LOAN AND
SECURITY AGREEMENT
CR Resorts Cancun, S. de ▇.▇. de C.V.
CR Resorts Los Cabos, S. de ▇.▇. de C.V.
CR Resorts Puerto Vallarta, S. de ▇.▇. de C.V.
Corporacion Mexitur S.A. de C.V.
CR Resorts Cancun Timeshare Trust, S. de ▇.▇. de C.V.
CR Resorts Cabos Timeshare Trust, S. de ▇.▇. de C.V.
CR Resorts Puerto Vallarta Timeshare Trust, S. de ▇.▇. de C.V.
Borrower
c/o Raintree Resorts International, Inc.
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Address
$20,000,000 Amount of Loan
Date: November 23, 1998
INTERNATIONAL RESORT FINANCE
TABLE OF CONTENTS
Page
1. DEFINITIONS....................................................................................................1
2. LOAN COMMITMENT; USE OF PROCEEDS...............................................................................6
2.1 Receivables Loan Commitment; Determination of Advance Amounts.........................................6
2.2 Receivables Loan Revolver.............................................................................6
2.3 Continuation of Obligations Throughout Term...........................................................6
2.4 Use of Advances.......................................................................................6
2.5 Repayment of Receivables Loan.........................................................................6
2.6 Interest..............................................................................................6
2.7 Receivables Loan Minimum Required Payments............................................................7
2.8 Prepayment............................................................................................7
2.9 Receivables Loan Fee; Custodial Fee; Availability Fee.................................................7
2.10 Application of Proceeds of Collateral and Payments....................................................8
2.11 Borrower's Unconditional Obligation to Make Payments..................................................8
3. SECURITY 8
3.1 Grant of Security Interest in Receivables Collateral..................................................8
3.2 Ineligible Instruments................................................................................9
3.3 Lockbox Collections and Servicing.....................................................................9
3.4 Replacement of Agents.................................................................................9
3.5 Maintenance of Security..............................................................................10
3.6 Liability of Guarantors..............................................................................10
4. CONDITIONS PRECEDENT TO ADVANCES; MINIMUM AMOUNT AND MAXIMUM FREQUENCY OF ADVANCES; METHOD OF DISBURSEMENT....10
4.1 Delivery of Receivables Loan Documents and Due Diligence Items Prior to Initial Advance..............10
4.2 Additional Conditions Precedent for Subsequent Advances..............................................13
4.3 General Conditions Precedent to All Advances.........................................................13
4.4 Conditions Satisfied at Borrower's Expense...........................................................13
4.5 Minimum Amount and Maximum Frequency of Advances.....................................................13
4.6 Disbursement of Advances.............................................................................13
4.7 No Waiver............................................................................................13
5. BORROWER'S REPRESENTATIONS AND WARRANTIES.....................................................................13
5.1 Good Standing........................................................................................14
5.2 Power and Authority; Enforceability..................................................................14
5.3 Borrower's Principal Place of Business...............................................................14
5.4 No Litigation........................................................................................15
5.5 Compliance with Legal Requirements...................................................................15
5.6 No Misrepresentations................................................................................15
5.7 No Default for Third Party Obligations...............................................................15
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5.8 Payment of Taxes and Other Impositions...............................................................15
5.9 Sales Activities.....................................................................................15
5.10 Time-Share Interest Not a Security...................................................................15
5.11 Zoning Compliance....................................................................................15
5.12 Eligible Instruments.................................................................................15
5.13 Assessments and Reserves.............................................................................15
5.14 Title to and Maintenance of Common Areas and Amenities...............................................15
5.15 Trust................................................................................................15
5.16 Year 2000............................................................................................16
5.17 Survival and Additional Representations and Warranties...............................................16
6. BORROWER'S COVENANTS..........................................................................................16
6.1 Borrower's Affirmative Covenants.....................................................................16
6.2 Borrower's Negative Covenants........................................................................20
6.3 Survival of Covenants................................................................................22
7. DEFAULT 22
7.1 Events of Default....................................................................................22
7.2 Remedies.............................................................................................23
7.3 Application of Proceeds During an Event of Default...................................................24
7.4 Uniform Commercial Remedies; Sale; Assembly of Receivables Collateral................................24
7.5 Application of Proceeds..............................................................................24
7.6 Lender's Right to Perform............................................................................25
7.7 Non-Exclusive Remedies...............................................................................25
7.8 Waiver of Marshalling................................................................................25
7.9 Attorney-in-Fact.....................................................................................25
8. COSTS AND EXPENSES; INDEMNIFICATION...........................................................................25
8.1 Costs and Expenses...................................................................................25
8.2 Indemnification......................................................................................26
9. CONSTRUCTION AND GENERAL TERMS................................................................................26
9.1 Special Provisions Relating to Trust.................................................................26
9.2 Payment Location.....................................................................................28
9.3 Entire Agreement.....................................................................................28
9.4 Powers Coupled with an Interest......................................................................28
9.5 Counterparts; Facsimile Signatures...................................................................28
9.6 Notices..............................................................................................28
9.7 Successors and Assigns...............................................................................28
9.8 Severability.........................................................................................29
9.9 Time of Essence......................................................................................29
9.10 Miscellaneous........................................................................................29
9.11 CHOICE OF LAW........................................................................................29
9.12 CHOICE OF JURISDICTION; WAIVER OF VENUE..............................................................29
9.13 WAIVER OF JURY TRIAL.................................................................................29
9.14 INDUCEMENT TO LENDER.................................................................................29
9.15 Compliance With Applicable Usury Law.................................................................29
9.16 NO RELATIONSHIP WITH PURCHASERS......................................................................30
9.17 NO JOINT VENTURE.....................................................................................30
9.18 Standards Applied to Lender's Actions................................................................30
9.19 Meaning of Subordination.............................................................................30
9.20 Scope of Reimbursable Attorney's Fees................................................................30
9.21 Publicity............................................................................................30
9.22 Permitted Contests...................................................................................30
9.23 Reliance.............................................................................................31
9.24 Currency.............................................................................................31
9.25 Consideration........................................................................................31
9.26 Judgment Currency....................................................................................31
Schedule ......... Schedule of Additional Terms
Exhibit A......... Conditions of Eligible Instrument
Exhibit B......... Permitted Encumbrances
Exhibit C......... Borrower's Certificate
Exhibit C-1....... Receivables Re-Assignment
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Exhibit D......... FINOVA Wiring Information
Exhibit E......... Additional Conditions to Receivables Loan Advances
Exhibit E-1....... Request for Receivables Loan Advance and Certification
Exhibit E-2....... Receivables Assignment
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This LOAN AND SECURITY AGREEMENT is entered into for good and valuable
consideration, by and between FINOVA CAPITAL CORPORATION, a Delaware corporation
("Lender"), and CR Resorts Cancun, S. de ▇.▇. de C.V. ("CR Cancun"); CR Resorts
Los Cabos, S. de ▇.▇. de C.V. ("CR Cabos"); CR Resorts Puerto Vallarta, S. de
▇.▇. de C.V. ("CR Puerto Vallarta"); Corporacion Mexitur, S.A. de C.V.
("Corporacion Mexitur"); CR Resorts Cancun Timeshare Trust, S. de ▇.▇. de C.V.
("Cancun Sub"); CR Resorts Cabos Timeshare Trust, S. de ▇.▇. de C.V. ("Cabos
Sub") and CR Resorts Puerto Vallarta Timeshare Trust, S. de ▇.▇. de C.V.
("Puerto Vallarta Sub"), individually and collectively, jointly and severally,
"Borrower".
1. DEFINITIONS
As used in this Agreement and the other Receivables Loan Documents unless
otherwise expressly indicated in this Agreement or the other Receivables Loan
Documents, the following terms shall have the following meanings (such meanings
to be applicable equally both to the singular and plural terms defined).
"Advance": an advance of the proceeds of the Receivables Loan by Lender to,
or on behalf of, Borrower in accordance with the terms and conditions of this
Agreement.
"Affiliate": with respect to any individual or entity, any other individual
or entity that directly or indirectly, through one or more intermediaries,
controls, or is controlled by, or is under common control with, such individual
or entity.
"Agents": the Servicing Agent and the Lockbox Agent.
"Agreement": this Loan and Security Agreement, as it may be from time to
time renewed, amended, restated or replaced.
"Applicable Usury Law": the usury law chosen by the parties pursuant to the
terms of paragraph 9.11 or such other usury law which is applicable if such
usury law is not.
"Articles of Organization": the charter, articles, operating agreement,
joint venture agreement, partnership agreement, by-laws and any other written
documents evidencing the formation, organization, governance and continuing
existence of an entity.
"Availability Advance": an Advance which is made against an Eligible
Instrument after the first Advance made against such Instrument and is based
upon the difference at such time between the Borrowing Base of such Instrument
and the unpaid principal balance of the Receivables Loan attributable to such
Instrument; provided that the substitution of an Eligible Instrument for an
ineligible Instrument pursuant to paragraph 3.2 shall not be deemed to be an
Availability Advance for purposes of this paragraph, but the first and every
subsequent Advance against such substituted Eligible Instrument shall be deemed
to be an Availability Advance.
"Availability Fee": the meaning given to it in paragraph 2.9(c).
"Base Rate": means the publicly announced "Corporate Base" rate of
Citibank, N.A., as initially determined on the closing of the Receivables Loan
and as the same may thereafter change from time to time. As used above, the
"Corporate Base" rate of Citibank shall mean the rate of interest publicly
announced from time to time by Citibank, N.A., New York, New York, as the base
rate of interest charged by Citibank to its most creditworthy commercial
borrowers, notwithstanding the fact that some borrowers of Citibank may borrow
from Citibank at rates less than such announced base rate.
"Basic Interest": the meaning given to it in paragraph 2.6.
"Basic Interest Rate": the per annum rate of interest described in the
Schedule as the Basic Interest Rate.
"Borrower": individually and collectively, jointly and severally, the
individuals or business organizations signing below and identified above as
"Borrower"; and, subject to the restrictions on assignment and transfer
contained in this Agreement, their respective successors and assigns.
"Borrower's Knowledge": the actual, current knowledge of the chief
executive officers of Borrower.
"Business Day": any day other than a Saturday, a Sunday, a national holiday
in the United States of America or Mexico or a day on which banks in Phoenix,
Arizona or Mexico City are required to be closed.
"CILP Assignment": a written assignment to be executed and delivered to
Lender by Borrower and creating in favor of Lender a perfected, direct, first
and exclusive assignment of the Contracts, Intangibles, Licenses and Permits in
order to facilitate Performance of the Obligations, as it may be from time to
time renewed, amended, restated or replaced.
"Collateral": the Receivables Loan Collateral and the collateral pledged to
Lender pursuant to the Receivables Loan Security Documents.
"Commitment Letter": that certain Commitment Letter from Borrower to Lender
dated November 13, 1998 concerning the Receivables Loan and the Inventory Loan.
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"Contracts, Intangibles, Licenses, Permits": all contracts, licenses,
permits, plans and other intangibles in which Borrower now or hereafter has
rights and are now or hereafter used in connection with the marketing and sale
of Time-Share Interests and the management and/or operation of the Time-Share
Project.
"Custodial Fee": the meaning given to it in paragraph 2.9(b).
"Default Rate": the per annum rate of interest identified in the Schedule
as the Default Rate.
"Dollars" or "$": shall mean United States Dollars.
"Eligible Instrument": an Instrument which conforms to the standards set
forth in Exhibit A. An Instrument that has qualified as an Eligible Instrument
shall cease to be an Eligible Instrument upon the date of the first occurrence
of any of the following: (a) any installment due with respect to that Instrument
becomes more than sixty (60) days past due or (b) that Instrument otherwise
fails to continue to conform to the standards set forth in Exhibit A.
"Environmental Certificate": an environmental certificate executed and
delivered to Lender by Borrower and such other persons as Lender may require and
containing representations, warranties and covenants regarding the environmental
condition of the Time-Share Project, as it may be from time to time renewed,
amended, restated or replaced.
"Event of Default": the meaning set forth in paragraph 7.1.
"FPSI": FINOVA Portfolio Services, Inc., an Arizona corporation, and its
successors and assigns.
"GAAP": shall mean generally accepted accounting principles as in effect
from time to time in the United States of America, consistently applied,
throughout the period involved and with the prior periods, which shall include
the official interpretations thereof by the Financial Accounting Standards Board
or any successor thereto.
"Guarantor": at any time, a person or entity then required under the terms
of this Agreement to guarantee all or any part of the Obligations.
"Guaranty": a primary, joint and several guaranty or guarantee agreement
made by a Guarantor with respect to all or any part of the Obligations, as it
may be from time to time renewed, amended, restated or replaced.
"Impositions": all real estate, personal property, excise, privilege,
transaction, documentary stamp and other taxes, charges, assessments and levies
(including non-governmental assessments and levies such as maintenance charges,
association dues and assessments under private covenants, conditions and
restrictions) and any interest, costs, fines or penalties with respect thereto,
general and special, ordinary and extraordinary, foreseen and unforeseen, of any
kind and nature whatsoever which at any time prior to or after the execution
hereof may be assessed, levied or imposed. Impositions shall include any and all
taxes, withholding obligations, deduction, license fees, assessments, charges,
fines, penalties, or any property, privilege, excise, real estate or other
taxes, charges or assessments currently or hereafter levied or imposed by any
state, local or federal authority of Mexico upon or in connection with or
measured by the Receivables Loan Documents, the Collateral or the principal,
interest or other amounts payable by Borrower to Lender under the Receivables
Loan Documents, together with any amounts which must be withheld from the
proceeds of the Receivables Collateral pursuant to, without limitation, Sections
871, 881 and 1442 of the IRC. Imposition shall not include taxes payable to the
United States of America or to any state or political subdivision thereof
measured by the net income payable by Lender.
"Incipient Default": an event which after notice and/or lapse of time would
constitute an Event of Default.
"Indenture": the Indenture dated December 5, 1997, pursuant to which the
Redeemable Senior Notes were issued.
"Ineligibility Event": the meaning given to it in paragraph 3.2.
"Inventory Loan": that certain loan identified in the Commitment Letter as
the Inventory Loan.
"Installment Date": the meaning given to it in paragraph 2.7.
"Instrument": a purchase money promissory note which has arisen out of a
sale of a Time-Share Interest by Borrower to a Purchaser, is made payable by
such Purchaser to Borrower.
"Insurance Policies": the insurance policies that Borrower is required to
maintain and deliver pursuant to paragraph 6.1(c).
"IRC": The United States Internal Revenue Code, as amended.
"Lease Assignment": a written assignment to be executed and delivered to
Lender by Corporacion Mexitur and creating in favor of Lender a perfected,
direct, first and exclusive security interest in any sales office leases under
which Corporacion Mexitur conducts Time-Share Interest sales, in order to secure
Performance of the Obligations, and as it may be from time to time renewed,
2
amended, restated or replaced. The execution and delivery of the Lease
Assignment shall be a condition precedent to the closing of the Inventory Loan.
"Legal Requirements": (a) all present and future judicial decisions,
statutes, regulations, permits, licenses or certificates of any governmental
authority in any way applicable to Borrower directly or by virtue of its trust
beneficial interest on the Time Share Project; and (b) all contracts or
agreements (written or oral) by which Borrower directly or by virtue of its
trust beneficial interest on the Time Share Project, is bound or, if compliance
therewith would otherwise be in conflict with any of the Receivables Loan
Documents, by which Borrower directly or by virtue of its trust beneficial
interest on the Time Share Project, becomes bound with Lender's prior written
consent.
"Lender": FINOVA Capital Corporation, a Delaware corporation, and its
successors and assigns.
"Lockbox Agent": business organization identified in the Schedule as the
Lockbox Agent, or its successor as lockbox agent under the Lockbox Agreement.
"Lockbox Agreement": an agreement to be made among Lender, Borrower,
Trustee and Lockbox Agent, which provides for Lockbox Agent to collect through a
lockbox payments under Instruments constituting part of the Receivables
Collateral and to remit them to Lender, as it may be from time to time renewed,
amended, restated or replaced.
"Maximum Receivables Loan Amount": the amount identified in the Schedule as
the Maximum Receivables Loan Amount.
"Mexican GAAP": generally accepted accounting principals in Mexico in
accordance with the provisions established by the Mexican Accountants Institute.
"Minimum Opinion Matters": (a) A favorable legal opinion of counsel for
Borrower and Guarantor, which counsel must be acceptable to Lender, dated as of
the day of Required Closing Date, covering the due authorization, execution and
delivery of the Receivables Loan Documents; the enforceability and sufficiency
of Borrower's consumer documents; the absence of environmental liability schemes
in Mexico that would impose any liability on Lender upon an enforcement of
Lender's lien on the Time-Share Project, or otherwise; the enforceability,
validity and binding effect of the Receivables Loan Documents and of all legal
charges, liens and security interests granted thereby, under law of the state of
Arizona and the laws of Mexico; the enforceability under the laws of Mexico of
the Arizona choice of law, venue and jurisdiction provisions contained in the
Receivables Loan Documents; compliance under the laws of Mexico of applicable
usury laws; the procedures and requirements which must be satisfied by the
Borrower in connection with the making of withholding payments to the Mexican
taxing authorities; and such other matters as Lender may require, including
without limitation, Lender's satisfaction that under Mexican law, it can achieve
the practical realization of the remedies set forth in the Receivables Loan
Documents. In connection with such usury opinion, counsel shall be required to
opine that the Receivables Loan is not usurious under the law of Mexico (without
reliance on any usury savings clause).
(b) A favorable opinion from a tax attorney, acceptable to Lender,
providing that Borrower will be exempt from the payment of withholding taxes
associated with the Receivables Loan and with the Receivables Collateral due to
the foreign location of the Time-Share Project, Borrower's foreign jurisdiction
of organization, or the nationality of the purchasers of use rights and
memberships and further providing that Lender will incur no adverse tax
consequences as a result of making the Receivables Loan.
"Minimum Required Time-Share Approvals": Official communications issued by
the Mexican Consumer Protection Agency (Procuraduria Federal del Consumidor)
evidencing that the Purchase Contract and Time-Share Program Consumer Documents
were approved and registered by such government agency.
"Mirror Notes": Those notes totaling, in the aggregate, One Hundred Million
Dollars ($100,000,000.00) issued by CR Cancun, CR Cabos or CR Puerto Vallarta in
favor of CR Resorts Capital S. de ▇.▇. de C.V.
"Obligations": all obligations, agreements, duties, covenants and
conditions of Borrower to Lender which Borrower is now or hereafter required to
Perform under the Receivables Loan Documents.
"Operating Agreements": shall mean each of the following: (a) that certain
Contrato de Operacion, dated as of March 18, 1998, by and between Starwood
Cancun, S. de ▇.▇. de C.V., CR Cancun, CR Resorts Remainder Company, S. de ▇.▇.
de C.V., and Bancomer, S.A., Institucion de Banca Multiple, Grupo Financiero
Bancomer, Division Fiduciaria, (b) that certain Contrato de Operacion, dated as
of March 18, 1998, by and between Starwood Los Cabos, S. de ▇.▇. de C.V., CR
Cabos, CR Resorts Remainder Company, S. de ▇.▇. de C.V., and Bancomer, S.A.,
Institucion de Banca Multiple, Grupo Financiero Bancomer, Division Fiduciaria,
and (c) that certain Contrato de Operacion, dated as of March 18, 1998, by and
between Starwood Puerto Vallarta, S. de ▇.▇. de C.V., CR Puerto Vallarta, CR
Resorts Remainder Company, S. de ▇.▇. de C.V., and Bancomer, S.A.,
3
Institucion de Banca Multiple, Grupo Financiero Bancomer, Division
Fiduciaria.
"Oversight Agreement": an agreement between Borrower Lender, FPSI and
Servicing Agent, in form and substance satisfactory to Lender, allowing FPSI to
oversee and monitor the collection and servicing functions of the Servicing
Agent.
"Pass-Through Certificates": shall mean each of the following: (a) the Club
▇▇▇▇▇▇ Trust I Trust Certificate Nos. 1 and 2, each of which has been issued,
signed, registered and authenticated by Trustee, together with all replacements
and substitutions therefor, each representing an undivided fifty percent (50%)
of the beneficial interest in said Trusts, and (b) the Club ▇▇▇▇▇▇ Trust II
Trust Certificate Nos. 1 and 2, each of which has been issued, signed,
registered and authenticated by Trustee, together with all replacements and
substitutions therefor, each representing an undivided fifty percent (50%) of
the beneficial interest in said Trust.
"Performance" or "Perform": full, timely and faithful performance of the
Obligations by Borrower.
"Permitted Debt": the meaning given to it in paragraph 6.2(b).
"Permitted Encumbrances": the rights, restrictions, reservations,
encumbrances, easements and liens of record which Lender has agreed to accept as
set forth in Exhibit B.
"Pledge Agreement": shall mean, individually and collectively, (i) that
certain Security Agreement dated of even date herewith, between Trustee and
Lender, pursuant to which Trustee has granted to Lender a security interest in
the Receivables Collateral owned by Trustee under the Club ▇▇▇▇▇▇ Trust I as
security for Borrower's payment and Performance of the Obligations and as
security for Trustee's Performance of Trustee's obligations under such Pledge
Agreement, in form and substance acceptable to Lender in its discretion, and
(ii) that certain Security Agreement dated of even date herewith, between
Trustee and Lender, pursuant to which Trustee has granted to Lender a security
interest in the Receivables Collateral owned by Trustee under the Club ▇▇▇▇▇▇
Trust II as security for Borrower's payment and Performance of the Obligations
and as security for Trustee's Performance of Trustee's obligations under such
Pledge Agreement, in form and substance acceptable to Lender in its discretion.
"Purchase Contract": a purchase contract pursuant to which Borrower has
agreed to sell and a third party has agreed to purchase a Time-Share Interest.
"Purchaser": a purchaser who has executed a Purchase Contract.
"Quiet Enjoyment Rights": the meaning given to it in paragraph 4.1(b).
"Receivables": membership, use rights and other consumer receivables
arising from the sale of Time-Share Interests in the Time-Share Project.
"Receivables Assignment": a written assignment of specific Instruments and
their proceeds, executed by Borrower and Trustee substantially in form and
substance identical to Exhibit E-2.
"Receivables Collateral": (a) the Instruments which are now or hereafter
assigned, endorsed or delivered to Lender pursuant to this Agreement or against
which an Advance has been made; (b) all rights under all documents evidencing,
securing or otherwise pertaining to such Instruments, including, without
limitation, Purchase Contracts and escrow agreements; (c) all collateral and
other security interests given to secure an Instrument; (d) all Borrower's
rights under all escrow agreements and accounts pertaining to any of the
foregoing; (e) all reservation systems pertaining to the use of Time-Share
Interests; (f) the Trust Collateral; (g) all computer software, files, books and
records of Borrower pertaining to any of the foregoing; and (h) the cash and
non-cash proceeds of all of the foregoing, including, without limitation
(whether or not acquired with cash proceeds), all accounts, chattel paper,
contract rights, documents, general intangibles, instruments, fixtures, and
equipment, inventory and other goods.
