LOAN AND SECURITY AGREEMENT-RECEIVABLES among SILVERLEAF RESORTS, INC. (as Borrower) and THE PARTIES WHICH HEREAFTER EXECUTE THIS AGREEMENT OR A JOINDER AGREEMENT (as Lenders) and WELLS FARGO FOOTHILL, INC. (as Lender and Facility and Collateral...
EXHIBIT
10.2
LOAN
AND SECURITY AGREEMENT-RECEIVABLES
among
SILVERLEAF
RESORTS, INC.
(as
Borrower)
and
THE
PARTIES WHICH HEREAFTER EXECUTE THIS AGREEMENT OR A JOINDER
AGREEMENT
(as
Lenders)
and
▇▇▇▇▇
FARGO FOOTHILL, INC.
(as
Lender and Facility and Collateral Agent)
As
of
December 16, 2005
LOAN
AND SECURITY AGREEMENT-RECEIVABLES
THIS
LOAN AND SECURITY AGREEMENT-RECEIVABLES,
dated
as of December 16, 2005, entered into by and among SILVERLEAF
RESORTS, INC.,
a Texas
corporation, having an address of ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇▇ (as “Borrower”), the parties, including ▇▇▇▇▇
FARGO FOOTHILL, INC.,
a
corporation established under the laws of the State of California, having an
office and place of business at ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇
which execute and deliver this Agreement or a joinder agreement to this
Agreement in their respective capacities as Lenders hereunder (collectively,
the
“Lenders” and each individually a “Lender”) and ▇▇▇▇▇
FARGO FOOTHILL, INC. as
facility agent and collateral agent (“Agent”).
W
I T N E S
S E T H:
WHEREAS,
Borrower is engaged in the business of acquiring, constructing, developing,
owning, managing, selling and otherwise dealing with Intervals at the Resorts
(as each such term is hereafter defined); and
WHEREAS,
in connection with the Loans to be made by Lenders pursuant to this Agreement,
Agent has agreed to act as facility agent and collateral agent for the other
Lenders and to perform such duties with respect to the Loans as are expressly
set forth herein;
WHEREAS,
Lenders, subject to the terms and conditions of this Loan and Security
Agreement-Receivables, have agreed to provide to Borrower, for the purpose
of
providing liquidity in connection with Borrower’s ownership and sale of
Intervals, a loan in the amount of the Commitment.
NOW,
THEREFORE, in consideration of the mutual covenants and agreements contained
in
this Agreement, and for other good and valuable consideration, the receipt
and
adequacy of which are acknowledged, the parties to this Agreement, intending
to
be legally bound, agree as follows:
Section
1 -
Definition Of Terms
Capitalized
terms used in this Agreement are defined in this Section
1.
The
definitions include the singular and plural forms of the terms
defined.
Account.
Shall
mean an “account,” as that term is defined in the Code, and any and all
supporting obligations in respect thereof.
ACH
Transactions.
Any
cash management or related services (including the Automated Clearing House
processing of electronic funds transfers through the direct Federal Reserve
Fedline system) provided by a Bank Product Provider for the account of Borrower
or its Subsidiaries.
Additional
Credit Facility.
The
term “Additional Credit Facility” shall mean that certain $15,000,000 credit
facility provided by WFF to Borrower pursuant to that certain Loan and Security
Agreement-Inventory dated December 16, 2005 by and between Borrower and WFF
and
as may hereafter be further amended from time to time (the “Additional
Credit Loan Agreement”).”
Additional
Eligible Resorts or Additional Eligible Resort.
The
terms “Additional Eligible Resorts” and “Additional Eligible Resort” shall have
the meanings ascribed to such terms in Section 3.5 hereof.
Advance.
A
portion of the proceeds of the Loans advanced from time to time by Lenders
to
Borrower in accordance with the terms of this Agreement.
Affiliate.
Shall
mean, with respect to Borrower or any other Person, any Person who, directly
or
indirectly through one or more intermediaries, controls, is controlled by,
or is
under common control with, such Person. For purposes of this definition,
“control” means the possession, directly or indirectly, of the power to direct
the management and policies of a Person, whether through the ownership of stock,
by contract, or otherwise; provided,
however,
that,
in any event: (a) any Person which owns directly or indirectly 10% or more
of
the securities having ordinary voting power for the election of directors or
other members of the governing body of a Person or 10% or more of the
partnership or other ownership interests of a Person (other than as a limited
partner of such Person) shall be deemed to control such Person, (b) each
director (or comparable manager) of a Person shall be deemed to be an Affiliate
of such Person, and (c) each partnership or joint venture in which a Person
is a
partner or joint venturer shall be deemed to be an Affiliate of such Person.
Agreement.
This
Loan and Security Agreement-Receivables by and among Borrower, Agent and each
Lender which executes this Agreement (including the Exhibits and Schedules
to
it) or a joinder agreement hereto, as it may be amended from time to
time.
Annual
Operating Plan.
Borrower’s financial and business projections for its operations for the
upcoming fiscal twelve (12) month period inclusive of a budget and which shall
represent Borrower’s good faith best estimate of its future performance for the
period covered thereby.
Applicable
Default Rate.
The
Applicable Interest Rate plus four percent (4%) per annum;
provided, however,
that the
Applicable Default Rate shall in no event exceed the highest interest rate
permitted to be charged under applicable usury laws.
Applicable
Interest Rate.
A
variable rate, adjusted as of each day of each calendar month, equal to the
sum
of the Lender Reference Rate plus one half of one percent (0.50%) per annum,
with interest being computed in arrears on the basis of actual days elapsed
over
a year of 360 days, but in no event shall the rate of interest at any time
during the Term be less than six (6.00%) percent (a “Floating
Rate Advance”).
The
Lender Reference Rate on the Closing Date is 7.25%.
The
failure of Borrower to elect an Applicable Interest Rate three (3) Business
Days
prior to the Closing Date shall be deemed an election of the Floating Rate
Advance interest rate set forth in (i) above.
Applicable
Laws.
Shall
mean all applicable laws, rules, regulations and orders of any Governmental
Authority, including without limitation Credit Protection Laws, the Fair Labor
Standards Act and the Americans With Disabilities Act.
Assignment
of Notes Receivable and Mortgages.
The
term “Assignment of Notes Receivable and Mortgages” shall mean a recordable
Collateral Assignment of Notes Receivable and Mortgages, in the form attached
hereto as Exhibit A, made by Borrower in favor of Agent evidencing the
assignment to Agent, as collateral agent for each Lender, of all of the Pledged
Notes Receivable and Mortgages.
Availability.
Shall
mean, as of any date of determination, if such date is a Business Day, and
determined at the close of business on the immediately preceding Business Day,
if such date of determination is not a Business Day, the amount that Borrower
is
entitled to borrow as Advances under Section
2.1
(after
giving effect to all then outstanding Obligations and Bank Product Reserves
to
the extent applicable hereunder).
Backup
Servicing Agreement.
Shall
mean that certain Backup Servicing Agreement of even date herewith executed
by
and among Borrower, Agent and Concord Servicing Corporation.
Bank
Product.
Shall
mean any financial accommodation extended to Borrower or its Subsidiaries by
any
Bank Product Provider (other than pursuant to this Agreement) including: (a)
credit cards, (b) credit card processing services, (c) debit cards, (d) purchase
cards, (e) ACH Transactions, (f) cash management, including controlled
disbursement, accounts or services, or (g) transactions under Hedging
Agreements.
Bank
Product Agreements.
Shall
mean those certain agreements entered into from time to time by Borrower or
its
Subsidiaries with a Bank Product Provider in connection with the obtaining
of
any of the Bank Products.
Bank
Product Obligations.
Shall
mean all obligations, liabilities, contingent reimbursement obligations, fees,
and expenses owing by Borrower or its Subsidiaries to any Bank Product Provider
pursuant to or evidenced by the Bank Product Agreements and irrespective of
whether for the payment of money, whether direct or indirect, absolute or
contingent, due or to become due, now existing or hereafter
arising.
Bank
Product Provider.
Shall
mean ▇▇▇▇▇ Fargo or any of its affiliated entities.
Bank
Product Reserves.
Shall
mean, as of any date of determination, the amount of reserves that Agent has
established (based upon the relevant Bank Product Providers’ reasonable
determination of the credit exposure in respect of then extant Bank Products)
for Bank Products then provided or outstanding, provided however that at no
time
that there exist Lenders in additional to WFF, shall the maximum amount of
Bank
Product Reserves imposed be in excess of $2,500,000.
Borrowing
Base.
With
respect to each Eligible Note Receivable, pledged to Agent hereunder in
connection with each Advance from and after the Closing Date, an amount equal
to
seventy-five percent (75%) of the remaining principal balance of each such
Eligible Note Receivable.
Borrowing
Base Report.
The
form attached as Exhibit B (Borrowing Base Report) to Exhibit D (Borrower’s
Certificate and Request for Advance on Receivables Loan) to this Agreement
which
report, from time to time shall be signed by ▇▇▇▇▇ ▇. ▇▇▇▇▇ or ▇▇▇▇ ▇▇▇▇▇▇▇
or
such other Person designated in writing by Borrower to Agent.
Business
Day.
Each
day that is not a Saturday, a Sunday or a legal holiday under the laws of the
States of Texas or California.
Capital
Lease.
Shall
mean a lease that is required to be capitalized for financial reporting purposes
in accordance with GAAP.
CapitalSource
Finance Facility.
The
term “CapitalSource Finance Facility” shall mean that certain credit facility
provided by CapitalSource Finance, LLC to Borrower pursuant to the documents
listed on Schedule 1.1(b) hereto (the “CSF
Documents).
Closing
Date.
The
date of this Agreement.
Code.
Shall
mean the Uniform Commercial Code (or any successor statute), as in effect from
time to time, of the State of California or of any other state the laws of
which
are required as a result thereof to be applied in connection with the issue
of
perfection or the effect of perfection of security interests; provided
that to
the extent that the Code is used to define any term herein or in any other
Loan
Documents and such term is defined differently in different Articles or
divisions of the Code, the definition of such term contained in Article 9 shall
govern.
Collateral.
Collectively, all now owned or hereafter acquired right, title and interest
of
Borrower, in all of the following:
(i) Pledged
Notes Receivable and all proceeds of or from them;
(ii) Mortgages
and all proceeds of or from them;
(iii) Documents,
instruments, accounts, chattel paper, and general intangibles relating to the
Pledged Notes Receivable and the related Mortgages;
(iv) All
collateral under the Additional Credit Facility;
(v) All
books, records, reports, computer tapes, disks and software relating to the
Collateral; and
(vi) Extensions,
additions, improvements, betterments, renewals, substitutions and replacements
of, for or to any of the Collateral, wherever located, together with the
products, proceeds, issues, rents and profits thereof, and any replacements,
additions or accessions thereto or substitutions thereof.
Commitment.
The
term “Commitment” shall refer singly to the obligation of each Lender to make a
Loan or Loans to Borrower in an aggregate amount not to exceed the Pro Rata
Percentage for each Lender of each Advance and collectively to all Loans to
be
made by all Lenders as provided herein. The Commitment as of the Closing Date
is
$50,000,000 in the aggregate outstanding at any time during the Term of this
Agreement, and may from time to time be increased or decreased by Agent and
Lenders upon written a written agreement setting forth the terms and conditions
of any increase or decrease by and between Agent, Lenders and Borrower.
Common
Elements.
All
common elements, including but not limited to any limited common elements,
as
each such common element is defined or provided for in the Declaration or other
Timeshare Documents.
Custodian.
▇▇▇▇▇
Fargo Bank, National Association or ▇▇▇▇▇ Fargo Corporate Trust Services having
an address of 751 Kasota Ave, MAC# ▇▇▇▇▇-▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, or such
other custodial Agent as may be approved by Agent in writing from time to time.
Custodian shall be Lender's Agent for the purpose of maintaining possession
of
all present and future Collateral documents described in Section 3.4
hereof.
Custodial
Agreement.
The
Custodial and Collateral Agency Agreement, dated as of December 16, 2005 by
and
among Agent, as Agent for each Lender, Borrower and Custodian, pursuant to
which
the Custodian is to maintain possession of all present and future Collateral
documents described in Section 3.4
hereof,
or any custodial agreement entered into as a replacement of such
agreement.
Daily
Balance. Shall
mean, with respect to each day during the term of this Agreement, the amount
of
an Obligation owed at the end of such day.
Debtor
Relief Laws.
Any
applicable liquidation, conservatorship, bankruptcy, moratorium, rearrangement,
insolvency, reorganization or similar law, proceeding or device providing for
the relief of debtors from time to time in effect and generally affecting the
rights of creditors.
Declaration
or Declarations.
With
respect to each Resort, the applicable Declaration or Declarations described
on
Schedule 1.1(c) attached hereto.
Declarant
Rights.
Shall
mean the rights of the declarant in the Declaration for each
Resort.
Default.
An
event or condition the occurrence of which immediately is or, with a lapse
of
time or the giving or notice or both, becomes an Event of Default.
Designated
Account.
Shall
mean account number 32900165597 of Borrower maintained with Borrower’s
Designated Account Bank, or such other deposit account of Borrower (located
within the United States) that has been designated as such, in writing, by
Borrower to Agent.
Designated
Account Bank.
Shall
mean ▇▇ ▇▇▇▇▇▇ Chase Bank, ABA Number▇▇▇▇▇▇▇▇▇.
Disbursement
Letter.
Shall
mean an instructional letter executed and delivered by Borrower to Agent
regarding the extensions of credit to be made on the Closing Date, the form
and
substance of which is satisfactory to Agent.
Division
or Commission.
The
governmental authority of each state in which a Resort is located, having
jurisdiction over the establishment and operation of the Resorts in question
and
the sale of Intervals at such Resort.
EBITDA.
The
term EBITDA means, with respect to any Person for any period: (a) the sum of
(i)
net income (but excluding any extraordinary gains or losses or any gains or
losses from the sale or disposition of assets other than in the ordinary course
of business), (ii) interest expense, (iii) depreciation and amortization and
other non-cash items properly deducted in determining net income, and (iv)
federal, state and local income taxes, in each case for such Person for such
period, computed and calculated in accordance with GAAP minus (b) non-cash
items
properly added in determining net income, in each case for the corresponding
period.
Eligible
Notes Receivable.
Those
Pledged Notes Receivable which satisfy each of the following
criteria:
(a) Borrower
shall be the sole payee;
(b) it
arises
from a bona fide sale by Borrower of one or more Intervals;
(c) the
Interval sale from which it arises shall not have been cancelled by Purchaser,
and any statutory or other applicable cancellation or rescission period shall
have expired and the Interval sale is otherwise in compliance with this
Agreement;
(d) it
is
secured by a Mortgage on the purchased Interval;
(e) principal
and interest payments on it are payable to Borrower in legal tender of the
United States;
(f) payments
of principal and interest on it are payable in equal monthly
installments;
(g) it
shall
have an original term of no more than one hundred twenty (120)
months;
(h) a
cash
down payment has been received from Purchaser or the maker in an amount equal
to
at least ten percent (10%) of the actual purchase price of a one week Interval,
and Purchaser shall have received no cash or other rebates of any
kind;
(i) the
first
payment under each Note Receivable must be due and payable to Borrower within
45
days of the closing date of the purchase of the Interval, no monthly installment
is more than thirty (30) days contractually past due at the time of an Advance
in respect of such Note Receivable, nor more than sixty (60) days contractually
past due at any time;
(j) the
rate
of interest payable on the unpaid balance is at least the rate required so
that
when the Advance is made in respect of such Note Receivable the average interest
rate on all Eligible Notes Receivable in respect of which Advances are
outstanding shall not be less than twelve and one-half percent (12.5%) per
annum
at any time;
(k) Purchaser
of the related Interval has immediate access, for the timeshare “unit week”
related to such purchase, to the Interval described in the Mortgage securing
such Note Receivable, which Interval has been completed, developed, and
furnished in accordance with the specifications provided in the Purchaser’s
purchase contract, public offering statement and other Timeshare Documents;
and
Purchaser has, subject to the terms of the Declaration, purchase contract,
public offering statement and other Timeshare Documents, complete and
unrestricted access to the related Interval and the Resort;
(l) neither
Purchaser of the related Interval or any other maker of the Note is an Affiliate
of, or related to, or employed by Borrower;
(m) Purchaser
or other maker has no claim against Borrower and no defense, set-off or
counterclaim with respect to the Note Receivable;
(n) the
maximum remaining principal balance of any such Note Receivable shall not exceed
$50,000 and the total maximum remaining principal balance of the Notes
Receivable executed by any one Purchaser or other maker shall not exceed $60,000
in the aggregate (or such greater amount as may be approved in writing in
advance by Agent);
(o) it
is
executed by a U.S. or Canadian resident; provided, however, that up to three
percent (3%) of the outstanding principal balance of all Eligible Notes
Receivable may at any time be comprised of Notes Receivable executed by
residents of jurisdictions other than the U.S. or Canada;
(p) the
original of such Note Receivable has been endorsed to Agent and delivered to
the
Custodian as provided in this Agreement, and the terms thereof and all
instruments related thereto shall comply in all respects with all applicable
federal and state laws and the regulations promulgated thereunder;
(q) the
Unit
in which the timeshare Interval being financed or evidenced by such Note
Receivable is located, shall not be subject to any Lien which is not previously
consented to in writing by Agent;
(r) the
Note
Receivable is in full compliance with all Applicable Laws;
(s) no
modifications or extensions of the Note Receivable have been agreed to other
than with the consent of Lender or consistent with Borrower’s established
collection practices;
(t) the
Note
Receivable conforms to Borrower’s underwriting guidelines and criteria as set
forth on Schedule 1.1(d);
(u) the
Note
Receivable is evidenced by standard legal documentation and on a form reviewed
by and acceptable to Agent; and
(v) if
the
loan is a newly originated Note Receivable which is replacing an existing
Eligible Note Receivable pledged as Collateral under the Agreement and the
proceeds have been used to finance the purchase of an Interval which is being
upgraded by the Purchaser to a more expensive Interval:
(1) the
principal balance of the existing Eligible Note Receivable which is being
upgraded may still be included for purposes of calculating the Borrowing Base
for a period of time expiring on the earlier to occur of (i) the 31st day after
the consumer documents effecting the upgrade have been executed or (ii) the
date
on which any payment on such Eligible Note Receivable becomes thirty (30) or
more days past due;
(2) on
or
before the second Business Day after the expiration of the statutory rescission
period in connection with any consumer documents executed effecting any upgrade
involving an Eligible Note Receivable and in any event within ten (10) days
of
such upgrade, the Borrower shall deliver to the Agent or its designee the
original of the new promissory note, comparable instrument or installment sale
contract executed in connection with such upgrade duly endorsed in blank by
the
Borrower and the Borrower will cause all payments made with respect to such
new
promissory note, comparable instrument or installment sale contract to be
forwarded to the lockbox; and
(3) any
new
upgraded Note Receivable involving a prior Eligible Note Receivable shall only
be included as part of the Borrowing Base if the prior Eligible Note Receivable
has been removed from the Borrowing Base and the new upgraded Note Receivable
satisfies all conditions for an Eligible Note Receivable.
Encumbered
Intervals.
The
Intervals subject to the Mortgages.
Environmental
Laws.
Comprehensive Environmental Response, Compensation and Liability Act of 1980,
as
amended from time to time (“CERCLA”),
the
Resource Conservation and Recovery Act of 1976, as amended from time to time
(“RCRA”),
the
Superfund Amendments and Reauthorization Act of 1986, as amended, the federal
Clean Air Act, the federal Clean Water Act, the federal Safe Drinking Water
Act,
the federal Toxic Substances Control Act, the federal Hazardous Materials
Transportation Act, the federal Emergency Planning and Community Right to Know
Act of 1986, the federal Endangered Species Act, the federal Occupational Safety
and Health Act of 1970, the federal Water Pollution Control Act, all state
and
local environmental laws, rules and regulations of each state in which a Resort
is located, as all of the foregoing legislation may be amended from time to
time, and any regulations promulgated pursuant to the foregoing; together with
any similar local, state or federal laws, rules, ordinances or regulations
either in existence as of the date hereof, or enacted or promulgated after
the
date of this Agreement, that concern the management, control, storage,
discharge, treatment, containment, removal and/or transport of Hazardous
Materials or other substances that are or may become a threat to public health
or the environment; together with any common law theory involving Hazardous
Materials or substances which are (or alleged to be) hazardous to human health
or the environment, based on nuisance, trespass, negligence, strict liability
or
other tortious conduct, or any other federal, state or local statute,
regulation, rule, policy, or determination pertaining to health, hygiene, the
environment or environmental conditions.
Environmental
Indemnification Agreement.
The
term “Environmental Indemnification Agreement” shall mean the Environmental
Indemnification Agreement made by Borrower to Agent pursuant to this Loan
Agreement, as the same may be amended from time to time.
Event
of Default.
Defined
in Section 8.1 of this Agreement.
Exchange
Company.
Resort
Condominiums International, Inc. (“RCI”) or Interval International, Inc.
(“II”).
Fee
Letter.
Shall
mean that certain fee letter, dated as of even date herewith, between Borrower
and Agent, in form and substance satisfactory to Agent.
Final
Maturity Date.
The
term “Final Maturity Date” shall mean December 31, 2011.
Financial
Statements.
The tax
returns and balance sheets and statements of income and expense of the Borrower,
and the related notes and schedules delivered by Borrower to Agent prior to
the
Closing Date and provided for in Section 4.4(c)
of this
Agreement; and the quarterly, annual and other periodic financial statements
and
reports required to be provided to Agent pursuant to Section 7.1(h).
GAAP.
Generally accepted accounting principles, applied on a consistent basis, as
described in Opinions of the Accounting Principles Board of the American
Institute of Certified Public Accountants and/or in statements of the Financial
Accounting Standards Board which are applicable in the circumstances as of
the
date in question.
Governmental
Authority.
Shall
mean any federal, state, local, or other governmental or administrative body,
instrumentality, department, or agency or any court, tribunal, administrative
hearing body, arbitration panel, commission, or other similar dispute-resolving
panel or body.
Hazardous
Materials.
“Hazardous substances,” “hazardous waste” or “hazardous constituents,” “toxic
substances”, or “solid waste”, as defined in the Environmental Laws, and any
other contaminant or any material, waste or substance which is petroleum or
petroleum based, asbestos, polychlorinated biphenyls, flammable explosives,
or
radioactive materials.
Hedging
Agreement.
Any and
all transactions, agreements, or documents now existing or hereafter entered
into between Borrower or its Subsidiaries and a Bank Product Provider, which
provide for an interest rate, credit, commodity or equity swap, cap, floor,
collar, forward foreign exchange transaction, currency swap, cross currency
rate
swap, currency option, or any combination of, or option with respect to, these
or similar transactions, for the purpose of hedging Borrower’s or its
Subsidiaries’ exposure to fluctuations in interest or exchange rates, loan,
credit exchange, security or currency valuations or commodity
prices.
IRC.
Shall
mean the Internal Revenue Code of 1986, as in effect from time to
time.
IRS.
Shall
mean the Internal Revenue Service of the United States of America.
Indebtedness. (a)
all
obligations for borrowed money, (b) all obligations evidenced by bonds,
debentures, notes, or other similar instruments and all reimbursement or other
obligations in respect of letters of credit, bankers acceptances, interest
rate
swaps, or other financial products, (c) all obligations under Capital Leases,
(d) all obligations or liabilities of others secured by a Lien on any asset
a
Person or its Subsidiaries, irrespective of whether such obligation or liability
is assumed, (e) all obligations for the deferred purchase price of assets (other
than trade debt incurred in the ordinary course of business and repayable in
accordance with customary trade practices), (f) all obligations owing under
Hedging Agreements, and (g) any obligation of Borrower or its Subsidiaries
guaranteeing or intended to guarantee (whether directly or indirectly
guaranteed, endorsed, co-made, discounted, or sold with recourse) any obligation
of any other Person that constitutes Indebtedness under any of clauses
(a)
through
(f)
above.
Interval.
With
respect to each Resort the undivided fractional fee interval ownership interest
as a tenant-in-common (sometimes referred to in the Timeshare Documents as
a
vacation ownership interest, condoshare interest, or condoshare week) in a
Unit
sold to a Purchaser by delivery of a deed for a time-share period per calendar
year (or, in the case of a biennial use period, per alternate calendar year)
of
one week (as defined in the Declaration), together with all appurtenant rights
and interests, including, without limitation, appurtenant rights to use Common
Elements, and easement, license, access and use rights in and to all Resort
facilities and amenities (as described in the Declaration), all as more
particularly described in the Declaration or other Timeshare Documents.
Notwithstanding the foregoing, the term “Interval” shall also include, with
respect to the Oak N’ Spruce Resort only, the beneficial interest in the entity
which owns each of the Units at the Oak N’ Spruce Resort, as evidenced by the
delivery to the Purchaser of any such beneficial interest of a certificate
of
beneficial interest for a timeshare period per calendar year (or, in the case
of
biennial use period, per alternate calendar year) of one week (as defined in
the
Oak N’ Spruce Resort Declaration), together with all pertinent rights and
interests, including, without limitation, a pertinent right to use Common
Elements, and easements, license, access and use rights in and to all Oak N’
Spruce Resort facilities and amenities, all as more particularly described
in
the Declaration or other Timeshare Documents for the Oak N’ Spruce
Resort.
Inventory
Mortgage or Inventory Mortgages.
The
term “Inventory Mortgage” or “Inventory Mortgages” shall mean singly and
collectively, a properly recorded, first priority mortgage, deed of trust,
deed
to secure debt, assignment of beneficial interest or other security instrument,
as applicable, executed and delivered by Borrower encumbering all of the right,
title and interest of the Borrower in the Intervals and related or appurtenant
easement, access and use rights and benefits, that is collateral under the
Additional Credit Facility.
Lender.
Shall
have the meaning set forth in the preamble to this Agreement, and shall include
any other Person made a party to this Agreement in accordance with the
provisions of Section
10.9.
Lender
Expenses.
All (a)
costs or expenses (including taxes, and insurance premiums) required to be
paid
by Borrower or its Subsidiaries under any of the Loan Documents that are paid
or
incurred by Agent or any Lender, (b) fees or charges paid or incurred by Agent
or any Lender in connection with the Borrower and its Subsidiaries, including,
fees or charges for photocopying, notarization, couriers and messengers,
telecommunication, public record searches (including tax lien, litigation,
bankruptcy and UCC searches), filing, recording, publication, appraisal
(including periodic Collateral appraisals or business valuations to the extent
of the fees and charges (and up to the amount of any limitation) contained
in
this Agreement), (c) costs and expenses incurred by Agent or any Lender in
the
disbursement of funds to Borrower (by wire transfer or otherwise), (d) charges
paid or incurred by Agent or any Lender resulting from the dishonor of checks
relating to the Borrower or associated with the Collateral, (e) reasonable
costs
and expenses paid or incurred by the Agent or any Lender to correct any default
or enforce any provision of the Loan Documents, or in gaining possession of,
maintaining, handling, preserving, storing, shipping, selling, preparing for
sale, or advertising to sell the Collateral, or any portion thereof,
irrespective of whether a sale is consummated, (f) audit fees and expenses
of
Agent or any Lender related to audit examinations of the Books to the extent
of
the fees and charges (and up to the amount of any limitation) contained in
this
Agreement, (g) reasonable costs and expenses of third party claims or any other
suit paid or incurred by the Agent or any Lender in enforcing or defending
the
Loan Documents or in connection with the transactions contemplated by the Loan
Documents or the Agent or any Lender’s relationship with Borrower, (h) Agent and
each Lender’s and Participant’s reasonable fees and expenses (including
attorneys fees) incurred in advising, structuring, drafting, reviewing,
administering, or amending the Loan Documents, (i) Agent and each Lender’s and
Participant’s reasonable fees and expenses (including attorneys fees) incurred
in terminating, enforcing (including attorneys fees and expenses incurred in
connection with a “workout,” a “restructuring,” or an Insolvency Proceeding
concerning Borrower or its Subsidiaries or in exercising rights or remedies
under the Loan Documents), or defending the Loan Documents, irrespective of
whether suit is brought, or in taking any Remedial Action concerning the
Collateral and (j) a
$1,500
fee to WFF to cover WFF’s marketing and advertising costs with respect to this
Agreement and the Loan Documents.
