by the Person making payment when the payment is made.
(b) After the occurrence and during the continuance
of an Event of Default, the Agent may, and upon the direction of the Required
Lenders shall, apply all payments in respect of any Obligations and all proceeds
of the Collateral, subject to the provisions of this Agreement (i) first, to pay
the Obligations in respect of any fees, expense reimbursements, indemnities and
other amounts then due to the Agent until paid in full; (ii) second, to pay the
Obligations in respect of any fees and indemnities then due to the Lenders until
paid in full; (iii) third, ratably to pay interest due in respect of the Loans
and Agent Advances until paid in full; (iv) fourth, ratably to pay principal of
the Loans and Agent Advances until paid in full; and (v) fifth, to the ratable
payment of all other Obligations then due and payable
SECTION 4.04 Increased Costs and Reduced Return.
(a) If any Lender shall have determined that the
adoption or implementation of, or any change in, any law, rule, treaty or
regulation, or any policy, guideline or directive of, or any change in the
interpretation or administration thereof by, any court, central bank or other
administrative or Governmental Authority, or compliance by any Lender or any
Person controlling any such Lender with any directive of or guideline from any
central bank or other Governmental Authority or the introduction of or change in
any accounting principles applicable to any Lender or any Person controlling any
such Lender (in each case, whether or not having the force of law), shall (i)
change the basis of taxation of payments to any Lender or any Person controlling
any such Lender of any amounts payable hereunder (except for taxes on the
overall net income of any Lender or any Person controlling any such Lender),
(ii) impose, modify or deem applicable any reserve, special deposit or similar
requirement against any Loan or against assets of or held by, or deposits with
or for the account of, or credit extended by any Lender, or any Person
controlling any such Lender or (iii) impose on any Lender or any Person
controlling any such Lender or any other condition regarding this Agreement or
any Loan, and the result of any event referred to in clauses (i), (ii) or (iii)
above shall be to increase the cost to any Lender of making any Loan, agreeing
to make any Loan or to reduce any amount received or receivable by any Lender
hereunder, then, upon demand by such Lender, the Borrowers shall pay to such
Lender such additional amounts as will compensate such Lender for such increased
costs or reductions in amount.
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(b) If any Lender shall have determined that any
Capital Guideline or adoption or implementation of, or any change in, any
Capital Guideline by the Governmental Authority charged with the interpretation
or administration thereof, or compliance by any Lender or any Person controlling
any Lender with any Capital Guideline or with any request or directive of any
such Governmental Authority with respect to any Capital Guideline, or the
implementation of, or any change in, any applicable accounting principles (in
each case, whether or not having the force of law), either (i) affects or would
affect the amount of capital required or expected to be maintained by any Lender
or any Person controlling any Lender, and any Lender determines that the amount
of such capital is increased as a direct or indirect consequence of any Loans
made or maintained, or any Lender's or any such other controlling Person's other
obligations hereunder, or (ii) has or would have the effect of reducing the rate
of return on any Lender's or any such other controlling Person's capital to a
level below that which such Lender or such controlling Person could have
achieved but for such circumstances as a consequence of any Loans made or
maintained, or any agreement to make Loans, or such Lender's or such other
controlling Person's other obligations hereunder (in each case, taking into
consideration, such Lender's or such other controlling Person's policies with
respect to capital adequacy), then, upon demand by any Lender, the Borrowers
shall pay to such Lender from time to time such additional amounts as will
compensate such Lender for such cost of maintaining such increased capital or
such reduction in the rate of return on such Lender's or such other controlling
Person's capital.
(c) All amounts payable under this Section 4.04 shall
bear interest from the date that is ten days after the date of demand by a
Lender until payment in full to such Lender at the Reference Rate. A certificate
of any Lender claiming compensation under this Section 4.04 specifying the event
herein above described and the nature of such event shall be submitted by such
Lender to the Administrative Borrower, setting forth the additional amount due
and an explanation of the calculation thereof and such Lender's reasons for
invoking the provisions of this Section 4.04, and shall be final and conclusive
absent manifest error.
(d) If any of the events requiring payments of
additional amounts by the Borrowers under this Section 4.04 occurs and the
applicable Lender shall have made a demand for such payment hereunder, the
applicable Lender shall take such steps as may be reasonable (consistent with
its internal policy and legal and regulatory restrictions) to (i) change the
jurisdiction of its funding office if such change would avoid the Borrowers
being required to pay any additional amount or (ii) otherwise mitigate the
effects of any law or regulation or any change therein or interpretation thereof
as set forth in this Section 4.04 above.
SECTION 4.05 Joint and Several Liability of the Borrowers.
(a) Notwithstanding anything in this Agreement or any
other Loan Document to the contrary, each of the Borrowers hereby accepts joint
and several liability hereunder and under the other Loan Documents in
consideration of the financial
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accommodations to be provided by the Agent and the Lenders under this Agreement
and the other Loan Documents, for the mutual benefit, directly and indirectly,
of each of the Borrowers and in consideration of the undertakings of the other
Borrower to accept joint and several liability for the Obligations. Each of the
Borrowers, jointly and severally, hereby irrevocably and unconditionally
accepts, not merely as a surety but also as a co-debtor, joint and several
liability with the other Borrowers, with respect to the payment and performance
of all of the Obligations (including, without limitation, any Obligations
arising under this Section 4.05), it being the intention of the parties hereto
that all the Obligations shall be the joint and several obligations of each of
the Borrowers without preferences or distinction among them. If and to the
extent that any of the Borrowers shall fail to make any payment with respect to
any of the Obligations as and when due or to perform any of the Obligations in
accordance with the terms thereof, then in each such event the other Borrowers
will make such payment with respect to, or perform, such Obligation. Subject to
the terms and conditions hereof, the Obligations of each of the Borrowers under
the provisions of this Section 4.05 constitute the absolute and unconditional,
full recourse Obligations of each of the Borrowers enforceable against each such
Person to the full extent of its properties and assets, irrespective of the
validity, regularity or enforceability of this Agreement, the other Loan
Documents or any other circumstances whatsoever.
(b) The provisions of this Section 4.05 are made for
the benefit of the Agent, the Lenders and their successors and assigns, and may
be enforced by them from time to time against any or all of the Borrowers as
often as occasion therefor may arise and without requirement on the part of the
Agent, the Lenders or such successors or assigns first to marshal any of its or
their claims or to exercise any of its or their rights against any of the other
Borrowers or to exhaust any remedies available to it or them against any of the
other Borrowers or to resort to any other source or means of obtaining payment
of any of the Obligations hereunder or to elect any other remedy. The provisions
of this Section 4.05 shall remain in effect until all of the Obligations shall
have been paid in full or otherwise fully satisfied.
(c) Each of the Borrowers hereby agrees that it will
not enforce any of its rights of contribution or subrogation against the other
Borrowers with respect to any liability incurred by it hereunder or under any of
the other Loan Documents, any payments made by it to the Agent or the Lenders
with respect to any of the Obligations or any Collateral until such time as all
of the Obligations have been paid in full in cash. Any claim which any Borrower
may have against any other Borrower with respect to any payments to the Agent or
the Lenders hereunder or under any other Loan Documents are hereby expressly
made subordinate and junior in right of payment, without limitation as to any
increases in the Obligations arising hereunder or thereunder, to the prior
payment in full in cash of the Obligations.
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ARTICLE V.
CONDITIONS TO LOANS
SECTION 5.01 Conditions Precedent to Final Facility
Effectiveness. This Agreement shall become effective as of the Business Day (the
"Final Facility Effective Date") when each of the following conditions precedent
shall have been satisfied in a manner satisfactory to the Agent:
(a) Final Bankruptcy Order. The Final Bankruptcy
Court Order shall have been entered by the Bankruptcy Court and the Agent shall
have received a court stamped copy of such order, and such order shall be in
full force and effect and shall not have been reversed, stayed, modified or
amended absent prior written consent of the Agent and the Borrowers.
(b) Payment of Fees, Etc. The Borrowers shall have
paid all fees, costs, expenses and taxes then payable pursuant to this
Agreement, including, without limitation, Sections 2.11 and 10.04.
(c) Representations and Warranties; No Event of
Default. The following statements shall be true and correct: (i) the
representations and warranties contained in Article VI and in each other Loan
Document, certificate or other writing delivered to the Agent, or the Lenders
pursuant hereto or thereto on or prior to the Final Facility Effective Date are
true and correct on and as of the Final Facility Effective Date as though made
on and as of such date and (ii) no Default or Event of Default shall have
occurred and be continuing on the Final Facility Effective Date or would result
from this Agreement or the other Loan Documents becoming effective in accordance
with its or their respective terms.
(d) Legality. The making of the initial Loans shall
not contravene any law, rule or regulation applicable to the Agent or the
Lenders.
(e) Delivery of Documents. The Agent shall have
received on or before the Final Facility Effective Date the following, each in
form and substance satisfactory to the Agent and, unless indicated otherwise,
dated the Final Facility Effective Date:
(i) a certificate of an Authorized Officer
of each Loan Party, certifying as to the matters set forth in subsections (c)
and (m) of this Section 5.01;
(ii) a certificate of an Authorized Officer
of each Loan Party, certifying as to the charter and by-laws, limited liability
company agreement, operating agreement, agreement of limited partnership or
other organizational document of any Loan Party delivered to the Agent on the
Final Facility Effective Date, and that each such organizational document
remains in full force and effect on the Final Facility Effective Date;
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(iii) a copy of the joint resolutions of the
Loan Parties, certified as of the Final Facility Effective Date by an Authorized
Officer of the Parent, authorizing (A) the borrowings hereunder and the
transactions contemplated by the Loan Documents to which each Loan Party is or
will be a party, and (B) the execution, delivery and performance by each Loan
Party of each Loan Document to which such Loan Party is or will be a party and
the execution and delivery of the other documents to be delivered by such Person
in connection herewith and therewith; and
(iv) opinions of counsel to the Loan
Parties, in form and substance reasonably satisfactory to the Agent.
(f) Material Adverse Effect. The Agent shall have
determined, in its sole judgment, that no change having a Material Adverse
Effect shall have occurred since March 31, 2000.
(g) Valuation/Appraisal. The Agent shall have
received valuation/appraisals with respect to certain inventory collateral from
such third party appraisal firm or firms as selected by the Agent, and such
valuation/appraisal and the results thereof shall be acceptable to the Agent, in
its sole and absolute discretion.
(h) Cash Management System. The cash management
system of the Parent and its Subsidiaries shall be satisfactory to the Agent.
(i) Budget. The Agent shall have received the Budget.
(j) Payment and Termination of Existing Financing
Agreement. The Agent shall have received evidence satisfactory to it that the
Existing Financing Agreement has been terminated and paid in full and that the
Liens granted in connection with the Existing Financing Agreement have been
released.
(k) Security Documents. The Agent shall have received
from each applicable Loan Party such Guaranties, Security Agreements, Pledge
Agreements, financing statements and other security documents (including any
necessary consents to assignment of partnership interests) as the Agent may
request, the Custodial Bi-Party Agreement and that certain additional letter
regarding the data and the Custodial Agreement.
(l) After giving effect to the making of the Loans on
the Final Facility Effective Date, the Collateral Coverage Ratio, calculated
using the February 28, 2001 financial information, shall be equal to or greater
than the Required Collateral Coverage Ratio as in effect on the Final Facility
Effective Date.
(m) Title/UCC Searches. The Agent shall have received
such title searches and UCC searches confirming that there are no Liens (other
than the Liens that are
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being terminated pursuant to Section 5.01(k) and Permitted Liens, except those
referred to in clauses (a) and (k) of the definition of such term) on the "first
priority" Existing Financing Agreement Assets to the extent necessary to confirm
that, as of the Final Facility Effective Date, the Collateral Coverage Ratio is
equal to or greater than the Required Collateral Coverage Ratio, and such
searches shall be acceptable to the Agent, in its sole and absolute discretion.
(n) The Agent shall have received evidence
satisfactory to it that the Borrowers have implemented enhancements to their
inventory management systems that enable them to run automated reports of the
type specified in clauses (2) and (3) of Section 7.01(a)(xv).
(o) Inventory Reports. The Agent shall have received,
in form and substance acceptable to the Agent in its sole discretion, (i) a Time
Share Interest net zero report (including mapping tables for UDI, unit type and
season in such format as mutually agreed between the Agent and the
Administrative Borrower) as of the close of business on the day preceding the
Final Facility Effective Date and (ii) hard copy reports detailing the hard and
soft interval count, by unit type and season, for those Resorts not maintained
on the inventory management system as of the close of business on the day
preceding the Final Facility Effective Date.
(p) The Custodial Agreement shall be in full force
and effect.
SECTION 5.02 Conditions Precedent to all Loans. The obligation
of the Agent or any Lender to make any Loan is subject to the fulfillment, in a
manner satisfactory to the Agent, of each of the following conditions precedent:
(a) Payment of Fees, Etc. The Borrowers shall have
paid all fees, costs, expenses and taxes then payable by the Borrowers to the
Agent and the Lenders pursuant to this Agreement and the other Loan Documents,
including, without limitation, Sections 2.11 and 10.04 hereof.
(b) Representations and Warranties; No Event of
Default. The following statements shall be true and correct, and the submission
by the Administrative Borrower to the Agent of a Notice of Borrowing with
respect to each such Loan, and the Borrowers' acceptance of the proceeds of such
Loan shall each be deemed to be a representation and warranty by the Borrowers
on the date of such Loan that: (i) the representations and warranties contained
in Article VI and in each other Loan Document, certificate or other writing
delivered to the Agent pursuant hereto or thereto on or prior to the date of
such Loan are true and correct in all material respects on and as of such date
as though made on and as of such date, (ii) at the time of and after giving
effect to the making of such Loan and the application of proceeds thereof, no
Default or Event of Default has occurred and is continuing or would result from
the making of the Loan to be made on such date and (iii) the conditions set
forth in this Section 5.02 have been satisfied as of the date of such request.
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(c) Bankruptcy Court Order. On the date of such Loan,
the Final Bankruptcy Court Order shall have been signed by the Bankruptcy Court,
and the Agent shall have received a court stamped copy of the same and such
order shall be in full force and effect and shall not have been reversed,
stayed, modified or amended absent the consent of the Agent and the Borrowers.
(d) Legality. The making of such Loan shall not
contravene any law, rule or regulation applicable to the Agent or the Lenders.
(e) Notices. The Agent shall have received a Notice
of Borrowing pursuant to Section 2.03 hereof.
(f) Delivery of Documents. The Agent shall have
received such other agreements, instruments, approvals, opinions and other
documents, including Resort and other due diligence documents, each satisfactory
to the Agent in form and substance, as the Agent may reasonably request.
(g) Proceedings; Receipt of Documents. All
proceedings in connection with the making of such Loan and the other
transactions contemplated by this Agreement and the other Loan Documents, and
all documents incidental hereto and thereto, shall be satisfactory to the Agent
and its counsel, and the Agent and such counsel shall have received all such
information and such counterpart originals or certified or other copies of such
documents, in form and substance satisfactory to the Agent, as the Agent or such
counsel may reasonably request.
(h) Revolving Loans. In the case of Revolving Loans,
all amounts previously deposited in the Blocked Account pursuant to Section
2.10(c)(i) have been withdrawn in accordance with the provisions of this
Agreement and the applicable blocked account agreement.
SECTION 5.03 Conditions Precedent to Tranche B Term Loans. In
addition to the requirements of Section 5.01 and Section 5.02, the obligation of
the Agent or any Lender to make any Tranche B Term Loan is also subject to the
fulfillment, in a manner satisfactory to the Agent, of each of the following
conditions precedent:
(a) Payment and Termination of the Finova Loans. The
Agent shall have received evidence satisfactory to it that the Finova Loans have
been terminated and paid in an amount to be mutually agreed and that the Liens
granted in connection with the Finova Loans have been released.
(b) After giving effect to the making of such Tranche
B Term Loans, the Collateral Coverage Ratio shall be equal to or greater than
the Required Collateral Coverage Ratio as in effect on such date.
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(c) The Agent shall have received evidence
satisfactory to it that all consents and approvals necessary in connection with
the repayment of the Finova Loans have been obtained.
(d) The Agent, the Administrative Borrower and the
Creditors Committee shall have agreed on the amount and terms of the repayment
of the Finova Loans and the fee payable to the Agent pursuant to Section
2.11(c).
(e) Title/UCC Searches. The Agent shall have received
such title searches and UCC searches confirming that there are no Liens (other
than the Liens that are being terminated pursuant to Section 5.03(a) and
Permitted Liens, except those referred to in clauses (j), (k), (l) and (m) of
the definition of such term) on the Finova Assets and such searches shall be
acceptable to the Agent, in its sole and absolute discretion.
SECTION 5.04 Conditions Precedent to May Borrowings. In addition to the
requirements of Section 5.01 and Section 5.02, the obligation of the Agent or
any Lender to make any Loans on or after the May 2001 Remittance Date is also
subject to the fulfillment, in a manner satisfactory to the Agent, of each of
the following conditions precedent:
(a) Inventory Reports. The Agent shall have received
evidence satisfactory to it that the Borrowers have implemented, and that an
independent third party acceptable to the Agent in its sole discretion has
audited and verified (based upon procedures mutually agreed between the Agent
and the Administrative Borrower), the net zero report, the monthly audit
tracking report and the monthly mandatory prepayment report (demonstrating
compliance with the requirements set forth in Section 2.09(b)(i)).
(b) Title/UCC Searches. The Agent shall have received
such other title searches and UCC searches confirming that there are no Liens
(other than Permitted Liens) on the Collateral and such searches shall be
acceptable to the Agent, in its sole and absolute discretion.