"Receivables Loan": the revolving line of credit loan made pursuant to
Article 2.
"Receivables Loan Borrowing Base": with respect to an Eligible Instrument,
an amount equal to the percentage of the unpaid principal balance of such
Eligible Instrument identified in the Schedule as the RLBB Principal Balance
Percentage.
"Receivables Loan Borrowing Base Shortfall": at any time, the amount by
which the unpaid principal balance of the Receivables Loan exceeds the aggregate
Receivables Loan Borrowing Base of all Eligible Instruments.
"Receivables Loan Borrowing Term": the period commencing on the date of
this Agreement and ending on the close of the Business Day (or if not a Business
Day, the first Business Day thereafter) on the date identified in the Schedule
as the Receivables Loan Borrowing Term Expiration Date.
"Receivables Loan Collateral": the Receivables Collateral, the Insurance
Policies, and any and all other property now or hereafter serving as security
for the Performance of the Obligations, and all products and proceeds thereof.
4
"Receivables Loan Documents": this Agreement, the Receivables Loan Note,
any and all Guaranties, any and all Subordination Agreements, the Lockbox
Agreement, the Servicing Agreement, the Oversight Agreement, the Environmental
Certificate, the Receivables Loan Security Documents, and all other documents
now or hereafter executed in connection with the Receivables Loan, as they may
be from time to time renewed, amended, restated or replaced.
"Receivables Loan Fee": the amount identified in the Schedule as the
Receivables Loan Fee.
"Receivables Loan Maturity Date": the date (or if not a Business Day, the
first Business Day thereafter) which is identified in the Schedule as the
Receivables Loan Maturity Date.
"Receivables Loan Note": the promissory note to be made and delivered by
Borrower to Lender pursuant to paragraph 4.1, having a face amount equal to the
Maximum Receivables Loan Amount, dated as of even date herewith, and made
payable to Lender to evidence the Receivables Loan, as it may be from time to
time renewed, amended, restated or replaced.
"Receivables Loan Opening Prepayment Date": the date identified in the
Schedule as the Receivables Loan Opening Prepayment Date.
"Receivables Loan Prepayment Premium": an amount to be paid pursuant to
paragraph 2.8 upon a prepayment of the Receivables Loan, determined by
multiplying the amount of the prepayment by the percentage identified in the
Schedule as the Receivables Loan Prepayment Premium and determined in accordance
with provisions of the Schedule.
"Receivables Loan Security Documents": the CILP Assignment, the Pledge
Agreement, the Receivables Assignments, the Time-Share Management Agreement
Assignment, the Time-Share Marketing Agreement Assignment, this Agreement, the
Lease Assignment and all other documents now or hereafter securing the
Obligations, as they may be from time to time renewed, amended, restated or
replaced.
"Redeemable Senior Notes": those Series A and Series B thirteen percent
(13%) senior notes due December 1, 2004 in the aggregate principal amount of One
Hundred Million Dollars ($100,000,000.00) issued by Guarantor and CR Resorts S.
de ▇.▇. de C.V. and held by IBJ ▇▇▇▇▇▇▇▇ Bank and Trust Company, as trustee.
"Resolution": a resolution of a corporation certified as true and correct
by an authorized officer of such corporation, a certificate signed by the
manager of a limited liability company and such members whose approval is
required, or a partnership certificate signed by all of the general partners of
such partnership and such other partners whose approval is required.
"Required Closing Date": the date identified in the Schedule as the
Required Closing Date.
"Required Guarantors": the individuals identified in the Schedule as the
Required Guarantors.
"Schedule": the Schedule of Additional Terms which follows the signature
pages of the parties.
"Servicing Agent": the business organization identified in the Schedule as
the Servicing Agent, or its successor as Servicing Agent under the Servicing
Agreement.
"Servicing Agreement": the agreements to be made among Lender,
Borrower, Trustee and Servicing Agent, which provides for Servicing Agent to
perform for the benefit of Lender accounting, reporting and other servicing
functions with respect to the Receivables Collateral, as it may be from time to
time renewed, amended, restated or replaced.
"Subordination Agreement": a subordination agreement made by a Subordinator
subordinating indebtedness owed to it by Borrower to all or a part of the
Obligations, as it may be from time to time renewed, amended, restated or
replaced.
"Subordinator": at any time, a person or entity then required under the
terms of paragraph 6.1(e) to subordinate indebtedness owed to it by Borrower to
all or any part of the Obligations.
"Term": the duration of this Agreement, commencing on the date as of which
this Agreement is entered into and ending when all of the Obligations have been
Performed and Lender has no further obligation to extend credit in connection
with the Receivables Loan.
"Third Party Consents": those consents which Lender requires Borrower to
obtain, or which Borrower is contractually or legally obligated to obtain, from
others in connection with the transaction contemplated by the Receivables Loan
Documents.
"Time-Share Interest": a personal right to occupy and use a variable Unit
in the Time-Share Project at any time during the season to which it relates for
a period of at least seven (7) consecutive days every calendar year or every
other calendar year.
"Time-Share Program": the program under which Purchasers may own Time-Share
Interests, enjoy their respective Time-Share Interests on a recurring basis, and
share the expenses associated with the operation and management of such program.
5
"Time-Share Program Consumer Documents": the Purchase Contract, Instrument,
deed of conveyance, credit application, credit disclosures (if applicable),
rescission right notices, final subdivision public reports/prospectuses/public
offering statements, receipt for public report, exchange affiliation agreement
and other documents used or to be used by Borrower in connection with the sale
of Time-Share Interests.
"Time-Share Program Governing Documents": the trusts holding the Time-Share
Project; the Purchase Contracts; the Instruments, the rules and regulations of
the Borrower; the regulations for Club Regina's Multi-Resort System; any and all
rules and regulations from time to time adopted by the Borrower; the Operating
Agreements; and any subsidy agreement by which Borrower is obligated to
subsidize shortfalls in the budget of the Time-Share Program in lieu of paying
assessments.
"Time-Share Project": individually and collectively, those time-share
projects identified in the Schedule as the Time-Share Project.
"Trusts": shall mean each of: (a) the Club ▇▇▇▇▇▇ Trust I established
pursuant to that certain Receivables Trust Agreement, dated as of November ___,
1998, by and between Cabos Sub and Puerto Vallarta Sub, collectively as
depositor, and Trustee, as trustee, (b) the Club ▇▇▇▇▇▇ Trust II, established
pursuant to that certain Receivables Trust Agreement, dated as of November ___,
1998, by and between Cabos Sub and Puerto Vallarta Sub, collectively as
depositor, and Trustee, as trustee, together with any and all amendments,
substitutions and modifications of the foregoing.
"Trust Collateral": shall mean the Pass-Through Certificates, all the
beneficial interest in the Trusts and all proceeds of the foregoing.
"Trustee": shall mean U.S. Trust Company, National Association, a national
banking association organized and existing under the laws of the United States
of America, as Trustee under the Trusts, and any successor trustees thereunder.
"Unit": a dwelling unit in the Time-Share Project.
2. LOAN COMMITMENT; USE OF PROCEEDS
2.1 Receivables Loan Commitment; Determination of Advance Amounts. Lender
hereby agrees, if Borrower has Performed all of the Obligations then due, to
make Advances to Borrower in accordance with the terms and conditions of this
Agreement for the purposes specified in paragraph 2.4. The maximum amount of an
Advance shall be equal to (a) the aggregate Receivables Loan Borrowing Base for
all Eligible Instruments less (b) the then unpaid principal balance of the
Receivables Loan; provided, however, at no time shall the unpaid principal
balance of the Receivables Loan exceed the Maximum Receivables Loan Amount.
2.2 Receivables Loan Revolver. The Receivables Loan is a revolving line of
credit; however, all Advances shall be viewed as a single loan. Borrower shall
not be entitled to obtain Advances after the expiration of the Receivables Loan
Borrowing Term unless Lender, in its discretion, agrees in writing with Borrower
to make Advances thereafter on terms and conditions satisfactory to Lender.
2.3 Continuation of Obligations Throughout Term. Whether or not Borrower's
right to obtain Advances has terminated, this Agreement and Borrower's liability
for Performance of the Obligations shall continue until the end of the Term.
2.4 Use of Advances. Borrower will use the proceeds of the Receivables Loan
only for the following purposes: acquisitions, development, working capital and
repayment of existing obligations. The initial Advance of the Receivables Loan
shall be used, inter alia, to satisfy Guarantor's or its Affiliate's existing
indebtedness to Bancomer S.A. and pay the interest due on the Redeemable Senior
Notes. In order to accomplish the foregoing purposes, Borrower shall be
permitted to make intercompany loans to its Affiliates.
2.5 Repayment of Receivables Loan. The Receivables Loan shall be evidenced
by the Receivables Loan Note and shall be repaid in immediately available funds
according to the terms of the Receivables Loan Note and this Agreement.
2.6 Interest. Except as otherwise provided in this Receivables Loan Note or
this Agreement, interest ("Basic Interest") shall accrue on the unpaid principal
balance of the Receivables Loan from time to time outstanding at the Basic
Interest Rate. Basic Interest shall be calculated on the basis of the actual
number of days elapsed during the period for which interest is being charged
predicated on a year consisting of three hundred sixty (360) days. Payments of
principal, Basic Interest and any other amounts due and payable under the
Receivables Loan Documents shall earn interest after the date on which they are
due at the Default Rate. At the option of Lender, while an Event of Default
exists, Basic Interest shall accrue at the Default Rate.
2.7 Receivables Loan Minimum Required Payments.
(a) Monthly Payments. Commencing on the last Business Day of the calendar
month in which the initial Advance is made and on the last Business Day of
each
6
succeeding month thereafter ("Installment Date") until the Receivables Loan
Maturity Date or the date on which the Receivables Loan is paid in full,
whichever date first occurs, Borrower will pay to Lender an installment payment
of principal and interest on the Receivables Loan equal to one hundred percent
(100%) of all proceeds (except servicing fee payments made by consumers whose
principal and interest payments then due have been paid in full and payments
which are identified by such consumers as tax and insurance impounds or
maintenance and other assessment payments and are required to be so treated by
Lender) of the Receivables Collateral collected during the month in which the
payment is required to be made plus all such proceeds collected during any
preceding month during the Term and not previously paid to Lender, including,
without limitation, all payments collected under the Instruments which
constitute part of the Receivables Collateral. Regardless of whether the
proceeds of the Receivables Collateral are sufficient for that purpose, interest
on the principal balance hereof from time to time outstanding shall be due and
payable monthly in arrears on each Installment Date.
(b) Borrowing Base Maintenance. If there exists a Receivables Loan
Borrowing Base Shortfall for any reason other than an Ineligibility Event
which is subject to the provisions of paragraph 3.2 and Borrower knows of
the occurrence of such condition or should have known of its occurrence by
virtue of reports required to be delivered to Lender, Borrower, without
notice or demand, will immediately (a) make to Lender a principal payment
in an amount equal to the Receivables Loan Borrowing Base Shortfall plus
accrued and unpaid interest on such principal payment or (b) deliver to
Lender or cause the Trustee to deliver to Lender one or more Eligible
Instruments having an aggregate Receivables Loan Borrowing Base not less
than the Receivables Loan Borrowing Base Shortfall. Simultaneously with the
delivery of Eligible Instruments to correct a Receivables Loan Borrowing
Base Shortfall, Borrower will deliver to Lender or cause Trustee to deliver
to Lender all of the items (except for a "Request for Receivables Advance
and Certification") required to be delivered by Borrower (or Trustee) to
Lender pursuant to paragraph 4.2, together with a "Borrower's Certificate"
in form and substance identical to Exhibit C.
2.8 Prepayment.
(a) Prohibitions on Prepayment; Receivables Loan Prepayment Premium.
Without the prior written consent of Lender, Borrower shall not be entitled
to prepay the Receivables Loan except in accordance with the terms of this
Agreement. Commencing on the Receivables Loan Opening Prepayment Date,
Borrower shall have the option to prepay the Receivables Loan on any
Installment Date, upon thirty (30) days' prior written notice, accompanied
by the simultaneous payment of the applicable Receivables Loan Prepayment
Premium. No more than fifty percent (50%) of the then outstanding principal
balance of the Receivables Loan may be prepaid within the twelve (12) month
period beginning on the Receivables Loan Opening Prepayment Date or during
any successive twelve (12) month period thereafter, provided, however, that
at such time as the unpaid principal balance of the Receivables Loan is no
greater than Two Million Dollars ($2,000,000), Borrower shall have the
right to prepay the Receivables Loan in full during any successive twelve
(12) month period thereafter, under the conditions set forth above.
(b) Exceptions to Prepayment Prohibitions. Notwithstanding anything in
paragraph 2.8(a) to the contrary, the following shall not be prepayments
prohibited pursuant to paragraph 2.8(a) or require the payment of the
Receivables Loan Prepayment Premium: (i) principal payments scheduled under
the Receivables Loan Note including, without limitation, those payments
required pursuant to paragraphs 2.7 and 3.2 unless due to an intentional
misrepresentation or breach of warranty by Borrower or Guarantor concerning
the Receivables Collateral qualifying as Eligible Instruments; and (ii)
prepayments of the Receivables Loan resulting from prepayments of the
Receivables Collateral by Purchasers which have not been solicited by
Borrower in breach of the terms and conditions of paragraph 6.2(e).
(c) Receivables Loan Prepayment Premium Payable for Involuntary
Prepayments. The Receivables Loan Prepayment Premium shall be payable
regardless of whether the prepayment of the Receivables Loan is voluntary
or is required because repayment of the Receivables Loan has been
accelerated pursuant to any of Lender's rights under the Receivables Loan
Documents (including, without limitation, any right to accelerate following
casualty or
7
condemnation or when an Event of Default exists).
2.9 Receivables Loan Fee; Custodial Fee; Availability Fee.
(a) Receivables Loan Fee. Borrower will pay to Lender the Receivables Loan
Fee in accordance with the requirements set forth in the Schedule. The
Receivables Loan Fee has been earned and shall be non-refundable. An
application fee in the amount of Ten Thousand Dollars ($10,000) has been
received by Lender, is non-refundable and shall not be applied against the
Receivables Loan Fee or any other costs and expenses due to Lender.
(b) Custodial Fee. In addition to all other fees required to be paid in
connection with the Receivables Loan, Borrower shall pay to Lender the fee
("Custodial Fee") identified in the Schedule as the Custodial Fee per each
Instrument which is delivered to Lender in connection with the Receivables
Loan and is in the physical custody of Lender. The Custodial Fee for an
Instrument shall be paid by Borrower to Lender at the time the Instrument
is assigned to Lender. After the Custodial Fee is paid for an Instrument,
no fee shall be payable to Lender for any Instrument which is delivered to
Lender pursuant to paragraph 3.2 in replacement for an Instrument for which
Borrower has paid the Custodial Fee. Once a Custodial Fee has been paid to
Lender, Borrower shall not be entitled to any reimbursement of any portion
hereof.
(c) Availability Fee. Borrower will pay to Lender, at the time of any
Advance, a fee ("Availability Fee") equal to the product of the percentage
identified in the Schedule as the Availability Fee Percentage times the
portion of such Advance which constitutes an Availability Advance.
2.10 Application of Proceeds of Collateral and Payments. Notwithstanding
anything in the Receivables Loan Documents to the contrary, the amount of all
payments or amounts received by Lender with respect to the Receivables Loan
shall be applied to the extent applicable under the Receivables Loan Documents:
(a) first, to any past due payments of interest on the Receivables Loan and to
accrued interest on the Receivables Loan through the date of such payment,
including any default interest; (b) then, to any late fees, examination fees and
expenses, collection fees and expenses and any other fees and expenses due to
Lender under the Receivables Loan Documents in connection with the Receivables
Loan; and (c) last, the remaining balance, if any, to the unpaid principal
balance of the Receivables Loan; provided, however, while an Event of Default or
Incipient Default exists, each payment received with respect to the Receivables
Loan shall be applied to such amounts owed to Lender by Borrower as Lender in
its discretion may determine. In calculating interest and applying payments as
set forth above: (a) interest on the Receivables Loan shall be calculated and
collected through the date payment is actually received by Lender; (b) interest
on the outstanding principal balance of the Receivables Loan shall be charged
during any grace period permitted under the Receivables Loan Documents; (c) at
the end of each month, all past due interest and other past due charges provided
for under the Receivables Loan Documents with respect to the Receivables Loan
shall be added to the principal balance of the Receivables Loan in accordance
with the provisions of Article 363 of the Mexican Commercial Code; and (d) to
the extent that Borrower makes a payment or Lender receives any payment or
proceeds of the Collateral for Borrower's benefit that is subsequently
invalidated, set aside or required to be repaid to any other person or entity,
then, to such extent, the Obligations in connection with the Receivables Loan
intended to be satisfied shall be revived and continue as if such payment or
proceeds had not been received by Lender and Lender may adjust the Receivables
Loan balance as Lender, in its discretion, deems appropriate under the
circumstances. The provisions of this paragraph 2.10 are also subject to the
parties rights and obligations under the Receivables Loan Documents as to the
application of proceeds of the Collateral following an Event of Default.
2.11 Borrower's Unconditional Obligation to Make Payments. Whether or not
the proceeds from the Receivables Loan Collateral shall be sufficient for that
purpose, Borrower will pay when due all payments required to be made pursuant to
any of the Receivables Loan Documents, Borrower's obligation to make such
payments being absolute and unconditional.
3. SECURITY
3.1 Grant of Security Interest in Receivables Collateral. To secure the
Performance of all of the Obligations and to secure to Trustee's Performance of
all of its obligations under the Pledge Agreement, Borrower hereby grants to
Lender a security interest in and assigns to Lender (i) the Trust Collateral and
(ii) all other items of Receivables Collateral (other than the Trust
Collateral). Such security interest shall be absolute, continuing, perfected,
direct, first, exclusive and applicable to all existing and future Advances and
to all of the Obligations and to all of the obligations of the Trustee under the
Pledge Agreement. Borrower will unconditionally assign, endorse and deliver to
Lender, with full recourse, all Instruments which are part of the Receivables
Collateral.
8
To the extent that the Trustee is the owner of the Receivables Collateral,
Borrower hereby irrevocably instructs the Trustee to grant to Lender, pursuant
to the Pledge Agreement, a security interest in the Receivables Collateral owned
by the Trustee and furthermore instructs the Trustee to unconditionally assign,
endorse and deliver to Lender, with full recourse, all of the Instruments owned
by the Trustee and which are part of the Receivables Collateral. Borrower
further warrants and guarantees the enforceability of the Receivables
Collateral. Lender is hereby appointed Borrower's attorney-in-fact to take any
and all actions in Borrower's name and/or on Borrower's behalf deemed necessary
or appropriate by Lender with respect to the collection and remittance of
payments (including the endorsement of payment items) received on account of the
Receivables Collateral; provided, however, that Lender shall not take any action
which is described in paragraph 7.2(c) unless an Event of Default exists. Lender
may notify persons bound thereby of the existence of Lender's interest as
assignee in the Receivables Collateral and request from any person bound by the
Receivables Collateral any information relating to such person.
3.2 Ineligible Instruments. If an Instrument which is part of the
Receivables Collateral ceases to be an Eligible Instrument or is determined not
to be an Eligible Instrument ("Ineligibility Event") and as a result of the
occurrence of such Ineligibility Event, the unpaid principal balance of the
Receivables Loan is in excess of the Receivables Loan Borrowing Base, (such
excess, hereinafter the "Borrowing Base Shortfall"), then within thirty (30)
days thereafter Borrower will either (a) make to Lender a principal payment in
an amount equal to the Borrowing Base Shortfall plus accrued and unpaid interest
on such payment or (b) replace or cause the Trustee to replace such ineligible
Instruments with one or more Eligible Instruments having an aggregate
Receivables Loan Borrowing Base not less than the Borrowing Base Shortfall.
Simultaneously with the delivery of the replacement Eligible Instrument to
Lender for an ineligible Instrument, Borrower will deliver to Lender and cause
the Trustee to deliver all of the items (except for a "Request for Receivables
Loan Advance and Certification") required to be delivered by Borrower (or
Trustee) to Lender pursuant to paragraph 4.2, together with a "Borrower's
Certificate" in form and substance identical to Exhibit C. Lender will reassign
and/or endorse to Trustee, without recourse or warranty of any kind, the
ineligible Instrument if: (a) no Event of Default or Incipient Default exists;
(b) Borrower has made any principal payment and Performed any replacement
obligations as required above in connection with any Ineligibility Event caused
by such ineligible Instrument; and (c) Borrower has requested Lender in writing
to release the ineligible Instrument. Borrower will prepare the reassignment
document which shall be in form and substance identical to Exhibit C-1 and will
deliver it to Lender for execution, and Lender will send Borrower and Trustee
the re-assignment document and send to Borrower or Trustee, as the case may be,
the Instrument being reassigned within thirty (30) days after satisfaction of
the conditions precedent specified in the foregoing sentence.
3.3 Lockbox Collections and Servicing. Lockbox Agent shall be instructed
and required to collect payments on the Instruments constituting part of the
Receivables Collateral and remit collected payments to Lender on the last day
(or if such day is not a Business Day, on the preceding Business Day) of each
and every month after the date of the first Receivables Loan Advance, according
to the terms of the Lockbox Agreement. Payments shall not be deemed received by
Lender until Lender actually receives such payments from Lockbox Agent. Pursuant
to the Servicing Agreement, Servicing Agent shall be instructed and required to
furnish to Lender at Borrower's sole cost and expense, no later than the tenth
(10th) day of each month commencing with the first full calendar month following
the date of this Agreement, a report, in a format satisfactory to Lender, which:
(a) shows as of the end of the prior month with respect to each Instrument which
constitutes part of the Receivables Collateral (i) all payments received,
allocated between principal, interest, late charges and taxes, (ii) the opening
and closing balances, (iii) present value calculated at the Discount Rate (when
and if Servicing Agent possesses such capability), (iv) average consumer
interest rates; and (v) extensions, refinances, prepayments and other similar
adjustments; and (b) indicates delinquencies of thirty (30), sixty (60), ninety
(90) days and in excess of ninety (90) days. Borrower will pay without notice or
demand any amount which was due and payable by Borrower on the last Business Day
of the preceding month covered by such reports within five (5) Business Days of
Borrower's Knowledge of such amounts. If such reports are not timely received,
Lender may estimate the amount which was due and payable. Borrower will pay upon
demand the amount determined by Lender in good faith to be due and payable. If
payment is made on the basis of Lender's estimate and thereafter reports
required by this paragraph are received by Lender, the estimated payment amount
shall be adjusted by an additional payment or a refund to the correct amount, as
the reports may indicate; such additional amount to be paid by Borrower upon
demand and such refund to be made by Lender within five (5) Business Days after
the receipt by Lender of the aforementioned reports, in accordance with the
provisions of Section 9.6 hereof. At the end of each calendar quarter, Borrower
will deliver or cause the Servicing Agent to deliver to Lender a current list of
the names, addresses and phone numbers of the obligors on each of the
Instruments constituting part of
9
the Receivables Collateral. Borrower will also deliver or cause Servicing
Agent to deliver to Lender, promptly after receipt of a written request for
them, such other reports with respect to Instruments constituting part of the
Receivables Collateral as Lender may from time to time reasonably require.