Lender
Reference Rate.
The
rate of interest announced, from time to time, within ▇▇▇▇▇ Fargo at its
principal office in San Francisco as its “prime rate”, with the understanding
that the “prime rate” is one of ▇▇▇▇▇ Fargo’s base rates (not necessarily the
lowest of such rates) and serves as the basis upon which effective rates of
interest are calculated for those loans making reference thereto and is
evidenced by the recording thereof after its announcement in such internal
publication or publications as ▇▇▇▇▇ Fargo may designate.
Lender-Related
Person.
Shall
mean any Lender affiliated entity, and the officers, directors, employees,
and
agents of a Lender.
Lien.
Any
interest in property securing an obligation owed to, or claim by, a Person
other
than the owner of such property, whether such interest arises in equity or
is
based on the common law, statute, or contract.
Loan
or Receivables Loan.
The
term “Loan” or “Receivables Loan” means, as the context requires, singly each
Advance and collectively all Advances made by Lenders to Borrower under or
pursuant to this Agreement.
Loan
Documents.
Collectively, this Agreement and the following documents and instruments listed
below as such agreements, documents, instruments or certificates may be amended,
renewed, extended, restated or supplemented from time to time.
This
Agreement;
The
Note;
The
Fee Letter
The
Environmental Indemnification Agreement;
The
Collateral Assignment of Notes Receivable and
Mortgages;
Borrower’s
Certificate and Request for Advance;
The
Lockbox Agreement;
The
Custodial Agreement;
The
Servicing Agreement;
The
Standby Servicing Agreement Assignment;
Financing
Statements;
UCC
financing statements covering the Collateral, to be filed with the Texas
Secretary of State and the Secretary of State and/or such other office where
UCC
financing statements are required to be filed pursuant to the Code;
and
Other
Items;
Such
other agreements, documents, instruments, certificates and materials as Agent
may request to evidence the Obligations; to evidence and perfect the rights
and
Liens and security interests of Agent, as agent for Lenders, contemplated by
the
Loan Documents, and to effectuate the transactions contemplated herein, as
such
agreements, documents, instruments or certificates may be hereafter amended,
renewed, extended, restated or supplemented from time to time.
Loan
Year.
The
period from the Closing Date through the last day of the next full twelve (12)
calendar month period and each twelve (12) calendar month period
thereafter.
Lockbox
Agent.
The ▇▇
▇▇▇▇▇▇ Chase Bank, a New York banking association having a place of business
at
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, or such other financial
institution as may be approved by Agent in writing from time to
time.
Lockbox
Agreement.
The
Lockbox and Servicing Agreement, dated as of December 16, 2005, by and among
Borrower, Lenders, Agent, Servicing Agent and Lockbox Agent, pursuant to which
the Lockbox Agent is to provide lockbox, reporting and related services and
is
to provide for the receipt of payments on the Notes Receivable and the
disbursement of such payments to Agent.
Mandatory
Prepayment.
Any
prepayment required by Section 2.4(b)
of this
Agreement.
Marketing
and Sales Expenses.
Shall
mean all promotion, lead generation, sales commissions and all other marketing
expenses incurred or paid by Borrower pursuant to any marketing agreements
or
otherwise.
Material
Adverse Change.
Shall
mean (a) a material adverse change in the business, prospects, operations,
results of operations, assets, liabilities or condition (financial or otherwise)
of Borrower, taken as a whole, (b) a material impairment of the ability of
Borrower to perform its obligations under the Loan Documents or of the Lender’s
ability to enforce the Obligations or realize upon the Collateral, or
(c) any impairment of the enforceability or priority of the Lender’s Liens
with respect to the Collateral.
Mortgage.
A
properly recorded, first priority mortgage, deed of trust, deed to secure debt,
assignment of beneficial interest or other security instrument, as applicable,
executed and delivered by each Purchaser to Borrower, securing a Pledged Note
Receivable and encumbering all of the right, title and interest of such
Purchaser in the related Encumbered Interval and related or appurtenant
easement, access and use rights and benefits. Agent acknowledges that
assignments of beneficial interest executed by Purchasers of Intervals at Oak
N’
Spruce Resort will not be recorded and that Borrower will not be required to
provide Agent or Lenders with any title insurance with respect to Intervals
at
Oak N’ Spruce Resort.
Note.
The
Receivables Loan Note.
Note
Receivable.
A
promissory note executed in favor of Borrower in connection with a Purchaser’s
acquisition of an Interval.
Obligations.
All
Indebtedness due Agent, any Lender or any Affiliate of a Lender, all Bank
Product Obligations (including any amounts due and payable to any Bank Product
Provider in respect of Bank Products), all amounts due or becoming due to Agent
or any Lender in respect of the Loan under any of the Loan Documents, including
principal, interest, prepayment premiums, contributions, taxes, insurance,
loan
charges, custodial fees, attorneys’ and paralegals’ fees and expenses and other
fees (including the fees provided for in the Fee Letter) or expenses incurred
by
Agent or any Lender or advanced to or on behalf of Borrower by Agent or any
Lender pursuant to any of the Loan Documents, and the prompt and complete
payment and performance by the Borrower of all obligations, indebtedness and
liabilities pursuant to this Agreement or any of the Loan Documents or
otherwise.
Operating
Contract or Operating Contracts.
As
defined in Section 6.20.
Participant.
Participant shall mean, singly and collectively, any bank or other entity,
which
is indirectly or directly funding to or through WFF with respect to the Loan,
in
whole or in part, including, without limitation, any direct or indirect assignee
of WFF in the Loan.
Payment
Authorization Agreement.
Pre-authorized electronic debit agreement by a Purchaser for payment of a Note
Receivable.
Permitted
Discretion.
A
determination made in the exercise of reasonable (from the perspective of a
secured asset-based lender in the same or similar circumstances) business
judgment.
Person.
An
individual, partnership, corporation, limited liability company, trust,
unincorporated organization, other entity, or a government or agency or
political subdivision thereof.
Pledged
Notes Receivable.
Any
Note Receivable which at any time has been pledged to Agent on behalf of Lenders
by Borrower pursuant to this Agreement or any of the Loan
Documents.
Prescribed
Laws.
The
term “Prescribed Laws” shall mean, collectively, (a) the Uniting and
Strengthening America by Providing Appropriate Tools Required to Intercept
and
Obstruct Terrorism Act of 2001 (Public Law ▇▇▇ ▇▇) (▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇), (▇)
Executive Order No. 13224 on Terrorist Financing, effective September 24, 2001,
and relating to Blocking Property and Prohibiting Transactions With Persons
Who
Commit, Threaten to Commit, or Support Terrorism, (c) the International
Emergency Economic Power Act, 50 U.S.C. § 1701 et seq., (d) the Trading with the
Enemy Act, 50 U.S.C. App. 1 et seq., and (d) all other Legal Requirements
relating to money laundering or terrorism, and, in each case, any Executive
Orders or regulations promulgated under any such laws.
Property
or Properties.
Any
interest in any kind of property or asset, whether real, personal or mixed,
tangible or intangible.
Pro
Rata Percentage.
The
applicable percentage of the Loan that each Lender has agreed to make to
Borrower pursuant to this Agreement as set forth in Schedule 1.0 hereto, as
such
percentage may from time to time be amended by Agent and the applicable
Lender.
Purchase
Price.
The
total purchase price of a timeshare Interval, as set forth in the Timeshare
Documents and Note Receivable relating to the purchase of such
Interval.
Purchaser.
Any
Person who purchases one or more Intervals.
Quarterly
Financial Report.
Individually and collectively, as applicable, the financial reports delivered
in
accordance with Section 7.1(h)(i).
Resort
or Resorts (also “Eligible Resort” or “Eligible
Resorts”).
Individually and collectively, as applicable, each or all of the interval
ownership and time-share projects consisting of: (i) (A) ▇▇▇▇▇ Lake Ranch,
▇▇▇▇▇▇▇, Texas; (B) Piney Shores Resort, Conroe, Texas; (C) Lake O’ The Woods,
Flint, Texas; (D) Hill Country Resort, Canyon Lake, Texas; (E) Ozark Mountain
Resort, ▇▇▇▇▇▇▇▇▇▇ City, Missouri; (F) Holiday Hills Resort, Branson, Missouri;
(G) Fox River Resort, LaSalle County, Illinois; (H) Timber Creek Resort,
Jefferson County, Missouri (I) Oak N’ Spruce Resort, South ▇▇▇, Massachusetts;
(J) Apple Mountain Resort, Habersham County, Georgia; (K) The Villages, Flint,
Texas and (L) Silverleaf’s Seaside Resort, Galveston County, Texas; (M) Orlando
Breeze Resort, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇ County, Florida (also sometimes individually
and
collectively referred to herein as the “Existing Resorts”) and (ii) subject to
Agent’s prior written approval and satisfaction by the Borrower of the
conditions precedent set forth in Sections 3.5
and
4.4
hereof,
the Additional Eligible Resorts. The term “Resort” or “Resorts” includes, among
other things, the undivided annual or (biennial) timeshare ownership interests
(Intervals) in the respective Resorts, and the appurtenant exclusive rights
to
use Units in one or more buildings or phases and all appurtenant or related
properties, amenities, facilities, equipment, appliances, fixtures, easements,
licenses, rights and interests, including without limitation, the Common
Elements, as established by and more fully defined and described in the
respective Declarations, and the other Timeshare Documents.
Resort
Finance Facility.
The
term “Resort Finance Facility” shall mean that certain credit facility provided
by Resort Funding, LLC to Borrower pursuant to the documents listed on Schedule
1.1(e) hereto (the “RFC
Documents).
Revolving
Loan Period.
The
period during the Term in which the Borrower may borrow, repay and re-borrow
Advances and shall terminate on December 31, 2008.
Revolving
Loan Term.
Shall
mean the period commencing on the Closing Date and ending on December 31,
2008.
Servicing
Agent.
Lender’s exclusive Agent, which shall be such Person or Persons designated by
Borrower and approved by Agent in its sole discretion, for the purposes of
billing and collecting amounts due on account of the Pledged Notes Receivable,
providing reports pursuant to the Lockbox Agreement and performing other
servicing functions not performed by the Lockbox Agent. Borrower shall be the
Servicing Agent until an Event of Default shall have occurred and Agent replaces
Borrower as Servicing Agent as provided in Section 9.1
(i).
Silverleaf
Club.
Shall
mean Silverleaf Club, a Texas non-profit corporation.
Silverleaf
Finance II Documents.
Shall
mean the loan agreement, the developer transfer agreement, the demand notes
and
all other agreements or documents executed in connection with the TFC Conduit
Loan, as each may be amended, restated or otherwise modified from time to
time.
SPV.
Shall
mean any special purpose entity created for the purpose of effecting a
securitization of certain of the assets of Borrower.
SPV
Assets.
Shall
mean those assets sold or conveyed by Borrower to the SPV pursuant to the
documents created for the securitization transaction.
Standby
Servicer.
Shall
mean the Person selected by Agent to act as standby servicer in accordance
with
this Agreement. The Standby Servicer will be Concord Servicing
Corporation.
Standby
Servicing Agreement.
Shall
mean the agreement pursuant to which the Standby Servicer shall provide
servicing functions with respect to the Pledged Notes Receivable in accordance
with Sections 9.1(i)
hereof.
Subsidiary.
Of a
Person means a corporation, partnership, limited liability company, or other
entity in which that Person directly or indirectly owns or controls the shares
of Stock having ordinary voting power to elect a majority of the board of
directors (or appoint other comparable managers) of such corporation,
partnership, limited liability company, or other entity.
Survey.
A plat
or survey of the Resorts prepared by a licensed surveyor acceptable to
Agent.
Tangible
Net Worth.
Tangible Net Worth means, with respect to any Person, the amount calculated
in
accordance with GAAP as: (i) the consolidated net worth of such Person and
its
consolidated subsidiaries, minus (ii) the consolidated intangibles of such
Person and its consolidated subsidiaries, including, without limitation,
goodwill, trademarks, tradenames, copyrights, patents, patent allocations,
licenses and rights in any of the foregoing and other items treated as
intangible in accordance with GAAP. Notwithstanding the foregoing, if subsequent
to the Closing Date deferred sales are no longer considered an asset under
GAAP,
Agent agrees, at the request of Borrower, to determine, in its reasonable
discretion, whether deferred sales should continue to be considered an asset
for
purposes of determining Borrower’s Tangible Net Worth.
Term.
The
period beginning on the Closing Date and ending on the Final Maturity
Date.
Textron
Financial Facility.
The
term “Textron Financial Facility” shall mean that certain credit facility
provided by Textron Financial Corporation to Borrower pursuant to the documents
listed on Schedule 1.1(f) hereto (the “TFC
Documents).
TFC
Conduit Loan.
Shall
mean that certain loan facility provided by Textron Financial Corporation in
accordance with the terms of the Silverleaf Finance II Documents.
Timeshare
Act.
Any
statute, act, regulation, ordinance, rule or law applicable to the establishment
and operation of the Resorts and the sales of the Intervals.
Timeshare
Documents.
Any
registration statement required under any Timeshare Act approving the
establishment and operation of the Resorts and the sales of
Intervals.
Timeshare
Owners’ Association.
With
respect to each Resort, the applicable not-for-profit corporations described
on
Schedule 1.1(g).
Total
Interest Expense.
For any
period, the aggregate amount of interest required to be paid or accrued by
Borrower and its Subsidiaries during such period on all indebtedness of Borrower
and its consolidated Subsidiaries outstanding during all or any part of such
period, whether such interest was or is required to be reflected as an item
of
expense or capitalized, including payments consisting of interest in respect
of
any capitalized lease, or any synthetic lease and including commitment fees,
agency fees, facility fees, balance deficiency fees and similar fees or expenses
in connection with the borrowing of money.
Transfer
Account.
The
account established by Agent to which all Loans by Lenders will be
made.
UCC
Financing Statements.
The
UCC-1 Financing Statements, naming the Borrower as debtor and the Agent as
secured party on behalf of Lenders, heretofore or hereafter filed in connection
with the Loan and all amendments thereto.
Unit.
With
respect to each Resort, one living unit in a building incorporated into the
Resort pursuant to the Declaration, together with all related or appurtenant
interests in services, easements and other rights or benefits, as described
and
provided for in the Declaration, including but not limited to the right to
use
the Resort amenities and facilities in accordance with the Timeshare
Documents.
▇▇▇▇▇
Fargo.
▇▇▇▇▇
Fargo Bank, National Association, a national banking association.
WFF.
▇▇▇▇▇
Fargo Foothill, Inc.
Section
2 -The
Loan
2.1 Revolving
Loan and Lending Limits.
(a) Revolving
Loan; Lending Limits; Making of Loans.
Upon
the
terms and subject to the conditions set forth in Sections 2.1(c) Section 2.7
of
this Agreement, each Lender agrees severally, at any time and from time to
time
during the Revolving Loan Period to make Advances to Borrower and Borrower
may
borrow, repay and re-borrow during the Revolving Loan Term, in an aggregate
amount not to exceed at any time the lesser of each Lender’s Pro Rata Percentage
of: (i) the Borrowing Base, (ii) the Availability or (iii) the Commitment.
The
Revolving Loan Period shall be the period during the Term in which the Borrower
may borrow, repay and re-borrow Advances and shall terminate in all respects
on
December 31, 2008.
Borrower
acknowledges, agrees and confirms that the obligations of all Lenders to make
Loans under this Agreement to Borrower is limited to the lesser of: (i) the
Borrowing Base, (ii) the Availability or (iii) the Commitment. Borrower further
acknowledges, agrees and confirms that the obligation of each Lender to make
loans hereunder to Borrower is limited to: (i) with respect to each Advance
hereunder, each Lender’s Pro Rata Percentage of any such Advance hereunder and
(ii) with respect to all Advances made hereunder, such Lender’s obligation
hereunder shall be limited to its commitment as set forth on Schedule
1.0.
Each
Loan
by a Lender shall be made ratably in accordance with each Lender’s respective
Pro Rata Percentage, provided, however, that the failure of any Lender to make
any required Loan shall not in itself relieve any other Lender of its obligation
to make any required Loan hereunder. Likewise, no Lender shall be responsible
or
liable for the failure of any other Lender to make any Loan required to be
made
by such other Lender, nor shall any Lender be obligated to make any Loan or
Loans in excess of its respective Pro Rata Percentage, but not in excess of
its
Commitment, in the event that any other Lender fails or refuses to make a Loan
or Loans as provided hereunder. As and when additional Lenders execute and
deliver this Agreement, then (A) such additional Lenders shall be deemed to
have
simultaneously purchased from each of the other Lenders who have previously
executed and delivered this Agreement, a share in such other Lenders’ Loans so
that the amount of the Loans of all Lenders shall be pro rata as otherwise
set
forth above and (B) such other adjustments shall be made from time to time
as
shall be equitable to insure that the Advances to Borrower are made ratably
by
each Lender in accordance with its respective Pro Rata Percentage.
(b) Advances
for Certain Fees. Borrower
has advised Lender that Custodian will ▇▇▇▇ on a monthly basis for its services.
Borrower agrees that upon receipt of a monthly billing from Custodian, it will,
unless Custodian shall have delivered such billing to Agent directly, review
and
approve such billing or discuss and resolve with Custodian any discrepancies
in
such billing, within five (5) days of receipt of such billing and advise Agent
of Borrower’s approval of such billing. Agent is authorized by Borrower to pay
directly to Custodian the amount of such billing as an Advance, to the extent
of
Availability, or as a deduction from the next requested Advance by
Borrower.
(c) Maximum
Amount of Advances.
Notwithstanding anything to the contrary contained herein, no Lender shall
have
an obligation to make an Advance or its Pro Rata Percentage thereof hereunder
to
the extent that the aggregate of Advances outstanding would cause the Loan
to
exceed the lesser of (i) Borrowing Base, (ii) the Availability or (iii) the
Commitment.
(d) Note
Evidencing Borrower’s Obligations.
Borrower’s obligations to pay the principal of and interest on the Loan or Loans
made by each Lender shall be evidenced by the Note to the Agent, as Agent for
each Lender, which Note shall be dated as of the date hereof and be in the
principal amount of $50,000,000.00. The Note will mature on the Final Maturity
Date, bear interest as provided in Section 2.2
hereof
and be otherwise entitled to the benefits of this Agreement. Notwithstanding
the
stated principal amount of the Note, the aggregate outstanding principal amount
of the Loan at any time shall be the aggregate principal amount owing on the
Note at such time. Agent shall and is hereby authorized to record in its
internal books and records the date and amount of each Advance made by Lenders,
the Applicable Interest Rate and interest period applicable thereto and each
repayment thereof; and such books and records shall, as between Borrower and
each Lender, absent manifest error, constitute prima facie evidence of the
accuracy of the information contained therein. Failure by Agent to so record
any
Advance made by Lenders (or any error in such recordation) or any payment
thereon shall not affect the Obligations of Borrower under this Agreement or
under the Note and shall not adversely affect Lender’s rights under this
Agreement with respect to the repayment thereof. At the election of any Lender,
Borrower shall execute and deliver to such Lender a note in a stated principal
amount equal to such Lender’s Pro Rata Percentage of the Loan, which such note
or notes shall be on the same terms and conditions as provided above and which
note or notes shall be included within the definition of “Note” as such term is
used herein.
(e) Notice
of Advances.
(i) Upon
receipt by Agent from Borrower of a written request for Advance in accordance
with Section
5
hereof
and Borrower’s satisfaction of the requirements set forth in Section
5
hereof,
Agent shall give a written notice (a “Notice
of Borrowing”)
to
each Lender, (which Notice of Borrowing shall be given to each Lender not less
than two (2) Business Days prior to the date of the proposed
Advance), setting forth: (i) the total amount of the Advance requested by
Borrower; (ii) the Borrowing Base received from Borrower supporting such
requested Advance; (iii) the amount of all Loans remaining outstanding by each
respective Lender; (iv) the outstanding principal balance of the Loan; (v)
each
such Lender’s Pro Rata Percentage of the requested Advance and (vi) the date on
which such Advance is to be made; or
(ii) at
its
option, the Agent shall provide to each Lender: (A) each month by the close
of
business on the fifth (5th) Business Day following receipt by Agent from
Borrower, but in no event later than the 30th day of the month: (i) a reconciled
Borrowing Base report (a “Borrowing
Base Report”)
in the
form attached as Exhibit B; and (ii) an updated trial balance and aging report
for the Pledged Notes Receivable (a “Collateral
Data Report”);
and
(B) by the close of business on the tenth (10th) Business Day following receipt
by Agent from Borrower of the Borrowing Base Report and the Collateral Data
Report: (i) a summary of all Advances made by Agent during the immediately
preceding month (a “Summary
of Weekly Advances”);
and
(ii) a summary report of Advances and repayments or collections for the
immediately preceding month and a calculation of the net Lender’s Advance
required of such Lender with respect to all Advances made during the immediately
preceding month (a “Lender
Advance Report”).
(f) Disbursement
of Funds.
(i) If
Notice
of Borrowing is provided in accordance with Section 2.1(e)
above,
then after receiving a Notice of Borrowing from Agent, each Lender shall, not
later than 11:00 a.m., Central Standard Time, on the date specified in such
Notice of Borrowing on which the proposed Advance is to be made, wire transfer
to Agent at the Transfer Account, in immediately available funds, an amount
equal to each such Lender’s Pro Rata Percentage of the proposed Advance as set
forth in the Notice of Borrowing. Upon Agent’s receipt of funds from each Lender
equal to the amount of the requested Advance, and subject to Borrower’s
compliance with the terms and conditions of this Agreement, Agent shall disburse
the Advance to Borrower by wire transfer of funds as directed in writing by
Borrower. If Agent shall not receive funds from any Lender as set forth above,
then the amount of the Advance in question shall be automatically reduced by
an
amount equal to the missing Lender’s Pro Rata Percentage of the Advance in
question, and Agent shall, subject to Borrower’s compliance with the terms and
conditions of this Agreement, disburse the Advance in the reduced amount to
Borrower by wire transfer of funds as directed in writing by Borrower. Agent,
in
its sole and absolute discretion, may (but shall not be obligated to) make
the
full amount of the requested Advance available to Borrower prior to the receipt
by Agent from one or more Lenders of funds representing such Lender’s or
Lenders’ Pro Rata Percentage of the Advance in question. If the funds
representing such Lender’s or Lenders’ Pro Rata Percentage of the Advance in
question are not received by Agent within two (2) Business Days of the date
of
such Advance, Borrower shall immediately, upon demand of Agent, repay such
amount to Agent. Nothing herein shall be deemed to relieve Agent or any Lender
from its obligations hereunder or to prejudice any rights Agent may have against
any Lender as a result of any Lender’s failure to make any Loan or Loans as
provided herein; or
(ii) If
notice
of Advances is provided in accordance with Section 2.1(e)
above,
then by the close of business on the third (3rd) Business Day following such
Lender’s receipt of the Lender Advance Report, such Lender shall wire transfer
to Agent at the Transfer Account, in immediately available funds, the net amount
due from such Lender as set forth in the Lender Advance Report. If the funds
representing such Lender’s amount of the Advance or Advances in question are not
received by Agent within five (5) Business Days of the date of such Lender’s
receipt of the Lender Advance Report, Borrower shall immediately, upon demand
of
Agent, repay such amount to Agent. Nothing herein shall be deemed to relieve
Agent or any Lender from its obligations hereunder or to prejudice any rights
Agent may have against any Lender as a result of any Lender’s failure to make
any Loan or Loans as provided herein.
(g) Monthly
Collateral and Borrowing Base Reporting.
Within
ten (10) days following the end of any calendar month, Borrower shall provide
to
Agent:
(i) an updated borrowing base report (a “Borrowing
Base Report”)
in the
form attached as Exhibit B; and (ii) an updated trial balance and aging report
for the Pledged Notes Receivable (a “Collateral
Data Report”);
and
(iii) by the close of business on the tenth (10th) Business Day following
receipt by Agent from Borrower of the Borrowing Base Report and the Collateral
Data Report: (a) a summary of all Advances made by Agent during the immediately
preceding month (a “Summary
of Weekly Advances”);
and
(b) a summary report of Advances and repayments or collections for the
immediately preceding month.
2.2 Interest
Rates.
(a) Interest
Rates.
Except
as provided in clause
(b)
below,
all Obligations (except for Bank Product Obligations not charged to the Loan)
that have been charged to the Loan pursuant to the terms hereof shall bear
interest on the Daily Balance thereof at a per annum rate equal to the
Applicable Interest Rate from the date of Agent’s wiring of funds to Borrower
through the date of Agent’s receipt of repayment of the Loan (if received by
Agent later than noon, Central Standard Time, then interest accrual shall be
through the next Business Day following such receipt). The foregoing
notwithstanding, at no time shall any portion of the Obligations (other than
Bank Product Obligations) bear interest on the Daily Balance thereof at a per
annum rate less than the rate stated in the Applicable Interest Rate. To the
extent that interest accrued hereunder at the rate set forth herein would be
less than the foregoing minimum daily rate, the Applicable Interest Rate
chargeable hereunder for such day automatically shall be deemed increased to
the
minimum rate.
(b) Default
Rate.
Upon
the occurrence and during the continuation of an Event of Default (and at the
election of Agent), all Obligations (except for Bank Product Obligations) that
have been charged to the Loan pursuant to the terms hereof shall bear interest
on the Daily Balance thereof at a per annum rate equal to the Applicable Default
Rate. Each Lender’s Loan shall bear interest at the Applicable Interest Rate or
the Applicable Default Rate as applicable as of the date funds are received
by
Agent as provided in Section 2.1(f)
through
the date of Agent’s wiring of repayment funds to each Lender in accordance with
Sections 2.1(f)
and
2.3(c).
2.3 Payments.
From
and after the Closing Date, Borrower agrees punctually to pay or cause to be
paid to Agent, as Agent for each Lender, all principal and interest due under
the Note in respect of the Loans. Interest and all other fees payable hereunder
shall be due and payable, in arrears, on the first day of each month at any
time
that Obligations are outstanding. Borrower shall make the following payments
on
the Loan:
(a) Monthly
Payments.
Borrower shall direct or otherwise cause all makers of all Pledged Notes
Receivable to pay all monies due thereunder to the lockbox established pursuant
to the Lockbox Agreement, or as otherwise required by Agent. One hundred percent
(100%) of the cleared funds collected from the Pledged Notes Receivable each
week will be paid to Agent by the Lockbox Agent pursuant to the Lockbox
Agreement, and will be applied by Agent first to the payment of costs or
expenses incurred by Agent pursuant to this Agreement in creating, maintaining,
protecting or enforcing the Liens in and to the Collateral and in collecting
any
amounts due any Lender in connection with the Loan (“Collection
Costs”)
and
the balance to each Lender in accordance with the applicable percentage of
the
outstanding principal balance of the Loan that each Lender has made (the
“Pro
Rata Payment Percentage”).
Each
Lender shall apply each such payment in the following order: (i) to any
interest accrued at the Applicable Default Rate; (ii) then to interest
accrued and payable at the Applicable Interest Rate; and (iii) then to
outstanding principal. In the event that the cleared funds received by Agent
are
insufficient to pay the amounts described in aforementioned clauses (i)-(ii),
then Borrower shall pay the difference to Agent on or before the fifth (5th)
day
of the following month. In the event Borrower receives any payments on any
of
the Pledged Notes Receivable directly from or on behalf of the maker or makers
thereof, Borrower shall receive all such payments in trust for the sole and
exclusive benefit of Lenders; and Borrower shall deliver to the Lockbox Agent
all such payments (in the form so received by Borrower) as and when received
by
Borrower, unless Agent shall have notified Borrower to deliver directly to
Agent
all payments in respect of the Pledged Notes Receivable which may be received
by
Borrower, in which event all such payments (in the form received) shall be
endorsed by Borrower to Agent, as agent for Lenders and delivered to Agent
promptly upon Borrower’s receipt thereof.
(b) Final
Payment.
The
entire outstanding principal amount of the Loan, together with all other
Obligations hereunder, shall be due and payable on the Final Maturity
Date.
(c)
Payments to Lender.