(c) Other Deliveries. The Agent shall have received
such documents required to be delivered pursuant to Section 5.01 which it has,
in its sole and absolute discretion, permitted the Borrowers to deliver on the
May 2001 Remittance Date, including, without limitation, amended schedules to
certain Loan Documents and certain security documents (including any necessary
consents to assignment of partnership interests).
SECTION 5.05 Conditions Precedent to June Borrowings. In addition to
the requirements of Section 5.01 and Section 5.02, the obligation of the Agent
or any Lender to make any Loans on or after the June 2001 Remittance Date is
also subject to the fulfillment, in a manner satisfactory to the Agent, of each
of the following conditions precedent:
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(a) Sunterra Pacific Projections. The Agent shall
have received financial projections for Sunterra Pacific, Inc. for the period
through and including June 30, 2002, and such financial projections shall be
acceptable to the Agent, in its sole and absolute discretion.
(b) Inventory Reports. The Agent shall have received
evidence satisfactory to it that the "soft inventory" has been reconciled (in
terms of unit type and season) with the title searches and UCC searches provided
pursuant to this Agreement.
ARTICLE VI.
REPRESENTATIONS AND WARRANTIES
SECTION 6.01 Representations and Warranties. Each Borrower hereby
represents and warrants to the Agent and the Lenders as follows:
(a) Organization, Good Standing, Etc. Each Loan Party
(i) is a corporation, limited liability company or limited partnership duly
organized, validly existing and in good standing under the laws of the state or
jurisdiction of its organization, (ii) subject to the entry of the Final
Bankruptcy Court Order, has all requisite corporate, limited liability company
or partnership, as the case may be, power and authority to conduct its business
as now conducted and as presently contemplated and, in the case of the
Borrowers, to make the borrowings hereunder, and to execute and deliver each
Loan Document to which it is a party, and to consummate the transactions
contemplated thereby, and (iii) is duly qualified to do business and is in good
standing in each jurisdiction in which the character of the properties owned or
leased by it or in which the transaction of its business makes such
qualification necessary, except where the failure to be so qualified or in good
standing is not reasonably likely to have a Material Adverse Effect.
(b) Authorization, Etc. The execution, delivery and
performance by each Loan Party of each Loan Document to which it is or will be a
party, (i) upon entry of the Final Bankruptcy Court Order, have been duly
authorized by all necessary action, (ii) do not and will not contravene its
charter or by-laws, its limited liability company or operating agreement or its
certificate of partnership or partnership agreement, as applicable, or any
applicable law or any contractual restriction binding on or otherwise affecting
it or any of its properties (other than conflicts, breaches and defaults the
enforcement of which will be stayed by virtue of the filing of the Chapter 11
Cases), (iii) do not and will not result in or require the creation of any Lien
(other than pursuant to any Loan Document) upon or with respect to any of its
properties, and (iv) do not and will not result in any suspension, revocation,
impairment, forfeiture or nonrenewal of any permit, license, authorization or
approval applicable to its operations or any of its properties.
(c) Governmental Approvals. Except for the entry of
the Final Bankruptcy Court Order and such filings as may be required under the
Exchange Act, no
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authorization or approval or other action by, and no notice to or filing with,
any Governmental Authority is required in connection with the due execution,
delivery and performance by any Loan Party of any Loan Document to which it is
or will be a party.
(d) Execution and Binding Effect. As of the entry of
the Final Bankruptcy Court Order, each of the Loan Documents required to be
executed and delivered on or prior to the Final Facility Effective Date has been
duly and validly executed and delivered by each of the Loan Parties which is a
party thereto and constitute legal, valid and binding obligations of each of the
Loan Parties which is a party thereto enforceable in accordance with the terms
hereof or thereof. Each Loan Document that was not required to be executed and
delivered by any Loan Party prior to the Final Facility Effective Date, when
executed and delivered, will be validly executed and delivered by each Loan
Party party thereto, and will constitute legal, valid and binding obligations of
each such Loan Party, enforceable in accordance with the terms thereof.
(e) Subsidiaries. Schedule 6.01(e) is a complete and
correct description of the name, jurisdiction of incorporation and ownership of
the outstanding Capital Stock of such Subsidiaries of the Parent in existence on
the date hereof. All of the issued and outstanding shares of Capital Stock of
such Subsidiaries have been validly issued and are fully paid and nonassessable,
and the holders thereof are not entitled to any preemptive, first refusal or
other similar rights. Except as indicated on such Schedule, all such Capital
Stock is owned by the Parent or one or more of its wholly-owned Subsidiaries,
free and clear of all Liens.
(f) Litigation. Except as set forth in Schedule
6.01(f), there is no pending or, to the knowledge of any Loan Party, threatened
action, suit or proceeding affecting any Loan Party before any court or other
Governmental Authority or any arbitrator that (i) is reasonably likely to have a
Material Adverse Effect or (ii) as of the Final Facility Effective Date, relates
to this Agreement, the Term Notes, the Revolving Credit Notes or any other Loan
Document or any transaction contemplated hereby or thereby.
(g) Financial Condition.
(i) The Financial Statements, copies of
which have been delivered to the Agent and the Lenders, fairly present the
consolidated financial condition of the Parent and its Subsidiaries as at the
respective dates thereof and the consolidated results of operations of the
Parent and its Subsidiaries for the fiscal periods ended on such respective
dates, all in accordance with GAAP, and since March 31, 2000 no event or
development has occurred that has had or is reasonably likely to have a Material
Adverse Effect.
(ii) The Budget is believed by the Parent to
be reasonable, has been prepared on a reasonable basis and in good faith by the
Parent, and is based on assumptions believed by the Parent to be reasonable at
the time made and upon the best information then
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reasonably available to the Parent, and the Parent is not aware of any facts or
information that would lead it to believe that such Budget is incorrect or
misleading in any material respect.
(h) Compliance with Law, Etc. Except as set forth in
that certain separate writing delivered to the Agent prior to the Final Facility
Effective Date, none of the Loan Parties is in violation of its organizational
documents, any law, rule, regulation, judgment or order of any Governmental
Authority applicable to it or any of its Property or assets which is reasonably
likely to have a Material Adverse Effect, and no Default or Event of Default has
occurred and is continuing. Without limiting the foregoing, none of the Loan
Parties has taken or will knowingly take any action which would cause this
Agreement or any other Loan Document to violate any applicable state or federal
securities laws.
(i) ERISA. Except as set forth on Schedule 6.01(i),
(i) each Employee Plan is in substantial compliance with ERISA and the Code,
(ii) no Termination Event has occurred nor is reasonably expected to occur with
respect to any Employee Plan, (iii) the most recent annual report (Form 5500
Series) with respect to each Employee Plan, including any required Schedule B
(Actuarial Information) thereto, copies of which have been filed with the
Internal Revenue Service and will promptly be delivered upon request to the
Agent, is complete and correct and fairly presents the funding status of such
Employee Plan, and since the date of such report there has been no material
adverse change in such funding status, (iv) no Employee Plan had an accumulated
or waived funding deficiency or permitted decreases which would create a
deficiency in its funding standard account or has applied for an extension of
any amortization period within the meaning of Section 412 of the Code at any
time during the previous 60 months, and (v) no Lien imposed under the Code or
ERISA exists or is likely to arise on account of any Employee Plan within the
meaning of Section 412 of the Code at any time during the previous 60 months.
Neither the Loan Party nor any ERISA Affiliate thereof is or was during the
preceding six years obligated to contribute to any Multiemployer Plan and
neither the Loan Party nor any ERISA Affiliate thereof has assumed any
obligation of any predecessor with respect to any Multiemployer Plan. Except as
required by Section 4980B of the Code, none of the Loan Parties or any of their
ERISA Affiliates maintains an employee welfare benefit plan (as defined in
Section 3(1) of ERISA) which provides health or welfare benefits (through the
purchase of insurance or otherwise) for any retired or former employee of any
Loan Party or any of its ERISA Affiliates or coverage after a participant's
termination of employment. None of the Loan Parties or any of their ERISA
Affiliates has incurred any material liability or obligation under the Worker
Adjustment and Retraining Notification Act ("WARN") or similar state law, which
remains unpaid or unsatisfied.
(j) Taxes, Etc. All Federal, state and material local
tax returns and other reports required by applicable law to be filed by any Loan
Party have been filed, or extensions have been obtained, and all taxes,
assessments and other governmental charges imposed upon any Loan Party or any
Property of any Loan Party and which have become due and payable on or prior to
the date hereof have been paid, except as set forth on Schedule 6.01(j)
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and except to the extent contested in good faith by proper proceedings which
stay the imposition of any penalty, fine or Lien resulting from the non-payment
thereof and with respect to which adequate reserves have been set aside for the
payment thereof.
(k) Compliance with Regulation U. None of the Loan
Parties is nor will be engaged in the business of extending credit for the
purpose of purchasing or carrying margin stock (within the meaning of Regulation
T, U or X), and no proceeds of any Loan will be used to purchase or carry any
margin stock or to extend credit to others for the purpose of purchasing or
carrying any margin stock.
(l) Type of Business. None of the Loan Parties is
engaged in any business other than acquiring, marketing, sales, development,
management, rental and operation of time share resorts and other time share
activities, providing financing for the purchase of time share Units or other
interests in its time share Resorts and other leisure activities (exclusive of
gaming) and activities directly related to the foregoing.
(m) Adverse Agreements, Etc. None of the Loan Parties
is subject to any charter, limited liability company agreement, partnership
agreement or other corporate, partnership or limited liability company
restriction or any judgment, order, regulation, ruling or other requirement of a
court or other Governmental Authority (other than regulations or other similar
requirements relating to acquiring, marketing, sales, development, management,
rental and operation of time share resorts and other time share activities,
providing financing for the purchase of time share units or other interests in
its time share resorts and other leisure activities (exclusive of gaming) and
activities directly related to the foregoing), which is reasonably likely to
have a Material Adverse Effect.
(n) Permits, Etc. Except as set forth in that certain
separate writing delivered to the Agent prior to the Final Facility Effective
Date, each Loan Party has, and is in compliance with, all permits, licenses,
authorizations, approvals, entitlements and accreditations required for such
Person lawfully to own, lease, manage or operate, or to acquire, each business
currently owned, leased, managed or operated, or to be acquired, by such Person
except for the failure to obtain and maintain compliance with permits, licenses,
authorizations, approvals, entitlements and accreditations which is not
reasonably likely to have a Material Adverse Effect. No condition exists or
event has occurred which, in itself or with the giving of notice or lapse of
time or both, would result in the suspension, revocation, impairment, forfeiture
or non-renewal of any such permit, license, authorization, approval, entitlement
or accreditation, and there is no claim that any thereof is not in full force
and effect, except for the occurrence of such conditions or events which is not
reasonably likely to have a Material Adverse Effect.
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(o) Title to Properties.
(i) Each Loan Party has good and
indefeasible title to, or valid leasehold interests in, all Property and assets
material to its business, free and clear of all Liens except Permitted Liens.
All properties are in good working order and condition, ordinary wear and tear
excepted and in compliance with all laws, rules, regulations, judgments or
orders of any Governmental Authority, except for such noncompliance which is not
reasonably likely to have a Material Adverse Effect.
(ii) Schedule 6.01(o) sets forth a complete
and accurate list as of the Final Facility Effective Date of all Resorts and
real property owned by each Loan Party.
(p) Full Disclosure. Each Loan Party has disclosed to
the Agent all agreements, instruments and corporate or other restrictions to
which it is subject, and all other matters known to it, that, individually or in
the aggregate, is reasonably likely to have a Material Adverse Effect. None of
the other reports, financial statements, certificates or other information
furnished by or on behalf of any Loan Party to the Agent in connection with the
negotiation of this Agreement or delivered hereunder (as modified or
supplemented by other information so furnished) contains any material
misstatement of fact or omits to state any material fact necessary to make the
statements therein, in the light of the circumstances under which it was made,
not misleading; provided that, with respect to projected financial information,
each Loan Party represents only that such information was prepared in good faith
based upon assumptions believed to be reasonable at the time.
(q) Environmental Matters. Except as set forth on
Schedule 6.01(q), (i) the operations of each Loan Party are in compliance in all
material respects with Environmental Laws; (ii) there has been no Release at any
of the properties owned or operated by any Loan Party or a predecessor in
interest, or at any disposal or treatment facility which received Hazardous
Materials generated by any Loan Party or any predecessor in interest which could
have a Material Adverse Effect; (iii) no Environmental Action has been asserted
against any Loan Party or any predecessor in interest nor does any Loan Party
have knowledge or notice of any threatened or pending Environmental Action
against any Loan Party or any predecessor in interest which could have a
Material Adverse Effect; and (iv) no Environmental Actions have been asserted
against any facilities that may have received Hazardous Materials generated by
any Loan Party or any predecessor in interest which could have a Material
Adverse Effect.
(r) Insurance. Each Loan Party keeps or causes other
Persons to keep its Property adequately insured and maintains or causes other
Persons to maintain (i) insurance to such extent and against such risks,
including fire, as is customary with companies in the same or similar
businesses, (ii) workers' compensation insurance in the amount required by
applicable law, (iii) public liability insurance in amounts customary with
companies in the same or similar business against claims for personal injury or
death on properties owned, occupied or controlled
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by it, and (iv) such other insurance as may be required by law or as may be
reasonably required by the Agent (including, without limitation, against
larceny, embezzlement or other criminal misappropriation). Schedule 6.01(r) sets
forth a list of all insurance maintained by each Loan Party on the Final
Facility Effective Date.
(s) Use of Proceeds. The proceeds of the Loans shall
be used (i) in the case of the Tranche A Term Loans, for repayment of the
Existing Financing Agreement, (ii) in the case of the Tranche B Term Loans, for
repayment of the Finova Loans and, upon certain conditions and as agreed by the
parties from time to time, certain other obligations, and (iii) in the case of
the Revolving Loans, for working capital and other general corporate purposes
(including, without limitation, payments of fees and expenses to professionals
under Sections 330 and 331 of the Bankruptcy Code and administrative expenses of
the kind specified in Section 503(b) of the Bankruptcy Code incurred in the
ordinary course of business of the Borrowers, subject to the priorities set
forth in the definition of "Agreed Administrative Expense Priorities" herein,
payment of certain pre-petition obligations to the extent permitted to be paid
by Section 7.02(j) hereof) and for any other use not prohibited by the terms of
this Agreement, to the extent approved (if such approval is required) by the
Bankruptcy Court.
(t) Solvency. After giving effect to the transactions
contemplated by this Agreement and before and after giving effect to each Loan,
each Guarantor is Solvent.
(u) Location of Bank Accounts. Schedule 6.01(u) sets
forth a complete and accurate list as of the Final Facility Effective Date of
all deposit, checking and other bank accounts, all securities and other accounts
maintained with any broker dealer and all other similar accounts maintained by
each Loan Party, together with a description thereof (i.e., the bank or broker
dealer at which such deposit or other account is maintained and the account
number and the purpose thereof).
(v) Intellectual Property. Each Loan Party owns or
licenses or otherwise has the right to use all licenses, permits, trademarks,
trademark applications, patents, patent applications, service marks, tradenames,
copyrights, copyright applications, franchises, authorizations and other
intellectual property rights that are necessary for the operations of its
businesses, without infringement upon or conflict with the rights of any other
Person with respect thereto, except for such infringements and conflicts which,
individually or in the aggregate, are not reasonably likely to have a Material
Adverse Effect.
(w) Holding Company and Investment Company Acts. None
of the Loan Parties is (i) a "holding company" or a "subsidiary company" of a
"holding company" or an "affiliate" of a "holding company", as such terms are
defined in the Public Utility Holding Company Act of 1935, as amended, or (ii)
an "investment company" or an "affiliated person" or "promoter" of, or
"principal underwriter" of or for, an "investment company", as such terms are
defined in the Investment Company Act of 1940, as amended.
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(x) Place of Business; Chief Executive Office.
Schedule 6.01(x) sets forth a complete and accurate list as of the date hereof
of (i) each place of business of each Loan Party and (ii) the chief executive
office of each Loan Party.
(y) Administrative Priority; Lien Priority.
(i) As of the Final Facility Effective Date,
the Obligations of the Borrowers will constitute allowed administrative expenses
in the Chapter 11 Case having priority in payment over all other administrative
expenses and unsecured claims against the Borrowers now existing or hereafter
arising, of any kind or nature whatsoever, including without limitation all
administrative expenses of the kind specified in Sections 503(b) and 507(b) of
the Bankruptcy Code, subject, as to priority, only to Carve-Out Expenses having
priority over the Obligations to the extent set forth in the Agreed
Administrative Expense Priorities, but excluding any causes of action arising
under Sections 542, 544, 545, 547, 548, 550, 551, 553(b) or 724(a) of the
Bankruptcy Code.
(ii) The Lien and security interest of the
Agent on the Collateral shall be a valid and perfected first priority Lien
subject only to Permitted Liens (to the extent that such Permitted Liens are
accorded priority as a matter of law or pursuant to agreement).
(iii) The Final Bankruptcy Court Order is in full force and effect, and has not
been reversed, stayed, modified or amended absent the consent of the Agent and
the Borrowers.
(z) Existing Financing Agreement Assets. Schedule
6.01(z) hereto contains a true, correct and complete description, as of the
Final Facility Effective Date, of all Existing Financing Agreement Assets.
(aa) Finova Assets. Schedule 6.01(aa) hereto contains
a true, correct and complete list, as of the Final Facility Effective Date, of
all Finova Assets.