3.4 Replacement of Agents. If a default on the part of an Agent exists and
continues under the agreement to which it is a party or an Event of Default
exists and continues, Lender, subject to any additional restriction thereon
contained in the Lockbox Agreement or the Servicing Agreement, as applicable,
may at any time and from time to time, substitute a successor or successors to
any Agent acting under the Servicing Agreement or Lockbox Agreement. In any
event, if, at any time during the term of the Receivables Loan, Lender is not
satisfied with the servicing and collection abilities of Resort Communications,
Inc., Lender shall have the right to require that such servicing and collection
functions be performed by another servicing and collection company satisfactory
to Lender pursuant to a servicing agreement satisfactory in form and content to
Lender.
3.5 Maintenance of Security. Borrower will deliver or cause to be delivered
to Lender and will maintain or cause to be maintained in full force and effect
throughout the Term (except as otherwise expressly provided in such Receivables
Loan Document), as security for the Performance of the Obligations, the
Receivables Loan Security Documents and all other security required to be given
to Lender pursuant to the terms of this Agreement.
3.6 Liability of Guarantors. The payment and Performance of the Obligations
shall be jointly, severally, primarily and unconditionally guaranteed by the
Required Guarantors.
4. CONDITIONS PRECEDENT TO ADVANCES; MINIMUM AMOUNT AND MAXIMUM FREQUENCY
OF ADVANCES; METHOD OF DISBURSEMENT
4.1 Delivery of Receivables Loan Documents and Due Diligence Items Prior to
Initial Advance. Lender's obligation to make the initial Advance shall be
subject to and conditioned upon the terms and conditions set forth in the
following subparagraphs and elsewhere in this Agreement:
(a) Receivables Loan Documents. Borrower shall have delivered to Lender or
caused to be delivered to Lender the following duly executed, delivered
(where appropriate) and in form and substance satisfactory to Lender, not
later than the Required Closing Date:
(i) the Receivables Loan Documents;
(ii) UCC financing statements for filing and/or recording, as
appropriate, where necessary to perfect the security interests in the
Collateral;
(iii) the Receivables Assignment applicable to such Advance;
(iv) [Reserved]
(v) a favorable opinion or opinions from independent counsel for
Borrower, which counsel shall be satisfactory to Lender and which
opinion shall cover such matters as Lender may require, including,
without limitation, the Minimum Opinion Matters pertaining to Borrower
and the Time-Share Project;
(vi) a favorable opinion or opinions from independent counsel for any
and all Guarantors and (if any) other sureties for the Performance of
the Obligations, which counsel shall be approved by Lender and which
opinion shall cover such matters as Lender may require, including,
without limitation, the Minimum Opinion Matters pertaining to such
persons;
(vii) the Third Party Consents;
(viii) a request for the Receivables Loan Advance in form and
substance identical to Exhibit E-1; and
(ix) such other documents as Lender may reasonably require to effect
the intent and purposes of this Agreement.
(b) Organizational, Time-Share Project and Other Due Diligence Documents.
Borrower shall have delivered to Lender prior to the earlier of (a) the
date of the initial Advance or (b) the Required Closing Date:
(i) the Articles of Organization of Borrower, any and all Required
Guarantors and (if any) other sureties for the Obligations;
(ii) the Resolutions of Borrower, any and all Required Guarantors and
(if any) other sureties for the Obligations and, if applicable, their
respective managers, members and partners, to the extent any such
entity is not a natural person, authorizing the execution and delivery
of the Receivables Loan Documents, the transactions contemplated
thereby and such other matters as Lender may require;
10
(iii) evidence of good standing for all Required Guarantors and (if
any) other sureties for the Performance of the Obligations and, if
applicable, their respective managers, members and partners, to the
extent any such entity is not a natural person, from the state of its
organization and evidence that Borrower and Guarantor have obtained
all approvals, consents and business licenses which are necessary to
enable each of them, as applicable, to execute the Receivables Loan
Documents, consummate the Receivables Loan and operate within Mexico;
(iv) a Phase I environmental assessment of the Time-Share Project;
(v) evidence that all taxes and assessments on the Time-Share Project
have been paid;
(vi) such evidence as Lender may reasonably require that Purchasers
whose Instruments are the subject of the Receivables Assignment have
good and marketable title to the Time-Share Interests they have
purchased;
(vii) a condominium map of the Time-Share Project;
(viii) all permits, licenses, approvals and certificates for the
occupancy, use and operation of the Time-Share Project for time-share
and other intended uses and for the sale of Time-Share Interest,
including any necessary architectural committee approvals;
(ix) evidence that the Time-Share Project is zoned for time-share and
other intended uses and that all approvals required for such uses
under any covenants, conditions and restrictions have been obtained.
In addition, evidence satisfactory to Lender that the present use of
the Time-Share Project will not violate any existing bylaws,
restrictions, covenants or regulations affecting the Time-Share
Project;
(x) the Minimum Required Time-Share Approvals;
(xi) a copy of the Time-Share Program Consumer Documents and the
Time-Share Program Governing Documents;
(xii) the Insurance Policies;
(xiii) evidence that the Time-Share Project is not located within a
flood prone area or, if within a flood zone, evidence that flood
insurance has been obtained;
(xiv) evidence of the current and continued availability of utilities
necessary to serve the Time-Share Project for time-share and other
intended uses;
(xv) evidence of access to and parking for the Time-Share Project
adequate for time-share and hotel uses;
(xvi) a copy of all marketing contracts, management contracts, service
contracts, operating agreements, equipment leases, space leases and
other agreements pertaining to the Time-Share Project and which are
necessary for the sale, operation and intended time-share use of the
Time-Share Project and are not otherwise required pursuant to another
item in this paragraph;
(xvii) evidence that each owner of a Time-Share Interest will have
available to it the quiet and peaceful enjoyment of the Time-Share
Interest (including promised amenities and necessary easements) owned
by it which cannot be disturbed so long as such owner is not in
default of its obligations to pay the purchase price of its Time-Share
Interest, to pay assessments to the Borrower, and to comply with
reasonable rules and regulations pertaining to the use of the
Time-Share Interest ("Quiet Enjoyment Rights");
(xviii) the items required pursuant to Exhibit E;
(ixx) fully executed copy of the Trusts in a form approved by Lender,
certified correct by Borrower and Trustee;
(xx) original Pass-Through Certificates, with the assignment section
thereof executed by Borrower "in blank";
(xxi) copy of the notification, as contemplated under paragraph 9.1(c)
hereof, given by Borrower to Trustee, the contents of which shall be
acceptable to Lender, together with an acknowledgment from Trustee
indicating receipt thereof;
(xxii) copy of the notification, as contemplated under paragraph
9.1(d) hereof, given by Borrower to Trustee, the contents of which
shall be acceptable to Lender, together with an acknowledgment from
Trustee indicating receipt of such
11
notification and receipt of the agreements relating to the Obligations
;
(xxiii) satisfactory evidence that upon the initial Advance, Borrower
shall have good and marketable title to the Collateral. In addition,
satisfactory evidence that the security interests to be granted to
Lender have been duly perfected as first and prior charges and
security interests and that there are no other legal charges or
security interests filed against Borrower or the property of Borrower;
and
(xxiv) such other items as Lender requests which are reasonably
necessary to evaluate the request for the Advance and the satisfaction
of the conditions precedent to the Advance.
(c) Local Issues. Lender shall be satisfied with Mexican laws governing all
matters relating to the Receivables Loan, including without limitation, the
creation and perfection of security on real estate, the creation and
perfection of the assignment of purchaser contracts, the creation,
marketing and sale of unsold use rights and memberships, and other related
matters.
(d) Transfer Fees. Lender shall have received in form and substance
satisfactory to Lender, evidence of payment of transfer fees and taxes
assessed by applicable governmental authorities in connection with the
Receivables Loan or the transfer as contemplated in paragraph 4.1(k)
hereof.
(e) Certificate re Financial Statements. Lender shall have received in form
and substance satisfactory to Lender, a certification by the Borrower and
the Guarantor that the financial statements submitted to Lender by Borrower
and the Guarantor prior to the issuance of the Commitment Letter are true
and correct in all material respects. Borrower shall deliver to Lender
proforma consolidated financial statements prepared on the assumption that
the full amount of the Receivables Loan and the Inventory Loan have been
advanced to the Borrower and reflecting that the Borrowers, on a
consolidated basis, have a positive net worth and are solvent.
(f) Portfolio Interest Trust. Lender shall have received, in form and
substance satisfactory to Lender, evidence that the Instruments from United
States residents forming part of the Receivables Collateral being pledged
to Lender are held in one of the Trusts.
(g) Operating Agreements. Lender shall have received and approved the
Operating Agreements and shall have received evidence satisfactory to
Lender that the Operating Agreements are appurtenant to and run with the
land and that Lender would have the benefits of the Operating Agreements if
Lender held a first beneficial interest in the fideocomiso trust that holds
the unsold Time-Share Interest inventory or by other means.
(h) Credit Reports; Search Reports; Site Inspections. Lender shall have
received, in form and substance satisfactory to Lender, the results of UCC
searches (or its equivalent under Mexican law) with respect to Borrower,
lien, litigation, judgment and bankruptcy searches (or its equivalent under
Mexican law) for Borrower, any and all Required Guarantors and conducted in
such jurisdictions as Lender deems appropriate and having a currency
meeting Lender's requirements, credit references with respect to Borrower
and all Required Guarantors and background checks on ▇▇▇▇▇▇▇ ▇. ▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇. In addition, a member
of Lender's credit department shall have visited the Time-Share Project and
shall be satisfied with the results of such inspection.
(i) Organizational Structure. Lender shall be satisfied with the
organizational structure of Borrower and Guarantor.
(j) Broker: If the services of a broker have been utilized by Borrower to
arrange the Receivables Loan, evidence that any fee due such broker or
brokers has been paid or shall be paid. In any event, such fees are to be
borne solely by Borrower.
(k) Subsidiaries. All of the beneficial interest in the Trusts shall be
held by, or shall have been transferred by CR Cancun, CR Cabos and CR
Puerto Vallarta, as the case may be, into the name of Cancun Sub, Cabos Sub
and Puerto Vallarta Sub, and Lender shall be satisfied that none of the
Borrowers will incur any adverse income tax consequences as a result of the
foregoing.
(l) Existing Debt. Lender shall have reviewed and approved the terms and
conditions of the Redeemable Senior Notes, the Mirror Notes and any other
indebtedness owed by
12
Borrower or Guarantor. There shall exist no default, events of default or
incipient defaults under the Redeemable Senior Notes, the Mirror Notes or
such other indebtedness.
(m) Year 2000 Questionnaire. Borrower shall have satisfactorily completed
Lender's Year 2000 Questionnaire.
(n) Affiliation. Lender has received evidence satisfactory to it that the
Time-Share Projects are affiliated with either Resort Condominium
International or Interval International and are in good standing with such
exchange companies.
4.2 Additional Conditions Precedent for Subsequent Advances. For each
Advance, other than an Availability Advance, Lender's obligation to make such
Advance shall be subject to the terms and conditions set forth in Exhibit E,
including delivery of the items called for therein, by no later than the
Required Closing Date, with respect to the initial Advance, and at least five
(5) Business Days prior to the date of an Advance, with respect to each Advance
thereafter.
4.3 General Conditions Precedent to All Advances. Lender's obligation to
fund any Advance is subject to and conditioned upon the additional terms and
conditions set forth in the following subparagraphs being satisfied at the time
of such Advance:
(a) No material adverse change shall have occurred in the Time-Share
Project, the Collateral, the business or financial condition of Borrower or
any Required Guarantor (since the date of the latest financial and
operating statements given to Lender by or on behalf of Borrower or any
such Guarantor), or the ability of Borrower to Perform the Obligations.
(b) There shall have been no material, adverse change in the warranties and
representations made in the Receivables Loan Documents by Borrower, any
Required Guarantor and/or any surety for the Performance of the
Obligations.
(c) Neither an Event of Default nor Incipient Default shall have occurred
and be continuing.
(d) The interest rate applicable to the Advance (before giving effect to
any savings clause) will not exceed the maximum rate permitted by the
Applicable Usury Law.
(e) Borrower shall have paid to Lender the Receivables Loan Fee and all
other fees which are required to be paid at the time of the Advance.
(f) Lender is satisfied, in its discretion, that Lender will incur no
adverse foreign tax consequences as a result of the making of the Advance
and the performance of its obligations under the Receivables Loan
Documents. Lender shall be further satisfied, in its discretion, that the
principal and interest payments being made to Lender with respect to the
Receivables Loan and any other monies payable to Lender under the
Receivables Loan Documents will not be subject to withholding or subject
Lender to a withholding requirement.
(g) In the event the Instrument against which the Advance is to be made is
from a United States resident, such Instrument is held in one of the
Trusts.
(h) The Pass-Through Certificates are "in registered form".
4.4 Conditions Satisfied at Borrower's Expense. The conditions to Advances
shall be satisfied by Borrower at its expense.
4.5 Minimum Amount and Maximum Frequency of Advances. Advances shall be
made in amounts not less than the amounts identified in the Schedule as the
Minimum Advance Amount. Advances shall be made no more frequently in any
calendar month than the frequency identified in the Schedule as the Maximum
Advance Frequency.
4.6 Disbursement of Advances. Advances may be payable to Borrower; or if
requested by Borrower and approved in writing by Lender, to others, either
severally or jointly with Borrower, for the credit or benefit of Borrower.
Advances shall be disbursed in Dollars by wire transfer or, at Borrower's option
exercised by written request to Lender, by check or drafts. Borrower will pay
Lender's reasonable charge in connection with any wire transfer, and Lender's
current charge is identified in the Schedule as the Wire Transfer Fee. Lender
may, at its option, withhold from any Advance any sum (including costs and
expenses) then due to it under the terms of the Receivables Loan Documents or
which Borrower would be obligated to reimburse Lender pursuant to the
Receivables Loan Documents if first paid directly by Lender.
4.7 No Waiver. Although Lender shall have no obligation to make an Advance
unless and until all of the conditions precedent to the Advance have been
satisfied, Lender may, at its discretion, make Advances prior to that time
without waiving or releasing any of the Obligations.
13
5. BORROWER'S REPRESENTATIONS AND WARRANTIES
Borrower hereby jointly and severally represent and warrant to Lender that:
5.1.1 Corporate Existence. CR Cancun is a duly organized and validly
existing business organization of the type identified in the Schedule as
Borrower's Type of Business Organization under the laws of the jurisdiction
identified in the Schedule as Borrower's Jurisdiction of Organization and is
authorized to do business in the jurisdiction where the Time-Share Project is
located and in each jurisdiction where CR Cancun is at any time selling
Time-Share Interests or where at any time the location or nature of its
properties or its business makes such qualification necessary. CR Cancun has
full power and authority to carry on its business and own its property.
5.1.2 Corporate Existence. CR Cabos is a duly organized and validly
existing business organization of the type identified in the Schedule as
Borrower's Type of Business Organization under the laws of the jurisdiction
identified in the Schedule as Borrower's Jurisdiction of Organization and is
authorized to do business in the jurisdiction where the Time-Share Project is
located and in each jurisdiction where CR Cabos is at any time selling
Time-Share Interests or where at any time the location or nature of its
properties or its business makes such qualification necessary. CR Cabos has full
power and authority to carry on its business and own its property.
5.1.3 Corporate Existence. CR Puerto Vallarta is a duly organized and
validly existing business organization of the type identified in the Schedule as
Borrower's Type of Business Organization under the laws of the jurisdiction
identified in the Schedule as Borrower's Jurisdiction of Organization and is
authorized to do business in the jurisdiction where the Time-Share Project is
located and in each jurisdiction where CR Puerto Vallarta is at any time selling
Time-Share Interests or where at any time the location or nature of its
properties or its business makes such qualification necessary. CR Puerto
Vallarta has full power and authority to carry on its business and own its
property.
5.1.4 Corporate Existence. Corporacion Mexitur is a duly organized and
validly existing business organization of the type identified in the Schedule as
Borrower's Type of Business Organization under the laws of the jurisdiction
identified in the Schedule as Borrower's Jurisdiction of Organization and is
authorized to do business in the jurisdiction where the Time-Share Project is
located and in each jurisdiction where Corporacion Mexitur is at any time
selling Time-Share Interests or where at any time the location or nature of its
properties or its business makes such qualification necessary. Corporacion
Mexitur has full power and authority to carry on its business and own its
property.
5.1.5 Corporate Existence. Cancun Sub is a duly organized and validly
existing business organization of the type identified in the Schedule as
Borrower's Type of Business Organization under the laws of the jurisdiction
identified in the Schedule as Borrower's Jurisdiction of Organization and is
authorized to do business in the jurisdiction where the Time-Share Project is
located and in each jurisdiction where Cancun Sub is at any time selling
Time-Share Interests or where at any time the location or nature of its
properties or its business makes such qualification necessary. Cancun Sub has
full power and authority to carry on its business and own its property.
5.1.6 Corporate Existence. Cabos Sub is a duly organized and validly
existing business organization of the type identified in the Schedule as
Borrower's Type of Business Organization under the laws of the jurisdiction
identified in the Schedule as Borrower's Jurisdiction of Organization and is
authorized to do business in the jurisdiction where the Time-Share Project is
located and in each jurisdiction where Cabos Sub is at any time selling
Time-Share Interests or where at any time the location or nature of its
properties or its business makes such qualification necessary. Cabos Sub has
full power and authority to carry on its business and own its property.
5.1.7 Corporate Existence. Puerto Vallarta Sub is a duly organized and
validly existing business organization of the type identified in the Schedule as
Borrower's Type of Business Organization under the laws of the jurisdiction
identified in the Schedule as Borrower's Jurisdiction of Organization and is
authorized to do business in the jurisdiction where the Time-Share Project is
located and in each jurisdiction where Puerto Vallarta Sub is at any time
selling Time-Share Interests or where at any time the location or nature of its
properties or its business makes such qualification necessary. Puerto Vallarta
Sub has full power and authority to carry on its business and own its property.
5.2 Power and Authority; Enforceability. Borrower has full power and
authority to execute and deliver the Receivables Loan Documents and to Perform
the Obligations. All action necessary and required by Borrower's Articles of
Organization and all other Legal Requirements for Borrower to obtain the
Receivables Loan, to execute and deliver the Receivables Loan Documents which
have been or will be executed and delivered in connection with the Receivables
Loan Documents and to Perform the Obligations has been duly and effectively
taken. The Receivables Loan Documents
14
are and, and to Borrower's Knowledge,
shall be, legal, valid, binding and enforceable against Borrower; and do not
violate the Applicable Usury Law or constitute a default or result in the
imposition of a lien under the terms or provisions of any agreement to which
Borrower is a party. Except for the Third Party Consents delivered pursuant to
paragraph 4.1(a) and the consents evidenced by the Resolutions delivered
pursuant to paragraph 4.1(b), no consent of any governmental agency or any other
person not a party to this Agreement is or will be required as a condition to
the execution, delivery or enforceability of the Receivables Loan Documents .
5.3 Borrower's Principal Place of Business. Each Borrower's principal place
of business and chief executive office are located at the addresses identified
in the Schedule as Borrower's Principal Place of Business and Borrower's Chief
Executive Office.
5.4 No Litigation. There is no action, litigation or other proceeding
pending or, to Borrower's Knowledge, threatened before any arbitration tribunal,
court, governmental agency or administrative body against Borrower, which might
materially adversely affect the Time-Share Project, the Collateral, the business
or financial condition of Borrower, or the ability of Borrower to Perform the
Obligations. Borrower will promptly notify Lender if any such action, litigation
or proceeding is commenced or threatened. Borrower is not subject to
governmental liens, levies or garnishments for liabilities unrelated to the
taxation of the income from the Trusts.
5.5 Compliance with Legal Requirements. To Borrower's Knowledge, Borrower
has complied with all Legal Requirements in all material respects, including,
without limitation, all Legal Requirements of the state in which the Time-Share
Project is located and all other governmental jurisdictions in which the
Time-Share Project is located or in which Time-Share Interests will be sold or
offered for sale by Borrower.
5.6 No Misrepresentations. The Receivables Loan Documents and all
certificates, financial statements and written materials furnished to Lender by
or on behalf of Borrower in connection with the Receivables Loan do not contain
as of the date furnished to Lender any untrue statement of a material fact or
omit to state a fact which materially adversely affects or in the future may
materially adversely affect the Time-Share Project, the Collateral, the business
or financial condition of Borrower or any Guarantor, or the ability of Borrower
to Perform the Obligations.
5.7 No Default for Third Party Obligations. Borrower is not in default
under any other agreement evidencing, guaranteeing or securing borrowed money or
a receivables purchase financing or in violation of or in default under any
material term in any other material agreement, instrument, order, decree or
judgment of any court, arbitration or governmental authority to which it is a
party or by which it is bound.
5.8 Payment of Taxes and Other Impositions. Borrower has filed all tax
returns and has paid all Impositions, if any, required to be filed by it or paid
by it, including real estate taxes and assessments relating to the Time-Share
Project or the Collateral.
5.9 Sales Activities. Prior to the date of this Agreement, Borrower has
sold Time-Share Interests and offered Time-Share Interests for sale only in the
jurisdictions identified in the Schedule as the Jurisdictions Where Sales And/or
Offers to Sell Have Occurred.
5.10 Time-Share Interest Not a Security. Borrower has not sold or offered
for sale any Time-Share Interest as an investment. Except for the sale to
Purchasers of Series B Shares of variable capital stock in and to any of CR
Cancun, CR Cabos and/or CR Puerto Vallarta (in connection with Borrower's Club
▇▇▇▇▇▇ B Shares sales program), neither the sale nor the offering for sale of
any Time-Share Interest will constitute the sale or the offering for sale of a
security under any applicable law.
5.11 Zoning Compliance. Neither time-share use nor other transient use and
occupancy of the Time-Share Project violates or constitutes or will violate or
constitute a non-conforming use or require a variance under any private covenant
or restriction or any zoning, use or similar law, ordinance or regulation
affecting the use or occupancy of the Time-Share Project.