Agent
may at its sole and absolute discretion either: (i) promptly upon receipt wire
transfer to any Lender its Pro Rata Percentage of any payment received from
Borrower in accordance with this Section 2.3 or Section 2.4;
or (ii)
include any Lender’s Pro Rata Percentage of any payment received from Borrower
in accordance with this Section 2.3 or Section 2.4
in the
Lender Advance Report pursuant to Section 2.1(g),
for
transfer to Lender pursuant to Section 2.1(f).
2.4 Prepayments.
(a) Voluntary
Prepayments.
Except
for regular payments of interest and principal as provided hereunder,
prepayments, (i) shall not be permitted during the first Loan Year, and (ii)
may
be made in whole, but not in part, upon five (5) days prior written notice
to
the Agent at any time after the end of the first Loan Year upon payment of
the
applicable Prepayment Premium (whether such prepayment results from voluntary
payments by Borrower, acceleration, or otherwise); provided, however, that
(A)
payments or prepayments of Pledged Notes Receivable made by Purchasers who
are
not directly or indirectly solicited by Borrower to make such prepayment shall
not violate this Section 2.4(a),
and no
Prepayment Premium shall be payable as a result of any such payment by
Purchasers; and (B) if at any time the Borrower wishes to release any Pledged
Notes Receivable for the purpose of including those Pledged Notes Receivable
in
a Securitization pooling or similar conduit transaction, after 30 days’ prior
written notice to Agent, Borrower may prepay the principal balance of the Loan
in whole or in part, to the extent necessary to cause the then current
outstanding unpaid principal balance of the Loan to be equal to or less than
the
Borrowing Base, and no Prepayment Premium will be due where such prepayment
is
the result of a Securitization or similar conduit transaction closing, as
certified by Borrower to Agent. If
Borrower voluntarily prepays the entire Receivables Loan for any reason other
than pursuant to a Securitization, such prepayment must be accompanied by full
payment of the outstanding balance under the Additional Credit
Facility.
(b) Mandatory
Prepayments.
(i) Overadvances.
If at any time the outstanding principal balance of the Loan exceeds the
Borrowing Base or the Commitment, Borrower shall immediately either (A) prepay
the Loan in an amount necessary to reduce the outstanding principal balance
of
the Loan to an amount within the lending limits set forth in Section 2.1, or
(B)
pledge and deliver to Agent such additional or replacement Eligible Notes
Receivable such that the remaining outstanding principal balance of the Loan
is
within the lending limits set forth in Section 2.1.
(ii) Ineligible
Pledged Notes Receivable. If at any time after the expiration of the Revolving
Loan Term, Agent determines that any Pledged Notes Receivable which are included
in the Borrowing Base, do not qualify as Eligible Notes Receivable (“Ineligible
Notes Receivable”), then Borrower shall, within five (5) Business Days after
notice, either (A) prepay the Loan in an amount equal to the balance due under
such Pledged Note Receivable, or (B) replace the Ineligible Note Receivable
with
an Eligible Note Receivable having an outstanding aggregate principal balance
equal to or in excess of the outstanding principal balance of such Ineligible
Note Receivable. The pledge and delivery to Agent as agent for Lenders of
additional Eligible Notes Receivable shall comply with the document delivery
and
recordation requirements set forth in Section 5.1
of this
Agreement.
(iii) No
Prepayment Premium. No Prepayment Premium shall be due in connection with any
mandatory prepayment made in accordance with Sections 2.4(b)(i)
or
2.4(b)(ii)
above.
(c) Prepayment
Premium.
Except
as specifically set forth in Section 2.4(a)
and
2.4(b), above, any prepayment of the Loan pursuant to Section 2.4(a)
above
must be accompanied by a prepayment premium (the “Prepayment Premium”)
calculated, as of immediately prior to such prepayment, as follows:
|
Date
of Prepayment
|
Premium
|
|
|
During
the second Loan Year;
|
three
percent (3%) of the then outstanding balance of the
Loan;
|
|
|
During
the third Loan Year;
|
two
percent (2%) of the then outstanding balance of the
Loan;
|
|
|
During
all Loan Years subsequent to the
third Loan Year,
|
one
percent (1%) of the then outstanding balance of the
Loan;
|
|
(d)
Prepayment
Premium upon Acceleration.
If the
Loan is accelerated based on an Event of Default prior to the expiration of
the
first Loan Year, or if Borrower undertakes a voluntary prepayment prior to
expiration of the first Loan Year, at Agent’s sole discretion, payments on the
Loan must include the Prepayment Premium that would be applicable if prepayment
occurred in the second Loan Year.
2.5 Capital
Adequacy Event. If,
after
the date hereof, a Lender determines that (i) the adoption of or change in
any
law, rule, regulation or guideline regarding capital requirements for banks
or
bank holding companies, or any change in the interpretation or application
thereof by any Governmental Authority charged with the administration thereof,
or (ii) compliance by Lender or its parent bank holding company with any
guideline, request, or directive of any such entity regarding capital adequacy
(whether or not having the force of law), has the effect of reducing the return
on Lender’s or such holding company’s capital as a consequence of such Lender’s
agreements hereunder to a level below that which such Lender or such holding
company could have achieved but for such adoption, change, or compliance (taking
into consideration Lender’s or such holding company’s then existing policies
with respect to capital adequacy and assuming the full utilization of such
entity’s capital) by any amount deemed by Lender to be material, then Agent may
notify Borrower thereof. Following receipt of such notice, Borrower agrees
to
pay Agent on demand the amount
of
such reduction of return of capital as and when such reduction is determined,
payable within 90 days after presentation by Lender of a statement in the amount
and setting forth in reasonable detail Lender’s calculation thereof and the
assumptions upon which such calculation was based (which statement shall be
deemed true and correct absent manifest error). In determining such amount,
Lender may use any reasonable averaging and attribution methods.
2.6 Fee
Letter Fees.
As and
when due and payable under the terms of the Fee Letter, Borrower shall pay
to
Agent the fees set forth in the Fee Letter.
2.7 Suspension
of Advances.
(a) Suspension
of Sales.
If any
stay, order, cease and desist order, injunction, temporary restraining order
or
similar judicial or non-judicial sanction shall be issued limiting or otherwise
materially adversely affecting any Interval sales activities, other business
operations in respect of the Resorts, or the enforcement of the remedies of
Agent and Lenders hereunder, then, in such event, Agent and Lenders shall have
no obligation to make any Advances hereunder: (i) in respect of Pledged Notes
Receivable from the sale of Intervals which are the subject of any stay, order,
cease and desist order, injunction, temporary restraining order or similar
judicial or non-judicial sanction that has been issued until the stay, order,
cease and desist order, injunction, temporary restraining order or similar
judicial or non-judicial sanction has been lifted or released to the
satisfaction of Agent and (ii) in respect of Pledged Notes Receivable from
the
sale of Intervals at any Resort if: (x) the stay, order, cease and desist order,
injunction, temporary restraining order or similar judicial or non-judicial
sanction in question has not been lifted or released to the satisfaction of
Agent within sixty (60) days of its issuance and (y) there is a reduction in
the
total number of sales of Intervals by Borrower in any Loan Year of more than
twenty percent (20%) from the total number of sales of Intervals in the
immediately preceding Loan Year.
(b) Change
in Control.
If
there shall occur a change, singly or in the aggregate, of more than fifty
percent (50%) of the executive management of Borrower as described in Schedule
2.7(b) hereto, Agent shall have no obligation to make any Advances hereunder,
unless within thirty (30) days prior thereto Borrower provides Agent with
written information setting forth the replacement executive management personnel
of Borrower together with a description of those Persons’ experience, ability
and reputation, and Agent, acting in good faith, determines that the replacement
management personnel’s experience, ability and reputation is equal to or greater
than that of Borrower’s executive management as set forth on Schedule 2.7(b).
Agent shall have no obligation to make any Advances hereunder if more than
two
(2) of the five (5) Board of Directors’ positions are controlled by the
Borrower’s bond holders.
(c) Change
in Underwriting Standards.
No
Lender shall be obligated to fund any Advance hereunder if there shall occur
a
change in the underwriting standards, or the adherence thereto in the sole
discretion of the Agent, of Borrower with respect to the qualification or
eligibility of Purchaser’s which in the Permitted Discretion of Agent causes or
would most likely result in a Material Adverse Change in the Borrower’s business
or if there shall occur a change in the business of Borrower, which in the
Permitted Discretion of Agent causes or would most likely result in a Material
Adverse Change in the Borrower’s business.
(d) Default
or Event of Default.
No
Lender shall be obligated to fund any Advance hereunder if a Default or Event
of
Default shall have occurred and be continuing.
2.8 Pro
Rata Treatment.
Each
repayment of principal and interest shall be allocated among Lenders in
accordance with their respective Pro Rata Payment Percentage. Each Lender agrees
that in computing such Lender’s portion of any Advance to be made hereunder,
Agent may, in its discretion, round each Lender’s such Advance to the next
higher or lower whole dollar amount. If any Lender shall, through the exercise
of a right of banker’s lien, set-off, counterclaim or otherwise, obtain payment
with respect to its Loans which results in its receiving more than its Pro
Rata
Payment Percentage of any payments described above, then (A) such Lender shall
be deemed to have simultaneously purchased from each of the other Lenders a
share in such other Lender’s Loans so that the amount of the Loans of all
Lenders shall be pro rata as otherwise set forth above, (B) such Lender shall
immediately pay to the other Lenders their Pro Rata Payment Percentage of the
payments otherwise received as consideration for such purchase and (C) such
other adjustments shall be made from time to time as shall be equitable to
insure that all Lenders share such payments ratably. If all or any portion
of
any such excess payment is thereafter recovered from Lender which received
the
same, the purchase provided in this Section 2.8 shall be deemed to have been
rescinded to the extent of such recovery, without interest. Borrower expressly
consents to the foregoing arrangements and agrees that each Lender so purchasing
a portion of another Lender’s loans may exercise all rights of payment
(including all rights of set-off, banker’s lien or counterclaim) with respect to
such portion as fully as if such Lender were the direct holder of such
portion.
Section
3 -
Collateral
3.1 Grant
of Security Interest.
To
secure the payment and performance of the Obligations, for value received,
Borrower unconditionally and irrevocably assigns, pledges and grants to Agent,
as Agent for each Lender and the Bank Product Providers:
(a) a
first
priority security interest in the Eligible Notes Receivable pledged to Agent
on
behalf of Lenders as provided herein, the Mortgages with respect thereto and
that portion of the other Collateral related thereto;
(b) a
second
priority security interest in all collateral under the Additional Credit
Facility, subject only to the security interest securing the Additional Credit
Facility;
(c) a
security interest in all books, records, reports, computer tapes, disks and
software relating to the Collateral and all extensions, additions, improvements,
betterments, renewals, substitutions and replacements of, for or to any of
the
Collateral, wherever located, together with the products, proceeds, issues,
rents and profits thereof, and any replacements, additions or accessions thereto
or substitutions thereof.
For
convenience of administration, Agent is acting as agent for Lenders under the
Agreement. Agent, as such agent, may execute any of its duties hereunder by
or
through its agents, officers or employees and shall be entitled to rely upon
the
advice of counsel as to its duties. Agent, as such agent, shall not be liable
to
any Lender for any action taken or omitted to be taken by it in good faith
and
shall neither be responsible to Lenders for the consequences of any oversight
or
error of judgment nor be answerable to Lenders for any loss unless the same
shall happen through Agent’s gross negligence or willful misconduct. To the
extent that Agent, as such agent, shall not be reimbursed by Borrower for any
costs, liabilities or expenses incurred in such capacity, Lenders shall
reimburse Agent therefor pro rata in accordance with their respective Pro Rata
Percentages (including Agent as a Lender for this purpose). Each Lender agrees
that Agent shall be entitled to take and shall only be required to take, any
action which it is permitted to take under this Agreement.
3.2 Financing
Statements; Priority of Liens.
Borrower agrees, at its own expense, to authorize the filing of financing
statements, continuation statements and amendments provided for by the Code
and
to execute and deliver any and all other instruments or documents and take
such
other action as may be required to perfect and to continue the perfection of
Agent’s security interest in the Collateral. Borrower hereby authorizes Agent to
execute and/or file on Borrower’s behalf any such financing statements,
continuation statements and amendments.
Each
Lender shall have an equal security interest in the Collateral based upon its
Pro Rata Percentage and no Lender’s security interest in the Collateral shall
have priority over any other Lender’s security interest in the
Collateral.
3.3 Insurance.
Insurance coverage with respect to the Resort(s) is provided by the Silverleaf
Club. Borrower shall furnish Agent, upon request, with satisfactory evidence
that the Units, Buildings and Resorts are adequately insured. Such insurance
coverage shall insure against such risks, be in such amounts, with such
companies and on such other terms as Agent may reasonably require. Each such
policy shall name Agent as an additional insured and loss payee as agent for
Lenders, as their respective interests may appear.
3.4 Protection
of Collateral; Reimbursement.
The
portion of the Collateral consisting of: (i) the original Pledged Notes
Receivable, (ii) the original Mortgages, (iii) the original purchase
contracts (including addendum) related to such Pledged Notes Receivable and
Mortgages, and (iv) originals or true copies of the related
truth-in-lending disclosure, loan application, warranty deed, and if required
by
Agent, the related Purchaser’s acknowledgement receipt and the Exchange Company
application and disclosures, shall be delivered at Borrower’s expense to the
Custodian, and held in Custodian’s possession and control pursuant to the
Custodial Agreement. All fees and costs arising under the Custodial Agreement
shall be borne and paid by Borrower; and if Borrower fails to promptly pay
any
portion thereof when due, Agent may, at its option, but shall not be required
to, pay the same and charge Borrower’s account therefor, and Borrower agrees
promptly to reimburse Agent therefor with interest accruing thereon daily at
the
Default Rate. All sums so paid or incurred by Agent for any of the foregoing
and
any and all other sums for which Borrower may become liable hereunder and all
costs and expenses (including attorneys’ and paralegals’ fees, legal expenses
and court costs) which Agent may incur in enforcing or protecting its Lien
on,
or rights and interest in, the Collateral or any of its rights or remedies
under
this Agreement or any other Loan Document or with respect to any of the
transactions hereunder or thereunder, until paid by Borrower to Agent with
interest at the Default Rate, shall be included among the Obligations, and,
as
such, shall be secured by all of the Collateral. Agent shall not be liable
or
responsible in any way for the safekeeping of any of the Collateral or for
any
loss or damage thereto or for any diminution in the value thereof, or for any
act or default of the Custodian, Lockbox Agent, or Servicing Agent or any
warehouseman, carrier, forwarding agency, or other Person
whomsoever.
3.5 Additional
Eligible Resorts.
From
time to time during the Term, Borrower may propose to Agent that one or more
additional time-share plans and projects owned and operated by Borrower be
included among the Eligible Resorts in respect of which Advances may be made.
Any such proposal will be in writing, and will be accompanied or supported
by
the due diligence and supporting Borrower, Affiliate, project, financial and
related information identified in Section 4.4
hereto,
and such other information as Agent may require. Borrower will reasonably
cooperate with Agent’s underwriting and due diligence, and Borrower will be
responsible for payment upon billing for Agent’s and each Lender’s out-of-pocket
expenses in connection therewith. Subject to Agent’s satisfactory underwriting
and due diligence review, including satisfaction of the conditions in
Section
4
and 5
hereof as they relate to such additional time-share resorts, Agent may, but
shall not be required to, approve one or more such additional time-share
resorts, including future phases or condominiums in an Existing Eligible Resort,
as an Eligible Resort qualifying for Advances under and subject to the terms
of
this Agreement and the other Loan Documents.
Subject
in each instance to Agent’s underwriting and due diligence review, and Agent’s
prior written approval, any project as may be approved by Agent and Lenders
after the Closing Date, if any, is hereinafter referred to as an “Additional
Eligible Resort”. Any Advances hereunder with respect to any Additional Eligible
Resort will be subject to all terms and conditions of this Agreement and the
other Loan Documents.
3.6 Modification
of Eligible Notes Receivable.
Notwithstanding anything herein to the contrary, Borrower shall have the right
to modify the interest rate and term only of the Eligible Notes Receivable
without Agent’s prior consent, provided that: (i) any such change in the rate of
interest on any one or more Eligible Notes Receivable shall not reduce the
average interest rate on all Eligible Notes Receivable to less than twelve
and
one half percent (12 ½%) per annum at any time; (ii) the term of no Eligible
Notes Receivable shall be increased to a term longer than one hundred twenty
(120) months from the date of the first required monthly payment of such
Eligible Note Receivable, except that with respect to any Eligible Note
Receivable in respect of which one or more monthly payments have been deferred,
the term of such Eligible Note Receivable may be extended one month for each
such deferred payment provided, however, that in no event shall the term of
such
Eligible Note Receivable be increased to a term longer than one hundred twenty
eight (128) months from the date of the first required monthly payment of such
Eligible Note Receivable; (iii) at no time may Borrower so modify the terms
of
Eligible Notes Receivable constituting more than fifteen percent (15%) of the
outstanding principal balance of all Eligible Notes Receivable at any time.
Solely for purposes of calculating the foregoing fifteen percent (15%) limit,
an
Eligible Note Receivable shall not be considered “to have been modified” if the
Purchaser in respect of such note: (y) has made at least a ten percent (10%)
down payment on the Interval and (z) has made at least six (6) monthly payments,
with at least four (4) payments being made after the date the note was modified;
(iv) Borrower immediately provides Agent with notice of any such modification
together with any original documentation evidencing such modification and (v)
no
Eligible Note Receivable is modified more than once in any twelve (12) month
period or more than twice during the term of such Eligible Note
Receivable.
3.7 Assumption
of Obligations under Eligible Notes Receivable.
Notwithstanding anything herein to the contrary, upon the sale by a Purchaser
of
an Interval, the new Purchaser of the Interval may be substituted as obligor
under the Eligible Note Receivable in question, provided that: (i) said new
Purchaser assumes in writing all of the obligations of the original obligor
under the Eligible Note Receivable in question; (ii) the Eligible Note
Receivable continues to meet all of the criteria for an Eligible Note Receivable
as set forth herein and (iii) the new Purchaser has made a cash down payment
equal to at least 10% of the original sales price of the Interval in question,
which down payment shall be in addition to the cash down payment made by the
original obligor.
3.8 Purchaser/Criteria.
All
Eligible Notes Receivable pledged as Collateral to Agent subsequent to the
Closing Date will be underwritten in a manner consistent with the Borrower’s
general underwriting guidelines and criteria, as approved in writing by Agent
and as set forth on Schedule 1.1(d), including, without limitation: (i) the
requirement that a majority of sales shall be made to Purchasers with minimum
annual income as follows: $35,000 for purchasers residing in the state of Texas,
$40,000 for purchasers residing in the state of Illinois, and $45,000 for
purchasers residing in the state of Massachusetts, (ii) the requirement for
a
cash down payment of at least 15% of the sales price of the Interval for any
Purchaser with a FICO score less than 600, and (iii) the requirement that the
weighted average FICO Credit Bureau Scores of all Purchasers with respect to
which a FICO score can be obtained be not less than 640, provided that the
aggregate outstanding principal balance of Eligible Notes Receivable pledged
to
Agent with respect to which a FICO score can not be obtained, does not exceed
ten percent (10%) of the aggregate outstanding principal amount of all Eligible
Notes Receivable pledged to Agent. Borrower shall not materially alter its
general underwriting criteria without the prior written approval of Agent,
which
approval, Agent may withhold in its sole discretion. On a semi-annual basis,
Borrower shall provide Agent with written certification that the underwriting
criteria as approved by Agent remain in full force and effect and have not
been
revised or altered without Agent’s consent.
3.9 Cross
Collateralization.
The
Collateral also secures the Obligations of Borrower under the Additional Credit
Facility. Upon repayment of this Loan and the satisfaction by Borrower of all
of
the Obligations under this Loan, the Collateral shall continue to secure the
Additional Credit Facility as provided in the documents evidencing and securing
the Additional Credit Facility.
Section
4 -
Conditions Precedent To The Closing
4.1 Conditions
Precedent.
The
obligation of Agent and Lenders under this Agreement and the obligation to
fund
any Advance, including the initial Advance, hereunder shall be subject to the
satisfaction of each of the following conditions precedent, in addition to
all
of the conditions precedent set forth elsewhere in the Loan
Documents:
(a) Representations,
Warranties, Covenants and Agreements.
The
representations and warranties contained in the Loan Documents are and shall
be
true and correct in all respects, and all covenants and agreements have been
complied with and are correct in all respects, and all covenants and agreements
to have been complied with and performed by Borrower shall have been fully
complied with and performed to the satisfaction of Agent.
(b) No
Prohibited Acts.
Borrower shall not have taken any action or permitted any condition to exist
which would have been prohibited by any provision of this Agreement or the
Loan
Documents.
(c) No
Changes.
That
all information and documents heretofore delivered by Borrower to Agent with
respect to Borrower or the Resorts, including information and documents
delivered in connection with the Additional Credit Facility, remain true and
correct in all respects.
(d) Approval
of Documents Prior to Closing Date.
Borrower has delivered to Agent (with copies to Agent’s counsel), and Agent has
reviewed and approved the form and content of all of the items specified in
Subsection 4.1(d)(i)
through
4.1(d)(v)
below
(the “Submissions”). Agent shall have the right to review and approve any
changes to the form of any of the Submissions. If Agent disapproves of any
changes to any of the Submissions, Agent shall have the right to require
Borrower either to cure or correct the defect objected to by Agent or to elect
not to fund the Loan or any Advance. Under no circumstances shall Agent’s
failure to approve or disapprove a change to any of the Submissions be deemed
to
be an approval of such Submissions. All of the Submissions were and shall be
prepared at Borrower’s sole cost and expense, unless expressly stated to be an
obligation and expense of Agent. Agent shall have the right of prior approval
of
any Person responsible for preparing a Submission (“Preparer”) and may
disapprove any Preparer in its sole discretion, for any reason, including
without limitation, that Agent believes that the experience, skill, reputation
or other aspect of the Preparer is unsatisfactory in any respect. All
Submissions required pursuant to this Agreement shall be addressed to Agent
and
include the following language: “THE UNDERSIGNED ACKNOWLEDGES THAT ▇▇▇▇▇ FARGO
FOOTHILL, INC. AS AGENT FOR EACH LENDER IS RELYING ON THE WITHIN INFORMATION
IN
CONNECTION WITH ITS DETERMINATION TO MAKE A LOAN TO SILVERLEAF RESORTS, INC.
IN
CONNECTION WITH THE SUBJECT COLLATERAL.”
(i) A
certificate to be dated as of the Closing Date and signed by the president,
vice
president, or secretary of Borrower, certifying that the conditions specified
in
Sections 4.1(a),
4.1(b)
and
4.1(c)
above
are true;
(ii) Copies
of
the articles of incorporation and any amendments thereto of Borrower not
previously delivered to Agent, certified to be true and complete by Borrower
and
the Secretary of State of the State of Texas and a current certificate of good
standing for Borrower, and copies of any by-laws of Borrower and any amendments
thereto not previously delivered to Agent, certified to be true, correct and
complete by the secretary or assistant secretary of Borrower;
(iii) A
certificate of the Secretary of Borrower certifying the adoption by the Board
of
Directors of Borrower of a resolution authorizing Borrower to enter into and
execute this Agreement, the Note, and the other Loan Documents, to borrow the
Loan from the Lenders, and to grant to Agent for the benefit of the Lenders
a
first priority security interest in and to the Collateral;
(iv) A
certificate of the secretary or assistant secretary of Borrower certifying
the
incumbency, and verifying the authenticity of the signatures, of the specified
officers of Borrower authorized to sign the Agreement, the Note and the other
Loan Documents; and
(v) Copies
or
other evidence of all loans to Borrower from any officers, shareholders, or
Affiliates of Borrower not previously delivered to Agent.
(e) Execution
and Delivery of Loan Documents.
Borrower shall have delivered to Agent, on or before the Closing Date, the
following Loan Documents, each of which when required, shall be in recordable
form:
(i) This
Agreement;
(ii) Closing
Opinions for Borrower;
(iii) Note;
(iv) The
Fee Letter;
(v) Environmental
Indemnification Agreement;
(vi) Intercreditor
Agreement.
Borrower, Agent, Textron Financial Corporation, CapitalSource Finance, LLC,
and
Resort Funding Corporation shall have executed and delivered to Agent, on or
before the Closing Date, a modification of the intercreditor agreement for
the
purpose of adding Agent as a party thereto, in form, scope and substance
satisfactory to Agent; and
(vii) Other
Items.
Such
other agreements, documents, instruments, certificates and materials as Agent
may request to evidence the Obligations; to evidence and perfect the rights
and
Liens and security interests of Agent as agent for Lenders contemplated by
the
Loan Documents, and to effectuate the transactions contemplated
herein.
(f) Closing
Date Conditions.
On or
before the Closing Date, the following conditions shall be
satisfied:
(i) UCC
Search.
Agent
shall have obtained, at Borrower’s cost, such searches of the applicable public
records as it deems necessary under Texas, and other applicable law to verify
that it will have a first and prior perfected Lien and security interest
covering all of the Collateral. Agent shall not be obligated to fund any Advance
if Agent determines that Lenders do not have a first and prior perfected lien
and security interest covering any portion of the Collateral, except as
expressly provided herein.
(ii) Litigation
Search.
Agent
shall have obtained, at Borrower’s cost, an independent search to verify that
there are no bankruptcy, foreclosure actions or other material litigation or
judgments pending or outstanding against the Resorts, any portion of the
Collateral, Borrower, or any Affiliates of Borrower (each a “Material Party”).
The term “other material litigation” as used herein shall not include matters in
which (i) a Material Party is plaintiff and no counterclaim is pending or
(ii) which Agent determines in its sole discretion exercised in good faith,
are immaterial due to settlement, insurance coverage, frivolity, or amount
or
nature of claim. Lenders shall not be obligated to fund any Advance if Agent
determines that any such litigation is pending.
(iii) Insurance.
Evidence that Borrower is maintaining all policies of insurance required by
and
in accordance with Section 7.1(d)
hereof,
including copies of the most current paid insurance premium
invoices;
(iv) Governmental
Permits.
To the
extent not previously delivered to Agent, copies of all applicable government
permits, approvals, consents, licenses and certificates with respect to the
use
and operation of the Resorts;
(g) Taxes.
Evidence satisfactory to Agent that all taxes and assessments owed by or for
which Borrower is responsible for collection have been paid with respect to
the
Resorts and the Collateral, including but not limited to sales taxes, room
occupancy taxes, payroll taxes, personal property taxes, excise taxes,
intangible taxes, real property taxes and any assessments related to the resorts
or the Collateral. Copies of the most current tax bills for the Resorts shall
be
provided to Agent.
4.2 Expenses.
Borrower shall have paid all Lender Expenses (including any amounts due and
payable to any Bank Product Provider in respect of Bank Products) required
to be
paid pursuant to this Agreement. Lenders shall have no obligation to fund the
Loan or make the initial Advance or any subsequent Advance unless the amount
of
the Loan together with any moneys paid by Borrower is sufficient to satisfy
all
fees and expenses required to be paid pursuant to this Agreement.
4.3 Proceedings
Satisfactory.
Borrower shall execute all of the Loan Documents approved by Agent on the
Closing Date, and all actions taken in connection with the execution or delivery
of the Loan Documents, and all documents and papers relating thereto, shall
be
satisfactory to Agent and its counsel. Agent and its counsel shall have received
copies of such documents and papers as Agent or such counsel may reasonably
request in connection therewith, all in form and substance satisfactory to
Agent
and its counsel.
4.4 Conditions
Precedent to Funding of Advances with Respect to Additional Eligible
Resorts.
As
provided in Section 3.5
hereof,
Borrower may propose to Agent that Agent approve one or more additional
timeshare plans for inclusion hereunder as an Additional Eligible Resort in
respect of which Advances may be made. The obligation of Lenders to fund any
Advances with respect to an Additional Eligible Resort shall be subject to
the
satisfaction of each of the following conditions precedent, in addition to
all
of the conditions precedent set forth elsewhere in the Loan
Documents:
(a) Representations,
Warranties, Covenants and Agreements.