(bb) Time Share Interests. The sale, offering for
sale, and financing of Time Share Interests in the Resorts (i) do not constitute
the sale, or the offering of sale, of securities subject to registration
requirements of the Securities Act, or any state or foreign securities law, (ii)
except to the extent that any such violation(s), either individually or in the
aggregate, are not reasonably likely to have a Material Adverse Effect, do not
violate any timesharing or other law of any state or foreign country in which
sales or solicitation of Time Share Interests occur, and (iii) except to the
extent that any such violation(s), either individually or in the aggregate, are
not reasonably likely to have a Material Adverse Effect, do not violate any
consumer credit or usury laws of any state or foreign country in which sales or
solicitation of Time Share Interests occur. Except to the extent that any such
failure(s), either individually or in the aggregate, are not reasonably likely
to have a Material Adverse Effect, the Loan Parties have
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not failed to make or cause to be made any registrations or declarations with
any Governmental Authority necessary to the ownership of the Resorts or to the
conduct of their business, including, without limitation, the operation of the
Resorts and the sale, or offering for sale, of Time Share Interests therein.
Except to the extent that any such noncompliance(s), either individually or in
the aggregate, is not reasonably likely to have a Material Adverse Effect, the
Loan Parties have, to the extent required by their activities and businesses,
complied with (i) all of the applicable provisions of (A) the Consumer Credit
Protection Act, as amended, (B) the Federal Trade Commission Act, as amended,
(C) the Interstate Land Sales Full Disclosure Act, as amended, (D)
Truth-in-Lending Act and Regulation Z, as amended, (E) Equal Credit Opportunity
Act and Regulation B, as amended, (F) Telemarketing and Consumer Fraud and Abuse
Prevention Act, as amended, (G) any applicable condominium and timeshare
statutes, rules and regulations, including but not limited to those governing
the administration and operations of the condominium or timeshare association
and those requiring registrations of Time Share Interests in the Resorts as a
prerequisite to marketing and sales thereof, (H) any other laws of any
Governmental Authority otherwise applicable, and (I) all rules and regulations
promulgated under any of the foregoing. The Time Share Interests in the Resorts
(other than Sunterra Pacific, AKGI St. Maarten, N.V., Inc. and Sunterra St.
Croix) constitute undivided interests in real property under the laws of the
jurisdictions in which the applicable time share Units are located. The copies
of the Purchase Documents which have been delivered to the Agent by the
Borrowers are true and complete copies of the principal forms, as of the Final
Facility Effective Date, which have been or are being used by the Borrowers in
connection with the Resorts and the sale or offering for sale of Time Share
Interests therein.
(cc) Time Share Interest Exchange Network. Borrowers
and their Subsidiaries are members and participants pursuant to validly executed
and enforceable written agreements in Resort Condominium International and/or
Interval International, as applicable. Borrowers and their Subsidiaries have
paid all fees and other amounts due and owing under such agreements and are not
otherwise in default in any respect thereunder, except to the extent that is not
reasonably likely to have a Material Adverse Effect.
(dd) Common Areas. To the extent that Borrowers are
obligated to construct common areas and amenities, the common areas and
amenities appurtenant to sold Time Share Interests, and the streets and other
off-site improvements contained within the projects, have been completed or a
bond insuring the completion thereof has been obtained, except to the extent
that such failure to complete or post a bond is not reasonable likely to have a
Material Adverse Effect, and such interests in such common areas are free and
clear of all Liens except Permitted Liens.
(ee) Sunterra Securitizations. All of the Sunterra
Securitization transactions were consummated prior to the Filing Date, and none
of the Loan Parties' assets have been transferred into any Sunterra
Securitization on or after the Filing Date.
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(ff) Schedules. All of the information which is
required to be scheduled to this Agreement is set forth on the Schedules
attached hereto, is correct and accurate in all material respects and does not
omit to state any information material thereto.
(gg) Homeowners' Association, Maintenance Fees and
Developer Subsidies. As of March 31, 2001, all homeowners' association,
maintenance fees and/or developer subsidies, as applicable, required to be paid
by any Loan Party and which are past due have been paid, except to the extent
that such past due fees do not exceed $440,000 in the aggregate.
ARTICLE VII.
COVENANTS OF THE BORROWER
SECTION 7.01 Affirmative Covenants. So long as any principal of or
interest on any Loan or any other Obligation (whether or not due) shall remain
unpaid or any Lender shall have any Revolving Credit Commitment or Term Loan
Commitment hereunder, the Borrowers will, unless the Required Lenders shall
otherwise consent in writing:
(a) Reporting Requirements. Furnish to the Agent and
each Lender:
(i) beginning with the fiscal quarter ending
March 31, 2002, as soon as available and in any event within 60 days after the
end of each fiscal quarter of the Parent, consolidated and consolidating balance
sheets, consolidated and consolidating statements of operations and retained
earnings and consolidated statements of cash flows of the Parent and its
Subsidiaries (except that consolidating statements shall relate to resort
locations) as at the end of such quarter, and for the period commencing at the
end of the immediately preceding Fiscal Year and ending with the end of such
quarter, setting forth in each case in comparative form the figures for the
corresponding date or period of the immediately preceding Fiscal Year, all in
reasonable detail and certified by an Authorized Officer as fairly presenting,
in all material respects, the financial position of the Parent and its
Subsidiaries as of the end of such quarter and the results of operations and
cash flows of the Parent and its Subsidiaries for such quarter, in accordance
with GAAP applied in a manner consistent with that of the most recent audited
financial statements of the Parent and its Subsidiaries furnished to the
Lenders, subject to normal year-end adjustments;
(ii) as soon as available, and, for Fiscal
Year 2001 and thereafter, in any event within 120 days after the end of each
Fiscal Year, consolidated and consolidating balance sheets, consolidated and
consolidating statements of operations and retained earnings and consolidated
statements of cash flows of the Parent and its Subsidiaries (except that
consolidating statements shall relate to resort locations) as at the end of such
Fiscal Year, setting forth in comparative form the corresponding figures for the
immediately preceding Fiscal Year, all in reasonable detail and prepared in
accordance with GAAP, and accompanied
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by a report and an opinion without any qualifications (other than a "going
concern" qualification), prepared in accordance with generally accepted auditing
standards, of Deloitte & Touche LLP or other independent certified public
accountants of recognized standing selected by the Parent and satisfactory to
the Agent (which opinion shall be without any qualification or exception as to
the scope of such audit, except for limitations arising with respect to
financial statements for prior periods that were not audited by Deloitte &
Touche LLP, together with a written statement of such accountants (1) to the
effect that, in making the examination necessary for their certification of such
financial statements, they have not obtained any knowledge of the existence of
an Event of Default or a Default and (2) if such accountants shall have obtained
any knowledge of the existence of an Event of Default or such Default,
describing the nature thereof);
(iii) as soon as available, and in any event
within 30 days of the end of each fiscal month of the Parent and its
Subsidiaries, internally prepared consolidated and consolidating balance sheets,
consolidated and consolidating statements of operations and consolidated
statements of cash flows for such fiscal month of the Parent and its
Subsidiaries (except that consolidating statements shall relate to resort
locations) for such fiscal month and for the period from the beginning of such
Fiscal Year to the end of such fiscal month, all in reasonable detail and
certified by an Authorized Officer as fairly presenting, in all material
respects, the financial position of the Parent and its Subsidiaries as of the
end of such fiscal month and the results of operations and cash flows of the
Parent and its Subsidiaries for such fiscal month, in accordance with GAAP
applied in a manner consistent with that of the most recent audited financial
statements furnished to the Lenders, subject to normal year-end adjustments;
(iv) simultaneously with the delivery of the
financial statements of the Parent required by clauses (i), (ii) and (iii) of
this Section 7.01(a), a certificate of an Authorized Officer (A) stating that
such Authorized Officer has reviewed the provisions of this Agreement and the
other Loan Documents and has made or caused to be made under his or her
supervision a review of the condition and operations of the Parent and its
Subsidiaries during the period covered by such financial statements with a view
to determining whether the Parent and its Subsidiaries were in compliance with
all of the provisions of such Loan Documents at the times such compliance is
required by the Loan Documents, and that such review has not disclosed, and such
Authorized Officer has no knowledge of, the existence during such period of an
Event of Default or Default or, if an Event of Default or Default existed,
describing the nature and period of existence thereof and the action which the
Parent and its Subsidiaries propose to take or have taken with respect thereto
and (B) attaching a schedule showing the calculations specified in Section 7.02;
(v) promptly after filing thereof, copies of
all pleadings, motions, applications, financial information and other papers and
documents filed by the
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Borrowers in the Chapter 11 Cases, which such papers and documents shall also be
given or served on the Agent's counsel;
(vi) promptly after the sending thereof,
copies of all material written reports and all term sheets for a plan of
reorganization given by the Borrowers to the Creditors Committee or any other
official or unofficial creditors' committee in the Chapter 11 Cases, provided
that the Borrowers may redact confidential information contained in any such
report if it provides a summary of the nature of the information redacted to the
Agent;
(vii) promptly after submission to any
Governmental Authority, all documents and written information furnished to such
Governmental Authority in connection with any investigation of any Loan Party
other than those relating to routine inquiries by such Governmental Authority;
(viii) as soon as possible, and in any event
within three (3) Business Days after the occurrence of an Event of Default or
Default or the occurrence of any event or development that is reasonably likely
to have a Material Adverse Effect, the written statement of an Authorized
Officer setting forth the details of such Event of Default, Default, other event
or Material Adverse Effect and the action which the Parent and its Subsidiaries
propose to take with respect thereto;
(ix) (A) as soon as possible and in any
event (1) within ten (10) days after any Loan Party or any ERISA Affiliate
thereof knows or has reason to know that any Termination Event described in
clause (i) of the definition of Termination Event with respect to any Employee
Plan has occurred, (2) within 10 days after any Borrower or any ERISA Affiliate
thereof knows or has reason to know that any other Termination Event with
respect to any Employee Plan has occurred, or (3) within 10 days after any Loan
Party or any ERISA Affiliate thereof knows or has reason to know that an
accumulated funding deficiency has been incurred or an application has been made
to the Secretary of the Treasury for a waiver or modification of the minimum
funding standard (including installment payments) or an extension of any
amortization period under Section 412 of the Code with respect to an Employee
Plan, a statement of an Authorized Officer setting forth the details of such
occurrence and the action, if any, which such Loan Party or such ERISA Affiliate
proposes to take with respect thereto, (B) promptly and in any event within
three days after receipt thereof by any Loan Party or any ERISA Affiliate
thereof from the PBGC, copies of each notice received by any Loan Party or any
ERISA Affiliate thereof of the PBGC's intention to terminate any Plan or to have
a trustee appointed to administer any Plan, (C) promptly and in any event within
10 days after the filing thereof with the Internal Revenue Service if requested
by the Agent, copies of each Schedule B (Actuarial Information) to the annual
report (Form 5500 Series) with respect to each Employee Plan and Multiemployer
Plan, (D) promptly and in any event within 10 days after any Loan Party or any
ERISA Affiliate thereof knows or has reason to know that a required installment
within the meaning of Section 412 of the Code has not been made when due with
respect to an Employee
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Plan, and (E) promptly and in any event within 10 days after any Loan Party or
any ERISA Affiliate thereof send notice of a plant closing or mass layoff (as
defined in WARN) to employees, copies of each such notice sent by such Loan
Party or such ERISA Affiliate thereof;
(x) promptly after the commencement thereof
but in any event not later than five (5) days after service of process with
respect thereto on, or the obtaining of knowledge thereof by, any Loan Party,
notice of each action, suit or proceeding before any court or other Governmental
Authority or other regulatory body or any arbitrator which is reasonably likely
to have a Material Adverse Effect;
(xi) promptly after the sending or filing
thereof, copies of all statements, reports and other information (other than
matters solely of an administrative nature) any Loan Party sends to any holders
(other than a Loan Party) of its Indebtedness or its securities or files with
the SEC or any national (domestic or foreign) securities exchange;
(xii) promptly upon receipt thereof, copies
of all financial reports (including, without limitation, management letters), if
any, submitted to any Loan Party by its auditors in connection with any annual
or interim audit of the books thereof;
(xiii) within ten (10) Business Days after
receipt of a written request from the Agent to do so, deliver current price
lists for Time Share Interests to the Agent from time to time;
(xiv) promptly upon request by the Agent, a
list (including addresses and other contact information) of all title insurance
companies that typically insure the interest of the purchasers of time share
inventory sold by the Borrowers;
(xv) promptly upon request, provide such
other information pertaining to the Collateral, including but not limited to the
following: (1) month-end remittance reports in both paper and electronic form
relating to the mortgage receivables; (2) month-end inventory reports listing
hard and soft inventory count by resort, by unit type and by season; (3)
month-end audit tracking reports detailing all monthly changes to hard and soft
inventory and the reason for such change; and (4) financial information
pertaining to the Hawaiian Partnerships; and
(xvi) promptly upon request, such other
information concerning the condition or operations, financial or otherwise, of
any Loan Party as the Agent may from time to time reasonably request.
(b) Additional Guaranties and Collateral Security.
Cause:
(i) on the Final Facility Effective Date,
each Non-Debtor Subsidiary of any Loan Party existing on the Final Facility
Effective Date, other than (x)
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Subsidiaries of the Parent not organized under the laws of the United States or
any state thereof and (y) Subsidiaries that do not own assets with a book value
in excess of $100,000 for any such individual Subsidiary, to execute and deliver
to the Agent (A) a Guaranty guaranteeing the Obligations which is limited to 95%
of the net worth of such Guarantor or is otherwise acceptable to the Agent in
its sole discretion, (B) a Security Agreement and (C) if such Subsidiary has any
Subsidiaries, a Pledge Agreement together with (1) certificates evidencing all
of the Capital Stock of any Person owned by such Subsidiary, (2) undated stock
powers executed in blank with signature guaranteed, and (3) such opinion of
counsel and such approving certificate of such Subsidiary as the Agent may
reasonably request in respect of complying with any legend on any such
certificate or any other matter relating to such shares;
(ii) promptly upon any Loan Party acquiring
any Non-Debtor Subsidiary, each Non-Debtor Subsidiary of any Loan Party not
existing on the Final Facility Effective Date, other than (x) Subsidiaries of
the Parent not organized under the laws of the United States or any state
thereof and (y) Subsidiaries that do not own assets with a book value in excess
of $100,000 for any such individual Subsidiary, to execute and deliver to the
Agent promptly and in any event within three (3) Business Days after the
formation, acquisition or change in status thereof (A) a Guaranty guaranteeing
the Obligations which is limited to 95% of the net worth of such Guarantor or is
otherwise acceptable to the Agent in its sole discretion, (B) a Security
Agreement and (C) if such Subsidiary has any Subsidiaries, a Pledge Agreement
together with (1) certificates evidencing all of the Capital Stock of any Person
owned by such Subsidiary, (2) undated stock powers executed in blank with
signature guaranteed, and (3) such opinion of counsel and such approving
certificate of such Subsidiary as the Agent may reasonably request in respect of
complying with any legend on any such certificate or any other matter relating
to such shares;
provided, that, the Agent may at any time require from any Subsidiary which
becomes a Guarantor pursuant to clause (i) or (ii) above, and the Agent shall
require within 60 days after the Final Facility Effective Date with respect to
the Loan Parties and the Property set forth on Schedule 7.01(b)(ii), some or all
of the following: (A) one or more Mortgages creating on the real property of
such Subsidiary a perfected, highest available priority Lien on such real
property, subject only to Permitted Liens, a Title Insurance Policy covering
such real property, a 1999 ALTA/ACSM Minimum Detail Requirements for Urban Land
Title Surveys, including Table A Items 1, 2, 3, 4, 5, 6, 7 and 8 and such other
standards as the Agent or title company require as a condition to the removal of
any survey exceptions found on the Title Insurance Policies, certified to the
Agent and the title company, survey thereof (except with respect to Time Share
Interests) and a surveyor's certificate reasonably satisfactory to the Agent,
each in form and substance satisfactory to the Agent, together with such other
agreements, instruments and documents as the Agent may reasonably require, and
(B) such other agreements, instruments, approvals, legal opinions or other
documents reasonably requested by the Agent in order to create, perfect,
establish the highest available priority of or otherwise protect any Lien
purported to be covered by any such Security Agreement, Pledge Agreement or
Mortgage
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(subject only to any Permitted Liens) or otherwise to effect the intent that
such Subsidiary shall become bound by all of the terms, covenants and agreements
contained in the Loan Documents and that all Property and assets of such
Subsidiary shall become Collateral for the Obligations; and
(iii) within 10 days after the Final
Facility Effective Date, the Agent shall have received evidence satisfactory to
it that the Borrowers have used their commercially reasonable efforts to file
the Final Bankruptcy Order or other appropriate notice in each applicable county
recorder's office for the properties set forth on Schedule 7.01(b)(iii).
(c) Compliance with Laws, Etc. Except for such
noncompliance which is not reasonably likely to have a Material Adverse Effect,
comply, and cause each of their Subsidiaries to comply with all applicable laws,
rules, regulations, judgments and orders (including, without limitation, all
Environmental Laws), such compliance to include, without limitation, (i) paying
before the same become delinquent all taxes, assessments and governmental
charges or levies imposed upon it or upon its income or profits or upon any of
its properties, and (ii) paying all lawful claims the enforcement of which is
not stayed by the filing of the Chapter 11 Cases before the same become a Lien
or charge upon any of its properties, except in any such case to the extent
contested in good faith by proper proceedings which stay the imposition of any
penalty, fine or Lien resulting from the non-payment thereof and with respect to
which adequate reserves have been set aside for the payment thereof.
(d) Preservation of Existence, Etc. Except to the
extent permitted by Section 7.02(d)(i) or Section 7.02(d)(ii) hereof or except
as disclosed in writing to the Agent prior to the Final Facility Effective Date,
maintain and preserve, and cause each of their Subsidiaries to maintain and
preserve, their existence, rights and privileges, and become or remain duly
qualified and in good standing in each jurisdiction in which the character of
the properties owned or leased by them or in which the transaction of their
business makes such qualification necessary, except where failure to be so
qualified or in good standing would not be reasonably likely to have a Material
Adverse Effect.