5.12 Eligible Instruments. Each Instrument which is assigned to Lender
pursuant to this Agreement and against which an Advance is requested or which is
assigned in satisfaction of Borrower's obligations under paragraph 2.7 or 3.2
shall be an Eligible Instrument at the time of assignment. Borrower has
Performed all of its obligations to Purchasers, and there are no executory
obligations to Purchasers to be Performed by Borrower, except for non-delinquent
and executory obligations disclosed to Purchasers in their Purchase Contracts.
5.13 Assessments and Reserves. (a) The Borrower has authority to levy
annual assessments to cover the costs of maintaining and operating the
Time-Share Project; (b) to Borrower's Knowledge, levied assessments will be
adequate to cover the current costs of maintaining and operating the Time-Share
Project and to establish and maintain a reasonable reserve for capital
improvements to the extent and as required under the Operating Agreements and
Time-Share Program Consumer Documents; and (c) to Borrower's Knowledge, there
will be no events (other than inflation) which could give rise to a material
increase in such costs, except for
15
additions of subsequent phases of the
Time-Share Project that will not materially increase assessments.
5.14 Title to and Maintenance of Common Areas and Amenities. (a) The
Borrower will at all times own the furnishings in the Units and all the common
areas in the Time-Share Project and other amenities which have been promised or
represented as being available to Purchasers, free and clear of liens and
security interests except for the Permitted Encumbrances; (b) no part of the
Time-Share Project is or will be subject to partition by the owners of
Time-Share Interests; and (c) all access roads and utilities and off-site
improvements necessary to the use of the Time-Share Project will have been
dedicated to and/or accepted by the responsible governmental authority or
utility company or are owned by an association of owners of property in a larger
planned development or developments of which the Time-Share Project is a part.
5.15 Trusts. Each of Cabos Sub and Puerto Vallarta Sub have good right and
power to execute the Trusts and perform their respective obligations thereunder.
All action necessary and required by Cabos Sub's and Puerto Vallarta Sub's
Articles of Organization and all applicable laws for the execution and delivery
of the Trusts and all other documents executed and delivered in connection
therewith have been duly and effectively taken and the Trusts are and shall be
legal, valid, binding and enforceable against each of Cabos Sub and Puerto
Vallarta Sub in accordance with their terms. The execution, delivery and
performance of the Trusts and all other documents executed and delivered in
connection therewith will not violate, constitute a default under, or result in
the creation or imposition of any lien, charge or encumbrance (other than in
favor of Lender) upon any of the properties or assets of Cabos Sub or Puerto
Vallarta Sub pursuant to the provisions of any law, regulation, judgment,
decree, order, franchise or permit applicable to Cabos Sub or Puerto Vallarta
Sub; Cabos Sub's and Puerto Vallarta Sub's Articles of Organization; or any
other contract or other agreement or instrument which Cabos Sub or Puerto
Vallarta Sub is a party or by which Cabos Sub or Puerto Vallarta Sub or Cabos
Sub's or Puerto Vallarta Sub's properties or assets are bound. No consent of any
government or agency thereof, or any other person, firm or entity not a party
thereto, is or will be required as a condition to the execution, delivery,
performance or enforceability of the Trusts.
5.16 Year 2000. Borrower has taken all action necessary to assure that
there will be no material adverse change to Borrower's business by reason of the
advent of the year 2000, including without limitation that all computer-based
systems, embedded microchips and other processing capabilities effectively
recognize and process dates after April 1, 1999.
5.17 Survival and Additional Representations and Warranties. The
representations and warranties contained in this Article 5 are in addition to,
and not in derogation of, the representations and warranties contained elsewhere
in the Receivables Loan Documents and shall be deemed to be made and reaffirmed
prior to the making of each Advance.
6. BORROWER'S COVENANTS
6.1 Borrower's Affirmative Covenants.
(a) Corporate Existence. Borrower will maintain its existence as a business
organization of the type described below when it has signed this Agreement,
duly organized and validly existing as the type of organization identified
in the Schedule as Borrower's Type of Business Organization under the laws
of the jurisdiction identified in the Schedule as Borrower's Jurisdiction
of Organization and remain authorized to do business in the jurisdiction
where the Time-Share Project is located and in each jurisdiction where
Borrower is then selling Time-Share Interests or where at any time the
location or nature of its properties or its business then makes such
qualification necessary. Borrower will maintain full authority to Perform
the Obligations and to carry on its business and own its property.
(b) Compliance with Legal Requirements. Borrower will comply with and
maintain in full force and effect all Legal Requirements in all material
respects, including, without limitation, all Legal Requirements of the
jurisdiction in which the Time-Share Project is located and all other
governmental jurisdictions in which the Time-Share Project is located or in
which Time-Share Interests will be sold or offered for sale by Borrower.
Borrower shall at all times cause the Time-Share Project to be affiliated
and in good standing with Resort Condominium International or Interval
International.
(c) Insurance. Borrower will pay the cost of and will maintain and deliver
to Lender evidence of insurance policies required by Lender which cover
such risks (including hurricane risk), are written by insurers and are in
amounts and on forms satisfactory to Lender.
(d) Reports.
(i) Financial Information. During the Term, Borrower shall be required
to furnish or cause to be furnished to Lender the following financial
statements prepared in
16
reasonable detail, and certified as correct by
the principal financial officer of the subject of such statement: (a)
within forty-five (45) days after the end of each fiscal quarter, a
statement of profit and loss, a balance sheet, and a cash flow
statement as of the end of such quarter, as to each entity
constituting Borrower (prepared on a consolidated basis and translated
into English) and as to Guarantor, showing operating results for such
quarter for the period from the beginning of the relevant fiscal year
through the end of such quarter and for the comparable period of the
preceding fiscal year, if any; (b) within one hundred twenty (120)
days after the end of each fiscal year, a statement of profit and
loss, a balance sheet and a cash flow statement as of the end of such
year, as to each entity constituting Borrower, as to Guarantor, and as
to any time-share association; (c) within thirty (30) days after end
of each fiscal quarter, an audit report of Borrower's existing
Time-Share Interests inventory levels as of the end of such quarter
year, in a form acceptable to Lender, reconciling the Time-Share
Interests inventory levels and the sales thereof prepared by Lender or
a certified public accounting firm acceptable to Lender. Such report
shall demonstrate to Lender that (A) accurate inventory levels are
being maintained by Borrower and reported to Lender, (B) accurate
inventory systems and controls are being maintained by Borrower, (C)
Lender has received any required release payments, and (D) Borrower
has not sold more Unit types than are available during a particular
season. The annual financial statements of the Borrower shall be
prepared on a consolidated basis and shall be statutory audited by a
certified public accounting firm acceptable to Lender in accordance
with Mexican GAAP. The annual financial statements of Guarantor shall
be audited by a certified public accounting firm acceptable to Lender
in accordance with GAAP. The annual financial statements for the
Time-Share Association shall be in the form typically prepared by such
association. Borrower's and Guarantor's annual financial statements
shall be accompanied by a management letter from the accountants
detailing any deficiencies in accounting practices and commenting on
any other accounting-related matters. Together with Borrower's and
Guarantor's quarterly financial statements, Borrower and Guarantor
will deliver to Lender a certificate signed by Borrower's and
Guarantor's chief executive officer and chief financial officer
stating that there exists no Event of Default or Incipient Default or,
if any such Event of Default or Incipient Default exists, specifying
the nature and period of its existence and what action Borrower and
Guarantor propose to take with respect to it. Such certificate shall
state specifically that Borrower is in compliance with paragraphs
6.1(c), 6.1(e), 6.2(b) and 6.2(c), shall demonstrate the extent to
which Borrower is in compliance with Sections S.5(a), S.5(b) and
S.5(c) of the Schedule, shall demonstrate the extent to which
Guarantor is in compliance with the financial covenants required of
Guarantor under the Guaranty and shall be accompanied by Borrower's
bank statement reflecting compliance with the Cash Equivalents
covenant contained in Section S.5(b) of the Schedule. Borrower shall
require that Guarantor supply to Lender copies of any compliance
certificates submitted by Guarantor to the holder of the Redeemable
Senior Notes concurrently with the submission of such certificate to
such holder(s) and any notices (other than notices of a routine
nature) given by the holder of the Redeemable Senior Notes to
Guarantor or given by Guarantor to the holder of the Redeemable Senior
Notes, concurrently with such giving or receipt. For purposes of this
paragraph, in the case of a partnership or limited liability company,
"chief executive officer" of an entity shall mean the general partner,
member or manager having primary responsibility for the operations of
such entity; and "chief financial officer" of such an entity shall
mean the general partner, member or manager having primary
responsibility for the finances of such entity.
(ii) Litigation. Borrower will promptly notify Lender if any action,
litigation or other proceeding becomes pending or, to Borrower's
Knowledge, threatened before any arbitration tribunal, court,
governmental agency or administrative body against Borrower, which
might materially adversely affect the Time-Share Project, the
Collateral, the business or financial condition of Borrower, or the
ability of Borrower to Perform the Obligations.
(iii) Sales Reports. On or before the tenth (10th) day after the end
of each month, Borrower will cause to be furnished to Lender a sales
report showing the following information prepared with respect to each
Time-Share Project and on a consolidated basis as to all Time-Share
Projects: the number of tours, the number of sales and closings of
Time-Share Interests and the aggregate dollar amount
17
thereof,
including average sales price and down payments, during such month.
(iv) Time-Share Project and Sales Information. Borrower will deliver
current price lists for Time-Share Interests to Lender from to time to
time within ten (10) Business Days after receipt of a written request
from Lender to do so. Borrower will deliver to Lender from time to
time, as available and promptly upon amendment or effective date,
sales literature, registrations/consents to sell, and final
subdivision public reports/public offering statements/prospectuses.
Borrower will deliver to Lender any changes which Borrower proposes or
any other person having the power to do so proposes be made to the
Time-Share Program Consumer Documents and/or the Time-Share Program
Governing Documents last delivered to Lender, together with a
description and explanation of the changes; and other items requested
by Lender which relate to the Time-Share Interests.
(v) Right to Inspect. Borrower will at its expense permit Lender and
its representatives at all reasonable times to inspect the Time-Share
Project and to inspect, audit and copy Borrower's books and records,
provided, however, that, so long as no Event of Default or Incipient
Default has occurred and is continuing, Lender shall provide to
Borrower ten (10) Business Days' prior written notice before
conducting such inspections and audits. In that regard, Lender shall
likewise have the right to audit Borrower's use right or membership
inventory levels at such frequencies as Lender shall deem appropriate,
at Borrower's sole cost and expense. Borrower will permit FPSI,
Lender's wholly owned servicing subsidiary, to monitor the collection
and servicing function of Borrower with respect to those Receivables
collected and serviced by Borrower. Such monitoring shall be performed
at Lender's sole cost and expense except that Borrower shall reimburse
FPSI, on demand, for FPSI's travel expenses incurred in connection
with such monitoring. Provided there does not exist an Event of
Default, FPSI shall perform such monitoring no more frequently than
once per calendar year. During an Event of Default, there shall be no
limit on the frequency of such monitoring by FPSI and all such
monitoring performance during the pendency of an Event of Default
shall be performed at Borrower's sole cost and expense.
(vi) Time-Share Project Budgets. Within thirty (30) days after the end
of each fiscal year, Borrower will submit to Lender a proposed annual
maintenance and operating budgets of the Time-Share Project, certified
to be adequate by the Borrower and a statement of the annual
assessment to be levied upon the owners of Time-Share Interests.
(vii) Material Increases to Assessments. If Borrower has Knowledge or
has reason to believe that an event (other than general changes in the
economy) has occurred or could occur which could give rise to a
material increase in assessments to cover the then current costs of
operating the Time-Share Project and to establish and maintain a
reasonable reserve for capital improvements to the Time-Share Project,
it will notify Lender of the occurrence of such event.
(viii) Additional Information. Borrower will deliver to Lender the
reports and other information required pursuant to paragraph 3.3, and
Borrower will make available such further information as Lender may
from time to time reasonably request.
(e) Subordination of Indebtedness Owing to Affiliates. Borrower will cause
any and all indebtedness (other than the Mirror Notes) owing by it to its
shareholders, directors, officers, partners, members or managers, as the
case may be, to Guarantors, or to the relatives or Affiliates of Borrower
or any of the foregoing, and all liens, security interests and other
charges on the assets of Borrower to be fully subordinated in all aspects
to the Obligations pursuant to written agreements satisfactory to Lender;
provided, however, that (A) if neither an Event of Default nor an Incipient
Default then exists or will exist after giving effect to such payment, such
subordination shall not extend to (i) reasonable bonuses, salaries, other
compensation and fees at normal and customary rates for services actually
rendered so long as the payment of such salaries and fees is not prohibited
or otherwise limited pursuant to any provision set forth in the Schedule
and (ii) payments expressly permitted pursuant to the terms of this
Agreement and (B) any such subordination shall be subject to section 4.08
of the Indenture.
(f) Payment of Taxes. Borrower will file all tax returns and will pay all
taxes, if any, required to be filed by it or paid by it, including real
estate taxes and assessments
18
relating to the Time-Share Project or the
Collateral. Borrower will provide to Lender not more than thirty (30) days
after such Impositions required to be paid pursuant to the preceding
sentence become delinquent evidence that all taxes required to be paid
pursuant to the preceding sentence on the Units and Time-Share Project
common areas and related amenities have been paid in full.
(g) Impositions. All payments to be made by Borrower under the Receivables
Loan Documents shall be free of expense to Lender and to FPSI with respect
to the amount of any Impositions, all of which Impositions Borrower assumes
and shall pay when due pursuant to the laws of each of Mexico and the
United States of America, and in all events prior to the date on which
penalties apply, in addition to the other payments provided for in the
Receivables Loan Documents to be made by it. Borrower's Obligation to pay
Impositions shall likewise include the Obligation to pay any increase to
Lender or FPSI in tax imposed by Mexico or the United States of America (or
any political subdivisions of either) as a result of inclusion in income of
Lender of any amount required by this paragraph 6.1(g) to be paid to or for
Lender or FPSI. In that regard, but without limiting the generality of the
foregoing, the Basic Interest, the Default Rate, the Receivables Loan Fee,
the Custodial Fee, the Availability Fee, any prepayment premiums and any
other amounts payable under the Receivables Loan Documents on which
Impositions may be imposed shall be "grossed up" by any such Impositions
which may be imposed, in the way of withholding payments or otherwise, so
that after taking into account the payment of such Impositions, Lender and
FPSI receive, at the times and frequencies required under the Receivables
Loan Documents, the same amount of interest and other amounts as it would
receive had such Impositions not been imposed. Borrower shall promptly make
such withholding payments to the Mexican and United States of America
taxing authorities, shall obtain receipts from such authorities as to the
making of such withholding payments, shall supply Lender with true and
correct copies of such receipts within five (5) Business Days following
receipt thereof and shall in all other respects comply with all applicable
Mexican and United States of America tax laws with respect to the making of
such Imposition payments. FPSI is hereby expressly made a third-party
beneficiary of the provisions of this paragraph and shall have the right to
enforce this paragraph against Borrower in the same manner as if FPSI were
a party to this Agreement.
(h) Further Assurance. Borrower will execute or cause to be executed all
documents and do or cause to be done all acts necessary for Lender to
perfect or evidence and to continue the perfection of the liens and
security interest of Lender in the Collateral or otherwise to effect the
intent and purposes of the Receivables Loan Documents.
(i) Fulfillment of Obligations to Purchasers. Borrower will fulfill, and
will cause its Affiliates, agents and independent contractors at all times
to fulfill, all their respective material obligations to Purchasers.
Borrower will Perform all of its material obligations under the Time-Share
Program Consumer Documents and the Time-Share Program Governing Documents.
(j) Material Increases to Assessments. Borrower (i) will (A) discharge its
obligations under the Time-Share Program Governing Documents and (B)
maintain a reasonable reserve for capital improvements to the Time-Share
Project to the extent and as required under the Operating Agreements and
Time-Share Program Consumer Documents; and (ii) will pay not less often
than once every twelve (12) months, the difference between (A) the
cumulative total amount of the maintenance and operating expenses incurred
in the operation and maintenance of the Time-Share Project, together with a
reasonable reserve for capital improvements to the extent and as required
under the Operating Agreements and Time-Share Program Consumer Documents;
and the amount of any installment of real property taxes currently due and
payable with respect to the Time-Share Project and related amenities,
through the end of the calendar month preceding the month in which such
payment is made and (B) the cumulative total amount of assessments payable
to the Borrower, by owners (other than Borrower) of Time-Share Interests
therein through the end of the calendar month preceding the month in which
such payment is made.
(k) Maintenance of Time-Share Project and Other Property. Borrower will
maintain or cause to be maintained in good condition and repair all common
areas in the Time-Share Project and other on-site amenities which have been
promised or represented as being available to Purchasers and, to the extent
19
owned by Borrower or an Affiliate of Borrower, all portions of improvements
in which Units are located and are not part of the Time-Share Project.
Borrower will maintain a reasonable reserve to assure compliance with the
terms of the foregoing sentence. Borrower shall maintain the Operating
Agreements in full force and effect and shall make no material
modifications to the same without the prior written consent of Lender.
(l) Maintenance of Larger Tract. To the extent either the Time-Share
Project is part of a larger common ownership regime or planned development
or parts of buildings in which Units are located are not part of the
Time-Share Project, Borrower will pay its commercially reasonable share of
common expenses to be allocated to the Time-Share Project. Borrower will
use commercially reasonable efforts to cause all such property which is not
part of the Time-Share Project to be professionally managed in a first
class manner.
(m) Collection of Receivables Collateral. Borrower will undertake the
diligent, timely and commercially reasonable collection of amounts
delinquent under each Instrument which constitutes part of the Receivables
Collateral and will bear the entire expense of such collection. Lender
shall have no obligation to undertake any action to collect under any
Instrument.
(n) Notice of Lender's Interest. Borrower will deliver under its letterhead
notice of Lender's interest in the Receivables Collateral to persons bound
thereby, if requested, and will cause such notice to comply with applicable
law.
(o) Year 2000. Borrower shall take all action necessary to assure that
there will be no material adverse change to Borrower's business by reason
of the advent of the year 2000, including without limitation that all
computer-based systems, embedded microchips and other processing
capabilities effectively recognize and process dates after April 1, 1999.
At Lender's request, Borrower shall provide to Lender assurance reasonably
acceptable to Lender that Borrower's computer-based systems, embedded
microchips and other processing capabilities are year 2000 compatible.
(p) Inventory Loan. In the event the Inventory Loan has not closed by
January 31, 1999, Borrower shall, on or before that date, cause Lender to
be named as beneficiary under the fideocomiso trust that holds Borrower's
unsold Time-Share Interest inventory or otherwise be granted rights in form
satisfactory to Lender to such extent so that Lender will have the right,
directly or indirectly, to enforce the Operating Agreements. Lender's
ability to enforce the Operating Agreement shall not restrict or limit the
Borrower's ability to sell Time-Share inventory in the ordinary course of
business.
(q) Withholding Tax. For so long as any of the Obligations remain
outstanding, Borrower agrees to take all steps now or hereafter required in
order to avoid the imposition of withholding taxes under Section 871, 881
and 1442 of the IRC or any successors statutes. Without limiting the
generality of the foregoing, Borrower hereby agrees, for so long as any of
the Obligations are made outstanding:
(i) to maintain the Trusts in full force and effect, provided,
however, that Borrower may dissolve any Trust at any time from and
after the date on which the corpus of said Trust no longer contains
any Instruments forming a part of the Receivables Collateral;
(ii) prior to such time as Borrower requests that Lender make an
Advance against a particular Instrument, to transfer and convey the
Instrument to the applicable Trust and cause the Instrument to remain
within such Trust for so long as Lender has a security interest in
such Instrument;
(iii) to perform all acts required of Borrower under the Trusts
including without limitation the delivery to the Trustee of an IRS
Form W-8 within the time period required under the Trusts and furnish
Lender with a copy of such Form W-8 concurrently with the delivery of
the same to the Trustee; and
(iv) not to engage in a United States trade or business, as that term
is interpreted under the IRC. In that regard, but without limited to
generality of the foregoing, Borrower agrees to engage in no
operational, marketing, collection, administrative, servicing or other
business within the United States. To the extent that Borrower retains
the services of an Affiliate for purposes of performing operational,
marketing, collection, administrative, servicing or other business
activities for the benefit of Borrower, such business activities shall
be conducted pursuant to arms-length pricing and terms and be
evidenced by a written agreement
20
approved by Lender. Borrower shall
abide by all of its obligations under such agreement in a timely
fashion. Any such Affiliate retained to perform such business
activities on the part of Borrower shall perform similar businesses
and services with and on behalf of persons or entities other than
Borrower.
(r) Signatures. In the event recommended by Lender's Mexican counsel,
Borrower shall cause its authorized officer to initial or execute each page
of each Receivables Loan Document, promptly upon the request of Lender.
6.2 Borrower's Negative Covenants.
(a) Change in Borrower's Name or Principal Place of Business. Borrower will
not change its name or move its principal place of business or chief
executive office except upon not less than sixty (60) days' prior written
notice to Lender.
(b) Restrictions on Additional Indebtedness. Subject to the additional
restrictions set forth in paragraph 6.2(c) below, Borrower will not incur
any additional indebtedness, including, without limitation, any liability
under any capitalized lease or any liability as a guarantor or other
contingent liability, except for (i) short term accounts payable incurred
in connection with the operation of the Time-Share Project in the ordinary
course of business, (ii) the financing of time-share receivables
denominated in Mexican Pesos or Unidades de Inversion ("UDI's"), and (iii)
the Mirror Notes ("Permitted Debt"). If Lender consents to the incurring by
Borrower of additional indebtedness, Lender shall have the right of first
refusal to provide such financing to Borrower. If, during the Term,
Borrower wishes to accept an offer from a third party for financing
Borrower shall give Lender written notice of its intent to do so together
with a copy of the written proposal for the financing from the prospective
third party lender. Lender shall have ten (10) Business Days from receipt
of the notice and any other items reasonably requested by Lender in
connection with such proposed financing to issue a financing proposal to
extend such financing upon terms substantially equivalent or better than
those contained in the proposal from the prospective third party lender and
failure to do so shall be deemed to be an election by Lender not to extend
such financing. Lender shall have forty-five (45) days following the
receipt of the financing proposal timely accepted by Borrower within which
to issue a commitment; provided, however, Lender shall have no obligation
to issue such commitment. The failure of Lender to issue a commitment
within the foregoing period of time shall be deemed to be an election by
Lender not to extend such financing. In such event, Borrower shall be free
to accept the proposal from such third party lender and close such
transaction on terms that are in all material respects no more favorable to
the third party lender than those contained in its proposal. Borrower shall
not however, have the right to close such financing with such third party
lender on terms more favorable to the third party lender than those
contained in the proposal from the third party lender unless Lender has
been given the right to provide Borrower financing on terms substantially
equivalent to or better than those offered by such third party lender, as
more fully provided above.