The
representations and warranties contained in the Loan Documents are and shall
be
true and correct in all respects, and all covenants and agreements have been
complied with and shall be correct in all respects, and all covenants and
agreements to have been complied with and performed by Borrower shall have
been
fully complied with and performed to the satisfaction of Agent.
(b) No
Prohibited Acts or Changes.
Borrower shall not have taken any action or permitted any condition to exist
which would have been prohibited by any provision of the Loan Documents and
all
information and documents heretofore delivered by Borrower to Agent with respect
to Borrower or the Resorts, including information and documents delivered in
connection with the Additional Credit Facility, remain true and correct in
all
respects.
(c) Approval
of Documents Prior to Advance.
Borrower has delivered or caused to be delivered to Agent (with copies to
Agent’s counsel), at least fifteen (15) Business Days prior to the date of such
Advance, and Agent has reviewed and approved, at least five (5) Business Days
prior to such date, the form and content of all of the items specified in each
of the Submissions required pursuant to this Section 4.4.
Agent
shall have the right to review and approve any changes to the form of any of
the
Submissions. If Agent disapproves of any changes to any of the Submissions,
Agent shall have the right to require Borrower either to cure or correct the
defect objected to by Agent or to elect not to fund the Loan or any Advance.
Under no circumstances shall Agent’s failure to approve or disapprove a change
to any of the Submissions be deemed to be an approval of such Submissions.
All
of the Submissions were and shall be prepared at Borrower’s sole cost and
expense, unless expressly stated to be an obligation and expense of Agent.
Agent
shall have the right of prior approval of any Preparer and may disapprove any
Preparer in its sole discretion, for any reason, including without limitation,
that Agent believes that the experience, skill, reputation or other aspect
of
the Preparer is unsatisfactory in any respect. All Submissions required pursuant
to this Agreement shall be addressed to Agent and include the following
language: “THE UNDERSIGNED ACKNOWLEDGES THAT ▇▇▇▇▇ FARGO FOOTHILL, INC., AS
AGENT FOR EACH LENDER IS RELYING ON THE WITHIN INFORMATION IN CONNECTION WITH
ITS DETERMINATION TO MAKE A LOAN TO SILVERLEAF RESORTS, INC. IN CONNECTION
WITH
THE SUBJECT COLLATERAL.”
(i) a
certificate in the form attached as Exhibit C, to be dated as of the date of
each such Advance and signed by the president, vice president, or secretary
of
Borrower, certifying that the conditions specified in Sections 4.4(a)
and
4.4(b)
above
are true;
(ii) copies
of
the articles of incorporation of Borrower, together with any amendments thereto
certified to be true and complete by Borrower and the Secretary of State of
the
State of Texas, a current certificate of good standing for Borrower issued
by
the Secretary of State of the State of Texas, a current certificate of authority
to conduct business issued by the secretary of state in each state in which
the
Borrower conducts business, and copies of the by-laws of Borrower certified
to
be true, correct and complete by the secretary or assistant secretary of
Borrower;
(iii) a
Survey
for each Additional Eligible Resort for which Eligible Notes Receivable are
being pledged to Agent in connection with the Advance in question;
(iv) a
certificate of the secretary or assistant secretary of Borrower certifying
the
adoption by the board of directors thereof, respectively, of a resolution
authorizing the addition of the Resort in question as an Additional Eligible
Resort and to authorize Borrower to enter into, execute and deliver any
Documents in connection therewith;
(v) a
certificate of the secretary or assistant secretary of Borrower certifying
the
incumbency, and verifying the authenticity of the signatures, of the specified
officers of Borrower authorized to sign all documents required in connection
with such Additional Eligible Resort as required pursuant to this Section
4.4;
(vi) an
inspection report or reports covering each Additional Eligible Resort for which
Eligible Notes Receivable are being pledged to Agent in connection with the
Advance in question, including without limitation all real property and personal
property subject to the Declaration and all adjacent property,
confirming:
(1) the
absence of Hazardous Materials on the personal property and real property
comprising each such Additional Eligible Resort;
(2) that
the
inspection firm has obtained, reviewed and included within its report a CERCLIS
printout from the Environmental Protection Agency (the “EPA”), statements from
the EPA and other applicable state and local authorities and a Phase I
Environmental Audit, all of which information shall confirm that there are
no
known or suspected Hazardous Materials located at, used or stored on, or
transported to or from each such Additional Eligible Resort or in such proximity
thereto as to create a material risk of contamination of each such Additional
Eligible Resort;
(vii) evidence
that Borrower is maintaining all policies of insurance required by and in
accordance with Section 7.1(d)
hereof,
including copies of the most current paid insurance premium
invoices;
(viii) evidence
that Borrower and the Timeshare Documents for each Additional Eligible Resort
for which Eligible Notes Receivable are being pledged to Agent as agent for
Lenders in connection with the Advance in question are in compliance with all
Applicable Laws in connection with its sales of Intervals, including without
limitation, the Timeshare Acts;
(ix) a
current
preliminary title report or certificate of title for each Additional Eligible
Resort for which Eligible Notes Receivable are being pledged to Agent in
connection with the Advance in question, with copies of all title
exceptions;
(x) copies
of
all applicable governmental permits, approvals, consents, licenses, and
certificates for the establishment of each Additional Eligible Resort for which
Eligible Notes Receivable are being pledged to in connection with the Advance
in
question as timeshare projects in accordance with the applicable Timeshare
Act,
and for the occupancy and intended use and operation of each such Additional
Eligible Resort, including the Units, including a letter certification from
Borrower regarding zoning classification and compliance, letters or other
satisfactory evidence from utility companies, governmental entities or other
persons confirming that water, sewer (sanitary and storm), electricity, solid
waste disposal, telephone, police, fire and rescue services are being provided
to each Resort, and any business licenses necessary for operation of each such
Additional Eligible Resort;
(xi) certified
true, correct and complete copies of all of the Timeshare Documents for each
Additional Eligible Resort for which Eligible Notes Receivable are being pledged
to Agent as agent for Lenders in connection with the Advance in
question;
(xii) evidence
satisfactory to Agent that all taxes and assessments owed by or for which
Borrower is responsible for collection have been paid, including but not limited
to sales taxes, room occupancy taxes, payroll taxes, personal property taxes,
excise taxes, intangibles taxes, real property taxes, and income taxes, and
any
assessments related to each Additional Eligible Resort for which Eligible Notes
Receivable are being pledged to Agent as agent for Lenders in connection with
the Advance in question and copies of the most current paid tax bills for each
such Additional Eligible Resort evidencing that each such Additional Eligible
Resort have been segregated from all other property on the applicable municipal
taxrolls;
(xiii) written
confirmation from an architect covering each Additional Eligible Resort, for
which Eligible Notes Receivable are being pledged to Agent as agent for Lenders
in connection with the Advance in question as to the physical condition of
the
improvements at each such Additional Eligible Resort, including that soil
conditions are sufficient to support all existing and any contemplated
improvements to the real property; which written confirmation shall be in form
and substance reasonably acceptable to Agent;
(xiv) such
credit references on Borrower as Agent deems necessary in its sole
discretion;
(xv) copies
or
other evidence of all loans to Borrower from any officers, shareholders, or
Affiliates of Borrower, if any;
(xvi) a
commitment to issue Mortgagee Title Policies from Title Company for each such
Additional Eligible Resort. Notwithstanding anything heretofore to the contrary,
if any claim, lien, encumbrance, charge or other matter arises with respect
to
any Interval or Intervals for which an Eligible Note Receivable has been pledged
to Agent as agent for Lenders pursuant to this Agreement, then, in such
event:
| a. |
The
Note Receivable with respect to the Interval in question shall cease
to be
an Eligible Note Receivable and Borrower immediately shall either
replace
the Note Receivable in question or make a Mandatory Prepayment, if
necessary, as provided in Section 2.4(b)
hereof; and
|
| b. |
The
Resort at which the Interval in question is located shall cease to
be an
Additional Eligible Resort, unless and until Borrower shall cure
any such
claim, lien, encumbrance, charge or other matter to the satisfaction
of
Agent. Furthermore, any and all further requests for Advances in
respect
of such Resort must be accompanied by satisfactory Mortgagee Title
Policies for all Intervals with respect to which such Advances are
requested.
|
(d)
Financial
Statements To Be Delivered Prior to Advance.
A
current set of the Financial Statements;
(e)
Additional
Documents To Be Delivered Prior to Advance. To
the
extent not previously delivered hereunder or in connection with the Additional
Credit Facility, Borrower will execute, or cause to be executed with respect
to
each Additional Eligible Resort, an Assignment of Notes Receivable and
Mortgages, Borrower’s Affidavit with Respect to the Additional Eligible Resorts
and an Environmental Indemnification Agreement; and with respect to any
improvements, including any Units, constructed at a Resort within the
twenty-four month period prior to any Advance with respect to an Additional
Eligible Resort, Borrower shall also deliver to Agent, for its approval, such
documents and instruments as Agent may reasonably request in connection with
such newly constructed improvements, including, without limitation, copies
of
building permits, plans and specifications, construction and architectural
contracts, title insurance insuring over, among other things, mechanics liens,
certificates of occupancy and satisfactory evidence of the completion of such
improvements and such other documents, instruments, agreements, tests, reports
and inspections as Agent may require with respect to Borrower or any applicable
Affiliate, the Loan or any Resort, including any Additional Eligible Resort;
and
upon request of Agent, Borrower shall deliver evidence, satisfactory to Agent,
that there is no material litigation, written complaint, suit, action, written
claim or written charge pending against Borrower or any Affiliate with any
court
or with any governmental authority with respect to the Resorts, the Timeshare
Documents, any Eligible Notes Receivable, any Interval, or any marketing, offer
or sale of any Interval.
(f)
Physical
Inspection.
Agent
shall be satisfied with its physical inspection of the Additional Eligible
Resorts.
(g) UCC
Search.
Agent
shall have obtained, at Borrower’s cost, such searches of the applicable public
records as it deems necessary under all applicable law to verify that it has
a
first and prior perfected Lien and security interest covering all of the
Collateral. Agent shall not be obligated to fund any Advance if Agent determines
that Lenders do not have a first and prior perfected lien and security interest
covering any portion of the Collateral, except as expressly provided
herein.
(h) Litigation
Search.
Agent
shall have obtained, at Borrower’s cost, an independent search to verify that
there are no bankruptcy, foreclosure actions or other material litigation or
judgments pending or outstanding against the Additional Eligible Resorts, any
portion of the Collateral, Borrower, or any Affiliate, (each a “Material
Party”). The term “other material litigation” as used herein shall not include
matters in which (i) a Material Party is plaintiff and no counterclaim is
pending or (ii) which Agent determines, in its sole discretion, exercised in
good faith, are immaterial due to settlement, insurance coverage, frivolity,
or
amount or nature of claim. Agent shall not be obligated to fund any Advance
if
it determines that any such litigation is pending.
(i) Opinions
of Borrower’s Counsel.
Borrower shall deliver to Agent for the benefit of Agent and each Lender, at
Borrower’s sole cost and expense, such opinions of counsel, including counsel
admitted in each state in which each Additional Eligible Resort is located,
as
to such matters with respect to Borrower and each Additional Eligible Resort
as
Agent may request, and in form and substance acceptable to Agent in its sole
discretion.
(j) Funding
Procedure.
Borrower shall have complied to Agent’s satisfaction with each of the conditions
precedent to funding of an Advance set forth in Section
5
hereof.
(k) Management
of Resort.
Borrower shall provide evidence satisfactory to Agent that Borrower, or an
Affiliate, is the manager or operator of each Resort, pursuant to a written
management or operating agreement, in form and substance satisfactory to Agent,
which with respect to all Resorts shall have a term of at least three
years.
(l) Other
Items.
Such
other agreements, documents, instruments, certificates and materials as Agent
may request to determine the acceptability of any such Additional Eligible
Resort, to evidence the Obligations, to evidence and perfect the rights and
Liens and security interests of Agent contemplated by the Loan Documents, and
to
effectuate the transactions contemplated herein, including, without limitation,
true copies of all Resort Documents for each such Additional Eligible Resort,
all Timeshare Documents and operating and management contracts and agreements,
evidence of compliance with the applicable Timeshare Act and other Applicable
Laws, evidence of all required governmental licenses and permits; title
searches; title commitments or policies, including complete and legible copies
of each title exception, engineering, environmental and soil reports and
evidence of compliance with all applicable zoning and building codes; each
of
which shall be satisfactory to Agent in its Permitted Discretion.
Section
5 -
Funding Procedure
5.1 The
obligation of any Lender to make any Advance shall be subject to the
satisfaction of all of the following conditions precedent:
(a) Requests
for Advances.
Each
request for an Advance shall:
(i) be
in
writing in form attached hereto as Exhibit D, certify the amount of the
then-current Borrowing Base and specify the principal amount of the Advance
requested and designate the account to which the proceeds of such Advance are
to
be transferred;
(ii) state
that the representations and warranties of Borrower contained in the Agreement
and any closing or funding related certifications are true and correct as of
the
date of the request and, after giving effect to the making of such requested
Advance, will be true and correct as of the date on which the requested Advance
is to be made;
(iii) state
that no Default or Event of Default exists as of the date of the request and,
after giving effect to the making of such requested Advance, no Default or
Event
of Default would exist as of the date on which the requested Advance is to
be
made;
(iv) be
delivered to the office of Agent at least five (5) Business Days prior to the
date of the requested Advance;
(v) be
signed
by a principal financial officer of Borrower;
(vi) certify
that Borrower has no knowledge of any asserted or threatened defense, offset,
counterclaim, discount or allowance in respect of each Note Receivable to be
pledged in connection with such requested Advance, or in respect of any of
the
Pledged Notes Receivable;
(vii) contain
an aging report of the Pledged Notes Receivable; identifying, among other
things, which among them are Eligible Notes Receivable; and
(viii) contain
a
delinquency report which shall be in form and substance satisfactory to Agent
and shall show which of such Notes Receivable is delinquent and the duration
of
such delinquency, and which of such Pledged Notes Receivable is not an Eligible
Note Receivable;
(b) Loan
Documents/Collateral.
Not
less than five (5) Business Days prior to the date of any Advance, Borrower
shall have:
(i) delivered
to Agent a list of all Eligible Notes Receivable and related Mortgages which
are
to be the subject of such requested Advance, indicating the unpaid principal
balance owing on each of the Pledged Notes Receivable deemed to be an Eligible
Note Receivable, together with such additional information as Agent may
require;
(ii) delivered
to Agent (or, if Agent shall so instruct, a designee appointed by Agent in
writing) (A) the original of each Pledged Note Receivable (duly endorsed
with the words “Pay to the order of ▇▇▇▇▇ Fargo Foothill, Inc., as Agent, with
recourse”), (B) the original of each Mortgage securing such Pledged Notes
Receivable, (C) the original of each purchase contract (including addenda)
relating to the Pledged Notes Receivable and Mortgages, (D) originals or
true copies of the related truth-in-lending disclosures, loan application,
warranty deed, Payment Authorization Agreement and, if required by Agent, the
related Purchaser’s acknowledgement, receipt and exchange company application,
disclosures and materials, and (E) with respect to each Eligible Note Receivable
from the sale of Intervals at Oak N’ Spruce evidence satisfactory to Agent of
the filing in the appropriate recorder’s office of the original UCC-1 Financing
Statement, naming the Purchaser of the Interval giving rise to the Eligible
Note
Receivable as debtor and Borrower as secured party (the “Purchaser Financing
Statement”), perfecting Borrower’s security interest in the applicable Interval
to secure the Purchaser’s obligations under the Eligible Note Receivable and
naming Borrower as assignor and Agent as assignee, assigning to Agent, all
of
Borrower’s right, title and interest under each Purchaser Financing
Statement.
(iii) delivered
to Agent a duly executed Assignment of Notes Receivable and Mortgages assigning
to Agent all of Borrower’s right, title and interest in and to each such Pledged
Note Receivable and the related Mortgage; and
(iv) subject
to Section 4.4(c)(xvi)
hereof,
delivered to Agent, with respect to each Encumbered Interval, a commitment
for a
Mortgagee’s Title Policy showing that the Mortgage in respect of such Interval
has been assigned to Agent and insuring in favor of Agent the first priority
Lien of such Mortgage in the amount of the Advance to be made in respect of
such
Pledged Note Receivable, with a satisfactory title insurance policy to be issued
within forty five (45) days from the date of the Advance.
The
Mortgages and the assignments thereof to Agent shall each be duly recorded
in
the applicable land records. The Mortgagee’s Title Policies shall be in form and
substance satisfactory to Agent and shall be issued by a title insurance company
satisfactory to Agent (the “Title Company”), and name Agent, as agent for
Lenders, as the insured party therein as agent for Lenders. The funding of
the
requested Advance, delivery of the Collateral and issuance of the title
insurance policy, and recording of the assignments or any releases may, in
Agent’s discretion, be effected by way of an escrow arrangement with the Title
Company or other fiduciary, the form and substance of which shall be
satisfactory to Agent.
(c) Other
Conditions.
In
addition to the other conditions set forth in this Agreement, the making of
the
initial or any subsequent Advance shall be subject to the satisfaction of the
following conditions:
(i) no
Default or Event of Default shall exist immediately prior to the making of
such
requested Advance or, after giving effect thereto, immediately after the making
of such requested Advance;
(ii) each
agreement required to have been executed and delivered in connection with any
prior Advance shall be consistent with the terms of this Agreement and shall
be
in full force and effect;
(iii) the
date
on which such requested Advance is to be made shall be a Business
Day;
(iv) Borrower
shall have delivered to Agent a certification showing the dollar amount of
the
requested Advance based on the Eligible Notes Receivable pledged to Agent,
and
the Notes Receivable being pledged contemporaneously with each requested Advance
in the form attached hereto as Exhibit D;
(v) not
more
than one Advance shall have previously been made in the same calendar month
in
which such requested Advance is to be made, unless Agent, in its sole
discretion, agrees to make an additional Advance during such calendar
month;
(vi) such
requested Advance shall be in a principal amount of not less than $50,000,
unless Agent, in its sole discretion, agrees to make an Advance in an amount
less than $50,000;
(vii) Agent
shall have determined that the requested Advance, when added to the aggregate
outstanding principal amount of all previous Advances, if any, does not, based
on the Eligible Notes Receivable that have been duly pledged in favor of Agent
exceed the lesser of: (i) total amount of the Borrowing Base, (ii) the
Availability or (iii) the Commitment;
(viii) if
Agent
shall so require, Agent shall have received an executed closing protection
letter issued by the Title Company, which shall be reasonably acceptable to
Agent; and
(ix) each
Lender shall have agreed to make and does make an Advance in an amount equal
to
its respective Pro Rata Percentage.
(d) Expenses.
The
Borrower shall have paid all Lender Expenses (including any amounts due and
payable to any Bank Product Provider in respect of Bank Products) required
to be
paid by Borrower pursuant to this Agreement in connection with such requested
Advance or any conditions related thereto.
(e) Proceedings
Satisfactory.
All
actions taken in connection with such requested Advance and all documents and
papers relating thereto shall be satisfactory to Agent and its counsel. Agent
and its counsel shall have received copies of such documents and papers as
Agent
or such counsel may reasonably request in connection with such requested
Advance, all in form and substance reasonably satisfactory to Agent and its
counsel.
(f) Partial
Waiver of Requirement for Title Insurance Policies Upon Satisfactory Maintenance
of Inventory Control Procedures.
Anything in Section 5.1(b)(iv)
hereof
to the contrary notwithstanding, the delivery of a commitment for a Mortgagee
Title Policy and a Mortgagee Title Policy shall be required only with respect
to
twenty-five percent (25%) of the Eligible Notes Receivable delivered to Agent
in
respect of each advance, subject to the following requirements and limitations:
(i) Borrower
shall be in full compliance with the Inventory Control Procedures (as defined
in
Section 6.23
herein);
and
(ii) Agent
shall have the right in its sole discretion to determine those Eligible Notes
Receivable in respect of which commitments for Mortgagee Title Policies and
also
the Mortgagee Title Policies themselves shall be required.
In
the
event that Borrower fails to satisfy the requirements of Subparagraph
5.1(f)(i),
then,
immediately upon such failure, the partial waiver provided under this
subparagraph shall no longer be effective.
Section
6 -
General Representations And Warranties
Borrower
hereby represents and warrants to Agent and each Lender as follows:
6.1 Organization,
Standing, Qualification.
Borrower: (a) is a duly organized and validly existing Texas corporation duly
organized, validly existing and in good standing under the laws of the State
of
Texas, and (b) has all requisite power, corporate or otherwise, to conduct
its
business and to execute and deliver, and to perform its obligations under,
the
Loan Documents.
6.2 Authorization,
Enforceability, Etc.
(a) The
execution, delivery and performance by Borrower of the Loan Documents has been
duly authorized by all necessary corporate action by Borrower and does not
and
will not: (i) violate any provision of the certificate or articles of
incorporation of Borrower, bylaws of Borrower, or any agreement, law, rule,
regulation, order, writ, judgment, injunction, decree, determination or award
presently in effect to which Borrower is a party or is subject; (ii) result
in,
or require the creation or imposition of, any Lien upon or with respect to
any
asset of Borrower other than Liens in favor of Agent and Lenders; or (iii)
result in a breach of, or constitute a default by Borrower under, any indenture,
loan or credit agreement or any other agreement, document, instrument or
certificate to which Borrower is a party or by which it or any of its assets
are
bound or affected.
(b) No
approval, authorization, order, license, permit, franchise or consent of, or
registration, declaration, qualification or filing with, any governmental
authority or other Person, including without limitation, the Division or the
Timeshare Owners’ Association is required in connection with the execution,
delivery and performance by Borrower of any of the Loan Documents.
(c) The
Loan
Documents constitute legal, valid and binding obligations of Borrower,
enforceable against Borrower in accordance with their respective
terms.
(d) Borrower
has, or will have, good and marketable title to the Collateral, free and clear
of any lien, security interest, charge or encumbrance except for the security
interests created by this Agreement or any Loan Document or otherwise created
in
favor of Agent or those specifically consented to in writing by Agent or
permitted hereunder. No financing statement or other instrument similar in
effect covering all or any part of the Collateral is on file in any recording
office, except such as may have been filed in favor of Lenders hereunder or
Agent as permitted hereunder.
(e) The
execution and delivery of the Loan Documents, the delivery and endorsement
to
Agent as agent for Lenders of the Pledged Notes Receivable, the filing of the
UCC-1’s with the office of the secretary of state of the state in which Borrower
is organized and the Assignment of Notes Receivable and Mortgages in the
official records of the county in which the applicable Resort is located, create
in favor of Agent as agent for Lenders a valid and perfected continuing first,
as applicable, priority security interest in the Collateral. The Collateral
shall secure the full payment and performance of the Obligations.
(f) None
of
the Pledged Notes Receivable is forged or has affixed thereto any unauthorized
signatures or has been entered into by any Person without the required legal
capacity; and during the term of the Agreement, none will be forged, or will
have affixed thereto, any unauthorized signatures.
(g) Except
as
permitted in Sections 3.6
and
3.7
hereof,
there have been no modifications or amendments to the Pledged Notes Receivable
or Mortgages.
(h) The
makers of the Eligible Notes Receivable have no defenses, offsets, counterclaims
or claims relating to the Eligible Notes Receivable or the
Mortgages.
(i) The
Pledged Notes Receivable and the Mortgages were executed and delivered by
Purchasers in favor of Borrower in connection with the purchase of the related
Encumbered Intervals.
(j) The
Mortgages constitute and will constitute valid and enforceable first and prior
liens and security interests on the Encumbered Intervals.
(k) The
Pledged Notes Receivable and the Mortgages are and shall remain in full force
and effect, are and will be valid and binding obligations of the respective
makers in favor of Agent as holder on behalf of Lenders; and Borrower further
warrants and guarantees the value, quantity, sound condition, grade and quality
of the Encumbered Intervals and rights, properties, easements and interests
appurtenant or related thereto.
(l) The
grant
of the security interests described herein has not affected and will not affect
the validity or enforceability of the obligations of the respective makers
of
the Pledged Notes Receivable under such Notes Receivable or the respective
Mortgages.
(m)
Neither
Agent nor any Lender shall be required to take, and Borrower has taken any
and
all required steps to protect Agent and each Lender’s security interest in the
Collateral (other than maintaining possession of the portion of the Collateral
constituting instruments); and neither Agent nor any Lender is or shall be
required to collect or realize upon the Collateral or any distribution of
interest or principal, nor shall loss of, or damage to, the Collateral release
Borrower from any of the Obligations.
6.3 Financial
Statements and Business Condition.
The
Financial Statements for the first nine (9) months of the calendar year 2005,
are, to the best of Borrower’s knowledge, accurate and fairly represent the
financial condition of the Borrower for the periods in question, subject to
the
written qualifications set forth therein. To the best of Borrower’s knowledge,
there are no material liabilities, direct or indirect, fixed or contingent,
of
Borrower, except as disclosed to Agent in writing.
6.4 Taxes.
In
accordance with the requirements set forth in the Declaration, Borrower
represents and warrants that Borrower, Silverleaf Club, or the applicable
Timeshare Owners’ Association, as required, has paid or will have paid in full,
prior to delinquency, all ad valorem taxes and other taxes and assessments
against the Resorts and the Collateral; and Borrower knows of no basis for
any
additional taxes or assessments against the Resorts or the Collateral. Borrower,
Silverleaf Club, or the applicable Timeshare Owners’ Association, as the case
may be, has filed all tax returns required to have been filed by it and has
paid
or will pay prior to delinquency, all taxes shown to be due and payable on
such
returns, including interest and penalties thereon, and all other taxes which
are
payable by it to the extent the same have become due and payable.
6.5 Title
to Properties: Prior Liens.
Borrower has good and marketable title to all of the Collateral and to all
unsold Units and Intervals at each Resort, and all rights, properties and
benefits appurtenant to or benefiting them. Borrower is not in default under
any
of the documents evidencing or securing any indebtedness which is secured,
wholly or in part, by any portion of any Resort or any portion or all the
Collateral and no event has occurred which with the giving of notice, the
passage of time or both, would constitute a default under any of the documents
evidencing or securing any such indebtedness. Other than the Liens granted
in
favor of Agent, the Liens granted to secure the Additional Credit Facility,
and
the liens described in Schedule 6.5 attached hereto, there are no liens or
encumbrances against the Collateral, or against any Resort.
6.6 Subsidiaries,
Affiliates and Capital Structure.
Borrower has no Subsidiaries or Affiliates which have any involvement or
interest in any Resort in any way. None of the Affiliates of Borrower are
parties to any proxies, voting trusts, shareholders agreements or similar
arrangements pursuant to which voting authority, rights or discretion with
respect to Borrower is vested in any other Person.
6.7 Litigation,
Proceedings, Etc.
Except
for those matters identified in Schedule 6.7 hereto, there are no actions,
suits, proceedings, orders or injunctions pending or threatened against or
affecting Borrower, the Resorts or the Timeshare Owners’ Association at law or
in equity, or before or by any governmental authority or other tribunal, which
(a) could have a material adverse effect on Borrower or (b) relate to
the Loan or which could have a material effect on the Collateral or the Resorts.
Borrower has received no notice from any court, governmental authority or other
tribunal alleging that Borrower or the Resorts have violated the Timeshare
Act,
any of the rules or regulations thereunder, the Declaration or any other
Applicable Laws, agreements or arrangements that could have any material effect
on the Loan, the Collateral or the Resorts.
6.8 Licenses,
Permits, Etc.
Borrower, the Resorts, the Timeshare Owners’ Associations or Borrower’s
Affiliates involved in the operations of the Resorts, and, to the best of
Borrower’s knowledge after diligent inquiry, other Persons involved in the
operations of the Resorts, possess all requisite franchises, certificates of
convenience and necessity, operating rights, approvals, licenses, permits,
consents, authorizations, exemptions and orders as are necessary to carry on
its
or their business as now being conducted, without any known conflict with the
rights of others and, with respect to Borrower, the Resorts and the Timeshare
Owners’ Associations, in each case subject to no mortgage, pledge, Lien, lease,
encumbrance, charge, security interest, title retention agreement or option
other than as provided for by this Agreement.
6.9 Environmental
Matters.