(e) Keeping of Records and Books of Account. Keep
adequate records and books of account, with complete entries made in accordance
with GAAP.
(f) Inspection Rights. Permit, and cause each of
their Subsidiaries to permit, the Agent or representatives thereof at any time
and from time to time during normal business hours and, unless a Default or
Event of Default has occurred and is continuing, upon reasonable notice, at the
expense of the Borrowers, to examine and make copies of and abstracts from their
records and books of account, to visit and inspect their properties, to verify
materials, leases, notes receivable, deposit accounts and other assets of the
Loan Parties and their Subsidiaries, to conduct, on a reasonable basis and,
unless a Default or Event of Default has occurred and is continuing, in
consultation with the Administrative Borrower, audits, physical
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counts, valuations, appraisals (other than those provided for in Section
7.01(g)), environmental assessments or examinations and to discuss their
affairs, finances and accounts with any of the directors, officers, managerial
employees, independent accountants or other representatives thereof. The Loan
Parties agree to make available to the Agent reasonable on-site workspace for
the foregoing purposes. The Borrowers agree to pay the reasonable cost of such
audit, appraisal, assessment or examination.
(g) Appraisal Rights. Permit, and cause each of their
Subsidiaries to permit, the Agent or representatives thereof at any time and
from time to time on a reasonable basis, at the expense of the Lenders (unless
(x) a Default or Event of Default has occurred and is continuing or (y) the
Collateral Coverage Ratio calculated with the results of such collateral
valuation is equal to or less than Required Collateral Coverage Ratio, in which
case at the expense of the Borrowers), to engage an independent third party
appraisal firm to perform a collateral valuation of unsold inventory at any
Resort of the Borrowers for the purpose of updating the "Cost Factor" (as set
forth in Exhibit E hereto) for use in the calculation of Inventory Collateral
Value.
(h) Maintenance of Properties, Etc. Except as
otherwise provided in Section 2.09 and Section 2.10 of this Agreement, repair,
replace, maintain and preserve, and cause each of their Subsidiaries to repair,
replace, maintain and preserve, all of their properties (whether owned or held
under lease) which are necessary or useful in the proper conduct of their
business in good working order and condition, ordinary wear and tear excepted,
and comply, and cause each of their Subsidiaries to comply, at all times with
the provisions of all leases to which each of them is a party as lessee or under
which each of them occupies Property so as to prevent any loss or forfeiture
thereof or thereunder, in each case, other than sales of Property or rejection
of leases approved by the Bankruptcy Court and otherwise permitted by the terms
of this Agreement.
(i) Maintenance of Insurance. Maintain, and cause
each of their Subsidiaries to maintain, or other Persons shall maintain for the
Parent and its Subsidiaries, insurance with responsible and reputable insurance
companies or associations (including, without limitation, comprehensive general
liability, hazard, rent and business interruption insurance) with respect to
their properties (including all real properties leased or owned by them) and
business, in such amounts and covering such risks as is required by any
Governmental Authority having jurisdiction with respect thereto or as is carried
generally in accordance with sound business practice by companies in similar
businesses similarly situated and in any event in amount, adequacy and scope
reasonably satisfactory to the Agent. To the extent such policies name a Loan
Party or its Subsidiaries as a named insured, all policies covering the
Collateral are to be made payable to the Agent for the benefit of the Lenders,
as its interests may appear, in case of loss, under a standard non-contributory
"lender" or "secured party" clause and are to contain such other provisions as
the Agent may require to fully protect the Lenders' interest in the Collateral
and to any payments to be made under such policies. All certificates of
insurance
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are to be delivered to the Agent and the policies are to be premium prepaid,
with the loss payable and additional insured endorsement in favor of Agent and
such other Persons as the Agent may designate from time to time as their
respective interests may appear, and shall provide for not less than 30 days'
prior written notice to the Agent of the exercise of any right of cancellation.
If the Loan Parties or any of their Subsidiaries fail to maintain such
insurance, the Agent may arrange for such insurance, but at the Borrowers'
expense and without any responsibility on the Agent's part for obtaining the
insurance, the solvency of the insurance companies, the adequacy of the
coverage, or the collection of claims. Upon the occurrence and during the
continuance of an Event of Default, the Agent shall have the sole right, in the
name of the Lenders, the Loan Parties and their Subsidiaries, to file claims
under any insurance policies, to receive, receipt and give acquittance for any
payments that may be payable thereunder, and to execute any and all
endorsements, receipts, releases, assignments, reassignments or other documents
that may be necessary to effect the collection, compromise or settlement of any
claims under any such insurance policies, subject to the rights of third parties
that have been granted a Permitted Lien that is prior to the Lien in favor of
the Agent.
(j) Obtaining of Permits, Etc. Obtain, maintain and
preserve, and cause each of their Subsidiaries to obtain, maintain and preserve,
all permits, licenses, authorizations, approvals, entitlements and
accreditations which are necessary or useful in the proper conduct of its
business, except where the failure to obtain, maintain or preserve such permits,
licenses, authorizations, approvals entitlements and accreditations is not
reasonably likely to have a Material Adverse Effect.
(k) Environmental. Except as provided in Schedule
6.01(q), (i) keep any Property either owned or operated by them or any of their
Subsidiaries free of any Environmental Liens; (ii) comply, and cause their
Subsidiaries to comply, in all material respects with Environmental Laws and
provide to the Agent documentation of such compliance which the Agent reasonably
requests; (iii) as soon as practicable notify the Agent of any Release of a
Hazardous Material in excess of any reportable quantity from or onto Property
owned or operated by the Loan Parties or any of their Subsidiaries and take any
Remedial Actions required by Environmental Law to ▇▇▇▇▇ said Release; (iv)
promptly provide the Agent with written notice within 10 days of the receipt of
any of the following: (A) notice that an Environmental Lien has been filed
against any Property of any Loan Party or any of its Subsidiaries; (B)
commencement of any Environmental Action or notice that an Environmental Action
will be filed against any Loan Party or any of its Subsidiaries; and (C) notice
of a violation, citation or other administrative order which could have a
Material Adverse Effect and (v) defend, indemnify and hold harmless the Agent
and the Lenders and their transferees, and their respective employees, agents,
officers and directors, from and against any claims, demands, penalties, fines,
liabilities, settlements, damages, costs or expenses (including, without
limitation, reasonable attorney and consultant fees, investigation and
laboratory fees, court costs and litigation expenses) arising out of (A) the
presence, disposal, release or threatened release of any Hazardous Materials on
any Property at any time owned or occupied by any Loan Party or any of its
Subsidiaries (or its
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respective predecessors in interest or title), (B) any personal injury
(including wrongful death) or property damage (real or personal) arising out of
or related to such Hazardous Materials, (C) any investigation, lawsuit brought
or threatened, settlement reached or government order relating to such Hazardous
Materials and/or (D) any violation of any Environmental Law.
(l) Further Assurances. Take such action and execute,
acknowledge and deliver, and cause each of their Subsidiaries to take such
action and execute, acknowledge and deliver, at their sole cost and expense,
such agreements, instruments or other documents as the Agent may reasonably
require from time to time in order (i) to carry out more effectively the
purposes of this Agreement and the other Loan Documents, (ii) to subject to
valid and perfected highest available priority Liens (subject to Permitted
Liens), to the extent required by this Agreement and the other Loan Documents,
any of the Collateral or any other Property of the Guarantors and their
Subsidiaries, (iii) to establish and maintain the validity and effectiveness of
any of the Loan Documents and the validity, perfection and priority of the Liens
intended to be created thereby (subject to Permitted Liens), and (iv) to better
assure, convey, grant, assign, transfer and confirm unto the Agent the rights
now or hereafter intended to be granted to the Agent and the Lenders under this
Agreement or any other Loan Document. The assurances contemplated by this
Section 7.01(l) shall be given under applicable nonbankruptcy law (to the extent
not inconsistent with the Bankruptcy Code and orders of the Bankruptcy Court) as
well as the Bankruptcy Code, it being the intention of the parties that the
Agent may request assurances under applicable nonbankruptcy law, and such
request shall be complied with (if otherwise made in good faith by the Agent and
to the extent permitted by law) whether or not the Final Bankruptcy Court Order
is in force and whether or not dismissal of the Chapter 11 Cases or any other
action by the Bankruptcy Court is imminent, likely or threatened.
(m) Change in Collateral; Collateral Records. (i)
Give the Agent not less than 30 days' prior written notice of any change in the
location of any Collateral owned by a Guarantor, other than to locations
existing on the Filing Date and with respect to which the Agent has filed
financing statements and otherwise fully perfected its Liens thereon (subject to
Permitted Liens), and (ii) advise the Agent promptly, in sufficient detail, of
any material adverse change relating to the type, quantity or quality of the
Collateral or the Lien granted thereon.
(n) Note Receivable Information. Maintain, and cause
each of their Subsidiaries to maintain, or other Persons shall maintain for
Parent and its Subsidiaries, files that are accurate and complete in all
material respects relating to the notes receivable with respect to the Resorts
and other Collateral, and such files will contain copies of each note
receivable, copies of all relevant credit memoranda relating to such notes
receivable and all collection information and material correspondence related
thereto.
(o) Management of Cash and Mortgage Notes. The
Borrowers shall (i) establish and maintain a cash management system in which
cash proceeds from the sale of time share inventory and mortgage notes
receivable subject to a Permitted Lien are not
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commingled with cash proceeds from the sale of time share inventory and mortgage
notes receivable subject to the first priority Lien in favor of the Agent and
(ii) cause all custodians having possession of the Borrowers' mortgage notes
receivable and related documents and instruments subject to a Permitted Lien to
be segregated and not commingled with mortgage notes receivable and related
documents and instruments subject to the first priority Lien in favor of the
Agent and cause such custodians to comply with clause (i) above.
(p) Budget. Use its best efforts to act in accordance
with the Budget.
(q) Management Availability. Cause its Senior
Management and Advisors, and use best efforts to cause each of their
Subsidiaries to cause such Subsidiary's Senior Management and Advisors, to be
available to the Agent or representatives thereof on a monthly basis at times
and locations to be agreed upon and to provide the Agent or representatives
thereof with an update with respect to current operations and information
regarding the previous month's actual operating and financial results.
(r) Change in Key Personnel. Give the Agent prompt
notice of any changes or pending changes with respect to any Key Personnel,
including any material changes to the duties and responsibilities of any Key
Personnel and use best efforts to replace any Key Personnel with an individual
reasonably satisfactory to the Agent within 45 days of any vacancy (other than
the chief executive officer or chief financial officer) and, in the case of the
chief executive officer or chief financial officer, within 60 days of any
vacancy; provided, that, in any event, the Parent shall replace the chief
executive officer and the chief financial officer with an individual reasonably
satisfactory to the Agent within 90 days of any vacancy.
(s) Conversion of Soft Inventory. Use its reasonable
efforts to convert "soft" inventory and "accounts receivable" inventory into
"hard" inventory.
(t) Collateral Information. Use its best efforts to
provide the Agent with copies of any appraisals or valuations of material
Collateral and any qualified letter of intent, offer or commitment to purchase
material Collateral, in each case to the extent prepared for or received by any
of the Borrowers and to provide promptly to the Agent an updated Exhibit G to
the extent that Accounts Held for Sale are offered or listed at prices
materially less than the "Estimated Net Proceeds" set forth on such Exhibit for
such assets.
(u) Management of Resorts. With respect to each
Resort with which they have a management contract on the Final Facility
Effective Date, maintain, and cause each of their Subsidiaries to maintain such
management contracts, except to the extent that the failure to maintain such
management contracts is not reasonably likely to have a Material Adverse Effect.
(v) Homeowners' Association and Maintenance Fees.
Pay, and cause each of their Subsidiaries to pay, all homeowners' association
and maintenance fees required to
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be paid by them before such fees become delinquent or become a Lien (other than
a Permitted Lien) or charge upon any of its properties, except to the extent
contested in good faith by proper proceedings which stay the imposition of any
penalty, fine or Lien resulting from the non-payment thereof and with respect to
which adequate reserves have been set aside for the payment thereof.
(w) Servicer and Custodian. Enter into, and cause
each of their Subsidiaries to enter into, such servicer and custodian
arrangements as agreed to by the Agent and the Administrative Borrower;
provided, that, prior to entering into any custodian arrangements, the Borrowers
shall obtain either (i) the written consent of the Creditors Committee or (ii)
the approval of the Bankruptcy Court.
(x) Regulatory Matters. Comply, and cause each of
their Subsidiaries to comply, with all applicable regulations of any
Governmental Authority with respect to the sale of Time Share Interests in each
jurisdiction in which they are currently selling Time Share Interests, and to
take all actions (or cease all actions) as may be necessary to sell Time Share
Interests in each relevant jurisdiction, except to the extent such noncompliance
or failure to take action is not reasonably likely to have a Material Adverse
Effect.
(y) Sales and Marketing. At all times maintain, and
cause each of their Subsidiaries to maintain, an active sales and marketing
program for the sale of the Time Share Interests in each location where it
currently has material sales and marketing programs and in which it continues to
have material Time Share Interests.
(z) Club Obligations. Cause the Club to remain in
compliance in all material respects with all applicable laws, statutes, rules
and governmental regulations applicable to it and in compliance with each
material instrument, agreement or document to which it is a party or by which it
is bound. At all times, the Borrowers will administer and maintain all
obligations under the Club according to the terms and conditions of each
material instrument, agreement or document to which they are parties or by which
they are bound.
(aa) Systems. At all times maintain, and cause each
of their Subsidiaries to maintain, accounting and inventory interval systems
substantially as currently operating.
(bb) Inventory Management. Within a reasonable period
of time after the Final Facility Effective Date, implement, and cause each of
their Subsidiaries to implement, a backup storage and disaster recovery program
for their inventory management systems reasonably acceptable to the Agent.
(cc) Financial Advisor. At all times continue to
retain ▇▇▇ ▇▇▇▇ & Associates and a financial advisor reasonably acceptable to
Agent.
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(dd) Lien Releases. Use its commercially reasonable
efforts to have terminated or discharged all Liens (other than Permitted Liens
(other than Liens referred to in clause (n) of the definition of Permitted
Liens)) identified pursuant to the title searches and UCC searches obtained
pursuant to Section 5.04(b), and provide to the Agent evidence acceptable to the
Agent, in its sole and absolute discretion, of such termination or discharge.
(ee) Power of Attorney. Grant to the Agent a power of
attorney, in form and substance mutually agreed between the Agent and the
Administrative Borrower, executed by the Loan Parties and relating to the
resolution of exceptions pursuant to the Custodial Agreement and the Custodial
Bi-Party Agreement
SECTION 7.02 Negative Covenants. So long as any principal of or
interest on any Loan or any other Obligation (whether or not due) shall remain
unpaid or any Lender shall have any Commitment hereunder, the Borrowers shall
not, unless the Required Lenders shall otherwise consent in writing:
(a) Final Bankruptcy Court Order; Administrative
Priority; Lien Priority; Payment of Claims.
(i) At any time seek, consent to or suffer
to exist any modification, stay, vacation or amendment of the Final Bankruptcy
Court Order except for modifications and amendments agreed to by the Agent;
(ii) At any time suffer to exist a priority
for any administrative expense or unsecured claim against any Borrower (now
existing or hereafter arising of any kind or nature whatsoever, including
without limitation any administrative expenses of the kind specified in Sections
503(b) and 507(b) of the Bankruptcy Code) equal or superior to the priority of
the Lenders in respect of the Obligations, except for the Carve-Out Expenses
having priority over the Obligations to the extent set forth in the definition
of Agreed Administrative Expense Priorities;
(iii) At any time suffer to exist any Lien
on the Collateral having a priority equal or superior to the Lien in favor of
the Lenders in respect of the Collateral except for Permitted Liens; and
(iv) Prior to the date on which the
Obligations have been paid in full in cash and the Term Loan Commitment and the
Revolving Credit Commitment have been terminated, pay any administrative expense
claims except (A) Priority Professional Expenses and other payments pursuant to
sub-clause (i) of clause "first" of the definition of the term "Agreed
Administrative Expense Priorities", (B) any Obligations due and payable
hereunder, (C) other administrative expense claims incurred in the ordinary
course of the business of the Borrowers or their respective Chapter 11 Cases,
and (D) payments of pre-petition obligations permitted pursuant to Section
7.02(j) hereof (but which shall be authorized and
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allowed only if no Default or Event of Default shall have occurred and be
continuing), in each case to the extent and having the order of priority set
forth in the Agreed Administrative Expense Priorities.
(b) Liens, Etc. Create, incur, assume or suffer to
exist, or permit any of their Subsidiaries to create, incur, assume or suffer to
exist any Lien upon or with respect to any of their properties, whether now
owned or hereafter acquired, to file or suffer to exist under the Uniform
Commercial Code or any similar law or statute of any jurisdiction, a financing
statement (or the equivalent thereof) that names any Loan Party or any of its
Subsidiaries as debtor, to sign or suffer to exist any security agreement
authorizing any secured party thereunder to file such financing statement (or
the equivalent thereof), to sell any of its Property or assets subject to an
understanding or agreement, contingent or otherwise, to repurchase such Property
or assets (including sales of accounts receivable) with recourse to any Loan
Party or any of its Subsidiaries or assign or otherwise transfer, or permit any
of its Subsidiaries to assign or otherwise transfer, any account or other right
to receive income; other than, as to all of the above, Permitted Liens.