(c) Restrictions on Liens or Transfers. Borrower, without the prior written
consent of Lender, will not: (i) sell, convey, lease, pledge, hypothecate,
encumber or otherwise transfer any security for the Performance of the
Obligations; (ii) permit or suffer to exist any liens, security interests
or other encumbrances on the Collateral, except for the Permitted
Encumbrances and liens and security interests expressly granted to Lender;
(iii) sell, convey, lease, transfer or dispose of all or substantially all
of its assets to another entity provided, however, that this section (iii)
shall not be any more restrictive to the Borrower than is permitted by
section 4.08 of the Indenture; or (iv) if Borrower is an organization,
permit or suffer to exist any change in the legal or beneficial ownership
of Borrower or any person controlling Borrower (whether directly or
indirectly, through one (1) or more intermediaries) or any change in the
power to control it or any person controlling Borrower (whether directly or
indirectly, through one or more intermediaries). Without limiting Lender's
right to withhold its approval for other reasons, as a condition to
approval of any lien, security interest or other charge upon any of the
Collateral, Lender may require that the third party execute a subordination
agreement satisfactory to Lender and provide Quiet Enjoyment Rights to
owners of Time-Share Interests.
(d) No Sales Activities Prior to Approval. Borrower will not sell any
Time-Share Interest or offer any Time-
21
Share Interest for sale in any
jurisdiction, unless: (i) Borrower has delivered to Lender true and
complete copies of the Minimum Required Time-Share Approvals required in
such jurisdiction for its proposed conduct and all other evidence required
by Lender that Borrower has complied with all Legal Requirements of such
jurisdiction governing its proposed conduct; and (ii) Borrower has
delivered to Lender the Time-Share Program Consumer Documents and the
Time-Share Program Governing Documents which Borrower will be using in
connection with the Time-Share Project and the sale or offering for sale of
Time-Share Interests in such jurisdiction and such documents have been
approved by Lender, which approval shall not be unreasonably withheld.
(e) No Modification of Receivables Collateral or Payments by Borrower.
Borrower will not cancel or materially modify, or consent to or acquiesce
in any material modification (including, without limitation, any change in
the interest rate or amount, frequency or number of payments) to, or
solicit the prepayment of, any Instrument which constitutes part of the
Receivables Collateral (except for solicitations by the Borrower which
result in prepayment of a particular Instrument in exchange for a discount
not exceeding five percent (5%) of the principal balance of such
Instrument); or waive the timely performance of the material obligations of
the Purchaser under any such Instrument or its security; or release the
security for any such Instrument. Borrower will not pay or advance directly
or indirectly for the account of any Purchaser any sum required to be
deposited or owing by the Purchaser either under any Purchase Contract or
under any Instrument which constitutes part of the Receivables Collateral.
(f) No Modification of Time-Share Documents. Borrower will not cancel or
materially modify, or consent to or suffer to exist any cancellation or
material modification of any Time-Share Program Consumer Document or any
Time-Share Program Governing Document without the prior written consent of
Lender, such consent not to be unreasonably withheld or delayed.
(g) Maintenance of Larger Tract. To the extent either the Time-Share
Project is part of a larger common ownership regime or planned development
or parts of buildings in which Units are located are not part of the
Time-Share Project, Borrower will not permit common expenses to be
allocated to the Time-Share Project in an unreasonably disproportionate
manner.
6.3 Survival of Covenants. The covenants contained in this Article 6 are in
addition to, and not in derogation of, the covenants contained elsewhere in the
Receivables Loan Documents and shall be deemed to be made and reaffirmed prior
to the making of each Advance.
7. DEFAULT
7.1 Events of Default. The occurrence of any of the following events or
conditions shall constitute an Event of Default by Borrower under the
Receivables Loan Documents:
(a) failure of Lender to receive from Borrower within five (5) Business
Days of the date when due and payable (i) any amount payable under the
Receivables Loan Note or (ii) any other payment due under the Receivables
Loan Documents, except for the payment due at the Receivables Loan Maturity
Date for which no grace period is allowed;
(b) any representation or warranty which is made by Borrower or Guarantor
and is contained in the Receivables Loan Documents or in any certificate
furnished to Lender under the Receivables Loan Documents by or on behalf of
Borrower proves to be, in any material adverse respect, false or misleading
as of the date deemed made;
(c) a default in the Performance of the Obligations set forth in paragraph
3.2, 6.1(c), 6.1(e), 6.2(b), 6.2(c)(i), 6.2(c)(iii) or 6.2(c)(iv) hereof or
in Sections S.5(a), S.5(b) or S.5(c) of the Schedule;
(d) a default in the Performance of the Obligations or a violation of any
term, covenant or provision of the Receivables Loan Documents (other than a
default or violation referred to elsewhere in this paragraph 7.1) which
continues unremedied (i) for a period of thirty (30) days after notice of
such default or violation to Borrower in the case of a default under or
violation of paragraph 6.2(c)(ii) or any default or violation which can be
cured by the payment of money alone or (ii) for a period of thirty (30)
days after notice to Borrower in the case of any other default or
violation;
22
(e) an "Event of Default," as defined in any of the other Receivables Loan
Documents;
(f) any default, which default continues beyond any applicable cure period,
by any Borrower under (i) the Mirror Notes or under the documents and
instruments executed in connection therewith or (ii) any other agreement
evidencing, guaranteeing or securing borrowed money or a receivables
purchase financing involving an obligation in excess of Fifty Thousand
Dollars ($50,000) to make a payment of principal or interest or to
repurchase receivables; or any other material default by any Borrower
permitting the acceleration of any of the payment or repurchase obligations
of such Borrower which, if accelerated, will be in excess of Fifty Thousand
Dollars ($50,000) in the aggregate;
(g) any final, non-appealable judgment or decree for money damages or for a
fine or penalty against any Borrower which is not paid and discharged or
stayed within thirty (30) days thereafter and, when aggregated with all
other judgment(s) or decree(s) that have remained unpaid and undischarged
or are not stayed for such period, such amount is in excess of Fifty
Thousand Dollars ($50,000) as to any individual Borrower or Two Hundred
Thousand Dollars ($200,000) in the aggregate as to all such Borrowers.
(h) any party holding a lien on or security interest in any Collateral,
other than a lien created by a Purchaser solely with respect to the
Time-Share Interest(s) owned by it, commences foreclosure or similar sale
thereof;
(i) a material adverse change in the Time-Share Project, the Collateral or
the business or financial condition of any Borrower, which change is not
enumerated in this paragraph 7.1, as the result of which Lender in good
▇▇▇▇▇ ▇▇▇▇▇ the prospect of Performance of the Obligations impaired or the
Collateral imperiled;
(j) Any Borrower shall (i) generally not be paying its debts as they become
due, (ii) file, or consent by answer or otherwise to the filing against it
of, a petition for relief or reorganization, arrangement or liquidation or
any other petition in bankruptcy or insolvency under the laws of any
jurisdiction including, without limitation, the commencement of a
bankruptcy (quiebra), insolvency (suspension de pagos) or similar
proceedings in accordance with the Mexican Bankruptcy Insolvency Law (Ley
de Quiebras y Suspension de Pagos), (iii) make an assignment for the
benefit of its creditors, (iv) consent to the appointment of a custodian,
receiver, trustee or other officer with similar powers for itself or any
substantial part of its property, (v) be adjudicated insolvent, (vi)
dissolve or commence to wind-up its affairs or (vii) take any action for
purposes of the foregoing; or a petition for relief or reorganization,
arrangement or liquidation or any other petition in bankruptcy or
insolvency or the appointment of a custodian under the laws of any
jurisdiction is filed against any Borrower or a custodian is appointed for
any Borrower, the Collateral or any material part of any Borrower's
property and such proceeding is not dismissed and appointment vacated
within ninety (90) days thereafter;
(k) any of the events enumerated in paragraphs 7.1(b), (f), (g), (h), (i)
or (j) occurs with respect to any partner or manager of Borrower, if
Borrower is a partnership or limited liability company, Guarantor or other
surety for the Performance of the Obligations or Guarantor defaults in the
Performance of any of its obligations under the Guaranty executed by it;
(l) failure of Lender to receive from Borrower, within thirty (30) days of
the date Borrower knows of such event, notice of any event which renders
any representation or warranty in any Receivables Loan Documents false in
any material, adverse respect were it made after the occurrence of such
condition;
(m) any default, which continues beyond any applicable cure period, by
Guarantor under (i) the Redeemable Senior Notes or under the document and
instruments executed in connection therewith or (ii) any other agreement
evidencing, guaranteeing or securing borrowed money or a receivables
purchase financing involving an obligation in excess of Fifty Thousand
Dollars ($50,000) to make a payment of principal or interest or to
repurchase receivables; or any other material default by Guarantor
permitting the acceleration of any of the payment or repurchase obligations
of Guarantor which, if accelerated, will be in excess of Fifty Thousand
Dollars ($50,000) in the aggregate;
(n) Trustee defaults in the performance of its Secured Obligations under
and
23
as defined in the Pledge Agreement, if such default continues
unremedied for (i) a period of fifteen (15) days after notice thereof to
Trustee and Borrower in the case of a default which can be cured by the
payment of money only or (ii) a period of thirty (30) days after notice
thereof to Trustee and Borrower in the case of any other default;
(o) any representation or warranty of Trustee contained in the Pledge
Agreement proves to be, in any material respect, false or misleading as of
the date deemed made and such misleading representation or warranty has a
material adverse effect on Lender.
(p) if by or under the authority of any governmental authority the
management of any Borrower or its business is curtailed to the point of
making it effectively inoperative by any seizure or intervention or
proceedings of any nature;
(q) if any of the Time-Share Projects are appropriated or possession
thereof is lost by the Borrower;
(r) if for any reason any Mexican authorities close the Time-Share Project
or enjoin the further sale of Time-Share Interests therein; or
(s) if caused by the acts of Borrower or the Trustee, the zero balance
accounts maintained in the name of the Trustee under the Lockbox Agreement
are not swept into an account of which Lender is the sole owner, as
required under the Lockbox Agreement and such condition continues for a
period of five (5) Business Days.
7.2 Remedies. At any time after an Event of Default has occurred and while
it is continuing, Lender may but without obligation, in addition to the rights
and powers granted elsewhere in the Receivables Loan Documents and not in
limitation thereof, do any one or more of the following:
(a) cease to make further Advances;
(b) declare the Receivables Loan Note, together with any applicable
Receivables Loan Prepayment Premium and all other sums owing by Borrower to
Lender in connection with the Receivables Loan, immediately due and payable
without notice, presentment, demand or protest, which are hereby waived by
Borrower;
(c) with respect to the Receivables Collateral, (i) after any applicable
delinquency on a Purchase Contract, institute collection, foreclosure and
other enforcement actions against Purchasers and other persons obligated on
the Receivables Collateral, (ii) enter into modification agreements and
make extension agreements with respect to payments and other performances,
(iii) release persons liable for performance, (iv) settle and compromise
disputes with respect to payments and performances claimed due, all without
notice to Borrower, without being called to account therefor by Borrower
and without relieving Borrower from Performance of the Obligations, and (v)
receive, collect, open and read all mail of Borrower for the purpose of
obtaining all items pertaining to the Receivables Collateral;
(d) proceed to protect and enforce its rights and remedies under the
Receivables Loan Documents and to foreclose or otherwise realize upon its
security for the Performance of the Obligations, or to exercise any other
rights and remedies available to it at law, in equity or by statute;
(e) without notice to Borrower, have a receiver appointed for Borrower
and/or its property;
(f) Exercise any and all remedies of a secured party under the Arizona
Uniform Commercial Code and under Mexican law with respect to the
Collateral;
(g) following the realization by Lender of its security interest in the
Trust Collateral, terminate or revoke the Trusts or either of them;
(h) without limiting any other rights or remedies of Lender, exercise all
rights and remedies under the Pledge Agreement; and
7.3 Application of Proceeds During an Event of Default. Notwithstanding
anything in the Receivables Loan Documents to the contrary, while an Event of
Default exists, any cash received and retained by Lender in connection with the
Receivables Collateral may be applied to payment of the Obligations in the
manner provided in paragraph 7.5.
7.4 Uniform Commercial Remedies; Sale; Assembly of Receivables Collateral.
(a) UCC Remedies; Sale of Receivables Collateral. Lender shall have all of
the rights and remedies of a secured party under
24
the Uniform Commercial
Code of the State of Arizona and all other rights and remedies accorded to
a Secured Party at equity or law. Any notice of sale or other disposition
of the Receivables Collateral given not less than ten (10) Business Days
prior to such proposed action in connection with the exercise of Lender's
rights and remedies shall constitute reasonable and fair notice of such
action. Lender may postpone or adjourn any such sale from time to time by
announcement at the time and place of sale stated on the notice of sale or
by announcement of any adjourned sale, without being required to give a
further notice of sale. Any such sale may be for cash or, unless prohibited
by applicable law, upon such credit or installment as Lender may determine.
Borrower shall be credited with the net proceeds of such sale only when
such proceeds are actually received by Lender in good current funds.
Despite the consummation of any such sale, Borrower shall remain liable for
any deficiency on the Obligations which remains outstanding following such
sale. All net proceeds recovered pursuant to a sale shall be applied in
accordance with the provisions of paragraph 7.5.
(b) Lender's Right to Execute Conveyances. Lender may, in the name of
Borrower or in its own name, make and execute all conveyances, assignments
and transfers of the Receivables Collateral sold in connection with the
exercise of Lender's rights and remedies; and Lender is hereby appointed
Borrower's attorney-in-fact for this purpose.
(c) Obligation to Assemble Receivables Collateral. Upon request of Lender
when an Event of Default exists, Borrower shall assemble the Receivables
Collateral and make it available to Lender at a time and place designated
by Lender, if it is not already in Lender's possession.
7.5 Application of Proceeds. The proceeds of any sale of all or any part of
the Receivables Collateral made in connection with the exercise of Lender's
rights and remedies shall be applied in the following order of priorities;
first, to the payment of all costs and expenses of such sale, including without
limitation, reasonable compensation to Lender and its agents, attorneys' fees,
and all other expenses, liabilities and advances incurred or made by Lender, its
agents and attorneys, in connection with such sale, and any other unreimbursed
expenses for which Lender may be reimbursed pursuant to the Receivables Loan
Documents; second, to the payment of all late charges required by the
Receivables Loan Documents to be paid by Borrower, in such order and manner as
Lender shall in its discretion determine; third, to the payment of the
Obligations, in such order and manner as Lender shall in its discretion
determine, with no amounts applied to payment of principal until all interest
has been paid; fourth, to the other Obligations in such order and manner as
Lender may determine; and last, to the payment to Borrower, its successors or
assigns, or to whosoever may be lawfully entitled to receive the same, or as a
court of competent jurisdiction may direct, of any surplus then remaining from
such proceeds.
7.6 Lender's Right to Perform. Lender may, at its option, and without any
obligation to do so, pay, perform and discharge any and all obligations agreed
to be paid or Performed in the Receivables Loan Documents by Borrower or any
surety for the Performance of the Obligations if (a) such person fails to do so
and (b) (i) an Event of Default exists and at least five (5) Business Days'
notice has been given to such person of Lender's intention to take such action,
(ii) the action taken by Lender involves obtaining insurance which such person
has failed to maintain in accordance with the Receivables Loan Documents or to
deliver evidence thereof, or (iii) in the opinion of Lender, such action must be
taken because an emergency exists or to preserve any of the Collateral or its
value. For such purposes Lender may use the proceeds of the Collateral. All
amounts expended by Lender in so doing or in exercising its remedies under the
Receivables Loan Documents following an Event of Default shall become part of
the Obligations, shall be immediately due and payable by Borrower to Lender upon
demand, and shall bear interest at the Default Rate from the dates of such
expenditures until paid.
7.7 Non-Exclusive Remedies. No remedy in any Receivables Loan Document
conferred on or reserved to Lender is intended to be exclusive of any other
remedy or remedies, but each and every such remedy shall be cumulative and shall
be in addition to every other remedy given under any Receivables Loan Document
or now or hereafter existing at law or in equity. No delay or omission to
exercise any right or power shall be construed to be a waiver of or acquiescence
to any default or a waiver of any right or power; and every such right and power
may be exercised from time to time and as often as may be deemed expedient.
7.8 Waiver of Marshalling. Borrower, for itself and for all who may claim
through or under it, hereby expressly waives and releases all right to have the
Collateral, or any part of the Collateral, marshalled on any foreclosure, sale
or other enforcement of Lender's rights and remedies.
7.9 Attorney-in-Fact. For the purpose of exercising its rights and remedies
under paragraphs 7.2(c)
25
and 7.6, Lender may do so in Borrower's name or its name
and is hereby appointed as Borrower's attorney-in-fact to take any and all
actions in Borrower's name and/or on Borrower's behalf as Lender may deem
necessary or appropriate in its discretion in the accomplishment of such
purposes.
8. COSTS AND EXPENSES; INDEMNIFICATION
8.1 Costs and Expenses.
8.1.1 Borrower will pay on demand any and all costs and expenses incurred
by Lender (exclusive of Lender's employees' expenses other than travel expenses)
in connection with the initiation, documentation and closing of the Receivables
Loan, the making of Advances, the protection of the Collateral, or the
enforcement of the Obligations against Borrower, including, without limitation,
all attorneys', inspecting architect's/engineer's and other professionals' fees
(including, without limitation, reasonable out-of-pocket expenses and reasonable
and normal charges of such attorneys' and other professionals for photocopy,
telecopy and computer services, and clerical overtime), consumer credit reports,
and revenue, documentary stamp, transaction and intangible taxes. Without
limiting the generality of the foregoing, if a bankruptcy proceeding is
commenced by or against Borrower or otherwise involving the Collateral, Lender
shall, to the extent not already provided for herein, be entitled to recover,
and Borrower shall be obligated to pay, Lender's attorneys' fees and costs
incurred in connection with: any determination of the applicability of the
bankruptcy laws to the terms of the Receivables Loan Documents or Lender's
rights thereunder; any attempt by Lender to enforce or preserve its rights under
the bankruptcy laws or to prevent Borrower or any other person from seeking to
deny Lender its rights thereunder; any effort by Lender to protect, preserve or
enforce its rights against the Collateral, or seeking authority to modify the
automatic stay of 11 U.S.C. Section 362 or otherwise seeking to engage in such
protection, preservation or enforcement; or any proceeding(s) arising under the
bankruptcy laws, or arising in or related to a case under the bankruptcy laws.
In addition to the foregoing, Borrower agrees to timely pay all fees and
expenses of Trustee to perform the services contemplated under the Pledge
Agreement and under the Trusts. Borrower agrees to supply to Lender written
notice in the event the Trustee advises Borrower that the Trustee intends to
increase the fees and expenses payable to Trustee in connection with the
performance of its services under the Pledge Agreement and Trusts, within three
(3) Business Days following Borrower's Knowledge of such contemplated increase.
8.1.2 Borrower agrees to timely pay and reimburse the Trustee for all
Trustee's fees, costs and expenses incurred by or due and owing to the Trustee
under or in connection with the Trusts and Pledge Agreement and agrees to take
such steps as are necessary in order to prevent the Trustee from charging such
costs, fees and expenses against the Trust Estate (as that term is defined in
the Trusts) or from seeking reimbursement of such fees and expenses from the
proceeds of the Receivables Collateral. In the event Borrower or Trustee
withholds tax from the proceeds otherwise payable under the Receivables
Collateral, Borrower shall pay to Lender on the last day of each and every month
during the Term, the amount of tax so withheld during such month. In the event
Trustee expends or advances any funds which will be charged against the Trust
Estate or for which Trustee will be seeking reimbursement from the proceeds of
the Receivables Collateral, Borrower shall, within eight (8) days following
notification by Trustee as to such contemplated expenditure or advance, deposit
with Trustee, monies in an amount equal to such contemplated advance or
expenditure so that the Trust Estate and the proceeds from the Receivables
Collateral shall not be reduced by such advance or expenditure. In the event
such notice is given and Borrower fails to deposit such monies (and
notwithstanding the fact that such failure shall be deemed an Event of Default),
in the event Trustee does not or, has no obligation to so notify Borrower, or in
the event the Trustee charges Trustees fees, costs or expenses against the Trust
Estate or against the proceeds of the Receivables Collateral (and
notwithstanding the fact that such act on the part of the Trustee shall be
deemed an Event of Default), Borrower nevertheless shall pay to Lender on the
last day of each and every month during the Term, the amount of such advance,
expenditure or charge so made by Trustee during such month. The amounts payable
by Borrower to Lender hereunder shall be deemed proceeds from the Receivables
Collateral and shall be applied in the priority set forth in paragraph 2.10
hereof.
8.2 Indemnification. Borrower will INDEMNIFY, PROTECT, HOLD HARMLESS, and
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defend Lender, FPSI and their respective successors, assigns and shareholders
(including corporate shareholders), and the directors, officers, employees,
servants and agents of the foregoing, for, from and against: (a) any and all
liability, damage, penalties, or fines, loss, costs or expenses (including,
without limitation, court costs and attorneys' fees), claims, demands, suits,
proceedings (whether civil or criminal), orders, judgments, penalties, fines and
other sanctions whatsoever asserted against it and arising from or brought in
connection with the Time-Share Project, the Collateral, Lender's status by
virtue of the Receivables Loan Documents, creation of liens and security
interests, the terms of the Receivables Loan Documents or the transactions
related thereto, the security interest that Lender asserts in the Trust
Collateral, the holding by Lender of a beneficial interest in the Trusts or the
dissolution and liquidation of the Trusts, a breach of Borrower's obligations
under Paragraph 6.1(g), any assertion or claim that Lender is required to
withhold any tax due on the proceeds of any Instrument or Trust Collateral, or
any act or omission of Borrower or an Agent, or their respective employees or
agents, whether actual or alleged unless such act or omission is caused by
Lender's gross negligence or willful misconduct; and (b) any and all brokers'
commissions or finders' fees or other costs of similar type by any party in
connection with the Receivables Loan. On written request by a person or other
entity covered by the above agreement of indemnity, Borrower will undertake, at
its own cost and expense, on behalf of such indemnitee, using counsel
satisfactory to the indemnitee, the defense of any legal action or proceeding to
which such person or entity shall be a party. At Lender's option, Lender may at
Borrower's expense prosecute or defend any action involving the priority,
validity or enforceability of the Collateral. FPSI is hereby expressly made a
third-party beneficiary of the indemnity obligations of Borrower contained in
this paragraph 8.2 and shall have the right to enforce such indemnity
obligations against Borrower in the same manner as if FPSI were a party to this
Agreement.