Except
as otherwise noted on Schedule 6.9: (a) no Resort contains any
Hazardous Materials, (b) no Hazardous Materials are used or stored at or
transported to or from the Resorts, (c) neither Borrower nor the Resorts
nor any manager thereof nor to Borrower’s knowledge, the Timeshare Owners’
Associations, have received notice from any governmental agency, entity or
other
Person with regard to Hazardous Materials on, under or affecting any Resort,
and
(d) neither Borrower, the Resorts, nor any portion thereof, nor to
Borrower’s knowledge after diligent inquiry, the Timeshare Owners’ Associations,
are in violation of any Environmental Laws.
6.10 Full
Disclosure.
No
information, exhibit or written report or the content of any schedule furnished
by or on behalf of Borrower to Agent or any Lender in connection with the Loan
or the Resorts contains any material misstatement of fact or omits the statement
of a material fact necessary to make the statement contained herein or therein
not misleading. Borrower knows of no fact or condition which will prevent the
sale of Intervals to Purchasers or prevent the operation of the Resorts in
accordance with the Declarations and related public offering statements, and
in
accordance with applicable law, or prevent Borrower from performing its
Obligations pursuant to the Loan Documents.
6.11 Use
of Proceeds/Margin Stock.
None of
the proceeds of the Loan will be used to purchase or carry any margin stock
(as
defined under Regulation G, T, S, X or U of the Board of Governors of the
Federal Reserve System, as in effect from time to time), and no portion of
the
proceeds of the Loan will be extended to others for the purpose of purchasing
or
carrying margin stock. None of the transactions contemplated in the Agreement
(including, without limitation, the use of the proceeds from the Loan) will
violate or result in the violation of Section 7 of the Securities Exchange
Act
of 1934, as amended, or any regulations issued pursuant thereto, including,
without limitation, Regulations G, T, S, U and X of the Board of Governors
of
the Federal Reserve System, 12 C.F.R., Chapter 11.
6.12 Defaults.
Borrower has no knowledge of any Default or Event of Default not disclosed
to
Agent in writing. Borrower has no knowledge of any default or event of default
under any loan facility or with any Lender. Borrower has no knowledge of any
condition or event, which, with the passage of time, notice or both, would
constitute an Event of Default or an event of default under any loan facility
or
with any Lender.
6.13 Compliance
with Law.
Borrower
(a) is
not in
violation, nor are any of its Resorts, or the business operations in respect
of
any of the Resorts, or to Borrower’s knowledge after diligent inquiry, the
Timeshare Owners’ Association, in violation, of the Timeshare Act, or any laws,
ordinances, governmental rules or regulations of any state in which a Resort
is
located, any political subdivision of said states or any other jurisdiction
to
which Borrower or the Resorts, or the business operations conducted in respect
of the Resorts, or the Timeshare Owners’ Association, are subject;
(b) has
not
failed, nor have the Resorts or, to Borrower’s knowledge, the Timeshare Owners’
Associations failed, to obtain any consents or joinders, or any approvals,
licenses, permits, franchises or other governmental authorizations, or to make
or cause to be made any filings, submissions, registrations or declarations
with
any government or agency or department thereof, necessary to the establishment,
ownership or operation of the Resorts or any of Borrower’s Properties, or to the
conduct of Borrower’s business, including, without limitation, the operation of
the Resorts and the sale, or offering for sale, of Intervals therein; which
violation or failure to obtain or register materially adversely affects
Borrower, the Resorts or the business, prospects, profits, properties or
condition (financial or otherwise) of Borrower or the Resorts. Borrower has,
to
the extent required by its activities and businesses, and the operations of
the
Resorts, fully complied with: (1) all of the applicable provisions of
(a) the Consumer Credit Protection Act; (b) Regulation Z of the
Federal Reserve Board; (c) the Equal Credit Opportunity Act;
(d) Regulation B of the Federal Reserve Board; (e) the Federal
Trade Commission’s 3-day cooling-off Rule for Door-to-Door Sales;
(f) Section 5 of the Federal Trade Commission Act; (g) the
Interstate Land Sales Full Disclosure Act (“ILSA”); (h) federal postal
laws; (i) applicable state and federal securities laws; (j) applicable
usury laws; (k) applicable trade practices, home and telephone
solicitation, sweepstakes, anti-lottery and consumer credit and protection
laws;
(l) applicable real estate sales licensing, disclosure, reporting and
escrow laws; (m) the Americans With Disabilities Act and related
accessibility guidelines (“ADA”); (n) the Real Estate Settlement Procedures
Act (“RESPA”); (o) all amendments to and rules and regulations promulgated under
the foregoing acts or laws; (p) the Federal Trade Commission’s Privacy of
Consumer Financial Information Rule and (q) other applicable federal statutes
and the rules and regulations promulgated thereunder; and (2) all of the
applicable provisions of the Timeshare Acts, any law or laws of any state (and
the rules and regulations promulgated thereunder) relating to ownership,
establishment or operation of the Resorts, or the sale, offering for sale,
or
financing of Intervals;
(c) has
made
diligent inquiry, and to the best of Borrower’s knowledge, all persons or
entities owning an interest in Borrower: (i) are not currently identified on
United States Office of Foreign Assets Control (“OFAC”) List; and (ii) are not
persons or entities with whom a citizen of the United States is prohibited
to
engage in transactions by any trade embargo, economic sanction, or other
prohibition of Untied States law, regulation, or Executive Order of the
President of the United States. The OFAC List currently is accessible through
the internet website ▇▇▇.▇▇▇▇▇.▇▇▇/▇▇▇▇/▇▇▇▇▇▇.▇▇▇.
(d) represents
and warrants that at all times throughout the term of the Loan, (i) none of
the
funds or other assets of Borrower shall constitute property of, or shall be
beneficially owned, directly or indirectly, by, any Person subject to trade
restrictions under the Prescribed Laws (each such Person, an “Embargoed
Person”), with the result that the investment in Borrower (whether directly or
indirectly), is or would be prohibited by law or the Loan made by Lender is
or
would be in violation of law; (ii) no Embargoed Person shall have any interest
of any nature whatsoever in Borrower with the result that the investment in
Borrower (whether directly or indirectly), is or would be prohibited by law
or
the Loan is or would be in violation of law; and (iii) none of the funds of
Borrower shall be derived from any unlawful activity with the result that the
investment in Borrower (whether directly or indirectly), is or would be
prohibited by law or the Loan is or would be in violation of law.
6.14 Restrictions
of Borrower.
Borrower will not be, on or after the date hereof, a party to any contract
or
agreement which prohibits Borrower’s execution of or compliance with the terms
of this Agreement, the other Loan Documents, or the Additional Credit Facility
Agreement. Borrower has not agreed or consented to cause or permit in the future
(upon the happening of a contingency or otherwise) any of the Collateral,
whether now owned or hereafter acquired, to be subject to a Lien except in
favor
of Agent as provided herein and under the Additional Credit
Facility.
6.15 Broker’s
Fees.
Borrower, Agent and each Lender represent to each other that none of them has
made any commitment or taken any action which will result in a claim for any
brokers’, finders’ or other similar fees or commitments with respect to the
transactions described in the Agreement. Borrower agrees to indemnify Agent
and
each Lender and save and hold Agent and each Lender harmless from all claims
of
any Person for any broker’s or finder’s fee or commission, and this indemnity
shall include reasonable attorneys’ fees and legal expenses.
6.16 Deferred
Compensation Plans.
Borrower has no pension, profit sharing or other compensatory or similar plan
(herein called a “Plan”) providing for a program of deferred compensation for
any employee or officer. No fact or situation, including but not limited to,
any
“Reportable Event,” as that term is defined in Section 4043 of the Employee
Retirement Income Security Act of 1974 as the same may be amended from time
to
time (“Pension Reform Act”), exists or will exist in connection with any Plan of
Borrower which might constitute grounds for termination of any Plan by the
Pension Benefit Guaranty Corporation or cause the appointment by the appropriate
United States District Court of a Trustee to administer any such Plan. No
“Prohibited Transaction” within the meaning of Section 406 of the Pension
Reform Act exists or will exist upon the execution and delivery of the Agreement
or the performance by the parties hereto of their respective duties and
obligations hereunder. Borrower will (1) at all times make prompt payment
of contributions required to meet the minimum funding standards set forth in
Sections 302 through 305 of the Pension Reform Act with respect to each of
its
Plans; (2) promptly, after the filing thereof, furnish to Agent copies of
each annual report required to be filed pursuant to Section 103 of the
Pension Reform Act in connection with each Plan for each Plan Year, including
any certified financial statements or actuarial statements required pursuant
to
said Section 103; (3) notify Agent immediately of any fact, including,
but not limited to, any Reportable Event arising in connection with any Plan
which might constitute grounds for termination thereof by the Pension Benefit
Guaranty Corporation or for the appointment by the appropriate United States
District Court of a Trustee to administer the Plan; and (4) notify Agent of
any “Prohibited Transaction” as that term is defined in Section 406 of the
Pension Reform Act. Borrower will not (a) engage in any Prohibited
Transaction or (b) terminate any such Plan in a manner which could result
in the imposition of a Lien on the Property of Borrower pursuant to
Section 4068 of the Pension Reform Act.
6.17 Labor
Relations.
The
employees of Borrower are not a party to any collective bargaining agreement
with Borrower, and, to the best knowledge of Borrower and its officers, there
are no material grievances, disputes or controversies with any union or any
other organization of Borrower’s employees, or threats of strikes, work
stoppages or any asserted pending demands for collective bargaining by any
union
or organization.
6.18 Resort.
(a) Timeshare
Plan.
Each
Resort has been established and dedicated, and is and will remain, a time-share
plan and project in full compliance with all Applicable Laws and regulations,
including without limitation, the Timeshare Act.
(b) Access.
Each
Resort has direct access to a publicly dedicated road and all roadways inside
each Resort are subject to an access and use easement or other dedication or
provision that benefits and will continue to benefit all
Purchasers.
(c) Utilities.
Electric, sanitary and stormwater sewer, telephone, water facilities and other
necessary utilities are available in sufficient capacity to service each Resort
and any easements necessary to the furnishing of such utility services have
been
obtained and duly recorded, and inure to the benefit of each Resort and each
Timeshare Owners’ Association.
(d) Amenities.
Each
Purchaser of an Interval has and will have access to and the full use and
enjoyment of all of the Common Elements and public utilities of the Resort
in
which such interval is located, all in accordance with the Declaration and
Timeshare Documents.
(e) Construction.
All
costs arising from the construction or acquisition of any Units and any other
improvements and the purchase of any fixtures or equipment, inventory,
furnishings or other personalty located in, at, or on the Resorts have been
paid
or will be paid when due.
(f) Sale
of Intervals.
The
marketing, sale, offering of sale, rental, solicitation of Purchasers or, if
applicable, lessees, and financing of Intervals in the Resort: (1) do not
constitute the sale, or the offering of sale, of Securities subject to the
registration requirements of the Securities Act of 1933, as amended, or any
state securities law; (2) do not violate the Timeshare Act or any land
sales or consumer protection law, statute or regulation of the state where
the
Resort is located or any other state or jurisdiction in which a Purchaser
resides or in which sales or solicitation activities occur; and (3) do not
violate any consumer credit or usury statute of state where the Resort is
located or any other state or jurisdiction in which a Purchaser resides or
in
which sales or solicitation activities occur. All marketing and sales activities
are performed by employees of Borrower, all of whom are and shall be properly
licensed in accordance with Applicable Laws.
(g) Tangible
Property.
Except
for specific items which may be owned by independent contractors, the machinery,
equipment, fixtures, tools and supplies used in connection with the Resort,
including without limitation, with respect to the operations and maintenance
of
the Common Elements, are owned either by Borrower, Silverleaf Club, or the
applicable Timeshare Owners’ Association.
(h) Operating
Contracts.
Borrower, Silverleaf Club, or the applicable Timeshare Owners’ Association has
entered into the contracts, agreements, and arrangements necessary for the
operation of the Resorts, including but not limited to those with respect to
utilities, maintenance, management, services, marketing and sales.
6.19 Timeshare
Regimen Reports.
Borrower has furnished to Agent true and correct copies of the Timeshare
Documents listed on Schedule 6.19, which consist of all those placed on file
by
Borrower with the Divisions or any federal, state or local regulatory or
recording agencies, offices or departments. All such filings and/or
recordations, and all joinders and consents, necessary in order to establish
the
plan in respect of the Resorts, including without limitation, the Units,
Intervals, and all appurtenant Common Elements, and all related use and access
rights, have been done or obtained and all laws, regulations and statutes,
and
all agreements or arrangements, in connection therewith have been complied
with.
6.20 Operating
Contracts.
The
contracts, agreements and arrangements comprising those agreements or
arrangements relating to the operation of the Resorts, including without
limitation, with respect to utilities, maintenance, management, services,
marketing and sales under which the fees to be paid equal or exceed $50,000.00
(collectively, all such agreements and arrangements are referred to herein
as
the “Operating Contracts”) are unmodified and in full force and effect and shall
remain free and clear of any lien.
6.21 Architectural
and Environmental Control.
All
Units, Common Elements and other improvements at, upon or appurtenant to the
Resort are and will be in compliance with the design, use, architectural and
environmental control provisions, if any, set forth in the
Declaration.
6.22 Tax
Identification.
Borrower’s federal taxpayer’s identification number is: ▇▇-▇▇▇▇▇▇▇.
6.23 Inventory
Control Procedures.
Borrower has provided to Agent a true and complete copy of Borrower's Inventory,
Sales and Assignments procedures (the "Inventory Control Procedures"), a copy
of
which is attached hereto as Exhibit E. Borrower is and shall at all times be
in
full compliance with the Inventory Control Procedures from the date hereof
until
the Loan is repaid in full. Borrower shall permit Agent, its officers,
employees, auditors, and other agents or designees to review the books and
records of Borrower and make such other examinations and inspections as Agent
in
its sole discretion deems necessary to determine that Borrower is in full
compliance with such Inventory Control Procedures.
6.24 Additional
Representations and Warranties.
This
Agreement, the Note and the other Loan Documents constitute the legal, valid
and
binding obligation of Borrower, enforceable against Borrower in accordance
with
their respective terms.
Section
7 -
Covenants
7.1 Affirmative
Covenants.
So long
as any portion of the Obligations remains unsatisfied, Borrower hereby covenants
and agrees with Agent and each Lender as follows:
(a) Payment
and Performance of Obligations.
Borrower shall pay all of the Loan and related expenses (including any amounts
due and payable to any Bank Product Provider in respect of Bank Products) when
and as the same become due and payable, and Borrower shall strictly observe
and
perform all of the Obligations, including without limitation, all covenants,
agreements, terms, conditions and limitations contained in the Loan Documents,
and will do all things necessary which are not prohibited by law to prevent
the
occurrence of any Event of Default hereunder; and Borrower will maintain an
office or agency in the State of Texas where notices, presentations and demands
in respect of the Loan Documents may be made upon Borrower. Such office or
agency and the books and records of Borrower shall be maintained at ▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ until such time as Borrower
shall so notify Agent, in writing, of any change of location of such office
or
agency.
(b) Maintenance
of Existence, Qualification and Assets.
Borrower shall at all times (i) maintain its legal existence,
(ii) maintain its qualification to transact business and good standing in
any state and in any jurisdiction where it conducts business in connection
with
the Resorts, and (iii) comply or cause compliance with all governmental
laws, rules, regulations and ordinances applicable to the Resorts, Borrower
or
its business, including, without limitation, the Timeshare Act.
(c) Consolidation
and Merger.
Borrower will not consolidate with or merge into any other Person or permit
any
other Person to consolidate with or merge into it, unless: (i) Borrower is
the
continuing or surviving corporation in any such consolidation or merger and
(ii)
prior to and immediately after such consolidation or merger, Borrower shall
not
be in default hereunder.
(d) Maintenance
of Insurance.
Borrower, or if required pursuant to the Declaration, the Timeshare Owners’
Association, shall maintain (or Borrower shall cause to be maintained) at all
times during the term of this Agreement, policies of insurance with premiums
being paid when due, and shall deliver to Agent originals of insurance policies
issued by insurance companies, in amounts, in form and in substance, and with
expiration dates, all acceptable to Agent and containing a waiver of subrogation
rights by the insuring company, a non-contributory standard mortgagee benefit
clause, or their equivalents, and a mortgagee loss payable endorsement in favor
of and satisfactory to Agent on behalf of each Lender, and breach of warranty
coverage, providing the following types of insurance on and with respect to
Borrower (or, as appropriate, the respective Associations) and the
Resort:
(i) Fire
and
extended coverage insurance (including lightning, hurricane, tornado, wind
and
water damage, vandalism and malicious mischief coverage) covering the
improvements and any personal property located in or on the Resorts in an amount
not less than the full replacement value of such improvements and personal
property, and said policy of insurance shall provide for a deductible acceptable
to Agent, breach of warranty coverage, replacement cost endorsements
satisfactory to Agent, and shall not permit co-insurance;
(ii) Public
liability and property damage insurance covering the Units and the Resorts
in
amounts and on terms satisfactory to Agent; and
(iii) Such
other insurance on the Resorts or any replacements or substitutions therefor
including, without limitation, flood insurance (if the Property is or becomes
located in an area which is considered a flood risk by the U.S. Emergency
Management Agency or pursuant to the National Flood Insurance program), in
such
amounts and upon terms as may from time to time be reasonably required by
Agent.
To
the
extent any other timeshare receivable lender has any rights to approve the
form
of insurance policies with respect to the Resorts, the amounts of coverage
thereunder, the insurers under such policies, or the designation of an
attorney-in-fact for purposes of dealing with damage to any part of the Resorts
or insurance claims or matters related thereto, or any successor to such
attorney-in-fact, or any changes with respect to any of the foregoing, Borrower
shall take all steps as may be necessary (and, after turnover, if any, of
control of the Resort to the Timeshare Owners’ Association, Borrower shall use
its best efforts) to ensure that Agent on behalf of each Lender shall at all
times have a co-equal right, with such other lender (including, without
limitation, Borrower or any third-party lender), to approve all such matters
and
any proposed changes in respect thereof; and Borrower shall not cause or permit
any changes with respect to any insurance policies, insurers, coverage,
attorney-in-fact, or insurance trustee, if any, without Agent’s prior written
approval.
In
the
event of any insured loss or claim in respect of the Resorts or the Units,
Borrower shall apply (or cause to be applied), and Borrower covenants that
the
Timeshare Owners’ Association shall apply (or cause to be applied), all proceeds
of such insurance policies in a manner consistent with the Timeshare Documents
and the Timeshare Act.
All
insurance policies required pursuant to this Agreement (or the Timeshare
Documents or Timeshare Act) shall provide that the coverage afforded thereby
shall not expire or be amended, canceled, modified or terminated without at
least thirty (30) days prior written notice to Agent. At least thirty (30)
days
prior to the expiration date of each policy maintained pursuant to this Section
7.1(d),
a
renewal or replacement thereof satisfactory to Agent shall be delivered to
Agent. Borrower shall deliver or cause to be delivered to Agent receipts
evidencing the payment for all such insurance policies and renewals or
replacements.
In
the
event of any fire or other casualty to or with respect to the improvements
on or
at the Resorts, Borrower covenants that Borrower or the Timeshare Owners’
Association, as the case may be, will promptly restore or repair (or cause
to be
restored, repaired or replaced) the damaged improvements and repair or replace
any other personal property to the same condition as immediately prior to such
fire or other casualty and, with respect to the improvements and personal
property on the Resorts, in accordance with the terms of the Timeshare Documents
or Timeshare Act. The insufficiency of any net insurance proceeds shall in
no
way relieve Borrower or, as applicable, Borrower and Timeshare Owners’
Association, of its obligation to restore, repair or replace such improvements
and other personal property in accordance with the terms hereof, of the
Declaration or other Timeshare Documents or of the Timeshare Act, and Borrower
covenants that Borrower or, as the case may be, the Timeshare Owners’
Association, shall promptly comply and cause compliance with the provisions
of
the Declaration and other Timeshare Documents, or of the Timeshare Act relating
to such restoration, repair or replacement. Borrower shall, unless an Event
of
Default has occurred, apply all insurance proceeds payable to or received by
it,
in accordance with the applicable Declaration. If an Event of Default has
occurred, Agent may, in its sole discretion, apply all insurance proceeds in
accordance with the applicable Declaration or to the repayment of the
Loan.
(e) Maintenance
of Security.
Borrower shall execute and deliver (or cause to be executed and delivered)
to
Agent all security agreements, financing statement filing authorizations,
assignments and such other agreements, documents, instruments and certificates,
and supplements and amendments thereto, and take such other actions, as Agent
deems necessary or appropriate in order to maintain as valid, enforceable and
perfected first priority lien and security interest, as applicable, all Liens
and security interests in the Collateral granted to Agent as agent for Lenders
to secure the Obligations. Except as permitted under Section 3.6, Borrower
shall
not grant extensions of time for the payment of, compromise for less than the
full face value or release in whole or in part, any Purchaser or other Person
liable for the payment of, or allow any credit whatsoever except for the amount
of cash to be paid upon, any Collateral or any instrument, chattel paper or
document representing the Collateral.
(f) Payment
of Taxes and Claims.
Borrower will pay, and, as applicable pursuant to the Declaration, Borrower
covenants that the Timeshare Owners’ Association will pay, when due, all taxes
imposed upon the Resorts, the Collateral, Borrower, the Timeshare Owners’
Association, or any of its or their property, or with respect to any of its
or
their franchises, businesses, income or profits, real and personal property,
or
with respect to the Loan or any of the Loan Documents; and Borrower and the
Timeshare Owners’ Association, as the case may be, shall pay all other charges
and assessments against Borrower, the Collateral and the Resorts before any
claim (including, without limitation, claims for labor, services, materials
and
supplies) arises for sums which have become due and payable. Except for the
Liens in connection with the Additional Credit Facility, Liens set forth on
Schedule 6.5 and the Liens in favor of Agent on behalf of Lenders granted
pursuant to the Loan Documents, and except as otherwise specifically provided
for herein, Borrower covenants that no statutory or other Liens whatsoever
(including, without limitation, mechanics’, materialmens’, judgment or tax
liens) shall attach to any of the Collateral or the Resorts except for such
Liens as are expressly provided for pursuant to the Declaration. In the event
any such Lien attaches to any of the Collateral or the Resorts Borrower shall,
within thirty (30) days after any such Lien attaches, either (i) cause such
Lien to be released of record or (ii) provide Agent with a bond in
accordance with the Applicable Laws of the State, issued by a corporate surety
acceptable to Agent, in an amount and form acceptable to Agent.
(g) Inspections.
Borrower shall, at any time and from time to time and at the expense of
Borrower, permit Agent or any Lender or its respective agents or representatives
(provided such Lender has coordinated such inspection with Agent) to inspect
the
Resorts, the Collateral and if necessary, in Agent’s opinion, to ascertain or
assure Borrower’s compliance with the terms of this Agreement, any of Borrower’s
other assets or Property, and to examine and make copies of and abstracts from
its and, to the extent it has access thereto or possession thereof, the
Timeshare Owners’ Association’s, books, accounts, records, original
correspondence, computer tapes, disks, software, and other papers as it may
desire; and to discuss its affairs, finances and accounts with any of its
officers, employees, Affiliates, contractors or independent public accountants
(and by this provision Borrower authorizes said accountants to discuss with
Agent, its Agents or representatives, the affairs, finances and accounts of
Borrower). Agent and each Lender agree to use reasonable efforts not to
unreasonably interfere with Borrower’s business operations in connection with
any such inspections. Without limiting the foregoing, Agent shall have the
right
to make such credit investigations as Agent may deem appropriate in connection
with its review of Notes Receivable, and Borrower shall make available to Agent
all credit information in Borrower’s possession or under its control or to which
it may have access, with respect to Purchasers or other obligors under Notes
Receivable as Agent may request.
(h) Reporting
Requirements.
So long
as any portion of the Obligations remains unsatisfied, Borrower shall furnish
(or cause to be furnished, as the case may be) to Agent the
following:
(i) The
Following Collateral Reports.
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Within
1 Business Day of occurrence or receipt
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(a) Upon
becoming aware of the existence of any condition or event which
constitutes a Default or an Event of Default, Borrower shall deliver
to
Agent a written notice specifying the nature and period of existence
thereof and what action Borrower is taking or proposes to take with
respect thereto.
(b) Upon
becoming aware that the holder of any material obligation or of any
evidence of material indebtedness of the Borrower has given notice
or
taken any other action with respect to a claimed default or event
of
default thereunder, a written notice specifying the notice given
or action
taken by such holder and the nature of the claimed default or event
of
default and what action the Borrower is taking or proposes to take
with
respect thereto;
(c) Promptly
upon receipt thereof, one (1) copy of each other report submitted
to
Borrower by independent public accountants or other Persons in connection
with any annual, interim or special audit made by them of the books
of
Borrower;
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|
Weekly
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(d) None
at this time.
|
|
Monthly
(not later than the 10th Business Day of each month)
|
(e) a
Borrowing Base Report and all supporting reports and documentation
which
includes a detailed calculation of the Availability as of the end
of the
month,
(f) a
reconciliation to the detailed calculation of the Availability previously
provided to Agent,
(g) a
detailed calculation of Borrower’s obligations, if any, with respect to
Bank Product Agreements and a confirmation of payment or reimbursement
of
all funds received during the prior month from Purchasers for homeowner
fees and expenses to each of the Timeshare Owners’
Associations,
(h) monthly
aging Reports on all Notes Receivable
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|
Quarterly
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(i) a
sales report, detailing the sales of all Intervals at the Resorts
for the
period covered thereby, certified by Borrower to be true, correct
and
complete and otherwise in a form approved by Agent, provided however,
upon
30 days prior written notice Lender may require this report to be
furnished on a monthly basis,
(j) such
additional information as Agent may request with respect to the
Collateral, or the financial condition of Borrower,
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|
Annually
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(k) a
sales report, detailing the sales of all Intervals at the Resorts
for the
period covered thereby, certified by Borrower to be true, correct
and
complete and otherwise in a form approved by Agent, and
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|
Upon
request by Agent
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(l) such
other reports as to the Collateral, or the financial condition of
Borrower, as Agent may request.
|
In
addition, (i) to the extent required by Agent, in Agent’s Permitted Discretion,
Borrower agrees to facilitate the establishment of electronic collateral
reporting systems, which will be administered and maintained by Agent, and
to
cooperate with Agent to facilitate and implement a system of electronic
collateral reporting in order to provide electronic reporting of each of the
items set forth above, provided however the cost to Borrower for such set up
of
the electronic collateral reporting systems shall not exceed $5,000, and (ii)
a
senior member of the management of Borrower or other representative acceptable
to Agent will meet with Agent, telephonically at least once in each calendar
quarter and in person once each six (6) months, to review and discuss matters
relating to Borrower’s business, prospects, projections and affairs as is
determined to be reasonable and appropriate by Agent.
(ii) Quarterly
and Annual Financial Reports.
As soon
as available, but in any event upon Borrower’s filing of its Securities and
Exchange Commission Form 10-Q, a statement of income and expense and a balance
sheet of Borrower for the calendar or fiscal period then ended, and in the
case
of the second, and third calendar or fiscal quarters ended a statement showing
the period then ended and cumulative numbers for the portion of the year then
ended, all in such detail and scope as may be reasonably required by Agent
and
prepared by management on a basis consistent with prior accounting periods
and
accompanied by an Officer’s Certificate in the form of Exhibit F. In addition to
the above, as soon as available, but in any event upon Borrower’s filing of its
Securities and Exchange Commission Form 10-K reflecting Borrowers financial
results for each calendar year or other fiscal year as may be applicable (a
“Fiscal
Year”),
an
audited statement of income and expense of Borrower for the annual period ended
as of the end of such Fiscal Year, and a balance sheet of Borrower as of the
end
of such Fiscal Year, all in such detail and scope as may be reasonably required
by Agent and prepared in accordance with GAAP and on a basis consistent with
prior accounting periods. Each annual financial statement of Borrower shall
be
prepared by an independent certified public accountant, acceptable to Agent,
in
its sole discretion. Such audited annual statements shall also be in form and
content satisfactory to Agent.
(iii) Maintenance
of Inventory Control.