(c) Indebtedness. Create, incur, assume, guarantee or
suffer to exist, or otherwise become or remain liable with respect to, or permit
any of their Subsidiaries to create, incur, assume, guarantee or suffer to exist
or otherwise become or remain liable with respect to, any Indebtedness other
than Permitted Indebtedness.
(d) Fundamental Changes. Wind-up, liquidate or
dissolve (or permit or suffer any thereof) or merge, consolidate or amalgamate
with any Person, convey, sell, lease or sublease, transfer or otherwise dispose
of, whether in one transaction or a series of related transactions, all or any
part of their business, Property or assets, whether now owned or hereafter
acquired, or (agree to do any of the foregoing) or purchase or otherwise
acquire, whether in one transaction or a series of related transactions, all or
substantially all of the assets of any Person (or any division thereof) (or
agree to do any of the foregoing), or permit any of their Subsidiaries to do any
of the foregoing; provided, however, that
(i) (A) any Borrower may be merged into or
may consolidate with another Borrower, (B) any Guarantor may be merged into or
may consolidate with another Guarantor or (C) any wholly-owned Subsidiary of any
Loan Party (other than the Borrowers or the Guarantors) may be merged into such
Loan Party or another such wholly-owned Subsidiary of such Loan Party, or may
consolidate with another such wholly-owned Subsidiary of such Loan Party, so
long as (w) no other provision of this Agreement would be violated thereby, (x)
such Loan Party gives the Agent at least 60 days' prior written notice of such
merger or consolidation, (y) no Default or Event of Default shall have occurred
and be continuing either before or after giving effect to such transaction, and
(z) the Lenders' rights in any Collateral, including, without limitation, the
existence, perfection and priority of any Lien thereon, are not adversely
affected by such merger or consolidation;
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(ii) any of the Loan Parties and their
Subsidiaries may (A) sell Time Share Interests and other inventory in the
ordinary course of business, (B) dispose of obsolete or worn-out equipment in
the ordinary course of business, (C) enter into licenses or sublicenses in the
ordinary course of business, (D) effect transfers permitted by Section 7.02(f)
or Section 7.02(g) hereof , (E) effect Permitted Dispositions and (F) sell or
otherwise dispose of other Property or assets for cash in an aggregate amount
not less than the fair market value of such Property or assets with the consent
of the Agent, such consent not to be unreasonably withheld, provided that (x)
the consent of the Agent shall not be required for Dispositions (including any
transfer of a property management contract) set forth in the Budget so long as
the cumulative Net Cash Proceeds from such Dispositions are greater than or
equal to 90% of the cumulative forecasted Net Cash Proceeds for such
Dispositions as set forth in the Budget, and (y) the Borrowers comply with the
terms of Section 2.09(b)(ii) and Section 2.10(c)(ii); provided further, that in
any event the Net Cash Proceeds from a proposed Disposition will be greater than
or equal to 80% of the forecasted Net Cash Proceeds for such Disposition. The
Lien of the Agent and the Lenders in time share inventory sold in the ordinary
course of business on ordinary business terms in which the Net Cash Proceeds for
any such sale are less than $50,000 shall be released automatically and without
any further action on the part of the Agent or the Lenders upon the effective
date of such sale, provided that such release shall be revoked if the title
insurance company insuring the interest of the purchaser of such time share
inventory or the Administrative Borrower has received written notice from the
Agent of such revocation;
(iii) any of the Loan Parties and their
Subsidiaries may make investments in or loans to Non-Debtor Subsidiaries with an
aggregate balance at any time outstanding not more than $7,500,000 in excess of
such balance as of the Final Facility Effective Date; and
(iv) any of the Non-Debtor Subsidiaries
(other than the Guarantors) may convey, transfer or otherwise dispose of
Property and assets with a fair market value not to exceed $5,000,000 from the
Final Facility Effective Date and in a total amount not to exceed $15,000,000 in
the aggregate for all Non-Debtor Subsidiaries from the Final Facility Effective
Date.
(e) Change in Type of Business. Make, or permit any
of their Subsidiaries to make, any material change in the type of its business
as carried on at the date hereof.
(f) Loans, Advances, Investments, Etc. Make or commit
or agree to make any loan, advance guarantee of obligations, other extension of
credit or capital contributions to, or hold or invest in or commit or agree to
hold or invest in, or purchase or otherwise acquire or commit or agree to
purchase or otherwise acquire any shares of the Capital Stock, bonds, notes,
debentures or other securities of, or make or commit or agree to make any other
investment in, any other Person, or purchase or own any futures contract or
otherwise
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become liable for the purchase or sale of currency or other commodities at a
future date in the nature of a futures contract, or permit any of its
Subsidiaries to do any of the foregoing, except for: (i) investments existing on
the Final Facility Effective Date, as set forth on Schedule 7.02(f) hereto, but
not any increase in the amount thereof as set forth in such Schedule or any
other modification of the terms thereof, (ii) transfers, investments or loans
permitted by Section 7.02(d)(iii) hereof, (iii) other loans and advances by any
Loan Party to another Loan Party made in the ordinary course of business,
provided that any such loans or advances to any Loan Party that is not a
Borrower shall be subject to the prior written consent of the Agent and the
approval of the Bankruptcy Court, (iv) loans and advances made by any Non-Debtor
Subsidiary to any Loan Party, (v) purchase money loans made by any Loan Party to
the purchasers of time share inventory in the ordinary course of business, (vi)
other acquisitions or investments by Non-Debtor Subsidiaries in an amount not to
exceed $5,000,000 for any such acquisition or investment or, with the consent of
the Agent, such consent not to be unreasonably withheld, an agreed upon greater
amount, and (vi) Permitted Investments.
(g) Lease Obligations. Create, incur or suffer to
exist, or permit any of their Subsidiaries to create, incur or suffer to exist,
any obligations as lessee (i) for the payment of rent for any real or personal
property in connection with any sale and leaseback transaction, or (ii) for the
payment of rent for any real or personal property under leases or agreements to
lease other than (A) Capitalized Lease Obligations which would not cause the
aggregate amount of all obligations under Capitalized Leases entered into after
the Final Facility Effective Date owing by the Loan Parties and their
Subsidiaries to exceed the amounts provided for in subsection (h) of this
Section 7.02, and (B) Operating Lease Obligations which would not cause the
aggregate amount of all Operating Lease Obligations owing by the Loan Parties
and their Subsidiaries to exceed the amount outstanding on the Final Facility
Effective Date.
(h) Capital Expenditures. Make or commit or agree to
make, any Capital Expenditure (by purchase or Capitalized Lease) that would
cause the aggregate amount of all such Capital Expenditures made by the
Borrowers to exceed an amount as set forth in the Budget.
(i) Restricted Payments. (i) Declare or pay any
dividend or other distribution, direct or indirect, on account of any Capital
Stock of any Loan Party or any of its Subsidiaries, now or hereafter
outstanding, (ii) make any repurchase, redemption, retirement, defeasance,
sinking fund or similar payment, purchase or other acquisition for value, direct
or indirect, of any Capital Stock of any Loan Party or any direct or indirect
parent of any Loan Party, now or hereafter outstanding, (iii) make any payment
to retire, or to obtain the surrender of, any outstanding warrants, options or
other rights for the purchase or acquisition of shares of any class of Capital
Stock of any Loan Party, now or hereafter outstanding, (iv) return any of
capital to any shareholders or other equity holders of any Loan Party or any of
its Subsidiaries, or make any other distribution of Property, assets, shares of
Capital Stock, warrants, rights, options, obligations or securities thereto as
such or (v) pay any management fees or any other fees or
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expenses (including the reimbursement thereof by any Loan Party or any of its
Subsidiaries) pursuant to any management, consulting or other services agreement
to any of the shareholders or other equityholders of any Loan Party or any of
its Subsidiaries, or to any other Subsidiaries of any Loan Party.
(j) Payments. Make any payment of principal or
interest or otherwise on account of any Indebtedness or trade payable incurred
prior to the Filing Date, provided that such payments may be made: (i) to the
holders of, or in respect of, wage, salary, commission or other compensation and
employee benefit obligations (including expense reimbursements) to employees and
independent contractors which arose prior to the Filing Date; (ii) to landlords
in connection with the assumption of unexpired leases under Section 365 of the
Bankruptcy Code in an aggregate amount acceptable to the Agent; (iii) to lessors
and non-debtor parties to executory contracts in connection with the assumption
of such leases and contracts under Section 365 of the Bankruptcy Code; (iv) in
respect of workers' compensation benefits and liability and property insurance
policies of the Borrowers in an aggregate amount acceptable to the Agent; (v)
with respect to payroll taxes, garnishment payments, sales taxes, gift
certificates, customer refunds, customer credits or other trust fund
disbursements in accordance with past practice of the Borrowers; (vi) to the
holders of Permitted Liens which have priority over the Liens securing the
Obligations, the proceeds of the assets subject to such Permitted Liens in
connection with the sale, disposition, collection or other liquidation of such
assets to the extent necessary to satisfy such Permitted Liens; (vii) to the
holders of such Indebtedness, payments of principal, interest and fees with
respect to the Indebtedness of Sunterra Europe outstanding on the Filing Date in
an amount acceptable to the Agent; and (viii) to homeowners, timeshare,
condominium or property owners associations, fees, dues and other obligations
for the payment of money that become due prior to the Filing Date in an
aggregate amount acceptable to the Agent; in each case after prior written
notice of such payment has been given by the Administrative Borrower to the
Agent and subject to approval of the Bankruptcy Court.
(k) Transactions with Affiliates. Enter into, renew,
extend or be a party to, or permit any of their Subsidiaries to enter into,
renew, extend or be a party to any transaction or series of related transactions
(including, without limitation, the purchase, sale, lease, transfer or exchange
of Property or assets of any kind or the rendering of services of any kind) with
any Affiliate, except (i) in the ordinary course of business in a manner and to
an extent consistent with past practice and necessary or desirable for the
prudent operation of its business, for fair consideration and on terms no less
favorable to the Loan Parties or such Subsidiaries than would be obtainable in a
comparable arm's length transaction with a Person that is not an Affiliate
thereof, (ii) transactions among the Loan Parties and (iii) the conversion of
that certain Sunterra Europe intercompany note from a demand note to a term
facility on the terms and conditions set forth on Schedule 7.02(k).
(l) Environmental. Permit the use, handling,
generation, storage, treatment, release or disposal of Hazardous Materials at
any Property owned or leased by the
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Loan Parties or any of their Subsidiaries except in compliance with
Environmental Laws and so long as such use, handling, generation, storage,
treatment, release or disposal of Hazardous Materials does not result in a
Material Adverse Effect.
(m) Multiemployer Plans. Become or permit any ERISA
Affiliate to become obligated to contribute to any Multiemployer Plan, or assume
or permit any ERISA Affiliate to assume any obligation of any predecessor with
respect to any Multiemployer Plan.
(n) Availability. Permit the sum of (i) the month-end
book cash balance for any month (excluding amounts, if any, then on deposit in
the Blocked Accounts described in Sections 2.10(c)(i), 2.09(b)(iii) and
2.10(c)(iii)) and (ii) the Revolving Credit Borrowing Base less the aggregate
principal amount of Revolving Loans outstanding as of the end of such month, to
be less than $5,000,000.
(o) Collateral Coverage Ratio. Permit the Collateral
Coverage Ratio at any time to be less than the Required Collateral Coverage
Ratio; provided, that if the Collateral Coverage Ratio is equal to or less than
the Required Collateral Coverage Ratio, but greater that 1.75:1, then the
Administrative Borrower shall promptly but in any event within 10 Business Days
provide the Agent with a report outlining the reasons for the failure to
maintain a Collateral Coverage Ratio at least equal to the Required Collateral
Coverage Ratio and a plan (in such detail and substance as is acceptable to the
Agent) for achieving a Collateral Coverage Ratio at least equal to the Required
Collateral Coverage Ratio within a timeframe acceptable to the Agent (such
timeframe shall in no event exceed 90 days) (the "Collateral Coverage Ratio
Compliance Plan") and the Borrowers shall have 30 days from the date set forth
in the Collateral Coverage Ratio Compliance Plan to achieve a Collateral
Coverage Ratio at least equal to the Required Collateral Coverage Ratio; and
provided, further, that if the Administrative Borrower and the Agent are unable
to agree upon a Collateral Coverage Ratio Compliance Plan within 15 Business
Days after the initial noncompliance with the Collateral Coverage Ratio
(provided that the Collateral Coverage Ratio is greater than 1.75:1), then the
Borrowers shall have 30 days to achieve a Collateral Coverage Ratio at least
equal to the Required Collateral Coverage Ratio.
(p) Net Sales Contracts. As of the end of any month,
permit the aggregate amount of actual Time Share Interests sales contracts
written, net of ordinary course rescissions, for the last three months to exceed
a 40% positive variance or a 25% negative variance from the forecasted amount as
set forth in the Budget.
(q) Operating Margin. At any time, permit the
negative variance, if any, between the cumulative actual monthly Operating
Margin and the cumulative forecasted monthly Operating Margin for the same
period (as set forth in the Budget) to exceed $6,000,000.
(r) Professional Fees. Incur or pay any professional
fees incurred in connection with the Chapter 11 Cases during any three month
period in an amount in excess of
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120% of the forecasted amount of professional fees as approved by the Agent and
as set forth in the Budget (the "Professional Fee Cap"); provided, however, that
the Professional Fee Cap may be increased to the extent a pro forma Budget
reflecting such increase demonstrates to the reasonable satisfaction of the
Agent that the Collateral Coverage Ratio for the remaining term of this
Agreement will be equal to or greater than the Required Collateral Coverage
Ratio.
(s) Adjustment of Pricing. Without the Agent's
consent, such consent not to be unreasonably withheld, seek any material
adjustment to the Bankruptcy Court-approved pricing as of the Final Facility
Effective Date.
(t) Board of Directors of Parent. Without the Agent's
consent, such consent not to be unreasonably withheld, permit the election or
appointment to the Board of Directors of the Parent of any individual who is not
a director of the Parent as of the Final Facility Effective Date.
ARTICLE VIII.