9. CONSTRUCTION AND GENERAL TERMS
9.1 Special Provisions Relating to Trusts.
(a) Borrower acknowledges that Lender's security interest in the
Receivables Collateral and other collateral pledged to Lender as security
for the Obligations and Trustee's obligations under the Pledge Agreement
secures, inter alia, the payment and performance by Trustee of its
obligations under the Pledge Agreement. Borrower agrees that neither demand
on, nor pursuit of any remedies against Trustee shall be required as a
condition precedent to, and neither the pendency nor prior termination of
any action, suit or proceeding against Trustee shall bar or prejudice the
making of a demand upon Borrower hereunder or the exercise of any remedies
against Borrower. Neither (i) the exercise or failure to exercise by Lender
of any rights or remedies conferred to it under the Pledge Agreement; (ii)
the recovery of a judgment against Trustee; (iii) the commencement of any
action at law or the recovery of a judgment against Trustee and the
enforcement thereof; (iv) the taking or institution of any action against
Trustee nor (v) any delay in taking or pursuing any of the foregoing shall
extinguish or affect the obligations of Borrower hereunder. Lender may,
without impairing the liability of Borrower hereunder, extend the time for
payment or performance of any obligations of Trustee under the Pledge
Agreement; release or compromise any liability of Trustee thereunder;
extend the time for payment of the obligations of Trustee thereunder; and
agree to any amendment or modification or alteration of the Pledge
Agreement on such terms and conditions as may be acceptable to Lender.
Borrower shall have no rights of subrogation and hereby waives any right to
participate in any of the Collateral (as that term is defined in the Pledge
Agreement). Borrower waives any and all suretyship defenses and defenses in
the nature thereof.
(b) Borrower agrees to perform all acts that are necessary, required or
contemplated under the terms of the Trusts in order for Lender to have and
receive a security interest in the Receivables Collateral (including
without limitation a security interest in the Trust Collateral and an
assignment of the Pass-Through Certificates) and in order to insure that
all of the proceeds of the Receivables Collateral are paid directly to
Lender by virtue of and as a result of Lender's Security Interest in the
Trust Collateral and by virtue of the assignment in favor of Lender of the
Pass-Through Certificates.
(c) Without limiting the generality of the foregoing, Borrower agrees to
notify Trustee, pursuant to the provisions of Section V(D) of the Trusts,
that (i) Lender has a Security Interest in the Trust Collateral, (ii) such
Security Interest is a Pledge and/or Security Interest (as such terms are
defined in the Trusts) and not an outright assignment and (iii) all amounts
due with respect to the Trust Collateral shall be paid to Lender rather
than to Borrower until all of the Obligations have been paid and Performed
in full. Borrower agrees not to vary,
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modify or revoke the foregoing instructions to Trustee without the prior
written consent of Lender.
(d) Without further limiting the generality of the foregoing, Borrower
agrees to instruct Trustee, pursuant to Section II(C) of the Trusts, to
grant to Lender a Security Interest in Trustee's interest in the
Receivables Collateral as security for the payment and Performance of the
Obligations. Borrowers agree not to vary, modify or revoke the foregoing
instructions to Trustee, without the prior written consent of Lender.
(e) Borrower hereby agrees that Lender is entitled to receive, by virtue of
its security interest in the Trust Collateral, all proceeds from
Receivables Collateral and that all amounts due with respect to the Trust
Collateral (to the extent arising from or pertaining to the Receivables
Collateral) shall be paid to Lender rather than to Borrower until all of
the Obligations have been paid and Performed in full.
(f) Borrower shall not authorize or approve the performance by Trustee of
any extraordinary services, for which Trustee shall seek compensation,
without the advance written consent of Lender.
(g) Borrower shall not remove Trustee (or any successor to Trustee) as
trustee under the Trusts without the express written consent of Lender.
Borrower shall not appoint a successor trustee under the Trusts without
obtaining Lender's consent as to the identity of such successor and without
causing such successor, as a condition to such appointment, to become a
party to the Pledge Agreement, the Servicing Agreement and the Lockbox
Agreement in the same manner and to the extent that Trustee is such a
party. Borrower shall not modify the Trusts in any respect without the
prior written consent of Lender. Borrower shall not revoke or terminate the
Trusts without the prior written consent of Lender.
(h) Borrower recognizes that registration of certain of the Receivables
Collateral or other collateral under the federal and state securities laws
may be impractical because of the expenses or delays involved in the
registration process and that in the absence of such registration, Lender
may be unable to effect a public sale of all or a part of the Collateral,
but may be compelled to resort to one or more private sales to a restricted
group of purchasers who will be obliged to agree, among other things, to
acquire such collateral for their own account, for investment and not with
a view to the distribution or resale thereof. Borrower agrees that private
sales so made may be at prices and other terms less favorable to the seller
than if such collateral were sold at public sales, and that Lender has no
obligation to delay sale of any such Collateral for a period of time
necessary to permit such collateral to be registered for public sale under
the Securities Act of 1933, as amended, and any applicable Blue Sky or
other state securities laws. Borrower agrees that sales made under the
foregoing circumstances shall not be deemed to have been made in a
commercially unreasonable manner by virtue of any terms less favorable to
the seller resulting from the private nature of such sales.
(i) Borrower agrees to enforce, short of termination, all of the
obligations of Trustee under the Trust Agreements and hereby authorizes
Lender, following an Event of Default, to so enforce such obligations, in
the name of Borrower or otherwise but at the cost and the expense of
Borrower.
(j) Borrower shall not, at any time during the Term, (i) own in the
aggregate ten percent (10%) or more of the voting stock of any corporate
obligor of any receivables held by the Trusts, or ten percent (10%) or more
of the capital or profits interests of any obligor of any such receivables
that is a partnership or (ii) become a related person with respect to any
obligor on any of the receivables within the Trusts (within the meaning of
IRC Section 864(d)(4);
(k) Notwithstanding the fact that such transfer may constitute an Event of
Default, the Pass-Through Certificates shall be transferred only by the
surrender of an old Pass-Through Certificate and either the reissuance of
the old Pass-Through Certificate to the new holder or the issuance of a new
Pass-Through Certificate, in each case registered in the name of the new
holder;
(l) The identity of the owner of the receivables held by the Trusts shall
be reflected on books and records maintained by the Collection Agent
maintained pursuant to the Trust on behalf of the makers of those note
representing such receivables.
9.2 Payment Location. All monies payable under the Receivables Loan
Documents shall be paid to
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Lender at its address set forth following its signature in lawful monies of
the United States of America, unless otherwise designated in the Receivables
Loan Documents or by Lender by notice.
9.3 Entire Agreement. The Receivables Loan Documents exclusively and
completely state the rights and obligations of Lender and Borrower with respect
to the Receivables Loan. No modification, variation, termination, discharge,
abandonment or waiver of any of the provisions or conditions of the Receivables
Loan Documents shall be valid unless in writing and signed by a duly authorized
representative of the party sought to be bound by such action. The Receivables
Loan Documents supersede any and all prior representations, warranties and/or
inducements, written or oral, heretofore made by Lender, Borrower and the
Required Guarantors concerning this transaction, including the Commitment
Letter. However the Commitment Letter, to the extent it pertains to the
Inventory Loan, shall survive the execution of the Receivables Loan Documents
and the closing of the Receivables Loan.
9.4 Powers Coupled with an Interest. The powers and agency hereby granted
by Borrower are coupled with an interest and are irrevocable until the
Obligations have been paid in full and are granted as cumulative to Lender's
other remedies for collection and enforcement of the Obligations.
9.5 Counterparts; Facsimile Signatures. Any Receivables Loan Document may
be executed in counterpart, and any number of copies of such Receivables Loan
Document which have been executed by all parties shall constitute one (1)
original. Delivery of an executed counterpart of any Receivables Loan Document
by telefacsimile shall be equally as effective as delivery of a manually
executed counterpart of such Receivables Loan Document. Any party delivering an
executed counterpart of any Receivables Loan Document by telefacsimile shall
also deliver a manually executed counterpart of such Receivables Loan Document,
but the failure to deliver a manually executed counterpart shall not affect the
validity, enforceability, and binding effect of such Receivables Loan Document.
9.6 Notices. All notices, requests or demands required or permitted to be
given under the Receivables Loan Documents shall be in writing, and shall be
deemed effective (a) upon hand delivery, if hand delivered or (b) two (2)
Business Days after such are deposited for delivery via Federal Express or other
nationally recognized overnight courier service, addressed as shown below, or to
such other address as the party being notified may have designated in a notice
given to the other party. Written notice may be given by telecopy to the
telecopier number shown below or to such other telecopier number as the party
being notified may have designated in a notice given to the other party, which
notice shall be effective on the day of receipt if received during the
recipient's normal business hours on the day of receipt or otherwise on the next
Business Day; provided that such notice shall not be deemed effective unless not
later than the next Business Day, a copy of such notice is hand delivered or
deposited for delivery via courier in accordance with the requirements set forth
above. The notice addresses and telecopy numbers for Borrower and Lender are set
forth at the end of this Agreement following their respective signatures.
9.7 Successors and Assigns. All the covenants of Borrower and all the
rights and remedies of the Lender contained in the Receivables Loan Documents
shall bind Borrower, and, subject to the restrictions on merger, consolidation
and assignment contained in the Receivables Loan Documents, its successors and
assigns, and shall inure to the benefit of Lender, its successors and assigns,
whether so expressed or not. Borrower may not assign its rights in the
Receivables Loan Documents in whole or in part. Except as may be expressly
provided in a Receivables Loan Document, no person or other entity shall be
deemed a third party beneficiary of any provision of the Receivables Loan
Documents.
9.8 Severability. If any provision of any Receivables Loan Document is held
to be invalid, illegal or unenforceable under present or future laws, the
legality, validity and enforceability of the remaining provisions of the
Receivables Loan Documents shall not in any way be affected or impaired thereby.
In lieu of each such illegal, invalid or unenforceable provision, there shall be
added to the Receivables Loan Document affected, a provision that is legal,
valid and enforceable and as similar in terms to such illegal, invalid and
unenforceable provision as may be possible.
9.9 Time of Essence. Time is of the essence in the Performance of the
Obligations.
9.10 Miscellaneous. All headings are inserted for convenience only and
shall not affect any construction or interpretation of the Receivables Loan
Documents. Unless otherwise indicated, all references in a Receivables Loan
Document to clauses and other subdivisions refer to the corresponding
paragraphs, clauses and other subdivisions of the Receivables Loan Document; the
words "herein," "hereof," "hereto," "hereunder" and words of similar import
refer to the Receivables Loan Document as a whole and not to any particular
paragraph, clause or other subdivision; and reference to a numbered or lettered
subdivision of an Article or paragraph shall include relevant matter within the
Article or paragraph which is applicable to but not within such numbered or
lettered subdivision. All
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Schedules and Exhibits referred to in this Agreement are incorporated in
this Agreement by reference. Whenever the words "including", "include", or
"includes" are used in the Receivables Loan Documents, they shall be interpreted
in a non-exclusive manner as though the words, "without limitation," immediately
followed the same.
9.11 CHOICE OF LAW. EXCEPT AS OTHERWISE EXPRESSLY PROVIDED THEREIN, THE
RECEIVABLES LOAN DOCUMENTS AND THE RIGHTS, DUTIES AND OBLIGATIONS OF THE PARTIES
THERETO SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS
OF THE STATE OF ARIZONA (WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS) AND
TO THE EXTENT THEY PREEMPT THE LAWS OF SUCH STATE, THE LAWS OF THE UNITED
STATES.
9.12 CHOICE OF JURISDICTION; WAIVER OF VENUE. EACH OF BORROWER AND LENDER:
(A) HEREBY IRREVOCABLY SUBMITS ITSELF TO THE PROCESS, JURISDICTION AND VENUE OF
THE COURTS OF THE STATE OF ARIZONA, MARICOPA COUNTY, AND TO THE PROCESS,
JURISDICTION, AND VENUE OF THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF
ARIZONA, FOR THE PURPOSES OF SUIT, ACTION OR OTHER PROCEEDINGS ARISING OUT OF OR
RELATING TO ANY RECEIVABLES LOAN DOCUMENT OR THE SUBJECT MATTER THEREOF AND
WAIVE ANY OTHER JURISDICTION OR VENUE TO WHICH THE PARTIES MAY OTHERWISE BE
ENTITLED; AND (B) WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, HEREBY
WAIVES AND AGREES NOT TO ASSERT BY WAY OF MOTION, DEFENSE OR OTHERWISE IN ANY
SUCH SUIT, ACTION OR PROCEEDING ANY CLAIM THAT IT IS NOT PERSONALLY SUBJECT TO
THE JURISDICTION OF THE ABOVE-NAMED COURTS, THAT SUCH SUIT, ACTION OR PROCEEDING
IS BROUGHT IN AN INCONVENIENT FORUM OR THAT THE VENUE OF SUCH SUIT, ACTION OR
PROCEEDING IS IMPROPER. EACH OF BORROWER AND LENDER HEREBY WAIVES THE RIGHT TO
COLLATERALLY ATTACK ANY JUDGMENT OR ACTION IN ANY OTHER FORUM.
9.13 WAIVER OF JURY TRIAL. LENDER AND BORROWER ACKNOWLEDGE AND AGREE THAT
ANY CONTROVERSY WHICH MAY ARISE UNDER ANY RECEIVABLES LOAN DOCUMENT WOULD BE
BASED UPON DIFFICULT AND COMPLEX ISSUES; AND THEREFORE, THEY AGREE THAT ANY
LAWSUIT ARISING OUT OF ANY SUCH CONTROVERSY SHALL BE TRIED BY A JUDGE SITTING
WITHOUT A JURY, AND KNOWINGLY AND VOLUNTARILY WAIVE TRIAL BY JURY IN ANY SUCH
PROCEEDING.
9.14 INDUCEMENT TO LENDER. ALL OF THE PROVISIONS SET FORTH IN THIS
PARAGRAPH ARE A MATERIAL INDUCEMENT FOR LENDER'S MAKING ADVANCES TO BORROWER.
(BORROWER'S INITIALS RE: 9.11 - 9.14 _____)
9.15 Compliance With Applicable Usury Law. It is the intent of the parties
hereto to comply with the Applicable Usury Law. Accordingly, notwithstanding any
provisions to the contrary in the Receivables Loan Documents, in no event shall
the Receivables Loan Documents require the payment or permit the collection of
interest in excess of the maximum contract rate permitted by the Applicable
Usury Law.
9.16 NO RELATIONSHIP WITH PURCHASERS. LENDER DOES NOT HEREBY ASSUME AND
SHALL HAVE NO RESPONSIBILITY, OBLIGATION OR LIABILITY TO PURCHASERS, LENDER'S
RELATIONSHIP BEING THAT ONLY OF A CREDITOR WHO HAS TAKEN AN ASSIGNMENT FROM
BORROWER OF THE INSTRUMENTS IN ORDER TO FACILITATE PERFORMANCE OF THE
OBLIGATIONS. EXCEPT AS REQUIRED BY LAW AND FOR FILINGS MADE WITH THE SECURITIES
& EXCHANGE COMMISSION OR ANY STOCK EXCHANGE ON WHICH BORROWER'S STOCK IS TRADED,
BORROWER WILL NOT, AT ANY TIME, USE THE NAME OF OR MAKE REFERENCE TO LENDER WITH
RESPECT TO THE TIME-SHARE PROJECT, THE SALE OF TIME-SHARE INTERESTS OR
OTHERWISE, WITHOUT THE EXPRESS WRITTEN CONSENT OF LENDER.
9.17 NO JOINT VENTURE. THE RELATIONSHIP OF BORROWER AND LENDER IS THAT OF
DEBTOR AND CREDITOR, AND IT IS NOT THE INTENTION OF EITHER OF SUCH PARTIES BY
THIS OR ANY OTHER INSTRUMENT BEING EXECUTED IN CONNECTION WITH THE RECEIVABLES
LOAN TO ESTABLISH A PARTNERSHIP, AND THE PARTIES HERETO SHALL NOT UNDER ANY
CIRCUMSTANCES BE CONSTRUED TO BE PARTNERS OR JOINT VENTURERS.
9.18 Standards Applied to Lender's Actions. Unless otherwise specifically
stipulated elsewhere in the Receivables Loan Documents, if a matter is left in
the Receivables Loan Documents to the decision, requirement, request,
determination, judgment, opinion, approval, consent, satisfaction, acceptance,
agreement, option or discretion of Lender, its employees, Lender's counsel or
30
any agent for or contractor of Lender, such action shall be deemed to be
exercisable by Lender or such other person in its sole and absolute discretion
and according to standards established in its sole and absolute discretion.
Without limiting the generality of the foregoing, "option" and "discretion"
shall be implied by use of the words "if" or "may."
9.19 Meaning of Subordination. Any subordination required to be given under
the Receivables Loan Documents to Lender shall include the subordination of and
the deferral of the right to receive payments on the subordinated obligations
except to the extent expressly permitted in this Agreement; the remittances to
Lender of all prohibited payments received by the third party; the subordination
of all liens, security interests, assignments and other encumbrances and claims
held by the subordinating party on or against any of Borrower's property to
Lender's interest (whenever acquired) in such property; and an agreement on the
part of the third party not to exercise any remedies against Borrower so long as
all obligations under the Receivables Loan Documents have not been fully
satisfied.
9.20 Scope of Reimbursable Attorney's Fees. As used in the Receivables Loan
Documents, the term "attorneys' fees" includes the reasonable fees of attorneys
licensed to practice law in any jurisdiction, law clerks, paralegals,
investigators and others not admitted to the bar but performing services under
the supervision of a licensed attorney, and the expenses (including, without
limitation, normal and customary charges for telecopy and photocopy services and
clerical overtime) incurred by them in the performance of their services. As
used in the Receivables Loan Documents, attorneys' fees incurred by Lender in
the enforcement of any remedy or covenant include, without limitation,
attorneys' fees incurred in any foreclosure of the Receivables Loan Security
Documents, in protecting or sustaining the lien or priority of the Collateral,
or in any proceeding arising from or connected with any such matter, including
any bankruptcy, receivership, injunction or other similar proceeding, or any
appeal from or petition for review of any such matter, and with or without
litigation.
9.21 Publicity. Lender is hereby authorized to issue appropriate press
releases and to cause a tombstone to be published announcing the consummation of
this transaction and the aggregate amount thereof. Borrower consents to such
advertising and authorizes Lender to use Borrower's name, logo, insignia,
descriptive art work, trade name, trademark, or other similar material, whether
or not protected by copyright (or otherwise), in any such advertisement.
9.22 Joint and Several. All of the Obligations, covenants, representations
and warranties of Borrower in any of the Receivables Loan Documents shall be the
joint and several Obligations, covenants, representations and warranties of each
entity constituting Borrower, except to the extent otherwise set forth to the
contrary. Although Lender and Borrower intend that each entity constituting
Borrower shall be jointly and severally liable for all Obligations, to the
extent that this Agreement or the other Receivables Loan Documents may be
determined to secure indebtedness of any Borrower for which any other Borrower
is not primarily liable, each Borrower expressly waives the benefit of any and
all defenses available to a guarantor, surety, endorser or accommodation party
dependent on an obligor's character as such. Without limiting the generality of
the foregoing, each such other Borrower's liability hereunder shall not be
affected or impaired in any way by any of the following acts or things (which
Lender is hereby expressly authorized to do, omit or suffer from time to time
without notice to or consent of anyone):
(i) any acceptance of collateral security, guarantors, accommodation
parties or sureties for any or all Obligations;
(ii) any extension or renewal of any Obligations (whether or not for longer
than the original period) or any modification of the interest rate,
maturity or other terms of the Obligations;
(iii) any waiver or indulgence granted to any Borrower, and any delay or
lack of diligence in the enforcement of any or all Obligations owed by any
Borrower;
(iv) any full or partial release of, compromise or settlement with, or
agreement not to ▇▇▇, any Borrower or the Guarantor or other person liable
on any Obligations;
(v) any release, surrender, cancellation or other discharge of any or all
Obligations of Borrower or the acceptance of any instrument in renewal or
substitution for any instrument evidencing any Obligations;
(vi) any failure to obtain collateral security (including rights of setoff)
for any Obligations or to see to the proper or sufficient creation and
perfection thereof, or to establish the priority thereof, or to preserve,
protect, insure, care for, exercise or enforce any collateral security for
any Obligations;
(vii) any modification, alteration, substitution, exchange, surrender,
cancellation, termination, release or other change, impairment, limitation,
loss or discharge of any collateral security for any Obligations;
31
(viii) any assignment, sale, pledge or other transfer of any of the
Obligations owed by any Borrower; or
(ix) any manner, order or method of application of any payments or credits
on any Obligations.
Each Borrower waives all rights that it may now have or hereafter acquire,
whether by subrogation, contribution, reimbursement, recourse, exoneration,
contract or otherwise, to recover from any other Borrower or from any property
of any other Borrower any sums paid under this Agreement. No Borrower will
exercise or enforce any right of contribution to recover any such sums from any
person who is a co-obligor with any Borrower or a guarantor or surety of the
Obligations or from any property of any such person or entity until all of the
Obligations shall have been fully paid and discharged.
9.23 Reliance. Lender's examination, inspection, or receipt of information
pertaining to Borrower, any Guarantor, the Collateral or the Time-Share Project
shall not in any way be deemed to reduce the full scope and protection of the
warranties, representations and Obligations contained in the Receivables Loan
Documents.
9.24 Currency. All monetary amounts for all purposes hereunder shall be
denominated in United States Dollars. All amounts payable under the Receivables
Loan Documents shall be payable solely in United States Dollars in immediately
available funds for deposit into the bank account set forth in the attached
Exhibit D or such other account as Lender shall from time to time indicate by
written notice to Borrower.
9.25 Consideration. Each of the entities comprising Borrower acknowledges
the Lender would not make the Receivables Loan contemplated hereby unless each
of such entities (a) became a party to this Agreement and the other Receivables
Loan Documents, (b) became jointly and severally liable for the payment and
performance of all of the Obligations, and (c) granted to Lender a security
interest, subject to Permitted Encumbrances, in all items of Collateral owned by
each Borrower. Although each of the entities comprising Borrower maintains its
separate legal existence and operates as a distinct and separate entity, such
entities have historically engaged in substantial business with each other and
have operated, and intend to continue operating, as a joint and consolidated
entity for financial planning and cash management purposes and for purposes of
achieving certain business operation efficiencies. Each of the entities
comprising Borrower will therefore benefit from the financing arrangement and
accommodations made by Lender under this Agreement and the other Receivables
Loan Documents. Finally, it was a condition precedent on the part of Lender to
the closing of the Receivables Loan that each of CR Cabo, CR Cancun and CR
Puerto Vallarta form Cabo Sub, Cancun Sub and Puerto Vallarta Sub, respectively,
and that ▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ assign to Cabo Sub, Cancun
Sub and Puerto Vallarta Sub, inter alia, all of their right, title and interest,
if any, in and to the beneficial interest in the Trusts.