Borrower shall maintain and at all times fully comply with the Inventory Control
Procedures from the date hereof until the Loan is repaid in full. Borrower
shall
permit Agent, its officers, employees, auditors, and other agents or designees
to review the books and records of Borrower and make such other examinations
and
inspections as Agent in its sole discretion deems necessary to determine that
Borrower is in full compliance with such Inventory Control
Procedures.
(iv) Material
Adverse Developments.
Immediately upon becoming aware of any claim, action, proceeding, development
or
other information which may materially and adversely affect Borrower, the
Collateral, the Resorts, the business, prospects, profits or condition
(financial or otherwise) of Borrower, or the ability of Borrower to perform
its
Obligations under the Agreement, Borrower shall provide Agent with telephonic
or
telegraphic notice, followed by telefaxed and mailed written confirmation,
specifying the nature of such development or information and such anticipated
effect;
(v) Other
Information.
Borrower shall deliver to Agent: (i) within five (5) days of the filing thereof
with the United States Securities and Exchange Commission, copies of each Form
8-K, 10-Q and 10-K filed by Borrower; (ii) at least semi-annually during the
Term (or more frequently upon request of Agent), current addresses and telephone
numbers for each obligor under an Eligible Note Receivable pledged to Agent
on
behalf of Lenders hereunder and (iii) any other information related to the
Loan,
the Collateral, the Resorts or Borrower as Agent may in good faith request
including, without limitation, annually, federal call reports relating to
Lockbox Agent.
(vi) Annual
Operating Plan.
On or
before December 31 of each calendar year, Borrower shall deliver to Agent its
Annual Operating Plan.
(i) Records.
Borrower shall keep adequate records and books of account reflecting all
financial transactions of Borrower and with respect to the Resorts in which
complete entries will be made in accordance with GAAP. In addition, Borrower
shall keep, and shall promptly deliver to Agent upon Agent’s request therefor,
complete, timely and accurate records of all sales of Intervals and all payments
in respect of Pledged Notes Receivable.
(j) Management.
Borrower shall: (i) remain engaged in the active management of the Resorts,
(ii)
unless Borrower notifies Agent in writing at least thirty (30) days in advance
of its new location, retain its executive offices at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇
▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, and (iii) continue to perform duties substantially
similar to those presently performed as provided in the management agreement
relating to each Resort. No management agreement for any Resort shall be
modified, assigned, extended, terminated or entered into nor shall the current
method of operation and management of the Resorts be changed in any material
manner, without the prior written approval of Agent.
(k) FICA.
Borrower shall furnish to Agent within thirty (30) days after the expiration
of
each calendar quarter proof reasonably satisfactory to Agent that Borrower’s
obligations to make deposits for F.I.C.A., social security and withholding
taxes
have been satisfied.
(l) Operating
Contracts.
Subject
to the rights of the Timeshare Owners’ Association as set forth in the Timeshare
Documents, no Operating Contract shall be modified, extended, terminated or
entered into, without the prior written approval of Agent, if any such
modification, extension, termination or new agreement could have a material
adverse impact on the operation of the Resorts or the Collateral.
(m) Notices.
Borrower shall notify Agent within five (5) Business Days of the occurrence
of
any event (i) as a result of which any representation or warranty of
Borrower contained in any Loan Documents would be incorrect or materially
misleading if made at that time, or (ii) as a result of which Borrower is
not in full compliance with all of its covenants and agreements contained in
this Agreement or any Loan Document, or (iii) which constitutes or, with
the passage of time, notice or a determination by Agent would constitute, an
Event of Default.
(n) Maintenance.
Borrower shall maintain, or shall cause to be maintained, or to the extent
provided for pursuant to the Declaration, shall use its best efforts to cause
the Timeshare Owners’ Association to maintain, and the Resorts in good repair,
working order and condition and shall make all necessary replacements and
improvements to the Resorts consisting of real property so that the value and
operating efficiency of the Resorts will be maintained at all times and so
that
the Resorts remain in compliance in all respects with the Timeshare Act, the
Timeshare Documents and other applicable law.
(o) Claims.
Borrower shall promptly notify Agent of any claim, action or proceeding
affecting the Resorts or Collateral, or any part thereof, or Agent, any Lender
or any of the security interests or rights granted in favor of Agent hereunder
or under any of the Loan Documents. At the request of Agent, Borrower shall
appear in and defend in favor of each Lender, at Borrower’s sole expense, any
such claim, action or proceeding.
(p) Registration
and Regulations.
(i) Local
Legal Compliance.
Borrower will comply, and will cause the Resorts to comply, with all applicable
servitudes, restrictive covenants, applicable planning, zoning or land use
ordinances and building codes, all applicable health and Environmental Laws
and
regulations, and all other Applicable Laws, rules, regulations, agreements
or
arrangements.
(ii) Registration
Compliance.
Borrower will maintain, or cause to be maintained, all necessary registrations,
current filings, consents, franchises, approvals, and exemption certificates,
and Borrower will make or pay, or cause to be made or paid, all registrations,
declarations or fees with the Division and any other government or any agency
or
department thereof, whether in the state or another jurisdiction, required
in
connection with the Resorts and the occupancy, use and operation thereof, the
incorporation of Units into the time-share plan established pursuant to the
Declaration and the other Timeshare Documents, and the sale, advertising,
marketing, and offering for sale of Intervals. All such registrations, filings
and reports will be truthfully completed; and true and complete copies of such
registrations, applications, consents, licenses, permits, franchises, approvals,
exemption certificates, filings and reports will be delivered to Agent. Borrower
shall advise Agent of any changes with respect to its marketing or sales
programs in any jurisdiction, including jurisdictions other than the state,
and
at Agent’s request from time to time, Borrower shall deliver to Agent:
(A) written statements by the applicable state authorities, in form
acceptable to Agent, stating that no registration is necessary for the sale
of
Intervals in the particular state, (B) an opinion of counsel in form
acceptable to Agent and rendered by counsel acceptable to Agent, stating that
no
such registration is necessary, or (C) such other evidence of compliance
with Applicable Laws as Agent may require; and
(iii) Other
Compliance.
Borrower has, in all material respects, complied with and will comply with
all
laws and regulations of the United States, the State of Texas, each state in
which an applicable Resort or Collateral is located, any political subdivision
of either such state and any other governmental, quasi-governmental or
administrative jurisdiction in which Intervals have been sold or offered for
sale, or in which sales, offers of sale or solicitations with respect to the
Resorts have been or will be conducted, including to the extent applicable,
but
not limited to: (1) the Timeshare Act; (2) the Consumer Credit
Protection Act; (3) Regulation Z of the Federal Reserve Board;
(4) the Equal Credit Opportunity Act; (5) Regulation B of the
Federal Reserve Board; (6) the Federal Trade Commission’s 3-day cooling-off
Rule for Door-to-Door Sales; (7) Section 5 of the Federal Trade
Commission Act; (8) ILSA; (9) federal postal laws;
(10) applicable state and federal securities laws; (11) applicable
usury laws; (12) applicable trade practices, home and telephone
solicitation, sweepstakes, anti-lottery and consumer credit and protection
laws;
(13) applicable real estate sales licensing, disclosure, reporting and
escrow laws; (14) the ADA; (15) RESPA; (16) all amendments to and
rules and regulations promulgated under the foregoing acts or laws; (17) the
Federal Trade Commission’s Privacy of Consumer Financial Information Rule;
(18) other applicable federal statutes and the rules and regulations
promulgated thereunder; and (19) any state law or law of any state (and the
rules and regulations promulgated thereunder) relating to ownership,
establishment or operation of the Resort, or the sale, offering for sale, or
financing of Intervals.
(q) Other
Documents.
Borrower will maintain to the satisfaction of Agent and make available to Agent
and other Lenders, accurate and complete files relating to the Resorts, the
Pledged Notes Receivable and other Collateral, and such files will contain
true
copies of each Pledged Note Receivable, as amended from time to time, copies
of
all relevant credit memoranda relating to such Notes Receivable and all
collection information and correspondence relating thereto. Without limiting
the
foregoing, Borrower shall maintain evidence of its compliance with the
requirements of Section 3.8.
(r) Further
Assurances.
Borrower will execute and deliver, or cause to be executed and delivered, such
other and further agreements, documents, instruments, certificates and
assurances as, in the judgment of Agent exercised in good faith may be necessary
or appropriate to more effectively evidence or secure, and to ensure the
performance of, the Obligations. In addition, Borrower shall deliver to Agent
from time to time upon each request by Agent such documents, instruments or
other matters or items as Agent may require to evidence Borrower’s compliance
with the covenants set forth in this Section 7.1
and
Section 3.8.
(s) Utilities.
Borrower will cause, or to the extent provided for pursuant to the Declaration,
covenants to use its best efforts to ensure that the Timeshare Owners’
Association, or the manager of the Resorts, as applicable, will cause, electric,
sanitary and stormwater sewer, water facilities, drainage facilities, solid
waste disposal, telephone and other necessary utilities to be available to
the
Resorts in sufficient capacity to service the Resorts.
(t) Amenities.
Borrower will cause, or to the extent provided for pursuant to the Declarations,
will use its best efforts to ensure that the Timeshare Owners’ Association, or
the manager of the Resort, as applicable, will cause, the Resorts to be
maintained in good condition and repair, and in accordance with the provisions
of the applicable Timeshare Documents, and Borrower will cause each Purchaser
of
an Interval at the Resorts to have continuing access to, and the use of, to
the
extent of such Purchaser’s time-share periods, all of the Common Elements and
related or appurtenant services, rights and benefits, all as provided in the
Declaration and the Timeshare Documents.
(u) Expenses
and Closing Fees.
Whether
or not the transactions contemplated hereunder are completed, Borrower shall
pay
all expenses of Agent, each Lender and any Participant, whether at the Closing
Date or subsequent thereto relating to negotiating, preparing, documenting,
closing and enforcing this Agreement, including, but not limited
to:
(i) the
cost
of preparing, reproducing and binding this Agreement, the other Loan Documents
and all Exhibits and Schedules thereto;
(ii) the
reasonable fees and disbursements of Agent’s, each Lender’s and each
Participants’ counsel;
(iii) Agent’s,
each Lender’s and each Participants’ reasonable out-of-pocket
expenses;
(iv) all
reasonable fees and expenses (including fees and expenses of Agent’s, each
Lender’s and each Participants’ counsel) relating to any amendments, waivers,
consents or subsequent closings pursuant to the provisions hereof;
(v) all
costs, outlays, legal fees and expenses of every kind and character had or
incurred in (1) the interpretation or enforcement of any of the provisions
of,
or the creation, preservation or exercise of rights and remedies under, any
of
the Loan Documents including the costs of appeal (2) the preparation for,
negotiations regarding, consultations concerning, or the defense or prosecution
of legal proceedings involving any claim or claims made or threatened against
Agent arising out of this transaction or the protection of the Collateral
securing the Loan or Advances made hereunder, expressly including, without
limitation, the defense by Agent, each Lender and each Participant of any legal
proceedings instituted or threatened by any Person to seek to recover or set
aside any payment or setoff theretofore received or applied by Agent, each
Lender and each Participant with respect to the Obligations, and any and all
appeals thereof; and (3) the advancement of any expenses provided for under
any
of the Loan Documents;
(vi) all
expenses relating to the maintenance and administration of the Lockbox and
Lockbox Account by the Lockbox Agent and Servicing and any escrow by the Title
Company or any other escrow agent;
(vii) all
costs
and expenses incurred by Agent under the Note, and all late charges under the
Note;
(viii) all
real
and personal property taxes and assessments, documentary stamp and intangible
taxes, sales taxes, recording fees, title insurance premiums and other title
charges, document copying, transmittal and binding costs, appraisal fees, lien
and judgment search costs, fees of architects, engineers, environmental
consultants, surveyors and any special consultants, construction inspection
fees, brokers fees, escrow fees, wire transfer fees, and all travel and
out-of-pocket expenses of Agent, each Lender and each Participant to conduct
inspections or audits. Without limitation of the foregoing, Borrower shall
pay
the costs of UCC and other searches, UCC and other Loan Document recording
fees
and applicable taxes, and premiums on each Mortgagee Title Policy delivered
to
Agent pursuant to this Agreement; and
(ix)
audit,
appraisal, and valuation fees and charges as follows: (i) a fee of $950 per
day,
per auditor, plus out-of-pocket expenses for each financial audit of Borrower
performed by personnel employed or contracted by Agent, which audits shall
be
conducted at Borrower’s expense as frequently as Agent shall determine and (ii)
if implemented, a fee of $950 per day, per applicable individual, plus
out-of-pocket expenses for the establishment of electronic collateral reporting
systems, provided the aggregate fee to be paid by Borrower for this service
shall not exceed $5,000.
With
respect to the fees payable by Borrower under clauses (ii), (iii), and (iv)
above, provided that no Event of Default or condition, omission or act which,
with the passage of time, notice or both, would constitute an Event of Default,
has occurred, Agent, each Lender and/or each Participant shall provide Borrower
in advance, as applicable, with good faith estimates of: (1) the reasonable
fees
and disbursements of such party’s counsel; (2) such party’s reasonable
out-of-pocket expenses; and (3) the reasonable fees and expenses of such party
and its counsel relating to any amendments, waivers, consents or subsequent
closings pursuant to the provisions hereof, respectively; and such fees,
disbursements and expenses shall be in accordance with such good faith
estimates.
(v) Indemnification
of Agent and Lender.
In
addition to (and not in lieu of) any other provisions of any Loan Document
providing for indemnification in favor of Agent or Lenders, Borrower shall
defend, indemnify and hold harmless Agent and each Lender, its respective
subsidiaries, affiliates, officers, directors, agents, employees,
representatives, consultants, contractors, servants, and attorneys, as well
as
the respective heirs, personal representatives, successors or assigns of any
or
all of them (hereafter collectively the “Indemnified Lender Parties”), from and
against, and promptly pay on demand or reimburse each of them with respect
to,
any and all liabilities, claims, demands, losses, damages, costs and expenses
(including without limitation, reasonable attorneys’ and paralegals’ fees and
costs), actions or causes of action of any and every kind or nature whatsoever
asserted against or incurred by any of them by reason of or arising out of
or in
any way related or attributable to (i) this Agreement, the Loan Documents,
or
the Collateral; (ii) the transactions contemplated under any of the Loan
Documents or any of the Timeshare Documents, including without limitation,
those
in any way relating to or arising out of the violation of any federal or state
laws, including the Timeshare Act; (iii) any breach of any covenant or agreement
or the incorrectness or inaccuracy of any representation and warranty of
Borrower contained in this Agreement or any of the Loan Documents (including
without limitation any certification of Borrower delivered to Lender or Agent);
(iv) any and all taxes, including real estate, personal property, sales,
mortgage, excise, intangible or transfer taxes, and any and all fees or charges,
including, without limitation under the Timeshare Act, which may at any time
arise or become due prior to the payment, performance and discharge in full
of
the Obligations; (v) the breach of any representation or warranty as set forth
herein regarding any Environmental Laws; (vi) the failure of Borrower to perform
any obligation or covenant herein required to be performed pursuant to any
Environmental Laws; (vii) the use, generation, storage, release, threatened
release, discharge, disposal or presence on, under or about the Resorts of
any
Hazardous Materials; (viii) the removal or remediation of any Hazardous
Materials from the Resorts required to be performed pursuant to any
Environmental Laws or as a result of recommendations of any environmental
consultant or as required by Agent; (ix) claims asserted by any Person
(including without limitation any governmental or quasi-governmental agency,
commission, department, instrumentality or body, court, arbitrator or
administrative board (collectively, a “Governmental Agency”), in connection with
or any in any way arising out of the presence, use, storage, disposal,
generation, transportation, release, or treatment of any Hazardous Materials
on,
in, under or affecting the Resorts; (x) the violation or claimed violation
of
any Environmental Laws in regard to the Resorts; or (xi) the preparation of
an
environmental audit or report on the Resorts, whether conducted by a Lender,
Agent, Borrower or a third-party, or the implementation of environmental audit
recommendations. Such indemnification shall not give Borrower any right to
participate in the selection of counsel for Agent or any Lender or the conduct
or settlement of any dispute or proceeding for which indemnification may be
claimed. Agent and each Lender agree to give Borrower written notice of the
assertion of any claim or the commencement of any action or lawsuit described
in
this Section. It is the express intention of the parties hereto that the
indemnity provided for in this Section, as well as the disclaimers of liability
referred to in this Agreement, are intended to and shall protect and indemnify
Agent and each Lender from the consequences of Agent’s and each Lender’s own
negligence, whether or not that negligence is the sole or concurring cause
of
any liability, obligation, loss, damage, penalty, action, judgment, suit, claim,
cost, expense or disbursement provided, however, that Borrower shall not be
required to protect and indemnify Agent or any Lender from the consequences
of
Agent’s or any such Lender’s gross negligence, where that gross negligence is
the sole cause of the liability, obligation, loss, damage, penalty, action,
judgment, suit, claim, cost, expense or disbursement for which indemnification
or protection would otherwise be required. The provisions of this Section shall
survive the full payment, performance and discharge of the Obligations and
the
termination of this Agreement, and shall continue thereafter in full force
and
effect. In addition to the above, Borrower has advised Agent that payments
from
Purchasers will include reimbursements from such Purchasers of Time Share
Owners’ Association fees and expenses and Borrower hereby authorizes Agent to
apply such payments and reimbursements to the outstanding Obligations due from
Borrower to Agent and Lenders and Borrower will pay not less frequently than
monthly all sums due to such Time Share Owners’ Associations. Borrower hereby
indemnifies and holds Agent and each Lender harmless from the application of
such payments and agrees that it is its sole responsibility to remit funds
to
each Time Share Owners’ Association to reimburse such Time Share Owners’
Association for the payments made by Purchasers.
(w) Standby
Servicer.
Borrower will maintain the agreement for the Standby Servicer in full force
and
effect. Borrower agrees that upon the occurrence of a Default or Event of
Default hereunder, the Standby Servicer will assume full control over the
servicing of all Pledged Notes Receivable, reporting solely to Agent, as
provided in Sections 9.1(i).
(x) Additional
Loan Facility Documents and TFC Conduit Loan Documents.
Borrower will comply with the terms and conditions of the CapitalSource Finance
Facility, the Resort Finance Facility, the Textron Facility and the TFC Conduit
Loan. Nothing contained herein shall prohibit or limit Borrower’s ability to
amend or modify any of the CSF Documents or any of the RFC Documents or any
of
the TFC Documents or any document in connection with the TFC Conduit Loan or
documents evidencing any other indebtedness of Borrower, provided Borrower
provides Agent with a copy of the fully executed loan documents promptly within
ten (10) days after execution.
(y) Financial
Covenants.
(i) Tangible
Net Worth.
Borrower shall, on and after the Closing Date, at all times have and maintain
a
Tangible Net Worth of $108,000,000.
(ii) Marketing
and Sales Expenses.
As of
the last day of each fiscal quarter, commencing with the fiscal quarter ending
December 31, 2005, Borrower will not permit the four quarter cumulative ratio
of
Marketing and Sales Expenses to the Borrower’s net proceeds from the sale of
Intervals as recorded on the Borrower’s financial statements for the immediately
preceding four (4) consecutive fiscal quarters of the Borrower to equal or
exceed a ratio of .570 to 1.
(iii) Maximum
Loan Delinquency.
Borrower will not permit as of the last day of each calendar quarter its over
30-day delinquency rate on its entire Notes Receivable portfolio to be greater
than ten percent (10%).
(iv) Interest
Coverage.
For the
calendar quarter of Borrower ending December 31, 2005 and for each calendar
quarter thereafter, the average of the Interest Coverage Ratio for Borrower
for
such calendar quarter and the Interest Coverage Ratios for each of the three
immediately preceding calendar quarters shall be at least 1.25:1. The term
Interest Coverage Ratio means with respect to any Person for any calendar
quarter, the ratio of (a) EBITDA for such period less capital expenditures
as
determined in accordance with GAAP, for such period to (b) the Total Interest
Expense minus all non-cash items constituting interest expense for such
period.
(v) Profitable
Operations.
Borrower will not permit Consolidated Net Income (a) for any fiscal year,
commencing with the fiscal year ending December 31, 2005, to be less than $1.00
and (b) for any two consecutive fiscal quarters (reviewed on an individual
rather than on an aggregate basis) to be less than $1.00.
(vi) Maximum
Debt to Tangible Net Worth.
Borrower shall maintain a ratio of (i) the outstanding amount of Indebtedness
of
Borrower (excluding Subordinated Debt), to (ii) Tangible Net Worth, each as
measured on a fiscal quarter-end basis commencing the calendar quarter ending
December 31, 2005 and for each fiscal quarter thereafter, which is less than
or
equal to 6.00 to 1.00;
(vii) Minimum
FICO Scores.Borrower
shall not permit, for any calendar quarter, the weighted average FICO Credit
Bureau Scores of all sales with respect to which a FICO score can be obtained
to
be less than 640.
7.2 Negative
Covenants.
So long
as any portion of the Obligations remain unsatisfied, Borrower hereby covenants
and agrees with Agent and each Lender as follows:
(a) Limitation
on Other Debt, Further Encumbrances.
Borrower will not obtain financing and grant liens with respect to the
Collateral. Notwithstanding anything herein to the contrary, Borrower may,
without first obtaining the written consent of Agent obtain financing and grant
liens with respect to any of its assets or other property except for the
Collateral and those assets or property restricted by a negative pledge
provided: (i) Borrower provides ten days prior written notice to Agent setting
forth the terms and conditions of such financing; (ii) no Event of Default
or
condition, omission or act which, with the passage of time, notice or both,
would constitute an Event of Default, has occurred; (iii) such financing does
not result in an Event of Default hereunder or under any documents evidencing
any other indebtedness of Borrower; and (iv) Agent is promptly provided a copy
of the fully executed loan documents relating thereto.
(b) Restrictions
on Transfers.
Except
as hereinafter specifically provided, Borrower shall not, whether voluntarily
or
involuntarily, by operation of law or otherwise, (i) without obtaining the
prior
written consent of Agent (which consent may be given, withheld or conditioned
by
Agent in Agent’s sole discretion), transfer, sell, pledge, convey, hypothecate,
factor or assign all or any portion of the Collateral, the Encumbered Intervals,
the Common Elements relating to the Encumbered Intervals or any Resort
facilities or amenities, or contract to do any of the foregoing, including,
without limitation, pursuant to options to purchase, and so-called installment
sales contracts, land contracts, or contracts for deed, provided that the
foregoing restriction on transfers shall not apply to the conveyance of SPV
Assets to the SPV, (ii) without obtaining the prior written consent of Agent
(which consent may be given, withheld or conditioned by Agent in Agent’s sole
discretion), lease or license all or any portion of the Collateral, the
Encumbered Intervals, the Common Elements relating to the Encumbered Intervals
or any Resort facilities or amenities (except for the license created in favor
of SPV under any license agreement with Borrower, Silverleaf Club or any
timeshare owners association, to use or access the reservation system or related
computer hardware or software for any Resort), or change the legal or actual
possession or use thereof, (iii) permit the assignment, transfer, delegation,
change, modification or diminution of the duties or responsibilities of
Borrower, of any manager of the Resorts approved by Agent as manager of the
Resorts (except for an assignment of such duties to a professional management
company or companies reasonably acceptable to Agent in advance) without
obtaining the prior written consent of Agent (which consent shall not be
unreasonably withheld), or (iv) without obtaining the prior written consent
of
Agent (which consent may be given, withheld or conditioned by Agent in Agent’s
sole discretion), cause or permit the assignment, pledge or other encumbrance
of
any of the Operating Contracts or all or any portion of Borrower’s right, title
or interest in the Declaration. Without limiting the generality of the preceding
sentence, and subject to the terms of this Agreement, the prior written consent
of Agent (as specified above) shall be required for (A) any transfer of the
Encumbered Intervals, the Common Elements relating to the Encumbered Intervals
or any Resort facilities or amenities or any part thereof made to a subsidiary
or Affiliate or otherwise, (B) any transfer of all or any part of the Encumbered
Intervals, the Common Elements relating to the Encumbered Intervals or any
Resort facilities or amenities by Borrower to its stockholders or Affiliates
or
vice versa, and (C) any corporate merger or consolidation, disposition or other
reorganization, except as permitted in Section 7.1(c).
In the
event that Agent is willing to consent to a transfer which would otherwise
be
prohibited by this Section 7.2(b)
Agent
may condition its consent on such terms as it desires, including, without
limitation, an increase in the Applicable Interest Rate and the requirement
that
Borrower pay a transfer fee, together with any expenses incurred by Agent in
connection with the granting of such consent (including, without limitation,
attorneys’ fees and expenses). If Borrower violates the terms of this Section
7.2(b),
in
addition to any other rights or remedies which Agent may have herein, in any
other Loan Document, or at law or in equity, Agent may by written notice to
Borrower increase, effective immediately as of the date of such violation,
the
Applicable Interest Rate to the Applicable Default Rate.
(c) Use
of Lender or Agent’s Name.
Borrower will not, and will not permit any Affiliate to, without the prior
written consent of Agent, such Lender or a Participant, use the name of Agent,
any Lender or any Participant or the name of any affiliate of Agent, any Lender
or any Participant in connection with any of their respective businesses or
activities, except in connection with internal business matters and as required
in dealings with governmental agencies.
(d) Transactions
with Affiliates.
Except
as provided in the SPV Documents, without the prior written consent of Agent,
which shall not unreasonably be withheld, Borrower will not enter into any
transaction with any Affiliate in connection with the Resorts, including,
without limitation, relating to the purchase, sale or exchange of any assets
or
properties or the rendering of any service, except in the ordinary course of,
and pursuant to the reasonable requirements of, the operations of the Resorts
and upon fair and reasonable terms.
(e) Restrictive
Covenants.
Borrower will not without Agent’s prior written consent seek, consent to, or
otherwise acquiesce in, any change in any private restrictive covenant, planning
or zoning law or other public or private restriction, which would limit or
alter
the use of the Resorts.
(f) Subordinated
Obligations.
Borrower will not, directly or indirectly, (i) permit any payment to be
made in respect of any indebtedness, liabilities or obligations, direct or
contingent, (the “Subordinated Debt”) to any of its shareholders or their
affiliates or which are subordinated by the terms thereof or by separate
instrument to the payment of principal of, and interest on, the Note;
(ii) permit the amendment, rescission or other modification of any such
subordination provisions of any of Borrower’s subordinated obligations in such a
manner as to affect adversely the Lien in and to the Collateral or Agent’ senior
priority position and entitlement as to payment and rights with respect to
the
Note and the Obligations, or (iii) permit the prepayment or redemption,
except for mandatory prepayments, of all or any part of Borrower’s obligations
to its shareholders, or of any subordinated obligations of Borrower except
in
accordance with the terms of such subordination. Notwithstanding anything to
the
contrary in this Section 7.2(f),
so long
as Borrower’s Tangible Net Worth remains in compliance with Section 7.1(y)(i),
Borrower may: (i) retire unsecured subordinated debt, and/or (ii) declare
dividends, buy back stock, and perform other equity transactions.
(g) Timeshare
Regime.
Without
Agent’s prior written consent, Borrower shall not amend, modify or terminate the
Declarations or other Timeshare Documents, or any other restrictive covenants,
agreements or easements regarding the Resorts (except for routine
non-substantive modifications which have no impact on the Collateral). Except
as
otherwise provided herein, Borrower shall not assign its rights as developer
under the Declarations without Agent’s prior written consent, or file or permit
to be filed any additional covenants, conditions, easements or restrictions
against or affecting the Resorts (or any portion thereof) without Agent’s prior
written consent, which consent shall not be unreasonably withheld.
(h) Name
Change.
Borrower will not change its name or state of organization.
(i) Collateral.
Borrower shall not take any action (nor permit or consent to the taking of
any
action) which might impair the value of the Collateral or any of the rights
of
Agent or any Lender in the Collateral, nor shall Borrower cause or permit any
amendment to or modification of the form or terms of any of the Pledged Notes
Receivable, Mortgages or, except as specifically provided herein above, the
other Timeshare Documents.
(j) Marketing/Sales.