EVENTS OF DEFAULT
SECTION 8.01 Events of Default. If any of the following Events of
Default shall occur and be continuing:
(a) the Borrowers shall fail to pay any principal of
or interest on any Loan, any Agent Advance or any fee, indemnity or other amount
payable under this Agreement or any other Loan Document when due (whether by
scheduled maturity, required prepayment, acceleration, demand or otherwise);
(b) any representation or warranty made or deemed
made by or on behalf of any Loan Party or by any officer of the foregoing under
or in connection with any Loan Document or under or in connection with any
report, certificate, or other document delivered to the Agent or the Lenders
pursuant to any Loan Document shall have been incorrect or misleading in any
material respect when made or deemed made;
(c) any Loan Party shall fail to perform or comply
with any covenant or agreement contained in Article VII, or any Loan Party shall
fail to perform or comply with any covenant or agreement contained in Section 5
of any Security Agreement to which it is a party or Section 6 of any Pledge
Agreement to which it is a party or any material covenant of any Mortgage to
which it is a party, or the Collateral Coverage Ratio at any time shall be less
than 1.75:1;
(d) any Loan Party shall fail to perform or comply
with any other term, covenant or agreement contained in any Loan Document to be
performed or observed by it and, except as set forth in subsections (a), (b) and
(c) of this Section 8.01, such failure, if capable
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of being remedied, shall remain unremedied for 30 days after the earlier of the
date a senior officer of any Loan Party becomes aware of such failure and the
date written notice of such default shall have been given by the Agent to such
Loan Party;
(e) any Guarantor shall fail to pay any principal of
or interest on any of its Indebtedness (excluding Indebtedness evidenced by the
Term Loan Notes and the Revolving Credit Notes) in excess of $1,000,000, or any
interest or premium thereon, when due (whether by scheduled maturity, required
prepayment, acceleration, demand or otherwise) and such failure shall continue
after the applicable grace period, if any, specified in the agreement or
instrument relating to such Indebtedness, or any other default under any
agreement or instrument relating to any such Indebtedness, or any other event,
shall occur and shall continue after the applicable grace period, if any,
specified in such agreement or instrument, if the effect of such default or
event is to accelerate, or to permit the acceleration of, the maturity of such
Indebtedness; or any such Indebtedness shall be declared to be due and payable,
or required to be prepaid (other than by a regularly scheduled required
prepayment), redeemed, purchased or defeased or an offer to prepay, redeem,
purchase or defease such Indebtedness shall be required to be made, in each case
prior to the stated maturity thereof;
(f) An order with respect to any of the Chapter 11
Cases shall be entered by the Bankruptcy Court appointing, or any Borrower shall
file an application for an order with respect to any Chapter 11 Case seeking the
appointment of, (i) a trustee under Section 1104, or (ii) an examiner with
enlarged powers relating to the operation of the business (powers beyond those
set forth in Section 1106(a)(3) and (4) of the Bankruptcy Code) under Section
1106(b) of the Bankruptcy Code;
(g) An order with respect to any of the Chapter 11
Cases shall be entered by the Bankruptcy Court converting such Chapter 11 Case
to a Chapter 7 case;
(h) (i) the Borrowers file a Comprehensive Plan of
Reorganization which does not contain a provision for termination of the Term
Loan Commitment and the Revolving Credit Commitment and payment in full in cash
of all Obligations of the Borrowers hereunder and under the other Loan Documents
on or before the effective date of such plan or plans or (ii) an order shall be
entered by the Bankruptcy Court confirming a plan of reorganization in any of
the Chapter 11 Cases which does not contain a provision for termination of the
Term Loan Commitment and the Revolving Credit Commitment and payment in full in
cash of all Obligations of the Borrowers hereunder and under the other Loan
Documents on or before the effective date of such plan or plans upon entry
thereof;
(i) An order shall be entered by the Bankruptcy Court
dismissing any of the Chapter 11 Cases which does not contain a provision for
termination of the Term Loan Commitments and the Revolving Credit Commitments,
and payment in full in cash of all Obligations of the Borrowers hereunder and
under the other Loan Documents upon entry thereof;
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(j) An order with respect to any of the Chapter 11
Cases shall be entered by the Bankruptcy Court without the express prior written
consent of the Lender, (i) to revoke, reverse, stay, modify, supplement or amend
the Final Bankruptcy Court Order or (ii) to permit any administrative expense or
any claim (now existing or hereafter arising, of any kind or nature whatsoever)
to have administrative priority as to the Borrowers equal or superior to the
priority of the Lender in respect of the Obligations, except for allowed
administrative expenses having priority over the Obligations to the extent set
forth in the Agreed Administrative Expense Priorities, or (iii) to grant or
permit the grant of a Lien on the Collateral other than a Permitted Lien;
(k) an application for any of the orders described in
clauses (f), (g), (h), (i) or (j) above shall be made by a Person other than the
Borrowers and such application is not contested by the Borrowers in good faith
and the relief requested is granted in an order that is not stayed pending
appeal;
(l) an order shall be entered by the Bankruptcy Court
that is not stayed pending appeal granting relief from the automatic stay to any
creditor of any of the Borrowers with respect to any claim in an amount equal to
or exceeding $2,000,000 in the aggregate; provided, however, that it shall not
be an Event of Default if relief from the automatic stay is granted (i) solely
for the purpose of allowing such creditor to determine the liquidated amount of
its claim against the Borrowers, or (ii) to permit the commencement of and/or
prosecution of a proceeding to collect against an insurance company;
(m) any Guarantor, AKGI Poipu Investments, Inc.,
Argosy/KGI Poipu Investment Partnership, L.P. or Signature Capital-West Maui,
LLC (i) shall institute any proceeding or voluntary case seeking to adjudicate
it a bankrupt or insolvent, or seeking dissolution, liquidation, winding up,
reorganization, arrangement, adjustment, protection, relief or composition of it
or its debts under any law relating to bankruptcy, insolvency, reorganization or
relief of debtors, or seeking the entry of an order for relief or the
appointment of a receiver, trustee, custodian or other similar official for any
such Person or for any substantial part of its Property, (ii) shall be generally
not paying its debts as such debts become due or shall admit in writing its
inability to pay its debts generally, (iii) shall make a general assignment for
the benefit of creditors, or (iv) shall take any action to authorize or effect
any of the actions set forth above in this subsection (m);
(n) any proceeding shall be instituted against any
Guarantor, AKGI Poipu Investments, Inc., Argosy/KGI Poipu Investment
Partnership, L.P. or Signature Capital-West Maui, LLC seeking to adjudicate it a
bankrupt or insolvent, or seeking dissolution, liquidation, winding up,
reorganization, arrangement, adjustment, protection, relief of debtors, or
seeking the entry of an order for relief or the appointment of a receiver,
trustee, custodian or other similar official for any such Person or for any
substantial part of its Property, and either such proceeding shall remain
undismissed or unstayed for a period of 30 days or any of the
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actions sought in such proceeding (including, without limitation, the entry of
an order for relief against any such Person or the appointment of a receiver,
trustee, custodian or other similar official for it or for any substantial part
of its Property) shall occur;
(o) any provision of any Loan Document shall at any
time for any reason (other than pursuant to the express terms thereof) cease to
be valid and binding on or enforceable against any Loan Party intended to be a
party thereto, or the validity or enforceability thereof shall be contested by
any party thereto, or a proceeding shall be commenced by any Loan Party or any
Governmental Authority having jurisdiction over any of them, seeking to
establish the invalidity or unenforceability thereof, any Loan Party shall deny
in writing that it has any liability or obligation purported to be created under
any Loan Document;
(p) any Security Agreement, any Mortgage or any other
security document, after delivery thereof pursuant hereto, shall for any reason
fail or cease to create a valid and perfected and, except to the extent
permitted by the terms hereof or thereof, first priority Lien in favor of the
Agent for the benefit of the Lenders on any Collateral purported to be covered
thereby;
(q) one or more judgments or orders for the payment
of money exceeding $1,000,000 in the aggregate shall be rendered against any
Guarantor and remain unsatisfied and either (i) enforcement proceedings shall
have been commenced by any creditor upon any such judgment or order, or (ii)
there shall be a period of 10 consecutive days after entry thereof during which
a stay of enforcement of any such judgment or order, by reason of a pending
appeal or otherwise, shall not be in effect; provided, however, that any such
judgment or order shall not give rise to an Event of Default under this
subsection (q) if and for so long as (A) the amount of such judgment or order is
covered by a valid and binding policy of insurance between the defendant and the
insurer covering full payment thereof and (B) such insurer has been notified,
and has not disputed the claim made for payment, of the amount of such judgment
or order;
(r) any Termination Event with respect to any
Employee Plan shall have occurred, and, 30 days after notice thereof shall have
been given to any Loan Party by the Agent, (i) such Termination Event (if
correctable) shall not have been corrected, and (ii) the then current value of
such Employee Plan's vested benefits exceeds the then current value of assets
allocable to such benefits in such Employee Plan by more than $2,000,000 (or, in
the case of a Termination Event involving liability under Section 409, 502(i),
502(l), 515, 4062, 4063, 4064, 4069, 4201, 4204 or 4212 of ERISA or Section 4971
or 4975 of the Code, the liability is in excess of such amount);
(s) an event or development occurs which has or is
reasonably likely to have a Material Adverse Effect which is not cured within 10
Business Days after notice thereof to the Administrative Borrower by the Agent;
or
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(t) the Borrowers shall fail to deliver to the Agent
within seven (7) days after the Final Facility Effective Date, such opinions
required to be delivered pursuant to Section 5.01(e)(iv) which the Agent has, in
its sole and absolute discretion, permitted the Borrowers to deliver within
seven (7) days after the Final Facility Effective Date;
then, and in any such event, the Agent may, and shall at the request of the
Required Lenders, by notice to the Administrative Borrower, (i) terminate the
Revolving Credit Commitments and the Term Loan Commitments, whereupon the
Revolving Credit Commitments and the Term Loan Commitments shall terminate
immediately, (ii) declare all Loans then outstanding to be due and payable,
whereupon the aggregate principal of such Loans, all accrued and unpaid interest
thereon, all fees and all other amounts payable under this Agreement shall
become due and payable immediately, without further order of, or application to,
the Bankruptcy Court, presentment, demand, protest or further notice of any
kind, all of which are hereby expressly waived by each Loan Party and (iii)
exercise any and all of its other rights and remedies under applicable law
(including, but not limited to, the Bankruptcy Code and the Uniform Commercial
Code), hereunder and under the other Loan Documents.
ARTICLE IX.
AGENT
SECTION 9.01 Appointment. Each Lender (and each subsequent holder of
any Note by its acceptance thereof) hereby irrevocably appoints and authorizes
the Agent to perform the duties of the Agent as set forth in this Agreement
including: (i) to receive on behalf of each Lender any payment of principal of
or interest on the Notes outstanding hereunder and all other amounts accrued
hereunder for the account of the Lenders and paid to the Agent, and, subject to
Section 2.03 of this Agreement, to distribute promptly to each Lender its Pro
Rata Share of all payments so received, (ii) to distribute to each Lender copies
of all material notices and agreements received by the Agent and not required to
be delivered to each Lender pursuant to the terms of this Agreement, provided
that the Agent shall not have any liability to the Lenders for the Agent's
inadvertent failure to distribute any such notices or agreements to the Lenders
and (iii) subject to Section 9.03 of this Agreement, to take such action as the
Agent deems appropriate on its behalf to administer the Loans and the Loan
Documents and to exercise such other powers delegated to the Agent by the terms
hereof or the Loan Documents (including, without limitation, the power to give
or to refuse to give notices, waivers, consents, approvals and instructions and
the power to make or to refuse to make determinations and calculations) together
with such powers as are reasonably incidental thereto to carry out the purposes
hereof and thereof. As to any matters not expressly provided for by this
Agreement and the other Loan Documents (including, without limitation,
enforcement or collection of the Notes), the Agent shall not be required to
exercise any discretion or take any action, but shall be required to act or to
refrain from acting (and shall be fully protected in so acting or refraining
from acting) upon the instructions of the Required Lenders, and such
instructions of the Required Lenders shall be
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binding upon all Lenders and all holders of Notes; provided, however, that the
Agent shall not be required to take any action which, in the reasonable opinion
of the Agent, exposes the Agent to liability or which is contrary to this
Agreement or any Loan Document or applicable law.
SECTION 9.02 Nature of Duties. The Agent shall have no duties or
responsibilities except those expressly set forth in this Agreement or in the
Loan Documents. The duties of the Agent shall be mechanical and administrative
in nature. The Agent shall not have by reason of this Agreement or any Loan
Document a fiduciary relationship in respect of any Lender. Nothing in this
Agreement or any of the Loan Documents, express or implied, is intended to or
shall be construed to impose upon the Agent any obligations in respect of this
Agreement or any of the Loan Documents except as expressly set forth herein or
therein. Each Lender shall make its own independent investigation of the
financial condition and affairs of the Loan Parties in connection with the
making and the continuance of the Loans hereunder and shall make its own
appraisal of the creditworthiness of the Loan Parties and the value of the
Collateral, and the Agent shall have no duty or responsibility, either initially
or on a continuing basis, to provide any Lender with any credit or other
information with respect thereto, whether coming into its possession before the
initial Loans hereunder or at any time or times thereafter, provided that, upon
the reasonable request of a Lender, the Agent shall provide to such Lender any
documents or reports delivered to the Agent by the Loan Parties pursuant to the
terms of this Agreement or any Loan Document. If the Agent seeks the consent or
approval of the Required Lenders to the taking or refraining from taking any
action hereunder, the Agent shall send notice thereof to each Lender. The Agent
shall promptly notify each Lender any time that the Required Lenders have
instructed the Agent to act or refrain from acting pursuant hereto.
SECTION 9.03 Rights, Exculpation, Etc. The Agent and its directors,
officers, agents or employees shall not be liable for any action taken or
omitted to be taken by it under or in connection with this Agreement or the
other Loan Documents. Without limiting the generality of the foregoing, the
Agent (i) may treat the payee of any Note as the holder thereof until the Agent
receives written notice of the assignment or transfer thereof, pursuant to
Section 10.08 hereof, signed by such payee and in form satisfactory to the
Agent; (ii) may consult with legal counsel (including, without limitation,
counsel to the Agent or counsel to the Loan Parties), independent public
accountants, and other experts selected by it and shall not be liable for any
action taken or omitted to be taken in good faith by it in accordance with the
advice of such counsel or experts; (iii) make no warranty or representation to
any Lender and shall not be responsible to any Lender for any statements,
certificates, warranties or representations made in or in connection with this
Agreement or the other Loan Documents; (iv) shall not have any duty to ascertain
or to inquire as to the performance or observance of any of the terms, covenants
or conditions of this Agreement or the other Loan Documents on the part of any
Person, the existence or possible existence of any Default or Event of Default,
or to inspect the Collateral or other Property (including, without limitation,
the books and records) of any Person; (v) shall not be responsible to any Lender
for the due execution, legality, validity, enforceability, genuineness,
sufficiency or value of this Agreement or the other Loan Documents
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or any other instrument or document furnished pursuant hereto or thereto; and
(vi) shall not be deemed to have made any representation or warranty regarding
the existence, value or collectability of the Collateral, the existence,
priority or perfection of the Agent's Lien thereon, or any certificate prepared
by any Loan Party in connection therewith, nor shall the Agent be responsible or
liable to the Lenders for any failure to monitor or maintain any portion of the
Collateral. The Agent shall not be liable for any apportionment or distribution
of payments made in good faith pursuant to Section 2.03(c), and if any such
apportionment or distribution is subsequently determined to have been made in
error the sole recourse of any Lender to whom payment was due but not made,
shall be to recover from other Lenders any payment in excess of the amount which
they are determined to be entitled. The Agent may at any time request
instructions from the Lenders with respect to any actions or approvals which by
the terms of this Agreement or of any of the Loan Documents the Agent is
permitted or required to take or to grant, and if such instructions are promptly
requested, the Agent shall be absolutely entitled to refrain from taking any
action or to withhold any approval under any of the Loan Documents until it
shall have received such instructions from the Required Lenders. Without
limiting the foregoing, no Lender shall have any right of action whatsoever
against the Agent as a result of the Agent acting or refraining from acting
under this Agreement, the Notes or any of the other Loan Documents in accordance
with the instructions of the Required Lenders.
SECTION 9.04 Reliance. The Agent shall be entitled to rely upon any
written notices, statements, certificates, orders or other documents or any
telephone message believed by it in good faith to be genuine and correct and to
have been signed, sent or made by the proper Person, and with respect to all
matters pertaining to this Agreement or any of the Loan Documents and its duties
hereunder or thereunder, upon advice of counsel selected by it.
SECTION 9.05 Indemnification. To the extent that the Agent is not
reimbursed and indemnified by any Loan Party, the Lenders will reimburse and
indemnify the Agent from and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses, advances
or disbursements of any kind or nature whatsoever which may be imposed on,
incurred by, or asserted against the Agent in any way relating to or arising out
of this Agreement or any of the Loan Documents or any action taken or omitted by
the Agent under this Agreement or any of the Loan Documents, in proportion to
each Lender's Pro Rata Share, including, without limitation, advances and
disbursements made pursuant to Section 9.08; provided, however, that no Lender
shall be liable for any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses, advances or
disbursements for which there has been a final judicial determination that such
resulted from the Agent's gross negligence or willful misconduct. The
obligations of the Lenders under this Section 9.05 shall survive the payment in
full of the Loans and the termination of this Agreement.
SECTION 9.06 Agent Individually. With respect to its Pro Rata Share of
the Total Commitment hereunder, the Loans made by it and the Notes issued to or
held by it, the
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Agent shall have and may exercise the same rights and powers hereunder and is
subject to the same obligations and liabilities as and to the extent set forth
herein for any other Lender or holder of a Note. The terms "Lenders" or
"Required Lenders" or any similar terms shall, unless the context clearly
otherwise indicates, include the Agent in its individual capacity as a Lender or
one of the Required Lenders. The Agent and its Affiliates may accept deposits
from, lend money to, and generally engage in any kind of banking, trust or other
business with the Borrowers as if it were not acting as an Agent pursuant hereto
without any duty to account to the Lenders.
SECTION 9.07 Successor Agent.
(a) The Agent may resign from the performance of all
its functions and duties hereunder and under the other Loan Documents at any
time by giving at least thirty (30) Business Days' prior written notice to the
Administrative Borrower and each Lender. Such resignation shall take effect upon
the acceptance by a successor Agent of appointment pursuant to clauses (b) and
(c) below or as otherwise provided below.
(b) Upon any such notice of resignation, the Required
Lenders shall appoint a successor Agent who, in the absence of a continuing
Event of Default, shall be reasonably satisfactory to the Borrowers. Upon the
acceptance of any appointment as Agent hereunder by a successor Agent, such
successor Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Agent, and the retiring
Agent shall be discharged from its duties and obligations under this Agreement
and the other Loan Documents. After the Agent's resignation hereunder as the
Agent, the provisions of this Article IX shall inure to its benefit as to any
actions taken or omitted to be taken by it while it was Agent under this
Agreement and the other Loan Documents.
(c) If a successor Agent shall not have been so
appointed within said thirty (30) Business Day period, the retiring Agent shall
then appoint a successor Agent who, if an Event of Default is not continuing,
shall be reasonably satisfactory to the Borrowers, who shall serve as Agent
until such time, if any, as the Required Lenders appoint a successor Agent as
provided above.
SECTION 9.08 Collateral Matters.
(a) The Agent may from time to time, during the
occurrence and continuance of an Event of Default, make such disbursements and
advances ("Agent Advances") which the Agent, in its sole discretion, deems
necessary or desirable to preserve or protect the Collateral or any portion
thereof, to enhance the likelihood or maximize the amount of repayment by the
Borrowers of the Loans and other Obligations or to pay any other amount
chargeable to the Borrowers pursuant to the terms of this Agreement, including,
without limitation, costs, fees and expenses as described in Section 10.04. The
Agent Advances shall be repayable on demand and be secured by the Collateral.
The Agent Advances shall not constitute
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Loans but shall otherwise constitute Obligations hereunder. The Agent shall
notify each Lender and the Administrative Borrower in writing of each Agent
Advance, which notice shall include a description of the purpose of such Agent
Advance. Without limitation to its obligations pursuant to Section 9.05, each
Lender agrees that it shall make available to the Agent, upon the Agent's
demand, in Dollars in immediately available funds, the amount equal to such
Lender's Pro Rata Share of such Agent Advance. If such funds are not made
available to the Agent by such Lender, the Agent shall be entitled to recover
such funds on demand from such Lender, together with interest thereon, for each
day from the date such payment was due until the date such amount is paid to the
Agent, at the Federal Funds Rate for three Business Days and thereafter at the
Reference Rate.
(b) The Lenders hereby irrevocably authorize the
Agent, at its option and in its discretion, to release any Lien granted to or
held by the Agent upon any Collateral upon termination of the Total Commitment
and payment and satisfaction of all Loans and all other Obligations which have
matured and which the Agent has been notified in writing are then due and
payable; or constituting Property being sold or disposed of in the ordinary
course of any Loan Party's business and in compliance with the terms of this
Agreement and the other Loan Documents; or constituting Property in which the
Loan Parties owned no interest at the time the Lien was granted or at any time
thereafter; or if approved, authorized or ratified in writing by the Lenders.