9.26 Judgment Currency. If, for the purpose of obtaining or enforcing
judgment against Borrower or Guarantor in any court in any jurisdiction, it
becomes necessary to convert into any other currency (such other currency being
hereinafter referred to as the "Judgment Currency") an amount due in United
States Dollars under the Receivables Loan Documents, the conversion shall be
made at the rate of exchange available to Lender on the Business Day immediately
preceding (i) the date of actual payment of the amount due, in the case of any
proceeding in the courts of the State of Arizona or in the courts of any other
jurisdiction that will give effect to such conversion being made on such date,
or (ii) the date on which the judgment is given, in the case of any proceeding
in the courts of any other jurisdiction (the applicable date as of which such
conversion is made pursuant to this provision being hereinafter referred to as
the "Judgment Conversion Date"). If, in the case of any proceeding in the court
of any jurisdiction referred to above, there is a change in the rate of exchange
available to Lender between the Judgment Conversion Date and the date of actual
receipt of the amount due in immediately available funds, Borrower or Guarantor,
as the case may be, shall pay such additional amount (if any, but in any event
not a lesser amount) as may be necessary to ensure that the amount actually
received in the Judgment Currency, when converted at the rate of exchange
available to Lender on the date of payment, will produce the amount of United
States dollars, which could have been purchased with the amount of the Judgment
Currency stipulated in the judgment or judicial order at the rate of exchange on
the Judgment Conversion Date.
[SIGNATURE PAGE FOLLOWS]
32
[SIGNATURE PAGES/LOAN AND SECURITY AGREEMENT]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed in their respective name, personally or by their duly authorized
representatives as of November 23, 1998.
BORROWER
CR RESORTS CANCUN, S. de ▇.▇. de C.V., a Mexican limited
responsibility corporation with variable capital
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
By: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: Attorney-in-Fact
WITNESS:
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Notice Address and Telecopy Number:
Raintree Resorts International, Inc.
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: Chief Financial Officer
Telecopy No.: ▇▇▇-▇▇▇-▇▇▇▇
CR RESORTS LOS CABOS, S. de ▇.▇. de C.V., a Mexican limited
responsibility corporation with variable capital
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
By: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: Attorney-in-Fact
WITNESS:
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Notice Address and Telecopy Number:
Raintree Resorts International, Inc.
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: Chief Financial Officer
Telecopy No.: ▇▇▇-▇▇▇-▇▇▇▇
[ADDITIONAL SIGNATURES FOLLOW]
CR RESORTS PUERTO VALLARTA, S. de ▇.▇. de C.V., a Mexican
limited responsibility corporation with variable capital
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
By: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: Attorney-in-Fact
WITNESS:
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Notice Address and Telecopy Number:
Raintree Resorts International, Inc. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ Attention: Chief Financial
Officer Telecopy No.: ▇▇▇-▇▇▇-▇▇▇▇
CORPORACION MEXITUR, S.A. de C.V., a Mexican corporation
with variable capital
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
By: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: Attorney-in-Fact
WITNESS:
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Notice Address and Telecopy Number:
Raintree Resorts International, Inc. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ Attention: Chief Financial
Officer Telecopy No.: ▇▇▇-▇▇▇-▇▇▇▇
[ADDITIONAL SIGNATURES FOLLOW]
CR RESORTS CANCUN TIMESHARE TRUST, S. de ▇.▇. de C.V., a
Mexican limited responsibility corporation with variable
capital
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
By: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: Attorney-in-Fact
WITNESS:
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Notice Address and Telecopy Number:
Raintree Resorts International, Inc.
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: Chief Financial Officer
Telecopy No.: ▇▇▇-▇▇▇-▇▇▇▇
CR RESORTS CABOS TIMESHARE TRUST, S. de ▇.▇. de C.V., a
Mexican limited responsibility corporation with variable
capital
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
By: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: Attorney-in-Fact
WITNESS:
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Notice Address and Telecopy Number:
Raintree Resorts International, Inc.
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: Chief Financial Officer
Telecopy No.: ▇▇▇-▇▇▇-▇▇▇▇
[ADDITIONAL SIGNATURES FOLLOW]
CR RESORTS PUERTO VALLARTA TIMESHARE TRUST, S. de ▇.▇. de
C.V., a Mexican limited responsibility corporation with
variable capital
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
By: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: Attorney-in-Fact
WITNESS:
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Notice Address and Telecopy Number:
Raintree Resorts International, Inc.
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: Chief Financial Officer
Telecopy No.: ▇▇▇-▇▇▇-▇▇▇▇
A copy of all notices to the Borrower shall also be sent as follows (which
shall not be deemed notice):
Battle ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇, Esq.
Telecopy No.: ▇▇▇-▇▇▇-▇▇▇▇
STATE OF TEXAS )
) ss.
COUNTY OF ▇▇▇▇▇▇ )
The foregoing instrument was acknowledged before me this 23 day of
November, 1998, by ▇▇▇▇▇▇▇ ▇. ▇▇▇▇, the Attorney-in-Fact of CR Resort Cancun, S.
de ▇.▇. de C.V., a Mexican limited responsibility corporation with variable
capital on behalf of such corporation. He/She is personally known to me or has
produced __________________________ as identification.
/s/ ▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Notary Public in and for said State and County NOTARY SEAL HERE
My commission expires: ▇▇-▇▇-▇▇
▇▇▇▇▇ ▇▇ ▇▇▇▇▇ )
) ss.
COUNTY OF ▇▇▇▇▇▇ )
The foregoing instrument was acknowledged before me this 23 day of
November, 1998, by ▇▇▇▇▇▇▇ ▇. ▇▇▇▇, the Attorney-in-Fact of CR Resorts Los
Cabos, S. de ▇.▇. de C.V., a Mexican limited responsibility corporation with
variable capital on behalf of such corporation. He/She is personally known to me
or has produced __________________________ as identification.
/s/ ▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Notary Public in and for said State and County NOTARY SEAL HERE
My commission expires: ▇▇-▇▇-▇▇
▇▇▇▇▇ ▇▇ ▇▇▇▇▇ )
) ss.
COUNTY OF ▇▇▇▇▇▇ )
The foregoing instrument was acknowledged before me this 23 day of
November, 1998, by ▇▇▇▇▇▇▇ ▇. ▇▇▇▇, the Attorney-in-Fact of CR Resort Puerto
Vallarta, S. de ▇.▇. de C.V., a Mexican limited responsibility corporation with
variable capital on behalf of such corporation. He/She is personally known to me
or has produced __________________________ as identification.
/s/ ▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Notary Public in and for said State and County NOTARY SEAL HERE
My commission expires: ▇▇-▇▇-▇▇
▇▇▇▇▇ ▇▇ ▇▇▇▇▇ )
) ss.
COUNTY OF ▇▇▇▇▇▇ )
The foregoing instrument was acknowledged before me this 23 day of
November, 1998, by ▇▇▇▇▇▇▇ ▇. ▇▇▇▇, the Attorney-in-Fact of Corporacion Mexitur,
S.A. de C.V., a Mexican corporation with variable capital on behalf of such
corporation. He/She is personally known to me or has produced
__________________________ as identification.
/s/ ▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Notary Public in and for said State and County NOTARY SEAL HERE
My commission expires: ▇▇-▇▇-▇▇
▇▇▇▇▇ ▇▇ ▇▇▇▇▇ )
) ss.
COUNTY OF ▇▇▇▇▇▇ )
The foregoing instrument was acknowledged before me this 23 day of
November, 1998, by ▇▇▇▇▇▇▇ ▇. ▇▇▇▇, the Attorney-in-Fact of CR Resorts Cancun
Timeshare Trust, S. de ▇.▇. de C.V., a Mexican limited responsibility
corporation with variable capital on behalf of such corporation. He/She is
personally known to me or has produced __________________________ as
identification.
/s/ ▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Notary Public in and for said State and County NOTARY SEAL HERE
My commission expires: ▇▇-▇▇-▇▇
▇▇▇▇▇ ▇▇ ▇▇▇▇▇ )
) ss.
COUNTY OF ▇▇▇▇▇▇ )
The foregoing instrument was acknowledged before me this 23 day of
November, 1998, by ▇▇▇▇▇▇▇ ▇. ▇▇▇▇, the Attorney-in-Fact of CR Resorts Cabos
Timeshare Trust, S. de ▇.▇. de C.V., a Mexican limited responsibility
corporation with variable capital, on behalf of such corporation. He/She is
personally known to me or has produced __________________________ as
identification.
/s/ ▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Notary Public in and for said State and County NOTARY SEAL HERE
My commission expires: ▇▇-▇▇-▇▇
▇▇▇▇▇ ▇▇ ▇▇▇▇▇ )
) ss.
COUNTY OF ▇▇▇▇▇▇ )
The foregoing instrument was acknowledged before me this 23 day of
November, 1998, by ▇▇▇▇▇▇▇ ▇. ▇▇▇▇, the Attorney-in-Fact of CR
Resorts Puerto Vallarta Timeshare Trust, S. de ▇.▇. de C.V., a Mexican limited
responsibility corporation with variable capital on behalf of such corporation.
He/She is personally known to me or has produced __________________________ as
identification.
/s/ ▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Notary Public in and for said State and County NOTARY SEAL HERE
My commission expires: 10-31-99
LENDER FINOVA CAPITAL CORPORATION, a Delaware corporation
By:
/s/ ▇▇▇▇▇▇ SANTA ▇▇▇▇
Name: ▇▇▇▇▇▇ Santa ▇▇▇▇
title: Vice President
Lender's Notice Address and Telecopy Number:
FINOVA Capital Corporation
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn.: Vice President--International Resort Finance
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
FINOVA Capital Corporation
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn.: Vice President-Group Counsel
Telecopy: (▇▇▇)▇▇▇-▇▇▇▇
SCHEDULE OF ADDITIONAL TERMS
S.1 This Schedule has been incorporated by reference into and form a part
of that Loan and Security Agreement dated as of November 23, 1998 between FINOVA
Capital Corporation and CR Resorts Cancun, S. de ▇.▇. de C.V., CR Resorts Los
Cabos, S. de ▇.▇. de C.V., CR Resorts Puerto Vallarta, S. de ▇.▇. de C.V.,
Corporacion Mexitur, S.A. de C.V., CR Resorts Cancun Timeshare Trust, S. de ▇.▇.
de C.V., CR Resorts Cabos Timeshare Trust, S. de ▇.▇. de C.V., and CR Resorts
Puerto Vallarta Timeshare Trust, S. de ▇.▇. de C.V.
S.2 To the extent of any inconsistency between this Schedule and the other
provisions of the provisions of the Loan and Security Agreement, the provisions
of this Schedule shall prevail.
S.3 The provisions of the Loan and Security Agreement are supplemented as
follows (paragraph references are references to paragraphs of the Loan and
Security Agreement) which are intended to be supplemented by the following
provisions :
(a) [RESERVED]
(b) P. 1. Basic Interest Rate: One and three-fourths percent (1.75%) per
annum in excess of the Base Rate fluctuating monthly on the first day of
each calendar month based upon the Base Rate in effect on such date.
(c) P. 1. Default Rate: two percent (2%) above the Basic Interest Rate or
(b) the maximum contract rate permitted under the applicable usury law,
whichever of (a) or (b) is lesser.
(d) [Reserved]
(e) P. 1. Lockbox Agent: Bank One, Arizona, N.A.
(f) P. 1. Maximum Receivables Loan Amount: Twenty Million Dollars
($20,000,000).
(g) P. 1. RLBB Principal Balance Percentage: ninety percent (90%).
(h) [RESERVED]
(i) P. 1. Receivables Loan Borrowing Term Expiration Date: Eighteen (18)
months following the date of the first Advance, provided, however, that in
the event during such eighteen (18) month period there does not occur an
Event of Default or Incipient Default with respect to which Lender gave
Borrower written notice, the Receivables Loan Borrowing Term Expiration
Date shall be thirty six (36) months from the date of the first Advance.
(j) P. 1. Receivables Loan Fee: Two Hundred Thousand Dollars ($200,000).
(k) P. 1. Receivables Loan Maturity Date. Eighty-four (84) months from the
last Advance.
(l) P. 1. Receivables Loan Opening Prepayment Date. The date two (2) years
from the date of the first Advance.
(m) P. 1 Receivables Loan Prepayment Premium: The Receivables Loan
Prepayment Premium at any time shall be equal to an amount which is the
product of the then unpaid principal amount being prepaid times a
percentage based upon the year after the Receivables Loan Opening
Prepayment Date in which the prepayment occurs and determined in accordance
with the following schedule:
Years After Receivables Loan Applicable Receivables Loan
Opening Prepayment Date Prepayment Premium Percentage
Year 1 4 %
Year 2 3 %
Year 3 2 %
thereafter none
Year 1 shall be the period of time commencing on the Receivables Loan
Opening Prepayment Date and expiring twelve months thereafter. Each Year
thereafter begins on the next succeeding anniversary date of the Receivables
Loan Opening Prepayment Date and ends twelve (12) months thereafter. If the
prepayment occurs during a period when prepayment is closed, the applicable
prepayment premium percentage (if Lender agrees to allow such prepayment) shall
be five percent (5%).
(n) P. 1. Required Closing Date. November 25, 1998.
(o) P. 1. Required Guarantors: Raintree Resorts International, Inc.
(p) P. 1. Servicing Agent: Resort Communications, Inc., subject to Lender's
right to remove such Servicing Agent as provided in the Agreement.
(q) P. 1. Time Share Project: Club ▇▇▇▇▇▇ Resort at Los Cabos, Club ▇▇▇▇▇▇
Resort at Puerto Vallarta and Club ▇▇▇▇▇▇ Resort at Cancun.
(r) P. 2.9(a).Payment of Receivables Loan Fee: The Receivables Loan fee
shall be payable as follows: A total of One Hundred Fifty Thousand Dollars
($150,000) is due and payable at or prior to the Required Closing Date. The
remaining balance of Fifty Thousand Dollars ($50,000) is due in the earlier
of one (1) year following the Required Closing Date or at such time as the
unpaid principal balance of the Receivables Loan reaches Fifteen Million
Dollars ($15,000,000).
(s) P. 2.9(b).Custodial Fee: Five Dollars ($5).
(t) P. 2.9(c).Availability Fee Percentage: one percent (1%).
(u) P. 4.5. Minimum Advance Amount. One Hundred Thousand Dollars
($100,000).
(v) P. 4.5. Maximum Advance Frequency: twice per calendar month with a Five
Hundred Dollar ($500) charge being imposed in connection with the second
Receivables Advance in any one (1) calendar month. Lender shall have the
right to withhold the amount of such charge from such Advance.
(w) P. 4.6. Wire Transfer Fee. Twenty Five Dollars ($25).
(x) P. 5.1, 6.1. Borrower's Type of Business Organization:
(1) CR Cancun: a Mexican limited responsibility corporation with
variable capital;
(2) CR Cabos: a Mexican limited responsibility corporation with
variable capital;
(3) CR Puerto Vallarta: a Mexican limited responsibility corporation
with variable capital;
(4) Corporacion Mexitur: a Mexican corporation with variable capital;
(5) Cancun Sub: a Mexican limited responsibility corporation with
variable capital;
(6) Cabos Sub: a Mexican limited responsibility corporation with
variable capital;
(7) Puerto Vallarta Sub: a Mexican limited responsibility corporation
with variable capital;
(y) P. 5.1, 6.1. Borrower's Jurisdiction of Organization.
(1) CR Cancun: Mexico
(2) CR Cabos: Mexico
(3) CR Puerto Vallarta: Mexico
(4) Corporacion Mexitur: Mexico
(5) Cancun Sub: Mexico
(6) Cabos Sub: Mexico
(7) Puerto Vallarta Sub: Mexico
(z) P. 5.3. Borrower's Principal Place of Business.
(1) CR Cancun: Boulevard ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇
No. 3642 P.B. y Piso 7
Col. Jardines del Pedrigal
▇.▇. ▇▇▇▇▇, ▇▇▇▇▇▇ DF
(2) CR Cabos: Boulevard ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇
No. 3642 P.B. y Piso 7
Col. Jardines del Pedrigal
▇.▇. ▇▇▇▇▇, ▇▇▇▇▇▇ DF
(3) CR Puerto Vallarta: Boulevard ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇
No. 3642 P.B. y Piso 7
Col. Jardines del Pedrigal
▇.▇. ▇▇▇▇▇, ▇▇▇▇▇▇ DF
(4) Corporacion Mexitur: Boulevard ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇
No. 3642 P.B. y Piso 7
Col. Jardines del Pedrigal
▇.▇. ▇▇▇▇▇, ▇▇▇▇▇▇ DF
(5) Cancun Sub: Boulevard ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇
No. 3642 P.B. y Piso 7
Col. Jardines del Pedrigal
▇.▇. ▇▇▇▇▇, ▇▇▇▇▇▇ DF
(6) Cabos Sub: Boulevard ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇
No. 3642 P.B. y Piso 7
Col. Jardines del Pedrigal
C.P. 01900, Mexico DF
(7) Puerto Vallarta Sub: Boulevard ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇
No. 3642 P.B. y Piso 7
Col. Jardines del Pedrigal
C.P. 01900, Mexico DF
(aa) P. 5.3. Borrower's Chief Executive Office.
(1) CR Cancun: Boulevard ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇
No. 3642 P.B. y Piso 7
Col. Jardines del Pedrigal
▇.▇. ▇▇▇▇▇, ▇▇▇▇▇▇ DF
(2) CR Cabos: Boulevard ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇
No. 3642 P.B. y Piso 7
Col. Jardines del Pedrigal
▇.▇. ▇▇▇▇▇, ▇▇▇▇▇▇ DF
(3) CR Puerto Vallarta: Boulevard ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇
No. 3642 P.B. y Piso 7
Col. Jardines del Pedrigal
▇.▇. ▇▇▇▇▇, ▇▇▇▇▇▇ DF
(4) Corporacion Mexitur: Boulevard ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇
No. 3642 P.B. y Piso 7
Col. Jardines del Pedrigal
▇.▇. ▇▇▇▇▇, ▇▇▇▇▇▇ DF
(5) Cancun Sub: Boulevard ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇
No. 3642 P.B. y Piso 7
Col. Jardines del Pedrigal
▇.▇. ▇▇▇▇▇, ▇▇▇▇▇▇ DF
(6) Cabos Sub: Boulevard ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇
No. 3642 P.B. y Piso 7
Col. Jardines del Pedrigal
C.P. 01900, Mexico DF
(7) Puerto Vallarta Sub: Boulevard ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇
No. 3642 P.B. y Piso 7
Col. Jardines del Pedrigal
C.P. 01900, Mexico DF
(aa) P. 5.9 Jurisdiction Where Sales and/or Offers to Sell Have Occurred.
Mexico.
S.4 [RESERVED]
S.5 In addition to the other representations, warranties and covenants of
Borrower set forth in the Loan and Security Agreement, Borrower represents,
warrants and covenants as follows:
(a) On the final day of each fiscal quarter of Borrower, commencing with
the fiscal quarter ending March 31, 1999 and on the final day of each
fiscal year of Borrower, commencing with the fiscal year ending December
31, 1999, the sum of (i) the total of Borrower's consolidated costs and
expenses for commissions and selling relating to the retail sales of
time-share interests, use rights, memberships and fractional ownership
interests and (ii) the total of Borrower's consolidated general and
administrative expenses (the costs and expenses described in clauses (i)
and (ii) hereinafter the "SGA Expenses") shall not exceed sixty percent
(60%) of the sum of the gross proceeds of Borrower's consolidated processed
sales of retail time-shares interests, use rights, memberships and
fractional ownership interests plus "Demo Sales" for the same period (each
net of cancellations of and discounts on such sales) ("Net Sales"). The
foregoing covenant shall be tested quarterly based upon Borrower's total
aggregate SGA Expenses and Net Sales for the immediately preceding three
(3) month period and annually based upon Borrower's total aggregate SGA
Expenses and Net Sales for the immediately preceding twelve (12) month
period. SGA Expenses and Net Sales shall be as determined in accordance
with Mexican GAAP.
(b) Borrower shall not permit Delinquencies as of the end of any three (3)
consecutive calendar months during the term of the Receivables Loan to
exceed four percent (4%) of the aggregate then unpaid principal balance of
all Receivables which have been pledged or assigned to Lender. For purposes
hereof, Delinquencies shall mean, individually and collectively,
Receivables pledged or assigned to Lender under which an installment
payment becomes more than sixty (60) days past due. This covenant shall be
tested on a consolidated level as to all of the entities constituting
Borrower.
(c) Borrower shall maintain a ratio of Adjusted Current Assets to Adjusted
Current Liabilities of no less than 1.25 to 1.0 tested quarterly commencing
March 31, 1999. For purposes hereof, the term Adjusted Current Assets shall
mean the current assets shown on Borrower's balance sheet minus any
receivables owed to Borrower or any of them from any Affiliate and any
time-share accounts receivable, plus time-share accounts receivable
reserves and time-share cancellation reserves, determined on a consolidated
basis as to all entities constituting Borrower. For purposes hereof, the
term Adjusted Current Liabilities shall mean the current liabilities shown
on Borrower's balance sheet minus the current portion of any liabilities
owed by Borrower to any Affiliates and the current portion of any
installments due under the Mirror Notes, determined on a consolidated basis
as to all entities constituting Borrower.
EXHIBIT A
CONDITIONS OF ELIGIBLE INSTRUMENT
(a) Lender has a valid, direct and perfected first lien/security interest
in the Instrument and security therefor and has a valid and perfected first
priority right to payments.
(b) The Instrument does not represent a sale by Borrower, directly or
indirectly, to any of its members, managers, shareholders, directors, officers,
partners, as the case may be, its agents, employees or creditors, or any
relative or Affiliate of Borrower, of Guarantor or of the foregoing.
(c) Borrower has received from the Purchaser a minimum cash down payment of
ten percent (10%) of the total sales price (no part which has been advanced or
loaned to the Purchaser by Borrower, directly or indirectly) with such down
payment being represented by a cash or credit card payment.
(d) The Instrument must provide for level consecutive monthly installments
of principal and interest in U. S. funds over a term (from its effective date)
not exceeding eighty four (84) months from the date of its execution, and after
taking into account the making of an Advance against such Instrument, the
weighted average interest rate on all Instruments then assigned or pledged to
Lender does not fall below thirteen percent (13%) per annum. The foregoing
weighted calculation shall be performed by FPSI by applying their usual and
customary weighted average formula to such Instruments.
(e) At the time of funding of an Advance against the Instrument, no
scheduled installment payment on the Instrument is more than thirty (30) days
past due or has been deferred more than thirty (30) days.