Borrower shall not market, attempt to sell or sell or permit or justify any
sales or attempted sales of any Intervals except in compliance with the
Timeshare Act and Applicable Laws in state and other jurisdictions where
marketing, sales or solicitation activities occur.
(k) Modification
of Other Documents.
Borrower shall not amend or modify the Standby Servicing Agreement, without
the
prior written consent of Agent, which consent shall not be unreasonably
withheld.
(l) Declarant’s
Rights and Management Agreements.
Borrower
covenants, pledges and agrees that until the Loan and all other amounts due
and
owing under the this Agreement and the other Loan Documents are paid in full
Borrower will not, voluntarily or involuntarily, directly or indirectly,
mortgage, pledge, assign, sell, transfer, hypothecate, encumber, convey or
grant
a security interest in any: (i) contract or agreement, whether written, oral
or
otherwise, whether now or hereafter existing, including any management or
operating contract and agreement, between Borrower or any Affiliate of the
Borrower and the governing body of any Resort, with respect to the management
and operation of the Resort; or (ii) any rights of the Declarant (the “Declarant
Rights”) arising under the Declaration creating any Resort, or under the Bylaws
for the Resort, whether now or hereafter existing.
(m) Modifications
of Documents, Additional Loan Facility Documents, Silverleaf Finance II
Documents and Other Debt Instruments.
Nothing
contained herein shall prohibit or limit Borrower’s ability to amend or modify
any of the CSF Documents or any of the RFC Documents or any of the TFC Documents
or any document in connection with the TFC Conduit Loan or documents evidencing
any other indebtedness of Borrower, provided Borrower provides Agent with a
copy
of the fully executed loan documents promptly within ten (10) days after
execution.
(n) Change
in Certain Accounting Practices.
Borrower covenants, pledges and agrees that until the Loan and all other amounts
due and owing under the this Agreement and the other Loan Documents are paid
in
full Borrower will not, voluntarily or involuntarily, directly or indirectly,
without the prior written consent of Agent and each Lender, make any change
to
the existing policies of Borrower in connection with its accounting for
delinquent accounts.
Section
8 -
Events Of Default
8.1 Nature
of Events.
An
“Event of Default” shall exist if any of the following shall occur:
(a) Payments.
If
Borrower shall fail to make, as and when due, any payment or mandatory
prepayment of principal, interest, fees or other amounts with respect to the
Loan and such failure shall continue for five (5) days after notice of such
failure is provided by Agent.
(b) Covenant
Defaults.
If
Borrower shall fail to perform or observe any covenant, agreement or warranty
contained in this Agreement or in any of the Loan Documents, (other than with
respect to: (i) the failure to make timely payments in respect of the Loan
as
provided in Section 8.1(a);
(ii)
the failure to deliver payments made under the Pledged Notes Receivable directly
to Agent as required pursuant to Section 2.3 as provided in Section 8.1(h);
or
(iii) violation of: (y) the financial covenants in Section 7.1(y); or (z) any
negative covenants in Section 7.2 and, such failure shall continue for fifteen
(15) days after notice of such failure is provided by Agent, provided however,
that if Borrower commences to cure such failure within such 15 day period,
but,
because of the nature of such failure, cure cannot be completed within 15 days
notwithstanding diligent effort to do so, then, provided Borrower diligently
seeks to complete such cure, an Event of Default shall not result unless such
failure continues for a total of thirty (30) days and provided further that
it
shall not be a Default or an Event of Default, if during the initial sixty
(60)
days after the Closing Date Borrower is not able to achieve compliance with
all
covenants relating to the Collateral.
(c) Warranties
or Representations.
If any
representation or other statement made by or on behalf of Borrower in this
Agreement, in any of the Loan Documents or in any instrument furnished in
compliance with or in reference to the Loan Documents, is false, misleading
or
incorrect in any material respect as of the date made or
reaffirmed.
(d) Enforceability
of Liens.
If any
lien or security interest granted by Borrower to Agent in connection with the
Loan is or becomes invalid or unenforceable or is not, or ceases to be, a
perfected first priority lien or security interest, as applicable, in favor
of
Agent, encumbering the asset which it is intended to encumber, and Borrower
fails to cause such lien or security interest to become a valid, enforceable,
first and prior lien or security interest in a manner satisfactory to Agent
within ten (10) days after Agent delivers written notice thereof to
Borrower.
(e) Involuntary
Proceedings.
If a
case is commenced or a petition is filed against Borrower under any Debtor
Relief Law; a receiver, liquidator or trustee of Borrower or of any material
asset of Borrower is appointed by court order and such order remains in effect
for more than forty-five (45) days; or if any material asset of Borrower is
sequestered by court order and such order remains in effect for more than
forty-five (45) days.
(f) Proceedings.
If
Borrower voluntarily seeks, consents to or acquiesces in the benefit of any
provision of any Debtor Relief Law, whether now or hereafter in effect; consents
to the filing of any petition against it under such law; makes an assignment
for
the benefit of its creditors; admits in writing its inability to pay its debts
generally as they become due; or consents or suffers to the appointment of
a
receiver, trustee, liquidator or conservator for it, or any part of its,
assets.
(g) Attachment,
Judgment, Tax Liens.
The
issuance, filing, levy or seizure against the Collateral, or, with respect
to
the Resorts or the Obligations, against Borrower of one or more attachments,
injunctions, executions, tax liens or judgments for the payment of money
cumulatively in excess of $100,000.00, which is not discharged in full or stayed
within thirty (30) days after issuance or filing.
(h) Failure
to Deposit Proceeds.
If
Borrower shall fail to deliver payments made under the Pledged Notes Receivable
directly to Agent as required pursuant to Section 2.3 above, or if Borrower
shall take any other act which Agent or any Lender shall deem to be a conversion
of the Collateral or fraudulent with respect to Agent or any
Lender.
(i) Timeshare
Documents.
If the
Declaration, any of the other documents creating or governing the Resorts,
its
timeshare regime, or the Timeshare Owners’ Association, or the restrictive
covenants with respect to the Resorts, shall be terminated, amended or modified
without Agent’s prior written consent (except for routine non-substantive
modifications which have no impact on the Collateral).
(j) Removal
of Collateral.
If
Borrower conceals, removes, transfers, conveys, assigns or permits to be
concealed, removed, transferred, conveyed or assigned, any of the Collateral
in
violation of the terms of the Loan Documents or with the intent to hinder,
delay
or defraud its creditors or any of them including, without limitation, Agent
or
any Lender.
(k) Other
Defaults.
If a
material default shall occur in any of the covenants or Obligations set forth
in
any of the Loan Documents.
(l) Material
Adverse Change.
Any
material adverse change in the financial condition of Borrower or in the
condition of the Collateral. For purposes of this provision, a decline in the
net worth of Borrower of $500,000.00 or less shall not be considered a material
adverse change.
(m) Default
by Borrower in Other Agreements.
Any
default as defined in the applicable loan agreement, by Borrower (i) in the
payment of any indebtedness to any lender, including any indebtedness owed
under
the Capital Source Finance Facility, the Resort Finance Facility, the Textron
Financial Facility or the Additional Credit Facility; (ii) in the payment or
performance of other indebtedness for borrowed money or obligations secured
by
any part of the Resort; (iii) in the payment or performance of other material
indebtedness or obligations (material indebtedness or obligations being defined
for purposes of this provision as any indebtedness or obligation in excess
of
$200,000) where such default accelerates or permits the acceleration (after
the
giving of notice or passage of time or both) of the maturity of such
indebtedness, or permits the holders of such indebtedness to elect a majority
of
the board of directors of Borrower (whether or not such default[s] have been
waived by such holder) or (iv) the acceleration by CapitalSource Finance, LLC
under the CSF Documents, Resort Funding, LLC under the RFC Documents, Textron
Financial Corporation under the TFC Documents or the bondholders of their
respective credit facilities.
(n) Use
of Resorts.
Any act
or failure to act by Borrower which materially and adversely limits the rights
of Purchasers to use Common Elements, and related or appurtenant easement,
access and use rights and benefits of any of the Resorts, including but not
limited to a default by Borrower or any Affiliate under any loan document or
Declaration to which Borrower or any Affiliate is a party.
(o) Violation
of Negative Covenants.
Borrower violates any negative covenants set forth in Section 7.2.
(p) Violation
of Financial Covenants.
Borrower violates any financial covenants set forth in Section
7.1(y).
(q) Use
of Loan Proceeds.
If the
proceeds of any Advance are used in contravention of Section 6.11.
Section
9 -
Remedies
9.1 Remedies
Upon Default.
Should
an Event of Default occur, Agent on behalf of each Lender, may, take any one
or
more of the actions described in this Section
9,
all
without notice to Borrower:
(a) Acceleration.
Without
demand or notice of any nature whatsoever, declare the unpaid balance of the
Loans, or any part thereof, immediately due and payable, whereupon the same
shall be due and payable.
(b) Termination
of Obligation to Advance.
Terminate any obligation of Lenders to lend under this Agreement in its
entirety, or any portion of any such commitment, to the extent Agent shall
deem
appropriate, all without notice to Borrower.
(c) Judgment.
Reduce
each Lender’s claim to judgment, foreclose or otherwise enforce each Lender’s
security interest in all or any part of the Collateral by any available judicial
or other procedure under law.
(d) Sale
of Collateral.
After
notification, if any, provided for in Section 9.2
below,
Agent may sell or otherwise dispose of, at the office of Agent, or elsewhere,
as
chosen by Agent, all or any part of the Collateral, and any such sale or other
disposition may be as a unit or in parcels, by public or private proceedings,
and by way of one or more contracts (it being agreed that the sale of any part
of the Collateral shall not exhaust Agent’s power of sale, but sales may be made
from time to time until all of the Collateral has been sold or until the
Obligations have been paid in full and fully performed), and at any such sale
it
shall not be necessary to exhibit the Collateral. Borrower hereby acknowledges
and agrees that a private sale or sales of the Collateral, after notification
as
provided for in Section 9.2,
shall
constitute a commercially reasonable disposition of the Collateral sold at
any
such sale or sales, and otherwise, commercially reasonable action on the part
of
Agent.
(e) Retention
of Collateral.
At its
discretion, retain such portion of the Collateral as shall aggregate in value
to
an amount equal to the aggregate amount of the Loans, in satisfaction of the
Obligations, whenever the circumstances are such that Agent is entitled on
behalf of Lenders and elects to do so under applicable law.
(f) Receiver.
Apply
by appropriate judicial proceedings for appointment of a receiver for the
Collateral, or any part thereof, and Borrower hereby consents to any such
appointment.
(g) Purchase
of Collateral.
Buy the
Collateral at any public or private sale.
(h) Exercise
of Other Rights.
Agent
on behalf of each Lender, shall have all the rights and remedies of a secured
party under the Code and other legal and equitable rights to which it may be
entitled, including, without limitation, and without notice to Borrower, the
right to continue to collect all payments made on the Pledged Notes Receivable,
and to apply such payments to the Obligations, and to ▇▇▇ in its own name the
maker of any defaulted Pledged Notes Receivable. Agent may also exercise any
and
all other rights or remedies afforded by any other Applicable Laws or by the
Loan Documents as Agent shall deem appropriate, at law, in equity or otherwise,
including, but not limited to, the right to bring suit or other proceeding,
either for specific performance of any covenant or condition contained in the
Loan Documents or in aid of the exercise of any right or remedy granted to
Agent
in the Loan Documents. Agent shall also have the right to require Borrower
to
assemble any of the Collateral not in Agent’s possession, at Borrower’s expense,
and make it available to Agent at a place to be determined by Agent which is
reasonably convenient to both parties, and Agent shall, on behalf of the
Lenders, have the right to take immediate possession of all of the Collateral,
and may enter the Resorts or any of the premises of Borrower or wherever the
Collateral shall be located, with or without process of law wherever the
Collateral may be, and, to the extent such premises are not the property of
Agent, to keep and store the same on said premises until sold (and if said
premises be the property of Borrower, Borrower agrees not to charge Agent or
any
Lender for use and occupancy, rent, or storage of the Collateral, for a period
of at least ninety (90) days after sale or disposition of the
Collateral).
(i) Replacement
of Manager and Servicer.
Without
demand or notice of any nature whatsoever, upon an Event of Default, Agent
may
terminate any then existing servicing agreement and replace any then existing
Servicer with the Standby Servicer or such other servicer as Agent may select
in
its Permitted Discretion. Agent shall also have the right to assume management
of the Resorts.
9.2 Notice
of Sale.
Reasonable notification of time and place of any public sale of the Collateral
or reasonable notification of the time after which any private sale or other
intended disposition of the Collateral is to be made shall be sent to Borrower
and to any other person entitled under the Code to notice; provided, however,
that if the Collateral threatens to decline speedily in value or is of a type
customarily sold on a recognized market, Agent may sell or otherwise dispose
of
the Collateral without notification, advertisement or other notice of any kind.
It is agreed that notice sent not less than five (5) calendar days prior to
the
taking of the action to which such notice relates is reasonable notification
and
notice for the purposes of this Section 9.2.
Agent
shall have the right to bid at any public or private sale on behalf of Lenders.
Out of money arising from any such sale, Agent shall retain an amount equal
to
all of its costs and charges, including attorneys’ fees for advice, counsel or
other legal services or for pursuing, reclaiming, seeking to reclaim, taking,
keeping, removing, storing and advertising such Collateral for sale, selling
same and any and all other charges and expenses in connection therewith and
in
satisfying any prior Liens thereon. Any balance shall be applied upon the
Obligations, and in the event of deficiency, Borrower shall remain liable to
Lenders. In the event of any surplus, such surplus shall be paid to Borrower
or
to such other Persons as may be legally entitled to such surplus. If, by reason
of any suit or proceeding of any kind, nature or description against Borrower,
or by Borrower or any other party against Agent or any Lender, which in Agent’s
sole discretion makes it advisable for Agent to seek counsel for the protection
and preservation of Lenders’ security interest, or to defend the interest of
Lenders, such expenses and counsel fees shall be allowed to Agent and the same
shall be made a further charge and Lien upon the Collateral.
In
view
of the fact that federal and state securities laws may impose certain
restrictions on the methods by which a sale of Collateral comprised of
Securities may be effected after an Event of Default, Borrower agrees that
upon
the occurrence or existence of an Event of Default, Agent may, on behalf of
Lenders, from time to time, attempt to sell all or any part of such Collateral
by means of a private placement restricting the bidding and prospective
purchasers to whose who will represent and agree that they are purchasing for
investment only and not for, or with a view to, distribution. In so doing,
Agent
may solicit offers to buy such Collateral, or any part of it for cash, from
a
limited number of investors deemed by Agent, in its reasonable judgment, to
be
responsible parties who might be interested in purchasing the Collateral, and
if
Agent solicits such offers from not less than two (2) such investors, then
the
acceptance by Agent of the highest offer obtained therefrom shall be deemed
to
be a commercially reasonable method of disposition of such
Collateral.
9.3 Application
of Collateral; Termination of Agreements.
Upon
the occurrence of any Event of Default: (i) each Lender may, with or without
proceeding with such sale or foreclosure or demanding payment or performance
of
the Obligations, without notice, terminate each Lender’s further performance
under this Agreement or any other agreement or agreements between Lender and
Borrower, without further liability or obligation by Agent or any Lender; (ii)
Agent may, on behalf of Lenders, at any time, appropriate and apply on any
Obligations any and all Collateral in its, the Custodian’s, or the Lockbox
Agent’s possession and (iii) each Lender may apply any and all balances,
credits, deposits, accounts, reserves, indebtedness or other moneys due or
owing
to Borrower held by Lender hereunder or under any other financing agreement
or
otherwise, whether accrued or not. Neither such termination, nor the termination
of this Agreement by lapse of time, the giving of notice or otherwise, shall
absolve, release or otherwise affect the liability of Borrower in respect of
transactions prior to such termination, or affect any of the Liens, security
interests, rights, powers and remedies of Agent or Lenders, but they shall,
in
all events, continue until all of the Obligations are satisfied.
9.4 Rights
of Agent Regarding Collateral.
In
addition to all other rights possessed by Agent or Lenders, Agent, at its
option, may on behalf of each Lender from time to time after there shall have
occurred an Event of Default, and so long as such Event of Default remains
uncured, at its sole discretion, take the following actions:
(a) Transfer
all or any part of the Collateral into the name of Agent or its
nominee;
(b) Take
control of any proceeds of any of the Collateral;
(c) Extend
or
renew the Loan and grant releases, compromises or indulgences with respect
to
the Obligations, any portion thereof, any extension or renewal thereof, or
any
security therefor, to any obligor hereunder or thereunder; and
(d) Exchange
certificates or instruments representing or evidencing the Collateral for
certificates or instruments of smaller or larger denominations for any purpose
consistent with the terms of this Agreement.
9.5 Delegation
of Duties and Rights.
Agent
may execute any of its duties and/or exercise any of its rights or remedies
under the Loan Documents by or through its officers, directors, employees,
attorneys, agents or other representatives.
9.6 Agent
and/or Lenders not in Control.
Except
as expressly provided herein or in any Loan Document, none of the covenants
or
other provisions contained in this Agreement or in any Loan Document shall
give
Agent or any Lender the right or power to exercise control over the affairs
and/or management of Borrower.
9.7 Waivers.
The
acceptance by Agent or any Lender at any time and from time to time of partial
payments of the Loan or performance of the Obligations shall not be deemed
to be
a waiver of any Event of Default then existing. No waiver by Agent or any Lender
of any Event of Default shall be deemed to be a waiver of any other or
subsequent Event of Default. No delay or omission by Agent or any Lender in
exercising any right or remedy under the Loan Documents shall impair such right
or remedy or be construed as a waiver thereof or an acquiescence therein, nor
shall any single or partial exercise of any such right or remedy preclude other
or further exercise thereof, or the exercise of any other right or remedy under
the Loan Documents or otherwise. Further, except as otherwise expressly provided
in this Agreement or by applicable law, Borrower and each and every surety,
endorser, guarantor and other party liable for the payment or performance of
all
or any portion of the Obligations, severally waive notice of the occurrence
of
any Event of Default, presentment and demand for payment, protest, and notice
of
protest, notice of intention to accelerate, acceleration and nonpayment, and
agree that their liability shall not be affected by any renewal or extension
in
the time of payment of the Loan, or by any release or change in any security
for
the payment or performance of the Loan, regardless of the number of such
renewals, extensions, releases or changes.
9.8 Cumulative
Rights.
All
rights and remedies available to any Lender or Agent under the Loan Documents
shall be cumulative of and in addition to all other rights and remedies granted
under any of the Loan Document, at law or in equity, whether or not the Loan
is
due and payable and whether or not Agent shall have instituted any suit for
collection or other action in connection with the Loan Documents.
9.9 Expenditures
by Agent or Lender.
Any
sums expended by or on behalf of Agent or by Lenders pursuant to the exercise
of
any right or remedy provided herein shall become part of the Obligations and
shall bear interest at the Default Rate, from the date of such expenditure
until
the date repaid.
9.10 Diminution
in Value of Collateral.
Neither
Agent nor any Lender shall have any liability or responsibility whatsoever
for
any diminution or loss in value of any of the Collateral, specifically including
that which may arise from Agent or any Lender’s negligence or inadvertence,
whether such negligence or inadvertence is the sole or concurring cause of
any
damage.
9.11 Agent’s
Knowledge.
Agent
shall not be deemed to have knowledge or notice of the occurrence of any Event
of Default unless Agent has actual knowledge of the Event of Default or has
received a notice from a Lender or Borrower referring to this Agreement and
describing such Event of Default. Each Lender agrees that upon learning of
the
existence of an Event of Default, it will promptly notify Agent thereof in
writing. Any such notice by a Lender, shall be in writing sufficient to identify
the nature of the Event of Default.
9.12 Lender’s
Enforcement Rights.
Each
Lender has assigned to Agent its absolute and unconditional right to enforce
the
payment of its Note. No Lender may unilaterally enforce any Lien or security
interest in the Collateral, or bring suit against Borrower to enforce such
Lender’s rights hereunder or under its Note.
Section
10 -
Certain Rights Of Lender
10.1 Protection
of Collateral.
Agent on
behalf of each Lender may at any time and from time to time take such actions
as
Agent deems necessary or appropriate to protect the Lender’s Liens and security
interests in and to preserve the Collateral, and to establish, maintain and
protect the enforceability of Lender’s rights with respect thereto, all at the
expense of Borrower. Borrower agrees to cooperate fully with all of Agent’s
efforts to preserve the Collateral and Lender’s Liens, security interests and
rights and will take such actions to preserve the Collateral and Lender’s Liens,
security interests and rights as Agent may direct, including, without
limitation, by promptly paying upon Lender’s demand therefor, all documentary
stamp taxes or other taxes that may be or may become due in respect of any
of
the Collateral. All of Agent’s expenses of preserving the Collateral and each
Lender’s liens and security interests and rights therein shall be added to the
Loan.
10.2 Performance
by Agent.
If
Borrower fails to perform any agreement contained herein, Agent may itself
perform, or cause the performance of, such agreement, and the expenses
(including any amounts due and payable to any Bank Product Provider in respect
of Bank Products) of Agent or WFF incurred in connection therewith shall be
payable by Borrower under Section 10.5
below.
In no event, however, shall Agent or any Lender have any obligation or duties
whatsoever to perform any covenant or agreement of Borrower contained herein
or
in any of the Loan Documents, Timeshare Documents or Operating Contracts, and
any such performance by Agent shall be wholly discretionary with Agent. The
performance by Agent, of any agreement or covenant of Borrower on any occasion
shall not give rise to any duty on the part of Agent to perform any such
agreements or covenants on any other occasion or at any time. In addition,
Borrower acknowledges that neither Agent nor any Lender shall at any time or
under any circumstances whatsoever have any duty to Borrower or to any third
party to exercise any of Lender’s rights or remedies hereunder.
10.3 No
Liability of Agent or Lender.
Neither
the acceptance of this Agreement by Agent and each Lender, nor the exercise
of
any rights hereunder by Lender or Agent on its behalf, shall be construed in
any
way as an assumption by Agent or any Lender of any obligations, responsibilities
or duties of Borrower arising in connection with any Resort or under the
Timeshare Documents or Timeshare Acts, or under any of the Operating Contracts,
or in connection with any other business of Borrower, or the Collateral, or
otherwise bind Agent or any Lender to the performance of any obligations with
respect to any Resort or the Collateral; it being expressly understood that
neither Agent nor Lender shall be obligated to perform, observe or discharge
any
obligation, responsibility, duty, or liability of Borrower with respect to
any
Resort or any of the Collateral, or under any of the Timeshare Documents, the
Timeshare Acts or under any of the Operating Contracts, including, but not
limited to, appearing in or defending any action, expending any money or
incurring any expense in connection therewith. Without limitation of the
foregoing, neither this Agreement, any action or actions on the part of Agent
taken hereunder, prior to or following the occurrence of an Event of Default
shall constitute an assumption by Agent of any obligations of Borrower with
respect to any Resort or any documents or instruments executed in connection
therewith, and Borrower shall continue to be liable for all of its obligations
thereunder or with respect thereto. Borrower agrees to indemnify, protect,
defend and hold Agent and each Lender harmless from and against any and all
claims, demands, causes of action, losses, damages, liabilities, suits, costs
and expenses, including, without limitation, attorneys’ fees and court costs,
asserted against or incurred by Agent and each Lender by reason of, arising
out
of, or connected in any way with (i) any
failure or alleged failure of Borrower to perform any of its covenants or
obligations with respect to each Resort or to the Purchasers of any of the
Intervals, (ii) a
breach of any certification, representation, warranty or covenant of Borrower
set forth in any of the Loan Documents, (iii) the
ownership of the Pledged Notes Receivable and the rights, titles and interests
assigned hereby, or intended so to be, (iv) the
debtor-creditor relationships between Borrower on the one hand, and the Agent
or
Lender, on the other, or (v) the
operation of the Resorts or sale of Intervals. The obligations of Borrower
to
indemnify, protect, defend and hold Agent and each Lender harmless as provided
in this Agreement are absolute, unconditional, present and continuing, and
shall
not be dependent upon or affected by the genuineness, validity, regularity
or
enforceability of any claim, demand or suit from which Agent or any Lender
is
indemnified. The indemnity provisions in this Section 10.3
shall
survive the satisfaction of the Obligations and termination of this Agreement,
and remain binding and enforceable against the Borrower, or its successors
or
assigns. Borrower hereby waives all notices with respect to any losses, damages,
liabilities, suits, costs and expenses, and all other demands whatsoever hereby
indemnified, and agrees that its obligations under this Agreement shall not
be
affected by any circumstances, whether or not referred to above, which might
otherwise constitute legal or equitable discharges of its obligations
hereunder.
10.4 Right
to Defend Action Affecting Security.
Agent
may, at Borrower’s expense, appear in and defend any action or proceeding at law
or in equity which Agent in good faith believes may affect the security
interests granted under this Agreement, including without limitation, with
respect to the Collateral or the value of thereof or each Lender’s rights under
any of the Loan Documents.
10.5 Expenses.
All
expenses (including any amounts due and payable to any Bank Product Provider
in
respect of Bank Products) payable by Borrower, under any provision of this
Agreement shall be an Obligation of the Borrower and shall be paid by Borrower
to Agent, upon demand, and shall bear interest at the Default Rate from the
date
of expense until repaid by Borrower.
10.6 Lender’s
Right of Set-Off.
Each
Lender shall have the right to set-off against any Collateral any Obligations
then due and unpaid by Borrower provided that Lender remits to Agent all such
sums received as a result of such set-off so that Agent may insure the
distribution thereof in accordance with each Lenders Pro Rata Payment
Percentage.
10.7 No
Waiver.
No
failure or delay on the part of Agent in exercising any right, remedy or power
under this Agreement or in giving or insisting upon strict performance by
Borrower hereunder or in giving notice hereunder shall operate as a waiver
of
the same or any other power or right, and no single or partial exercise of
any
such power or right shall preclude any other or further exercise thereof or
the
exercise of any other such power or right. Agent, notwithstanding any such
failure, shall have the right thereafter to insist upon the strict performance
by Borrower of any and all of the terms and provisions of this Agreement to
be
performed by Borrower. The collection and application of proceeds, the entering
and taking possession of the Collateral, and the exercise by Agent of the rights
of Lenders contained in the Loan Documents and this Agreement shall not cure
or
waive any default, or affect any notice of default, or invalidate any acts
done
pursuant to such notice. No waiver by Agent or any Lender of any breach or
default of or by any party hereunder shall be deemed to alter or affect Lender’s
rights hereunder with respect to any prior or subsequent default.
10.8 Right
of Agent to Extend Time of Payment, Substitute, Release Security,
Etc.
Without
affecting the liability of any Person or entity including without limitation,
for the payment of any of the Obligations or without affecting or impairing
Lender’s Lien on the Collateral, or the remainder thereof, as security for the
full amount of the Loan unpaid and the Obligations, Agent may from time to
time,
without notice: (a) release
any Person liable for the payment of the Loan, (b) extend
the time or otherwise alter the terms of payment of the Loan, (c) accept
additional security for the Obligations of any kind, including deeds of trust
or
mortgages and security agreements, (d) alter,
substitute or release any property securing the Obligations, (e) realize
upon any collateral for the payment of all or any portion of the Loan in such
order and manner as it may deem fit, or (f) join
in any subordination or other agreement affecting this Agreement or the lien
or
charge thereof.
10.9 Assignments
and Participations
(a) Any
Lender may assign and participate and delegate to one or more assignees or
participants (each an “Assignee”)
all,
or any ratable part of all, of the Obligations and the other rights and
obligations of Lender hereunder and under the other Loan Documents; provided,
however,
that
each Lender so doing shall give Agent concurrent written notice of each such
assignment and provided further that Agent shall continue to deal solely and
directly only with each Lender in connection with the interest so assigned
to an
Assignee.
(b) In
connection with any such assignment or participation or proposed assignment
or
participation, any Lender may disclose all documents and information which
it
now or hereafter may have relating to Borrower and its businesses.
(c) Any
other
provision in this Agreement notwithstanding, any Lender which is a banking
institution may at any time create a security interest in, or pledge, all or
any
portion of its rights under and interest in this Agreement in favor of any
Federal Reserve Bank in accordance with Regulation A of the Federal Reserve
Bank
or U.S. Treasury Regulation 31 CFR §203.24, and such Federal Reserve Bank may
enforce sole through Agent such pledge or security interest in any manner
permitted under Applicable Laws but at all times subject to the rights and
limitations contained herein.