Upon request by the Agent at any time, the Lenders will confirm in writing the
Agent's authority to release particular types or items of Collateral pursuant to
this Section 9.08(b).
(c) Without in any manner limiting the Agent's
authority to act without any specific or further authorization or consent by the
Lenders (as set forth in Section 9.08(b)), each Lender agrees to confirm in
writing, upon request by the Agent, the authority to release Collateral
conferred upon the Agent under Section 9.08(b). Upon receipt by the Agent of
confirmation from the Lenders of its authority to release any particular item or
types of Collateral, and upon prior written request by any Loan Party, the Agent
shall (and is hereby irrevocably authorized by the Lenders to) execute such
documents as may be necessary to evidence the release of the Liens granted to
the Agent for the benefit of the Lenders upon such Collateral; provided,
however, that (i) the Agent shall not be required to execute any such document
on terms which, in the Agent's opinion, would expose the Agent to liability or
create any obligations or entail any consequence other than the release of such
Liens without recourse or warranty, and (ii) such release shall not in any
manner discharge, affect or impair the Obligations or any Lien upon (or
obligations of any Loan Party in respect of) all interests in the Collateral
retained by any Loan Party.
(d) The Agent shall have no obligation whatsoever to
any Lenders to assure that the Collateral exists or is owned by the Loan Parties
or is cared for, protected or insured or has been encumbered or that the Lien
granted to the Agent pursuant to this Agreement has been properly or
sufficiently or lawfully created, perfected, protected or enforced or is
entitled to any particular priority, or to exercise at all or in any particular
manner or under any
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duty of care, disclosure or fidelity, or to continue exercising, any of the
rights, authorities and powers granted or available to the Agent in this Section
9.08 or in any of the Loan Documents, it being understood and agreed that in
respect of the Collateral, or any act, omission or event related thereto, the
Agent may act in any manner it may deem appropriate, in its sole discretion,
given the Agent's own interest in the Collateral as one of the Lenders and that
the Agent shall have no duty or liability whatsoever to any other Lender.
ARTICLE X.
MISCELLANEOUS
SECTION 10.01 Notices, Etc. All notices and other communications
provided for hereunder shall be in writing and shall be mailed, telecopied or
delivered, if to any Loan Party, at the following address:
Sunterra Corporation
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Chief Financial Officer
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopier: ▇▇▇-▇▇▇-▇▇▇▇
with a copy to:
Sunterra Corporation
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopier: ▇▇▇-▇▇▇-▇▇▇▇
and to:
▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, III
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopier: ▇▇▇-▇▇▇-▇▇▇▇
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and to:
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ L.L.P.
▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopier: ▇▇▇-▇▇▇-▇▇▇▇
if to the Agent, to it at the following address:
Greenwich Capital Markets, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopier: ▇▇▇-▇▇▇-▇▇▇▇
with a copy to:
Greenwich Capital Markets, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopier: ▇▇▇-▇▇▇-▇▇▇▇
and to:
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopier: ▇▇▇-▇▇▇-▇▇▇▇
or, as to each party, at such other address as shall be designated by such party
in a written notice to the other party complying as to delivery with the terms
of this Section 10.01. All such notices and other communications shall be
effective, (i) if mailed, when received or three days after deposited in the
mails, whichever occurs first, (ii) if telecopied, when transmitted and
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confirmation received, or (iii) if delivered, upon delivery, except that notices
to the Agent pursuant to Article II shall not be effective until received by the
Agent.
(a) Nothing in this Agreement or in any other Loan
Document shall be construed to limit or affect the obligation of the Borrowers
or any other Person to serve upon the Lenders in the manner prescribed by the
Bankruptcy Code any pleading or notice required to be given to the Lenders
pursuant to the Bankruptcy Code.
SECTION 10.02 Amendments, Etc. No amendment or waiver of any provision
of this Agreement or any Note, and no consent to any departure by the Borrowers
or any other Loan Party therefrom, shall in any event be effective unless the
same shall be in writing and signed by the Required Lenders, and, in the case of
an amendment, the Borrowers, and then such waiver or consent shall be effective
only in the specific instance and for the specific purpose for which given,
provided, however, that no amendment, waiver or consent shall (i) increase the
Revolving Credit Commitment or Term Loan Commitment of any Lender, reduce the
principal of, or interest on, the Loans payable to any Lender, reduce the amount
of any fee payable for the account of any Lender, or postpone or extend any date
fixed for any payment of principal of, or interest or fees on, the Loans payable
to any Lender, in each case without the written consent of any Lender affected
thereby, (ii) increase the Total Revolving Credit Commitment, Total Term Loan
Commitment or Total Commitment, (iii) change the percentage of the Revolving
Credit Commitments, Term Loan Commitments or Total Commitments or of the
aggregate unpaid principal amount of the Notes that is required for the Lenders
or any of them to take any action hereunder, (iv) amend the definition of
"Required Lenders" or "Pro Rata Share", (v) release all or a substantial portion
of the Collateral (except as otherwise provided in this Agreement and the other
Loan Documents), subordinate any Lien granted in favor of the Agent for the
benefit of the Lenders, or release any Borrower or any Guarantor, (vi) modify,
waive, release or subordinate the super priority claim status of the Obligations
(except as permitted in this Agreement and the Loan Documents), or (vii) amend,
modify or waive Section 7.02(n), Section 7.02(o), Section 7.02(p), Section
7.02(q) or this Section 10.02 of this Agreement, in the case of clauses (ii)
through (vii), without the written consent of each Lender. Notwithstanding the
foregoing, no amendment, waiver or consent shall, unless in writing and signed
by the Agent, affect the rights or duties of the Agent (but not in its capacity
as a Lender) under this Agreement or the other Loan Documents. The parties to
this Agreement acknowledge that all material amendments to this Agreement will
require the consent of the Bankruptcy Court.
SECTION 10.03 No Waiver; Remedies, Etc. No failure on the part of the
Agent or any Lender to exercise, and no delay in exercising, any right hereunder
or under any other Loan Document shall operate as a waiver thereof; nor shall
any single or partial exercise of any right under any Loan Document preclude any
other or further exercise thereof or the exercise of any other right. The rights
and remedies of the Agent and the Lenders provided herein and in the other Loan
Documents are cumulative and are in addition to, and not exclusive of, any
rights
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or remedies provided by law. The rights of the Agent and the Lenders under any
Loan Document against any party thereto are not conditional or contingent on any
attempt by the Agent and the Lenders to exercise any of their rights under any
other Loan Document against such party or against any other Person.
SECTION 10.04 Expenses; Taxes; Attorneys' Fees. Without any further
order of the Bankruptcy Court, the Borrowers will pay on demand, all costs and
expenses incurred by or on behalf of the Agent (and, in the case of clauses (c)
through (m) below, the Lenders), regardless of whether the transactions
contemplated hereby are consummated, including, without limitation, reasonable
fees, costs, client charges and expenses of counsel for the Agent (and, in the
case of clauses (c) through (m) below, the Lenders), accounting, due diligence
(provided that in connection with the due diligence conducted prior to the
execution of this Agreement, the maximum allowable due diligence expense
reimbursement shall be $350,000), periodic field audits, physical counts,
valuations, investigations, searches and filings, monitoring of assets,
appraisals of Collateral, environmental assessments (all conducted on a
reasonable basis and, unless a Default or Event of Default shall have occurred
and be continuing, in consultation with the Administrative Borrower),
miscellaneous disbursements, examination, travel, lodging and meals, arising
from or relating to: (a) the negotiation, preparation, execution, delivery,
performance and administration of this Agreement, the other Loan Documents and
the Custodial Agreement, (including, without limitation, the preparation of any
additional Loan Documents, pursuant to Section 7.01(b) or the review of any of
the agreements, instruments and documents referred to in Section 7.01(f)), (b)
any requested amendments, waivers or consents to this Agreement, the other Loan
Documents or the Custodial Agreement whether or not such documents become
effective or are given, (c) the preservation and protection of any of the
Lenders' rights under this Agreement, the other Loan Documents or the Custodial
Agreement, (d) the defense of any claim or action asserted or brought against
the Agent or the Lenders by any Person that arises from or relates to this
Agreement, any other Loan Document, the Custodial Agreement, the Agent's or the
Lenders' claims against the Borrowers and each other Loan Party, or any and all
matters in connection therewith, (e) the commencement or defense of, or
intervention in, any court proceeding arising from or related to this Agreement,
any other Loan Document or the Custodial Agreement, (f) the filing of any
petition, complaint, answer, motion or other pleading by the Agent or the
Lenders, or the taking of any action in respect of the Collateral or other
security, in connection with this Agreement, any other Loan Document or the
Custodial Agreement, (g) the protection, collection, lease, sale, taking
possession of or liquidation of, any Collateral or other security in connection
with this Agreement, any other Loan Document or the Custodial Agreement, (h) any
attempt to enforce any Lien or security interest in any Collateral or other
security in connection with this Agreement, any other Loan Document or the
Custodial Agreement, (i) any attempt to collect from the Borrowers or any other
Loan Party, (j) the receipt by the Agent or the Lenders of any advice from
professionals with respect to any of the foregoing, (k) all liabilities and
costs arising from or in connection with the past, present or future operations
of the Borrowers and each other Loan Party involving any damage to real or
personal property or natural resources or harm or injury alleged to have
resulted from any
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Release of Hazardous Materials on, upon or into such property, (l) any
Environmental Liabilities and Costs incurred in connection with the
investigation, removal, cleanup and/or remediation of any Hazardous Materials
present or arising out of the operations of any facility of any Borrower or any
other Loan Party, or (m) any Environmental Liabilities and Costs incurred in
connection with any Environmental Lien. Without limitation of the foregoing or
any other provision of any Loan Document: (x) the Borrowers agree to pay all
stamp, document, transfer, recording or filing taxes or fees and similar
impositions now or hereafter payable in connection with this Agreement, any
other Loan Document or the Custodial Agreement, and the Borrowers agree to save
the Agent and the Lenders harmless from and against any and all present or
future claims, liabilities or losses with respect to or resulting from any
omission to pay or delay in paying any such taxes, fees or impositions, (y) the
Borrowers agree to pay all broker fees that may become due in connection with
the transactions contemplated by this Agreement (other than any such fees that
become payable solely as a result of actions of the Agent or any of the
Lenders), and (z) if the Borrowers fail to perform any covenant or agreement
contained herein or in any other Loan Document, the Agent may itself perform or
cause performance of such covenant or agreement, and the expenses of the Agent
incurred in connection therewith shall be reimbursed on demand by the Borrowers.
SECTION 10.05 Right of Set-off. Upon the occurrence and during the
continuance of any Event of Default, any Lender may, and is hereby authorized
to, at any time and from time to time, without notice to the Borrowers (any such
notice being expressly waived by the Borrowers) and to the fullest extent
permitted by law, set off and apply any and all deposits (general or special,
time or demand, provisional or final) at any time held and other indebtedness at
any time owing by such Lender to or for the credit or the account of the
Borrowers against any and all obligations of any of them now or hereafter
existing under any Loan Document, irrespective of whether or not such Lender
shall have made any demand hereunder or thereunder and although such obligations
may be contingent or unmatured. Each Lender agrees to notify the Administrative
Borrower promptly after any such set-off and application made by such Lender,
provided that the failure to give such notice shall not affect the validity of
such set-off and application.
SECTION 10.06 Survival. All covenants, agreements, representations and
warranties made by the Borrowers herein and in the certificates or other
instruments delivered in connection with or pursuant to this Agreement shall be
considered to have been relied upon by the other parties hereto and shall
survive the execution and delivery of this Agreement and the making of any
Loans, regardless of any investigation made by any such other party or on its
behalf, and shall continue in full force and effect as long as the principal of
or any accrued interest on any Loan or any fee or any other amount payable under
this Agreement is outstanding and unpaid and so long as the Term Loan
Commitments and Revolving Credit Commitments have not expired or terminated. The
provisions of Sections 2.13, 4.04, 10.04 and 10.15 and Article IX shall survive
and remain in full force and effect regardless of the consummation of the
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transactions contemplated hereby, the repayment of the Loans, the expiration or
termination of the Commitments or the termination of this Agreement or any
provision hereof.
SECTION 10.07 Severability. Any provision of this Agreement, which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining portions hereof or affecting the validity or
enforceability of such provision in any other jurisdiction.
SECTION 10.08 Assignments and Participations.
(a) This Agreement and the Notes shall be binding
upon and inure to the benefit of the Borrowers and the other Loan Parties and
the Agent and each Lender and their respective successors and assigns
(including, except for the right to request Loans, any trustee succeeding to the
rights of the Borrowers pursuant to Chapter 11 of the Bankruptcy Code or
pursuant to any conversion to a case under Chapter 7 of the Bankruptcy Code);
provided, however, that each of the Borrowers and the other Loan Parties may not
assign or transfer any of their rights hereunder, or under the Notes, without
the prior written consent of each Lender and any such assignment without the
Lenders' prior written consent shall be null and void.
(b) Each Lender may, with the written consent of the
Agent and, unless a Default or Event of Default has occurred and is continuing,
the written consent of the Administrative Borrower (which consent shall not be
required in connection with any assignment to any Affiliate of such Lender),
such consent of the Administrative Borrower not to be unreasonably withheld,
assign to one or more other lenders or other entities all or a portion of its
rights and obligations under this Agreement (including, without limitation, all
or a portion of its Revolving Credit Commitment or Term Loan Commitment, the
Loans made by it and the Notes held by it); provided, however, that (i) such
assignment is in an amount which is at least $5,000,000 or a multiple of
$1,000,000 in excess thereof (or the remainder of such Lender's Revolving Credit
Commitment or Term Loan Commitment) and (ii) the parties to each such assignment
shall execute and deliver to the Agent, for its acceptance, an Assignment and
Acceptance, together with any Note subject to such assignment and such parties
shall deliver to the Agent a processing and recordation fee of $5,000. Upon such
execution, delivery and acceptance, from and after the effective date specified
in each Assignment and Acceptance, which effective date shall be at least three
Business Days after the delivery thereof to the Agent (or such shorter period as
shall be agreed to by the Agent and the parties to such assignment), (A) the
assignee thereunder shall become a "Lender" hereunder and, in addition to the
rights and obligations hereunder held by it immediately prior to such effective
date, have the rights and obligations hereunder that have been assigned to it
pursuant to such Assignment and Acceptance and (B) the assigning Lender
thereunder shall, to the extent that rights and obligations hereunder have been
assigned by it pursuant to such Assignment and Acceptance, relinquish its rights
and be released from its obligations under this Agreement (and, in the case of
an Assignment and Acceptance covering all or the remaining portion of an
assigning Lender's rights and obligations
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under this Agreement, such Lender shall cease to be a party hereto).
Notwithstanding anything in this Agreement to the contrary, at no time shall
there be more than three (3) Lenders that are Lenders party to this Agreement.
(i) By executing and delivering an
Assignment and Acceptance, the assigning Lender and the assignee thereunder
confirm to and agree with each other and the other parties hereto as follows:
(A) other than as provided in such Assignment and Acceptance, the assigning
Lender makes no representation or warranty and assumes no responsibility with
respect to any statements, warranties or representations made in or in
connection with this Agreement or any other Loan Document or the execution,
legality, validity, enforceability, genuineness, sufficiency or value of this
Agreement or any other Loan Document furnished pursuant hereto; (B) the
assigning Lender makes no representation or warranty and assumes no
responsibility with respect to the financial condition of the Loan Parties or
any of their Subsidiaries or the performance or observance by the Loan Parties
of any of their obligations under this Agreement or any other Loan Document
furnished pursuant hereto; (C) such assignee confirms that it has received a
copy of this Agreement and the other Loan Documents, together with such other
documents and information it has deemed appropriate to make its own credit
analysis and decision to enter into such Assignment and Acceptance; (D) such
assignee will, independently and without reliance upon the Assigning Lender, the
Agent or any Lender and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under this Agreement and the other Loan Documents; (E) such
assignee appoints and authorizes the Agent to take such action as Agent on its
behalf and to exercise such powers under this Agreement and the other Loan
Documents as are delegated to the Agent by the terms thereof, together with such
powers as are reasonably incidental thereto; and (F) such assignee agrees that
it will perform in accordance with their terms all of the obligations which by
the terms of this Agreement and the other Loan Documents are required to be
performed by it as a Lender.
(ii) The Agent shall maintain, or cause to
be maintained at the Payment Office, a copy of each Assignment and Acceptance
delivered to and accepted by it and a register for the recordation of the names
and addresses of the Lenders and the Revolving Credit Commitments and Term Loan
Commitments of, and principal amount of the Loans owing to each Lender from time
to time (the "Register"). The entries in the Register shall be conclusive and
binding for all purposes, absent manifest error, and the Borrowers, the Agent
and the Lenders may treat each Person whose name is recorded in the Register as
a Lender hereunder for all purposes of this Agreement. The Register shall be
available for inspection by the Administrative Borrower and any Lender at any
reasonable time and from time to time upon reasonable prior notice.
(iii) Upon its receipt of an Assignment and
Acceptance executed by an assigning Lender and an assignee, together with the
Notes subject to such assignment, the Agent shall, if the Agent consents to such
assignment and if such Assignment
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and Acceptance has been completed (i) accept such Assignment and Acceptance,
(ii) give prompt notice thereof to the Administrative Borrower, (iii) record the
information contained therein in the Register, and (iv) prepare and distribute
to each Lender and the Administrative Borrower a revised Schedule 1.01(E) hereto
after giving effect to such assignment, which revised Schedule 1.01(E) shall
replace the prior Schedule 1.01(E) and become part of this Agreement.