(f) The Purchaser in all respects, including, without limitation, its
creditworthiness, is acceptable to Lender; has obtained from Borrower marketable
title to the purchased Time-Share Interest; and has not purchased more than four
(4) Time-Share Interests.
(g) The Instrument and any security for the payment of the amount due under
the Instrument are bona fide, are in form and substance satisfactory to Lender
and are valid and enforceable in accordance with their terms; upon the obligor's
default under the Instrument, subject only to notice and a reasonable grace
period, payment of the balance of the indebtedness owing under the Instrument
may be immediately accelerated and the lien of any security may be foreclosed or
realized upon; and title of the Purchaser to the purchased Time-Share
Interest(s) is subject only to the Permitted Encumbrances.
(h) The Unit(s) and the amenities that have been promised to the Purchasers
have been completed, fully furnished and approved and ready for occupancy and
the furnishings in those Units are free of any lien except for the Permitted
Encumbrances; no Unit or other part of the common areas of the Time-Share
Project is subject to partition; and the time-share use of the Units and
amenities conform to all applicable restrictions and laws, necessary approvals
having been obtained.
(i) The Instrument, any security for the payment of the amount due under
the Instrument and the related sale transaction comply with all applicable laws;
Borrower has Performed all its obligations due to the Purchaser and there are no
executory obligations to the Purchaser to be Performed by Borrower; and the
Purchaser does not have any right of rescission, set-off, abatement,
counterclaim or the like.
(j) The Purchaser is a United States or Canadian resident, unless the
Purchasers of at least ninety percent (90%) of all other Eligible Instruments
are United States or Canadian residents.
(k) The Unit represented by such Time-Share Interest is part of the Club
▇▇▇▇▇▇ Multi-Resort System.
(l) The Instrument executed by a Purchaser who is a United States resident
and representing the financed portion of the purchase price of a Time-Share
Interest is held by the Trustee in the Trust. In all other circumstances, the
Instrument is owned by Cancun Sub, Cabos Sub or Puerto Vallarta Sub.
(m) The Instrument is serviced by the Servicing Agent.
(n) As an alternative to the eligibility criteria set forth in
subparagraphs (c) and (d) above, the Instrument provides for level consecutive
monthly installments of principal and interest in U.S. funds over a term (from
its effective date) not exceeding twenty four (24) months from its execution,
with interest accruing on the unpaid balance at a rate as low as zero percent
(0.0%) per annum and the Borrower has received from the Purchaser a minimum cash
down payment of fifty percent (50%) of the total sales price (no part of which
has been advanced or loaned to the Purchaser by the Borrower, directly or
indirectly) with such down payment being represented by cash or credit card
payment; and provided that when the unpaid principal balance of such Instrument
is added to the unpaid principal balance of all other Instruments meeting the
eligibility criteria set forth in this subparagraph and against which an Advance
has been made, such sum is not in excess of ten percent (10%) of the unpaid
principal balance of all Instruments against which an Advance has been made.
(o) The Instruments contained within the Club ▇▇▇▇▇▇ Trust II shall contain
language substantially similar to the following:
The maker and payee hereof hereby agree that the identity of the owner of
this Promissory Note and the payee entitled to receive payments of
principal and interest pursuant to this Promissory Note shall be reflected
upon books maintained by Resort Communications, Inc., the "Custodian" on
behalf of maker for such purpose, and that all transfers, including
pledges, of the ownership of this Promissory Note, or any interest therein,
must be reflected in a book entry in the record of ownership maintained by
Custodian that identifies the owner of this Promissory Note or any interest
therein. For purposes of this paragraph, a "book entry" is defined as a
written record of ownership (maintained on paper and/or in magnetic or
electronic media) that identifies the holder of an interest in the
obligations represented by this Promissory Note. This Promissory Note may
not be endorsed in blank, made payable to bearer or otherwise be
transferred in such a manner that the Promissory Note could be come a
bearer instrument.
(q) To the extent that the Instrument is made by a Mexican resident, such
Instrument is endorsed with a form of endorsement approved by Lender's Mexican
counsel.
EXHIBIT B
PERMITTED ENCUMBRANCES
(a) Taxes and assessments which are a lien but are not yet due and payable.
(b) The matters shown on that _________________________ dated
_________________, issued by _____________________________, except for the
following:
EXHIBIT C
BORROWER'S CERTIFICATE
CR Resorts Cancun, S. de ▇.▇. de C.V., a Mexican limited responsibility
corporation with variable capital; CR Resorts Los Cabos, S. de ▇.▇. de C.V., a
Mexican limited responsibility corporation with variable capital; CR Resorts
Puerto Vallarta, S. de ▇.▇. de C.V., a Mexican limited responsibility
corporation with variable capital; Corporacion Mexitur, S.A. de C.V., a Mexican
corporation with variable capital; CR Resorts Cancun Timeshare Trust, S. de ▇.▇.
de C.V., a Mexican limited responsibility corporation with variable capital; CR
Resorts Cabos Timeshare Trust, S. de ▇.▇. de C.V., a Mexican limited
responsibility corporation with variable capital, and CR Resorts Puerto Vallarta
Timeshare Trust, S. de ▇.▇. de C.V., a Mexican limited responsibility
corporation with variable capital (collectively "Borrower") hereby jointly and
severally certify to FINOVA CAPITAL CORPORATION ("Lender") that (i) the total
unpaid payments due under the Instruments described in Schedule A attached
hereto and by this reference incorporated herein and the unpaid principal
balance for each such Instrument is as set forth in Schedule A; and (ii) such
Instruments are, individually and collectively, Eligible Instruments.
Except as otherwise defined herein or the context otherwise requires, all
capitalized terms used herein have the meaning given to them in the Loan and
Security Agreement between Borrower and Lender dated as of ______________,
199____, as it may be from time to time renewed, amended, replaced or restated.
DATED: ____________, ______.
"BORROWER" CR RESORTS CANCUN, S. de ▇.▇. de C.V., a Mexican
limited responsibility corporation with variable capital
By:
Type/Print Name:
Title:
CR RESORTS LOS CABOS, S. de ▇.▇. de C.V., a Mexican limited
responsibility corporation with variable capital
By:
Type/Print Name:
Title:
CR RESORTS PUERTO VALLARTA, S. de ▇.▇. de C.V., a Mexican
limited responsibility corporation with variable capital
By:
Type/Print Name:
Title:
CORPORACION MEXITUR, S.A. de C.V., a Mexican corporation
with variable capital
By:
Type/Print Name:
Title:
CR RESORTS CANCUN TIMESHARE TRUST, S. de ▇.▇. de C.V., a
Mexican limited responsibility corporation with variable
capital
By:
Type/Print Name:
Title:
CR RESORTS CABOS TIMESHARE TRUST, S. de ▇.▇. de C.V., a
Mexican limited responsibility corporation with variable
capital
By:
Type/Print Name:
Title:
CR RESORTS PUERTO VALLARTA TIMESHARE TRUST, S. de ▇.▇. de
C.V., a Mexican limited responsibility corporation with
variable capital
By:
Type/Print Name:
Title:
EXHIBIT C-1
RECEIVABLES RE-ASSIGNMENT
When recorded, mail to:
RE-ASSIGNMENT OF INSTRUMENTS
KNOW ALL MEN BY THESE PRESENTS:
That FINOVA Capital Corporation, a Delaware corporation ("Assignor") for
Ten Dollars ($10.00) and other valuable consideration to it in hand, the receipt
whereof is hereby acknowledged, does by these presents grant, bargain, sell,
assign, transfer and set over unto [Trust or Borrower dependent upon the nature
of Instrument] ("Assignee") Assignee all of Assignor's interest in the
Instruments ("Instruments") described in Schedule A attached hereto and by this
reference incorporated herein.
TOGETHER WITH all obligations therein secured, all moneys due and to become
due thereunder, and all interest thereon, and all rights arising therefrom.
This re-assignment is made without recourse and without representation or
warranty of any kind, express and implied (except that Assignor has not sold or
assigned any interest in or otherwise encumbered the Instruments or other rights
being reassigned hereunder).
IN WITNESS WHEREOF, the Assignor has caused these presents to be executed
the ____ day of _________________, 199__.
WITNESS: "Assignor"
FINOVA CAPITAL CORPORATION, a Delaware corporation
By:
Type/Print Name:
Title:
STATE OF ___________________) ) County of ____________________)
I, _______________________, a notary public in and for the State and County
aforesaid, do certify that ____________________________________ whose name, as
________________________ of _____________________, is signed to the writing
above, bearing date on the ___ day of ________________________, has acknowledged
the same before me in my County aforesaid.
Given under my hand and official seal this ___ day of ___________________.
My term of office expires on the ____ day of ____________________.
Notary Public
SCHEDULE a
to RE-assignment of instruments
Purchaser
Date
Original Principal
Amount Secured
EXHIBIT D
FINOVA BANK ACCOUNT
EXHIBIT E
ADDITIONAL CONDITIONS
TO RECEIVABLES LOAN ADVANCES
(a) a completed and executed "Request for Receivables Loan Advance and
Certification," in form and substance identical to Exhibit E-1.
(b) (i) signed original Instruments which qualify as Eligible Instruments
and have been duly and unconditionally endorsed to Lender by Borrower or the
Trustee, as the case may be, (ii) copies of signed receipts for public offering
statements/property reports/prospectuses required to be given to Purchasers in
connection with the sales of Time-Share Interests giving rise to such
Instruments, (iii) the original Purchase Contracts and copies of credit
disclosure statements and other items requested by Lender which were signed by
such Purchasers in connection with such sales, and (iv) evidence that all
rescission rights have expired and Borrower has Performed all its statutory and
contractual obligations with respect thereto.
(c) a Receivables Assignment in recordable form and otherwise in form and
substance identical to Exhibit E 2 to the Loan and Security Agreement, properly
completed, executed and acknowledged assigning the Instruments covered by item
(b) above.
(d) if not previously furnished, evidence satisfactory to Lender that: (i)
all Time-Share Interests which are the subject of the Instruments covered by
item (b) above have all necessary and promised on-site and off-site improvements
thereto and necessary and promised utilities are available; (ii) all Units and
amenities which are to be available to Purchasers obligated on the Instruments
covered by item (b) above have been completed in accordance with all applicable
building codes and are fully furnished, necessarily equipped and will be
available for use by Purchasers without disturbance or termination of their use
rights so long as they are not in default of their obligations under the
Instruments; and (iii) all furnishings in the Units and amenities are owned by
the Borrower, free of charges, liens and security interests other than the
Permitted Encumbrances.
(e) if requested by Lender, written confirmation from the Servicing Agent
that it has not received notice of any complaint, demand, set-off, or claim by
any person, including, without limitation, any Purchaser, with respect to the
Instruments covered by item (b) above (other than as to routine matters
involving the servicing of an Instrument) and certifying the unpaid total
payments due under the unpaid principal balance of such Instruments.
(f) if requested by Lender in accordance with its normal underwriting
procedures, a credit report from a recognized consumer credit reporting agency
on each Purchaser obligated under an Instrument covered by item (b) above.
(g) if requested by Lender, evidence reasonably satisfactory to it that
there are no conflicting charges or security interests claimed in the
Receivables Collateral.
(h) if requested by Lender following a material change of circumstances or
not more often than annually at Lender's discretion, an opinion from independent
counsel to Borrower satisfactory to Lender with respect to the continued
compliance of the Time-Share Project and Borrower's sales and marketing
activities with applicable laws, the enforceability of the Instruments and such
other matters as Lender shall reasonably require.
(i) if requested by Lender following a material change of circumstances or
not more often than annually at Lender's discretion, an opinion letter from
independent counsel to Lender with respect to the continued compliance of the
Time-Share Project and Borrower's sales and marketing activities with applicable
laws, the enforceability of the Instruments and such other matters as Lender
shall reasonably require.
(j) if requested by Lender, such other items which are reasonably necessary
to evaluate the request for the Receivables Loan Advance and the satisfaction of
the conditions precedent thereto.
(k) evidence that the Borrower has delivered to the Trustee and the Lender
a Form W-8 as required under Paragraph 6.1(r)(iii) of the Agreement of which
this Exhibit forms a part.
EXHIBIT E-1
REQUEST FOR RECEIVABLES LOAN ADVANCE
AND CERTIFICATION
The undersigned ("Borrower") requests FINOVA CAPITAL CORPORATION ("Lender")
to make a Receivables Loan Advance in the sum of _____________________________
______________ UNITED STATES DOLLARS (U.S. $_____________) upon receipt hereof,
pursuant to the Loan and Security Agreement between such parties dated as of
_______________, 19____ (with any amendments, "Agreement").
Borrower hereby certifies to Lender that (i) the total unpaid payments due
under the Instruments for which the requested disbursement of the Receivables
Loan is sought and the unpaid principal balance for each such Eligible
Instrument is as set forth on Schedule A attached hereto and by this reference
incorporated herein; (ii) the Instruments against which the requested
disbursement of the Receivables Loan is sought are, individually and
collectively, Eligible Instruments; (iii) no material adverse change has
occurred in the financial condition or in the business and operations of
Borrower since _______________, _____, the date of the last financial statements
delivered to Lender; (iv) all representations and warranties contained in the
Agreement are true and correct as of the date hereof; (v) neither an Event of
Default nor an Incipient Default exists; and (vi) Borrower has Performed and
complied with all agreements, covenants and conditions required by the Agreement
to be Performed and complied with prior to or at the date of the requested
disbursement of the Receivables Loan.
Except as otherwise defined herein or the context otherwise requires, all
capitalized terms used herein have the meaning given to them in the Agreement.
DATED: ________________, ______.
"BORROWER"
CR RESORTS CANCUN, S. de ▇.▇. de C.V., a Mexican limited
responsibility corporation with variable capital
By:
Type/Print Name:
Title:
CR RESORTS LOS CABOS, S. de ▇.▇. de C.V., a Mexican limited
responsibility corporation with variable capital
By:
Type/Print Name:
Title:
CR RESORTS PUERTO VALLARTA, S. de ▇.▇. de C.V., a Mexican
limited responsibility corporation with variable capital
By:
Type/Print Name:
Title:
CORPORACION MEXITUR, S.A. de C.V., a Mexican corporation
with variable capital
By:
Type/Print Name:
Title:
CR RESORTS CANCUN TIMESHARE TRUST, S. de ▇.▇. de C.V., a
Mexican limited responsibility corporation with variable
capital
By:
Type/Print Name:
Title:
CR RESORTS CABOS TIMESHARE TRUST, S. de ▇.▇. de C.V., a
Mexican limited responsibility corporation with variable
capital
By:
Type/Print Name:
Title:
CR RESORTS PUERTO VALLARTA TIMESHARE TRUST, S. de ▇.▇. de
C.V., a Mexican limited responsibility corporation with
variable capital
By:
Type/Print
Name: Title:
EXHIBIT E-2
RECEIVABLES ASSIGNMENT
ASSIGNMENT OF INSTRUMENTS AND RECEIVABLES COLLATERAL
KNOW ALL MEN BY THESE PRESENTS:
That U. S. Trust Company, National Association, as Trustee of the Club
▇▇▇▇▇▇ Trust I, U.S. Trust Company, a national association, as Trustee of the
Club ▇▇▇▇▇▇ Trust II, CR Resorts Cancun, S. de ▇.▇. de C.V., a Mexican limited
responsibility corporation with variable capital; CR Resorts Los Cabos, S. de
▇.▇. de C.V., a Mexican limited responsibility corporation with variable
capital; CR Resorts Puerto Vallarta, S. de ▇.▇. de C.V., a Mexican limited
responsibility corporation with variable capital; Corporacion Mexitur, S.A. de
C.V., a Mexican corporation with variable capital; CR Resorts Cancun Timeshare
Trust, S. de ▇.▇. de C.V., a Mexican limited responsibility corporation with
variable capital; CR Resorts Cabos Timeshare Trust, S. de ▇.▇. de C.V., a
Mexican limited responsibility corporation with variable capital, and CR Resorts
Puerto Vallarta Timeshare Trust, S. de ▇.▇. de C.V., a Mexican limited
responsibility corporation with variable capital (collectively, "Assignor"), as
owner of the Instruments ("Instruments") described in Schedule A attached hereto
and by this reference incorporated herein, together with all other items of
Receivables Collateral pertaining to such Instruments, for Ten Dollars ($10.00)
and other valuable consideration to it in hand paid by FINOVA Capital
Corporation, a Delaware corporation ("Assignee"), the receipt whereof is hereby
acknowledged, does by these presents grant, bargain, sell, assign, transfer and
set over unto Assignee all of Assignor's interest in said Instruments and
Receivables Collateral pertaining thereto.
TOGETHER WITH all obligations therein secured, all moneys due and to become
due thereunder, and all interest thereon, and all rights arising therefrom.
For purposes hereof, the term Receivables Collateral shall be as defined in
that certain Loan and Security Agreement between CR Resorts Cancun, S. de ▇.▇.
de C.V., CR Resorts Los Cabos, S. de ▇.▇. de C.V., CR Resorts Puerto Vallarta,
S. de ▇.▇. de C.V., Corporacion Mexitur S.A. de C.V., CR Resorts Cancun
Timeshare Trust, S. de ▇.▇. de C.V., CR Resorts Cabos Timeshare Trust, S. de
▇.▇. de C.V., and CR Resorts Puerto Vallarta Timeshare Trust, S. de ▇.▇. de C.V
as Borrower and FINOVA Capital Corporation as Lender dated __________, 19__, as
amended.
This Assignment may be executed in any number of separate counterparts, all
of which, when taken together, shall constitute one and the same instrument,
notwithstanding the fact that all parties have not signed the same counterpart.
IN WITNESS WHEREOF, the Assignor has caused these presents to be executed
the ___ day of ________________, 199__.
"Assignor"
WITNESS: CR RESORTS CANCUN, S. de ▇.▇. de C.V., a Mexican
limited responsibility corporation with variable capital
By:
Type/Print Name:
Title:
WITNESS: CR RESORTS LOS CABOS, S. de ▇.▇. de C.V., a Mexican
limited responsibility corporation with variable capital
By:
Type/Print Name:
Title:
WITNESS: CR RESORTS PUERTO VALLARTA, S. de ▇.▇. de C.V., a
Mexican limited responsibility corporation with variable
capital
By:
Type/Print Name:
Title:
WITNESS: CORPORACION MEXITUR, S.A. de C.V., a Mexican
corporation with variable capital
By:
Type/Print Name:
Title:
WITNESS: CR RESORTS CANCUN TIMESHARE TRUST, S. de ▇.▇. de
C.V., a Mexican limited responsibility corporation with
variable capital
By:
Type/Print Name:
Title:
WITNESS: CR RESORTS CABOS TIMESHARE TRUST, S. de ▇.▇. de
C.V., a Mexican limited responsibility corporation with
variable capital
By:
Type/Print Name:
Title:
WITNESS: CR RESORTS PUERTO VALLARTA TIMESHARE TRUST, S. de
▇.▇. de C.V., a Mexican limited responsibility corporation
with variable capital
By:
Type/Print Name:
Title:
WITNESS: U. S. TRUST COMPANY, NATIONAL ASSOCIATION, as
Trustee of the Club ▇▇▇▇▇▇ Trust I
By:
Type/Print Name:
Title:
WITNESS: U. S. TRUST COMPANY, NATIONAL ASSOCIATION, as
Trustee of the Club ▇▇▇▇▇▇ Trust II
By:
Type/Print Name:
Title:
STATE OF _____________ )
) ss.
County of ______________ )
The foregoing instrument was acknowledged before me this _____ day of
____________________, 1998, by _______________________________________, the
__________________________ of CR Resorts Cancun, S. de ▇.▇. de C.V., a Mexican
limited responsibility corporation with variable capital on behalf of such
corporation. He/She is personally known to me or has produced
__________________________ as identification.
Notary Public in and for said State and County
My commission expires:
STATE OF _____________ )
) ss.
County of ______________ )
The foregoing instrument was acknowledged before me this _____ day of
____________________, 1998, by _______________________________________, the
__________________________ of CR Resorts Los Cabos, S. de ▇.▇. de C.V., a
Mexican limited responsibility corporation with variable capital on behalf of
such corporation. He/She is personally known to me or has produced
__________________________ as identification.
Notary Public in and for said State and County
My commission expires:
STATE OF _____________ )
) ss.
County of ______________ )
The foregoing instrument was acknowledged before me this _____ day of
________________________, 1998, by _______________________________________, the
__________________________ of CR Resorts Puerto Vallarta, S. de ▇.▇. de C.V., a
Mexican limited responsibility corporation with variable capital on behalf of
such corporation. He/She is personally known to me or has produced
__________________________ as identification.
Notary Public in and for said State and County
My commission expires:
STATE OF _____________ )
) ss.
County of ______________ )
The foregoing instrument was acknowledged before me this _____ day of
________________________, 1998, by _______________________________________, the
__________________________ of Corporacion Mexitur, S.A. de C.V., a Mexican
corporation with variable capital on behalf of such corporation. He/She is
personally known to me or has produced __________________________ as
identification.
Notary Public in and for said State and County
My commission expires:
STATE OF _____________ )
) ss.
County of ______________ )
The foregoing instrument was acknowledged before me this _____ day of
________________________, 1998, by _______________________________________, the
__________________________ of CR Resorts Cancun Timeshare Trust, S. de ▇.▇. de
C.V., a Mexican limited responsibility corporation with variable capital on
behalf of such corporation. He/She is personally known to me or has produced
__________________________ as identification.
Notary Public in and for said State and County
My commission expires:
STATE OF _____________ )
) ss.
County of ______________ )
The foregoing instrument was acknowledged before me this _____ day of
____________________, 1998, by _______________________________________, the
__________________________ of CR Resorts Cabos Timeshare Trust, S. de ▇.▇. de
C.V., a Mexican limited responsibility corporation with variable capital, on
behalf of such corporation. He/She is personally known to me or has produced
__________________________ as identification.
Notary Public in and for said State and County
My commission expires:
STATE OF _____________ )
) ss.
County of ______________ )
The foregoing instrument was acknowledged before me this _____ day of
____________________, 1998, by _______________________________________, the
__________________________ of U. S. Trust Company, National Association, as
Trustee of the Club ▇▇▇▇▇▇ Trust I, on behalf thereof. He/She is personally
known to me or has produced __________________________ as identification.
Notary Public in and for said State and County
My commission expires:
STATE OF _____________ )
) ss.
County of ______________ )
The foregoing instrument was acknowledged before me this _____ day of
____________________, 1998, by _______________________________________, the
__________________________ of U. S. Trust Company, National Association, as
Trustee of the Club ▇▇▇▇▇▇ Trust II, on behalf thereof. He/She is personally
known to me or has produced __________________________ as identification.
Notary Public in and for said State and County
My commission expires:
SCHEDULE a
to assignment of instruments
Purchaser
Date
Original Principal
Amount Secured