(iv) A Registered Loan (and the Registered
Note, if any, evidencing the same) may be assigned or sold in whole or in part
only by registration of such assignment or sale on the Register (and each
Registered Note shall expressly so provide). Any assignment or sale of all or
part of such Registered Loan (and the Registered Note, if any, evidencing the
same) may be effected only by registration of such assignment or sale on the
Register, together with the surrender of the Registered Note, if any, evidencing
the same duly endorsed by (or accompanied by a written instrument of assignment
or sale duly executed by) the holder of such Registered Note, whereupon, at the
request of the designated assignee(s) or transferee(s), one or more new
Registered Notes in the same aggregate principal amount shall be issued to the
designated assignee(s) or transferee(s). Prior to the registration of assignment
or sale of any Registered Loan (and the Registered Note, if any evidencing the
same), the Agent shall treat the Person in whose name such Registered Loan (and
the Registered Note, if any, evidencing the same) is registered as the owner
thereof for the purpose of receiving all payments thereon and for all other
purposes, notwithstanding notice to the contrary.
(v) In the event that any Lender sells
participations in a Registered Loan, such Lender shall maintain a register on
which it enters the name of all participants in the Registered Loans held by it
(the "Participant Register"). A Registered Loan (and the Registered Note, if
any, evidencing the same) may be participated in whole or in part only by
registration of such participation on the Participant Register (and each
Registered Note shall expressly so provide). Any participation of such
Registered Loan (and the Registered Note, if any, evidencing the same) may be
effected only by the registration of such participation on the Participant
Register.
(vi) Any foreign Person who purchases or is
assigned or participates in any portion of such Registered Loan shall provide
the Agent (in the case of a purchase or assignment) or the Lender (in the case
of a participation) with a completed Internal Revenue Service Form W-8
(Certificate of Foreign Status) or a substantially similar form for such
purchaser, participant or any other affiliate who is a holder of beneficial
interests in the Registered Loan.
(c) Each Lender may sell participations to one or
more banks or other entities in or to all or a portion of its rights and
obligations under this Agreement and the other Loan Documents (including,
without limitation, all or a portion of its Term Loan Commitment and Revolving
Credit Commitment, and the Loans made by it); provided, that (i) such Lender's
obligations under this Agreement (including without limitation, its Term Loan
Commitment and
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Revolving Credit Commitment hereunder) and the other Loan Documents shall remain
unchanged; (ii) such Lender shall remain solely responsible to the other parties
hereto for the performance of such obligations, and the Borrowers, the Agent and
the other Lenders shall continue to deal solely and directly with such Lender in
connection with such Lender's rights and obligations under this Agreement and
the other Loan Documents, and (iii) a participant shall not be entitled to
require such Lender to take or omit to take any action hereunder except (A)
action directly effecting an extension of the maturity dates or decrease in the
principal amount of the Loans, or (B) action directly effecting an extension of
the due dates or a decrease in the rate of interest payable on the Loans or the
fees payable under this Agreement, or (C) actions directly effecting a release
of all or a substantial portion of the Collateral or any Borrower or any
Guarantor (except as set forth in Section 9.08 of this Agreement or any Loan
Document).
SECTION 10.09 Counterparts. This Agreement may be executed in any
number of counterparts and by different parties hereto in separate counterparts,
each of which shall be deemed to be an original, but all of which taken together
shall constitute one and the same agreement.
SECTION 10.10 GOVERNING LAW. THIS AGREEMENT, THE NOTES AND THE OTHER
LOAN DOCUMENTS SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW
OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED IN THE
STATE OF NEW YORK EXCEPT AS GOVERNED BY THE BANKRUPTCY CODE.
SECTION 10.11 WAIVER OF JURY TRIAL, ETC. EACH LOAN PARTY, THE AGENT AND
THE LENDERS HEREBY WAIVE ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING
OR COUNTERCLAIM CONCERNING ANY RIGHTS UNDER THIS AGREEMENT, THE NOTES OR OTHER
LOAN DOCUMENTS, OR UNDER ANY AMENDMENT, WAIVER, CONSENT, INSTRUMENT, DOCUMENT OR
OTHER AGREEMENT DELIVERED OR WHICH IN THE FUTURE MAY BE DELIVERED IN CONNECTION
THEREWITH, OR ARISING FROM ANY FINANCING RELATIONSHIP EXISTING IN CONNECTION
WITH THIS AGREEMENT, AND AGREE THAT ANY SUCH ACTION, PROCEEDINGS OR COUNTERCLAIM
SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY. EACH LOAN PARTY CERTIFIES
THAT NO OFFICER, REPRESENTATIVE, AGENT OR ATTORNEY OF THE AGENT OR ANY LENDER
HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT THE AGENT OR ANY LENDER WOULD NOT,
IN THE EVENT OF ANY ACTION, PROCEEDING OR COUNTERCLAIM, SEEK TO ENFORCE THE
FOREGOING WAIVERS. EACH LOAN PARTY HEREBY ACKNOWLEDGES THAT THIS PROVISION IS A
MATERIAL INDUCEMENT FOR THE LENDERS ENTERING INTO THIS AGREEMENT.
SECTION 10.12 Consent by the Agent and Lenders. Except as otherwise
expressly set forth herein to the contrary, if the consent, approval,
satisfaction, determination,
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judgment, acceptance or similar action (an "Action") of the Agent or any Lender
shall be permitted or required pursuant to any provision hereof or any provision
of any other agreement to which the Borrowers and any other Loan Party are
parties and to which the Agent or any Lender has succeeded thereto, such Action
shall be required to be in writing and may be withheld or denied by the Agent or
such Lender, in its sole discretion, with or without any reason, and without
being subject to question or challenge on the grounds that such Action was not
taken in good faith.
SECTION 10.13 No Party Deemed Drafter. Each of the parties hereto
agrees that no party hereto shall be deemed to be the drafter of this Agreement.
SECTION 10.14 Sunterra Corporation as Agent for Borrowers. Each
Borrower hereby irrevocably appoints Sunterra Corporation as the borrowing agent
and attorney-in-fact for the Borrowers (the "Administrative Borrower") which
appointment shall remain in full force and effect unless and until the Agent
shall have received prior written notice signed by all of the Borrowers that
such appointment has been revoked and that another Borrower has been appointed
Administrative Borrower. Each Borrower hereby irrevocably appoints and
authorizes the Administrative Borrower (i) to provide the Agent with all notices
with respect to Loans obtained for the benefit of any Borrower and all other
notices and instructions under this Agreement and (ii) to take such action as
the Administrative Borrower deems appropriate on its behalf to obtain Loans and
to exercise such other powers as are reasonably incidental thereto to carry out
the purposes of this Agreement. It is understood that the handling of the Loan
Account and Collateral of the Borrowers in a combined fashion, as more fully set
forth herein, is done solely as an accommodation to the Borrowers in order to
utilize the collective borrowing powers of the Borrowers in the most efficient
and economical manner and at their request, and that neither the Agent nor the
Lenders shall incur liability to the Borrowers as a result hereof. Each of the
Borrowers expects to derive benefit, directly or indirectly, from the handling
of the Loan Account and the Collateral in a combined fashion since the
successful operation of each Borrower is dependent on the continued successful
performance of the integrated group. To induce the Agent and the Lenders to do
so, and in consideration thereof, each of the Borrowers hereby jointly and
severally agrees to indemnify the Indemnitees (as hereinafter defined) and hold
the Indemnitees harmless against any and all liability, expense, loss or claim
of damage or injury, made against such Indemnitee by any of the Borrowers or by
any third party whosoever, arising from or incurred by reason of (a) the
handling of the Loan Account and Collateral of the Borrowers as herein provided,
(b) the Agent and the Lenders relying on any instructions of the Administrative
Borrower, or (c) any other action taken by the Agent or any Lender hereunder or
under the other Loan Documents.
SECTION 10.15 Indemnification. In addition to each Loan Party's other
Obligations under this Agreement, each Loan Party agrees to, jointly and
severally, defend, protect, indemnify and hold harmless the Agent, each Lender
and all of their respective officers, directors, employees, attorneys,
consultants and agents (collectively called the "Indemnitees")
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from and against any and all losses, damages, liabilities, obligations,
penalties, fees, reasonable costs and expenses (including, without limitation,
reasonable attorneys' fees, costs and expenses) incurred by such Indemnitees,
whether prior to or from and after the Final Facility Effective Date, whether
direct, indirect or consequential, as a result of or arising from or relating to
or in connection with any of the following: (i) the negotiation, preparation,
execution or performance or enforcement of this Agreement, any other Loan
Document, the Custodial Agreement or of any other document executed in
connection with the transactions contemplated by this Agreement, (ii) the
Agent's or any Lender's furnishing of funds to the Borrowers under this
Agreement, including, without limitation, the management of any such Loans,
(iii) any matter relating to the financing transactions contemplated by this
Agreement, the other Loan Documents or the Custodial Agreement or by any
document executed in connection with the transactions contemplated by this
Agreement, the other Loan Documents or the Custodial Agreement, (iv) any act or
omission by any broker, agent or other salesperson of the Time Share Interests,
or (v) any claim, litigation, investigation or proceeding relating to any of the
foregoing, whether or not any Indemnitee is a party thereto (collectively, the
"Indemnified Matters"); provided, however, that the Loan Parties shall not have
any obligation to any Indemnitee under this Section 10.15 for any Indemnified
Matter caused by the gross negligence or willful misconduct of such Indemnitee,
as determined by a final judgment of a court of competent jurisdiction. Such
indemnification for all of the foregoing losses, damages, fees, costs and
expenses of the Indemnitees are chargeable against the Loan Account. To the
extent that the undertaking to indemnify, pay and hold harmless set forth in
this Section 10.15 may be unenforceable because it is violative of any law or
public policy, each Loan Party shall, jointly and severally, contribute the
maximum portion which it is permitted to pay and satisfy under applicable law,
to the payment and satisfaction of all Indemnified Matters incurred by the
Indemnitees. This Indemnity shall survive the repayment of the Obligations and
the discharge of the Liens granted under the Loan Documents.
SECTION 10.16 Records. The unpaid principal of and interest on the
Notes, the interest rate or rates applicable to such unpaid principal and
interest, the duration of such applicability, the Term Loan Commitments, the
Revolving Credit Commitments, and the accrued and unpaid fees payable pursuant
to Section 2.11 hereof, including, without limitation, the Facility Fee, the
Unused Line Fee, and the Early Termination Fee, shall at all times be
ascertained from the records of the Agent, which shall be conclusive and binding
absent manifest error.
SECTION 10.17 Binding Effect. This Agreement shall become effective
when it shall have been executed by each Loan Party, the Agent and each Lender
and when the conditions precedent set forth in Section 5.01 hereof have been
satisfied or waived in writing by the Agent, and thereafter shall be binding
upon and inure to the benefit of each Loan Party, the Agent and each Lender, and
their respective successors and assigns, except that the Loan Parties shall not
have the right to assign their rights hereunder or any interest herein without
the prior
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written consent of each Lender, and any assignment by any Lender shall be
governed by Section 10.08 hereof.
SECTION 10.18 Acknowledgment Regarding Sunterra Securitizations.
Nothing in this Agreement, or in any agreement or instrument entered into in
connection herewith, or in the Final Bankruptcy Court Order shall be construed
as affecting or altering the rights or obligations of any Person with respect to
the Sunterra Securitizations or as granting to any Lender or the Agent any Lien
or other claim on: (i) any mortgage loans, mortgage notes or other installment
obligations ("Securitization Mortgage Notes") that were transferred prior to the
Filing Date as part of the Sunterra Securitizations, or any proceeds or profits
of such Securitization Mortgage Notes; (ii) any funds or other assets that are
held or received by the Parent or any of its Subsidiaries or Affiliates in their
capacities as servicers or sub-servicers pursuant to the Sunterra
Securitizations and in which the servicers or sub-servicers do not hold an
equitable interest; or (iii) any funds or other assets of Finance L.L.C.,
TerraSun L.L.C. or Dutch Elm LLC, except to the extent, if any, that such funds
or other assets are subject to recovery under the Bankruptcy Code or other
applicable law or order. Notwithstanding anything in this Agreement to the
contrary, none of Finance L.L.C., TerraSun Holding, TerraSun L.L.C., DE Holdings
or Dutch Elm, LLC shall be a Guarantor or Loan Party or shall otherwise be
liable in respect of any of the Obligations. The foregoing provisions are not
intended to prohibit any Lien in favor of any Lender or the Agent in any right
which any Loan Party possesses now or in the future in respect of the Sunterra
Securitizations (including, without limitation, amounts representing excess cash
flow distributed to such Loan Party and any rights with respect to the servicing
of such Securitization Mortgage Notes); provided, that the existence of such
Lien does not violate and is not in violation of any provision in existence as
of the Final Facility Effective Date contained in any document relating to any
Sunterra Securitization or other off-balance sheet financing facility. This
Section 10.18 is for the express benefit of the parties to the Sunterra
Securitizations and may not be amended, waived or otherwise modified without
either their prior written consent or further order of the Bankruptcy Court,
upon prior notice to them.
* * * * * * *
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their respective officers thereunto duly authorized,
as of the date first above written.
BORROWERS:
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SUNTERRA CORPORATION
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------
Name:▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President and Chief
Financial Officer
AKGI LAKE TAHOE INVESTMENTS, INC.
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
AKGI ST. MAARTEN N.V.
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
ALL SEASONS PROPERTIES, INC.
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
S-1
ALL SEASONS REALTY, INC.
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
ALL SEASONS RESORTS, INC.
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
ALL SEASONS RESORTS, INC.
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
ARGOSY GRAND BEACH, INC.
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
S-2
ARGOSY HILTON HEAD, INC.
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
ARGOSY PARTNERS, INC.
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
S-3
ARGOSY/KGI GRAND BEACH
INVESTMENT PARTNERSHIP
By: Argosy Grand Beach, Inc.,
its General Partner
By:/s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
By: Argosy Partners, Inc.,
its General Partner
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
By: KGI Grand Beach Investments
Inc., its Managing General
Partner
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
S-4
ARGOSY/KGI PORT ROYAL PARTNERS
By: Argosy Hilton Head, Inc.
its General Partner
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
By: KGI Port Royal, Inc.,
its Managing General Partner
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
AVCOM INTERNATIONAL, INC.
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
DESIGN INTERNATIONALE-RMI, INC.
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
S-5
GRAND BEACH PARTNERS, L.P.
By: Argosy/KGI Grand Beach
Investment Partnership, its
General Partner
By: Argosy Partners, Inc.,
its General partner
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
By: Argosy Grand Beach, Inc.,
its General Partner
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
By: KGI Grand Beach
Investments, Inc. its
Managing General Partner
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
S-6
GRAND BEACH RESORT,
LIMITED PARTNERSHIP
By: Grand Beach Partners, LP,
its General Partner
By: Argosy/KGI Grand Beach
Investment Partnership,
its General Partner
By: KGI Grand Beach
Investments, Inc.,
its Managing General Partner
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
By: Argosy Partners, Inc.,
its General Partner
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
By: Argosy Grand Beach, Inc.,
its General Partner
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
S-7
GREENSPRINGS ASSOCIATES
By: Plantation Resorts Group, Inc.,
its Joint Venturer
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
By: Greensprings Plantation Resort,
Inc., its Joint Venturer
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
GREENSPRINGS PLANTATION RESORT,
INC.
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
S-8
▇▇▇▇▇▇ TAHOE DEVELOPMENT
By: Lakewood Development Inc.,
its Managing General Partner
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
By: Ridgewood Development Inc.,
its General Partner
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
KGI GRAND BEACH INVESTMENTS, INC.
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
KGI PORT ROYAL, INC.
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
S-9
KGK LAKE TAHOE DEVELOPMENT, INC.
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
LAKE TAHOE RESORT PARTNERS, LLC
By: AKGI Lake Tahoe Investments, Inc.,
its Managing Member
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
By: KGK Lake Tahoe Development, Inc.,
its Member
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
LAKEWOOD DEVELOPMENT INC.
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
S-10
MMG DEVELOPMENT CORP.
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
PLANTATION RESORTS GROUP, INC.
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
POINTE PARTNERS LIMITED PARTNERSHIP
By: ▇▇▇▇▇▇ Tahoe Developments,
its Managing General Partner
By: Lakewood Development Inc.,
its Managing General Partner
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
By: Ridgewood Development Inc.,
its General Partner
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
S-11
PORT ROYAL RESORT, L.P.
By: Argosy/KGI Port Royal Partners,
its General Partner
By: KGI Port Royal, Inc.,
its Managing General Partner
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
By: Argosy Hilton Head, Inc.,
its General Partner
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
S-12
POWHATAN ASSOCIATES
By: Plantation Resorts Group, Inc.,
its Joint Venturer
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
By: Williamsburg Vacations, Inc.,
its Joint Venturer
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
PREMIER VACATIONS, INC.
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
RESORT CONNECTIONS, INC.
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
S-13
RESORT MARKETING INTERNATIONAL, INC.
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
RESORTS DEVELOPMENT INTERNATIONAL,
INC.
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
RIDGE POINTE LIMITED PARTNERSHIP
By: Pointe Partners Limited Partnership,
its Managing General Partner
By: ▇▇▇▇▇▇ Tahoe Development,
its Managing General Partner
By: Lakewood Development Inc.,
its Managing General Partner
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
By: Ridgewood Development Inc.,
its General Partner
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
S-14
RIDGEWOOD DEVELOPMENT INC.
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
RKG, CORP.
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
SUNTERRA FINANCIAL SERVICES, INC.
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
SUNTERRA ST. CROIX, INC.
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
WILLIAMSBURG VACATIONS, INC.
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
S-15
[AGENT AND LENDER SIGNATURE PAGE FOLLOWS]
AGENT AND LENDER:
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GREENWICH CAPITAL MARKETS, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: VP, Credit Asset Backed