(d) Agent
acknowledges that as of the date hereof, WFF is the only Lender. Subsequent
to
the date hereof, in the event that Agent desires to allow another party to
executed a joinder agreement or become a Lender under the provisions of this
Agreement, Borrower shall have a right of prior approval of such action,
provided that Borrower shall not unreasonably withhold its approval of any
additional Lender and provided further that Borrower’s non response for a period
of ten (10) Business Days after being notified by Agent of such action shall
be
deemed to be approval of Borrower to such action of Agent.
10.10 Notice
to Purchaser.
Borrower authorizes any of Agent, Lockbox Agent or Servicing Agent (but none
of
Agent, Lockbox Agent nor Servicing Agent shall be obligated) to communicate
at
any time and from time to time with any Purchaser or any other Person primarily
or secondarily liable under a Pledged Note Receivable with regard to the Lien
of
Agent thereon and any other matter relating thereto, and by no later than the
Closing Date, Borrower shall deliver to Agent a notification to the Purchasers
executed in blank by Borrower and in form acceptable to Agent, pursuant to
which
the Purchasers (or other obligors) may be directed to remit all payments in
respect of the Collateral as Agent may require.
10.11 Collection
of the Notes.
Borrower hereby directs and authorizes each party liable for the payment of
the
Pledged Notes Receivable, and by no later than the Closing Date shall direct
in
writing each such party, to pay each installment thereon to Lockbox Agent
pursuant to the Lockbox Agreement, unless and until directed otherwise by
written notice from Agent or, at Agent’s direction, from Borrower, after which
such parties are and shall be directed to make all further payments on the
Pledged Notes Receivable in accordance with the directions of
Agent.
Following
the occurrence of an Event of Default, Agent shall have the right to require
that all payments becoming due under the Pledged Notes Receivable be paid
directly to Agent, as agent for Lenders, and Agent is hereby authorized to
receive, collect, hold and apply the same in accordance with the provisions
of
this Agreement. In the event that following the occurrence of an Event of
Default, Agent or Lockbox Agent does not receive any installment of principal
or
interest due and payable under any of the Pledged Notes Receivable on or prior
to the date upon which such installment becomes due, Agent may, at its election
(but without any obligation to do so), give or cause Lockbox Agent to give
notice of such default to the defaulting party or parties, and Agent shall
have
the right (but not the obligation), subject to the terms of such Notes, to
accelerate payment of the unpaid balance of any of the Pledged Notes Receivable
in default and to foreclose each of the Mortgages securing the payment thereof,
and to enforce any other remedies available to the holder of such Pledged Notes
Receivable with respect to such default. Borrower hereby further authorizes,
directs and empowers Agent (and Lockbox Agent or any other Person as may be
designated by Agent in writing) to collect and receive all checks and drafts
evidencing such payments and to endorse such checks or drafts in the name of
Borrower and upon such endorsements, to collect and receive the money therefor.
The right to endorse checks and drafts granted pursuant to the preceding
sentence is irrevocable by Borrower, and the banks or banks paying such checks
or drafts upon such endorsements, as well as the signers of the same, shall
be
as fully protected as though the checks or drafts have been endorsed by
Borrower.
10.12 Power
of Attorney.
Borrower
does hereby irrevocably constitute and appoint Agent as Borrower’s true and
lawful Agent and attorney-in-fact, with full power of substitution, for Borrower
and in Borrower’s name, place and stead, or otherwise, to (a) endorse
any checks or drafts payable to Borrower in the name of Borrower and in favor
of
Agent on behalf of each Lender, (b) to
demand and receive from time to time any and all property, rights, titles,
interests and liens hereby sold, assigned and transferred, or intended so to
be,
and to give receipts for same, (c) from
time to time to institute and prosecute in Agent’s own name any and all
proceedings at law, in equity, or otherwise, that Agent may deem proper in
order
to collect, assert or enforce any claim, right or title, of any kind, in and
to
the property, rights, titles, interests and liens hereby sold, assigned or
transferred, or intended so to be, and to defend and compromise any and all
actions, suits or proceedings in respect of any of the said property, rights,
titles, interests and liens, (d) upon
an Event of Default to change the Borrower’s post office mailing address, and
(e) generally
to do all and any such acts and things in relation to the Collateral as Agent
shall in good ▇▇▇▇▇ ▇▇▇▇ advisable. Borrower hereby declares that the
appointment made and the powers granted pursuant to this Section 10.12 are
coupled with an interest and are and shall be irrevocable by Borrower in any
manner, or for any reason, unless and until a release of the same is executed
by
Agent and duly recorded in the appropriate public records of Dallas County,
Texas.
10.13 Relief
from Automatic Stay, Etc.
To
the
fullest extent permitted by law, in the event the Borrower shall make
application for or seek relief or protection under the federal bankruptcy code
(“Bankruptcy Code”) or other Debtor Relief Laws, or in the event that any
involuntary petition is filed against the Borrower under such Code or other
Debtor Relief Laws, and not dismissed with prejudice within 45 days, the
automatic stay provisions of Section 362 of the Bankruptcy Code are hereby
modified as to Agent and each Lender to the extent necessary to implement the
provisions hereof permitting set-off and the filing of UCC Financing Statements
or other instruments or documents; and Agent and each Lender shall automatically
and without demand or notice (each of which is hereby waived) be entitled to
immediate relief from any automatic stay imposed by Section 362 of the
Bankruptcy Code or otherwise, on or against the exercise of the rights and
remedies otherwise available to Lenders as provided in the Loan
Documents.
Section
11 -
Term Of Agreement
This
Agreement shall continue in full force and effect and the security interests
granted hereby and the duties, covenants and liabilities of Borrower hereunder
and all the terms, conditions and provisions hereof relating thereto shall
continue to be fully operative until all of the Obligations have been satisfied
in full. Borrower expressly agrees that if Borrower makes a payment to Agent
on
behalf of any Lender, which payment or any part thereof is subsequently
invalidated, declared to be fraudulent or preferential, or otherwise required
to
be repaid to a trustee, receiver or any other party under any Debtor Relief
Laws, state or federal law, common law or equitable cause, then to the extent
of
such repayment, the Obligations or any part thereof intended to be satisfied
and
the Liens provided for hereunder securing the same shall be revived and
continued in full force and effect as if said payment had not been
made.
Section
12 -
Miscellaneous
12.1 Notices.
All
notices, requests and other communications to any party hereunder shall be
in
writing and shall be given to such party at its address set forth below or
at
such other address as such party may hereafter specify for the purpose of notice
to Agent, any Lender or Borrower. Each such notice, request or other
communication shall be effective (a) if
given by mail, when such notice is deposited in the United States Mail with
first class postage prepaid, addressed as aforesaid, provided that such mailing
is by registered or certified mail, return receipt requested, (b) if
given by overnight delivery, when deposited with a nationally recognized
overnight delivery service such as Federal Express or Airborne with all fees
and
charges prepaid, addressed as provided below, or (c) if
given by any other means, when delivered at the address specified in this
Section 12.1.
| If to Borrower: |
Silverleaf
Resorts, Inc.
|
| ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇ |
| ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ |
| Attn: Mr. ▇▇▇▇▇▇ ▇▇▇▇, CEO |
| With a Copy to: | Meadows, Owens, Collier, Reed, Cousins and Blau |
| 3700 Nations Bank Plaza |
| ▇▇▇ ▇▇▇▇ ▇▇. |
| ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ |
| Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq. |
| If to Lender: | ▇▇▇▇▇ Fargo Foothill, Inc. |
| ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ |
| ▇▇▇▇▇ ▇▇▇▇ |
| ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ |
| Attn: Loan Portfolio Manager |
| Fax No. ▇▇▇-▇▇▇-▇▇▇▇ |
| With a Copy to: | Polivy & ▇▇▇▇▇▇▇▇, LLC |
| Six Central Row, 2nd Floor |
| ▇.▇. ▇▇▇ ▇▇▇▇▇▇ |
| ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇ |
| ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq. |
| ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq. |
| Phone: (▇▇▇) ▇▇▇-▇▇▇▇ |
| Fax: (▇▇▇) ▇▇▇-▇▇▇▇ |
| ▇▇▇▇▇▇▇@▇▇▇.▇▇▇ |
| ▇▇▇▇▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇.▇▇▇ |
12.2 Survival.
All
representations, warranties, covenants and agreements made by Borrower herein,
in the other Loan Documents or in any other agreement, document, instrument
or
certificate delivered by or on behalf of Borrower under or pursuant to the
Loan
Documents shall be considered to have been relied upon by Lenders and shall
survive the delivery to Lenders of such Loan Documents (and each part thereof),
regardless of any investigation made by or on behalf of Lenders.
12.3 Governing
Law.
THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS (EXCEPT AS MAY BE EXPRESSLY PROVIDED
THEREIN TO THE CONTRARY) SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF CALIFORNIA, EXCLUSIVE OF ITS CHOICE OF LAWS
PRINCIPLES.
12.4 Limitation
on Interest.
Agent
and
each Lender and Borrower intend to comply at all times with applicable usury
laws. All agreements between Agent, each Lender and Borrower, whether now
existing or hereafter arising and whether written or oral, are hereby limited
so
that in no contingency, whether by reason of demand or acceleration of the
maturity of the Note or otherwise, shall the interest contracted for, charged,
received, paid or agreed to be paid to Agent or any Lender exceed the highest
lawful rate permissible under applicable usury laws. If, from any circumstance
whatsoever fulfillment of any provision hereof, of the Note or of any other
Loan
Documents shall involve transcending the limit of such validity prescribed
by
any law which a court of competent jurisdiction may deem applicable hereto,
then
ipso facto, the obligation to be fulfilled shall be reduced to the limit of
such
validity; and if from any circumstance Agent or any Lender shall ever receive
anything of value deemed interest by applicable law which would exceed the
highest lawful rate, such amount which would be excessive interest shall be
applied to the reduction of the principal of the Loan and not to the payment
of
interest, or if such excessive interest exceeds the unpaid balance of principal
of the Loan, such excess shall be refunded to Borrower. All interest paid or
agreed to be paid to Lenders shall, to the extent permitted by applicable law,
be amortized, prorated, allocated and spread throughout the full period until
payment in full of the principal so that the interest on the Loan for such
full
period shall not exceed the highest lawful rate. Borrower agrees that in
determining whether or not any interest payment under the Loan Documents exceeds
the highest lawful rate, any non-principal payment (except payments specifically
described in the Loan Documents as “interest”) including without limitation,
prepayment fees and late charges, shall to the maximum extent not prohibited
by
law, be an expense, fee, premium or penalty rather than interest. Agent and
each
Lender hereby expressly disclaim any intent to contract for, charge or receive
interest in an amount which exceeds the highest lawful rate. The provisions
of
the Note, this Agreement, and all other Loan Documents are hereby modified
to
the extent necessary to conform with the limitations and provisions of this
Section 12.4, and this Section 12.4 shall govern over all other provisions
in
any document or agreement now or hereafter existing. This Section 12.4 shall
never be superseded or waived unless there is a written document executed by
Agent, each Lender and the Borrower, expressly declaring the usury limitation
of
this Agreement to be null and void, and no other method or language shall be
effective to supersede or waive this paragraph.
12.5 Invalid
Provisions.
If any
provision of this Agreement or any of the other Loan Documents is held to be
illegal, invalid or unenforceable under present or future laws effective during
the term thereof, such provision shall be fully severable, this Agreement and
the other Loan Documents shall be construed and enforced as if such illegal,
invalid or unenforceable provision had never comprised a part hereof or thereof,
and the remaining provisions hereof or thereof shall remain in full force and
effect and shall not be affected by the illegal, invalid or unenforceable
provision or by its severance therefrom. Furthermore, in lieu of such illegal,
invalid or unenforceable provision there shall be added automatically as a
part
of this Agreement and/or the Loan Documents (as the case may be) a provision
as
similar in terms to such illegal, invalid or unenforceable provision as may
be
possible and be legal, valid and enforceable.
12.6 Successors
and Assigns.
This
Agreement and the other Loan Documents shall be binding upon and inure to the
benefit of Borrower, Agent and each Lender and their respective successors
and
assigns; provided that Borrower may not transfer or assign any of its rights
or
obligations under this Agreement, or the other Loan Documents without the prior
written consent of Agent. This Agreement and the transactions provided for
or
contemplated hereunder or under any of the Loan Documents are intended solely
for the benefit of the parties hereto. No third party shall have any rights
or
derive any benefits under or with respect to this Agreement, or the other Loan
Documents except as provided in advance in a writing signed on behalf of Agent
and each Lender.
12.7 Amendment.
This
Agreement may not be amended or modified, and no term or provision hereof may
be
waived, except by written instrument signed by the Borrower and Agent on behalf
of itself and Lenders.
12.8 Counterparts;
Effectiveness.
This
Agreement may be signed in any number of counterparts, each of which shall
be an
original, with the same effect as if the signature thereto and hereto were
on
the same instrument. This Agreement shall become effective upon Agent’s receipt
of one or more counterparts hereof signed by Borrower.
12.9 Lender
and Agent Not Fiduciaries.
The
relationship between Borrower, Agent and each Lender is solely that of debtor
and creditor, and Agent and Lenders have no fiduciary or other special
relationship with Borrower, and no term or provision of any of the Loan
Documents shall be construed so as to deem the relationship between Borrower,
Agent and Lenders to be other than that of debtor and creditor.
12.10 Return
of Notes Receivable.
(a) In
the
event Borrower complies with its Obligations under Section 2.4(b)
of this
Agreement with respect to Pledged Notes Receivable pursuant to which a default
by the Purchaser thereof has occurred, and Borrower thereafter desires to
enforce such Note Receivable against the Purchaser thereof, then provided that
no Event of Default has occurred which has not been cured to Agent’s
satisfaction (as evidenced by a written acceptance of such cure executed by
Agent), and no event has occurred which with notice, the passage of time or
both, would constitute an Event of Default, then within thirty (30) days after
its receipt of a written request from Borrower, Agent shall deliver such
ineligible Note Receivable to Borrower, provided that such delivery shall be
for
the sole purpose of enforcing Agent’s rights thereunder and Agent,
notwithstanding such delivery, shall continue to have, on behalf of Lenders,
a
first priority security interest in any such note.
(b) In
the
event that all Obligations hereunder are fully satisfied, then within a
reasonable time thereafter, Agent shall endorse the Pledged Notes Receivable
“Pay to the order of Silverleaf Resorts, Inc. without recourse”, and deliver
such Pledged Notes Receivable, together with any other nonrecourse Collateral
reassignment documents requested and prepared by Borrower, at Borrower’s sole
cost and expense.
12.11 Accounting
Principles.
Where
the character or amount of any asset or liability or item of income or expense
is required to be determined or any consolidation or other accounting
computation is required to be made for the purposes of this Agreement, the
same
shall be determined or made in accordance with GAAP consistently applied at
the
time in effect, to the extent applicable, except where such principles are
inconsistent with the requirements of this Agreement.
12.12 Total
Agreement.
This
Agreement and the other Loan Documents, including the Exhibits and Schedules
to
them, is the entire agreement between the parties relating to the subject matter
hereof, incorporates or rescinds all prior agreements and understandings between
the parties hereto relating to the subject matter hereof, cannot be changed
or
terminated orally or by course of conduct, and shall be deemed effective as
of
the date it is accepted by Agent at the offices set forth above. The documents
evidencing the Additional Credit Facility shall remain in full force and
effect.
12.13 Litigation.
TO
THE FULLEST EXTENT NOT PROHIBITED BY APPLICABLE LAW WHICH CANNOT BE WAIVED,
BORROWER AGENT AND EACH LENDER HEREBY KNOWINGLY, VOLUNTARILY, INTENTIONALLY
AND
IRREVOCABLY WAIVE ANY AND ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION OR
PROCEEDING TO ENFORCE OR DEFEND OR CLARIFY ANY RIGHT, POWER, REMEDY OR DEFENSE
ARISING OUT OF OR RELATED TO THIS AGREEMENT, THE OTHER LOAN DOCUMENTS, OR THE
TRANSACTIONS CONTEMPLATED HEREIN OR THEREIN, WHETHER SOUNDING IN TORT OR
CONTRACT OR OTHERWISE, OR WITH RESPECT TO ANY COURSE OF CONDUCT, COURSE OF
DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY PARTY; AND
EACH AGREES THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A JUDGE
AND
NOT BEFORE A JURY. EACH OF BORROWER, AGENT AND ANY LENDER FURTHER WAIVES ANY
RIGHT TO SEEK TO CONSOLIDATE ANY SUCH LITIGATION IN WHICH A JURY TRIAL HAS
BEEN
WAIVED WITH ANY OTHER LITIGATION IN WHICH A JURY TRIAL CANNOT OR HAS NOT BEEN
WAIVED. FURTHER, BORROWER HEREBY CERTIFIES THAT NO REPRESENTATIVE OF AGENT
OR
ANY LENDER NOR ANY AGENT’S OR LENDER’S COUNSEL HAS REPRESENTED, EXPRESSLY OR
OTHERWISE, THAT AGENT OR LENDER WOULD NOT, IN THE EVENT OF SUCH LITIGATION,
SEEK
TO ENFORCE THIS WAIVER OF RIGHT TO JURY TRIAL PROVISION. BORROWER ACKNOWLEDGES
THAT THE PROVISIONS OF THIS SECTION ARE A MATERIAL INDUCEMENT TO LENDER’S
ACCEPTANCE OF THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS.
The
waiver and stipulations of Borrower, Agent and each Lender in this Section
12.13
shall
survive the final payment or performance of all of the Obligations of Borrower
and the resulting termination of this Agreement.
12.14 Incorporation
of Exhibits.
This
Agreement, together with all Exhibits and Schedules hereto, constitute one
document and agreement which is referred to herein by the use of the defined
term “Agreement.” Such Exhibits and Schedules are incorporated herein as to
fully set out in this Agreement. The definitions contained in any part of this
Agreement shall apply to all parts of this Agreement.
12.15 Consent
to Advertising and Publicity of Timeshare Documents.
Borrower hereby consents that Agent and each Lender may issue and disseminate
to
the public information describing the credit accommodation entered into pursuant
to this Agreement, including the names and addresses of Borrower and any
subsidiaries and Affiliates, the amount and a general description of Borrower’s
business.
12.16 Directly
or Indirectly.
Where
any provision in the Agreement refers to action to be taken by any Person,
or
which such Person is prohibited from taking, such provisions shall be applicable
whether such action is taken directly or indirectly by such Person.
12.17 Headings.
Section
headings have been inserted in the Agreement as a matter of convenience of
reference only; such section headings are not a part of the Agreement and shall
not be used in the interpretation of this Agreement.
12.18 Gender
and Number.
Words
of any gender in this Agreement shall include each other gender and the singular
shall mean the plural and vice versa where appropriate.
12.19
Revival and Reinstatement of Obligations.
If the
incurrence or payment of the Obligations by Borrower or the
transfer
to Agent or any Lender of any property should for any reason subsequently be
declared to be void or voidable under any state or federal law relating to
creditors’ rights, including provisions of the Bankruptcy Code relating to
fraudulent conveyances, preferences, or other voidable or recoverable payments
of money or transfers of property (collectively, a “Voidable
Transfer”),
and
if any Lender is required to repay or restore, in whole or in part, any such
Voidable Transfer, or elects to do so upon the reasonable advice of its counsel,
then, as to any such Voidable Transfer, or the amount thereof that any Lender
is
required or elects to repay or restore, and as to all reasonable costs,
expenses, and attorneys fees of such Lender related thereto, the liability
of
Borrower
automatically shall be revived, reinstated, and restored and shall exist as
though such Voidable Transfer had never been made.
12.20
Confidentiality.
Agent
and each Lender for itself and an Assignee of such lender, agrees that material,
non-public information regarding Borrower, its operations, assets, and existing
and contemplated Annual Operating Plans shall be treated by Agent and each
Lender in a confidential manner, and shall not be disclosed by Agent or any
Lender to Persons who are not parties to this Agreement, except: (a) to
attorneys for and other advisors, accountants, auditors, and consultants to
any
Lender, (b) to Subsidiaries of Agent or any Lender and Agent or Lender
affiliated entities (including the Bank Product Providers), provided that any
such Subsidiary or affiliated entity shall have agreed to receive such
information hereunder subject to the terms of this Section
12.20,
(c) as
may be required by statute, decision, or judicial or administrative order,
rule,
or regulation, (d) as may be agreed to in advance by Borrower or as requested
or
required by any Governmental Authority pursuant to any subpoena or other legal
process, (e) as to any such information that is or becomes generally available
to the public (other than as a result of prohibited disclosure by Agent or
any
Lender), (f) in connection with any assignment, prospective assignment, sale,
prospective sale, participation or prospective participations, or pledge or
prospective pledge of any Lender’s interest under this Agreement, provided that
any such assignee, prospective
assignee, purchaser, prospective purchaser, Participant, prospective
participant, pledgee, or prospective pledgee shall have agreed in writing to
receive such information hereunder subject to the terms of this Section, and
(g)
in connection with any litigation or other adversary proceeding involving
parties hereto which such litigation or adversary proceeding involves claims
related to the rights or duties of such parties under this Agreement or the
other Loan Documents. The provisions of this Section
12.20
shall
survive for 2 years after the payment in full of the Obligations. Anything
contained herein or in any other Loan Document to the contrary notwithstanding,
the obligations of confidentiality contained herein and therein, as they relate
to the transactions contemplated hereby, shall not apply to the federal tax
structure or federal tax treatment of such transactions, and each party hereto
(and any employee, representative, of Agent or of any Lender or of any other
party hereto) may disclose to any and all Persons, without limitation of any
kind, the federal tax structure and federal tax treatment of such transactions
(including all written materials related to such tax structure and tax
treatment). The preceding sentence is intended to cause the transactions
contemplated hereby to not be treated as having been offered under conditions
of
confidentiality for purposes of Section 1.6011-4(b)(3) (or any successor
provision) of the Treasury Regulations promulgated under Section 6011 of the
IRC, and shall be construed in a manner consistent with such purpose. In
addition, each party hereto acknowledges that it has no proprietary or exclusive
rights to the tax structure of the transactions contemplated hereby or any
tax
matter or tax idea related thereto.
Section
13 -
Agent
13.1 Authorization
and Action.
Each
Lender hereby accepts the appointment of and irrevocably (but subject to Section
13.8)
authorizes Agent to take such action as Agent on its behalf and to exercise
such
powers as are expressly delegated to Agent by the terms hereof, together with
such powers as are reasonably incidental thereto. Agent shall not be required
to
take any action which exposes Agent to personal liability or which is contrary
to this Agreement or applicable law. Agent agrees to give to each Lender prompt
notice of each notice given to it by Borrower pursuant to the terms of this
Agreement. The appointment and authority of Agent hereunder shall terminate
upon
the payment of the Obligations in full.
13.2 Nature
of Agent’s Duties.
Agent
shall have no duties or responsibilities except those expressly set forth in
this Agreement or in the other Loan Documents. The duties of Agent shall be
mechanical and administrative in nature. Agent shall not have by reason of
this
Agreement a fiduciary relationship in respect of any Lender. Nothing in this
Agreement or any of the Loan Documents, express or implied, is intended to
or
shall be construed to impose upon Agent any obligations in respect of this
Agreement or any of the Loan Documents except as expressly set forth herein
or
therein. Agent shall not have any duty or responsibility, either initially
or on
a continuing basis, to provide any Lender with any credit or other information
with respect to Borrower, whether coming into its possession before the date
hereof or at any time or times thereafter (except as expressly set forth in
this
Agreement). If Agent seeks the consent or approval of Lenders, to the taking
or
refraining from taking any action hereunder, Agent shall send notice thereof
to
each Lender.
13.3 UCC
Filings.
Each of
Borrower, Agent and Lender expressly recognizes and agrees that Agent shall
be
listed as the assignee or secured party of record on the various UCC filings
required to be made hereunder in order to perfect the grant of a security
interest in the Collateral herein for the benefit of Lenders, that such listing
shall be for administrative convenience only in creating a single secured party
to take certain actions hereunder on behalf of the holders of the Obligations,
and that such listing will not affect in any way the status of such holders
as
the beneficial holders of such security interest. In addition, such listing
shall impose no duties on Agent other than those expressly and specifically
undertaken in accordance with this Section
13.
13.4 Agent’s
Reliance, Etc.
Neither
Agent nor any of its directors, officers, agents or employees shall be liable
for any action taken or omitted to be taken by it or them as Agent under or
in
connection with this Agreement (including Agent’s servicing, administering or
collecting Receivables) except for its or their own gross negligence or willful
misconduct. Without limiting the foregoing, Agent: (i) may consult with legal
counsel (including counsel for Borrower), independent public accountants and
other experts selected by it and shall not be liable for any action taken or
omitted to be taken in good faith by it in accordance with the advice of such
counsel, accountants or experts; (ii) makes no warranty or representation to
Lender and shall not be responsible to any Lender for any statements, warranties
or representations made in or in connection with this Agreement; (iii) shall
not
have any duty to ascertain or to inquire as to the performance or observance
of
any of the terms, covenants or conditions of this Agreement on the part of
Borrower or to inspect the property (including the books and records) of
Borrower (except as otherwise expressly set forth in this Agreement); (iv)
shall
not be responsible to any Lender for the due execution, legality, validity,
enforceability, genuineness, sufficiency, or value of this Agreement, or any
other instrument or document furnished pursuant hereto, or any certificate,
report, statement or other document referred to or provided for in, or received
by Agent under or in connection with, the Loan Documents, or for any failure
of
Borrower or any of its Affiliates to perform its obligation under the Loan
Documents; and (v) shall incur no liability under or in respect of this
Agreement by acting upon any notice (including notice by telephone), consent,
certificate or other instrument or writing (which may be by telex or telecopier)
believed by it to be genuine and to be or to have been signed or sent by the
proper party or parties. Agent may, but shall not be required to, at any time
request instructions from Lenders with respect to any actions or approvals
which
by the terms of this Agreement or of any of the other Loan Documents Agent
is
permitted or required to take or to grant, and Agent shall be absolutely
entitled to refrain from taking any action or to withhold any approval and
shall
not be under any liability whatsoever to any Person for refraining from any
action or withholding any approval under any of the Loan Documents until it
shall have received such instructions from the requisite Lender, as applicable
in accordance with this Agreement. Without limiting the foregoing, Lender shall
not have any right of action whatsoever against Agent as a result of Agent
acting or refraining from acting under this Agreement or any of the other Loan
Documents in accordance with the instructions of the requisite Lender as
applicable in accordance with this Agreement. Agent shall be entitled to rely,
and shall be fully protected in relying, upon any note, writing, resolution,
notice, consent, certificate, affidavit, letter, cablegram, telegram, telecopy,
telex or teletype message, statement, order or other document or conversation
reasonably believed by it or them to be genuine and correct and to have been
signed, sent or made by the proper Person or Persons and upon advice and
statements of legal counsel (including counsel to Borrower), independent
accountants and other experts selected by Agent.
13.5 Agent
and Affiliates.
To the
extent that Agent or any of its Affiliates are or shall become Lenders
hereunder, Agent or such Affiliate, in such capacity, shall have each and every
right and power under this Agreement as would any other Lender hereunder
(including the right to vote upon any matter upon which any of Lenders are
entitled to vote) and, without exception, may exercise the same as though it
were not an Agent. Agent and its Affiliates may engage in any kind of business
with Borrower, any of its Affiliates and any Person who may do business with
or
own securities of Borrower or any of its Affiliates, all as if it were not
an
Agent hereunder and without any duty to account therefor to
Lenders.
13.6 Credit
Decision.
Independently, and without reliance upon Agent, each Lender has, to the extent
it deems appropriate, made and shall continue to make (a) its own independent
investigation of the financial affairs and business affairs of Borrower in
connection with any action or inaction with respect to the transactions
contemplated herein, and (b) its own evaluation of the creditworthiness of
Borrower and of the value of the Collateral, and, except as expressly provided
in this Agreement, Agent has had and shall have no duty or responsibility to
provide any Lender with any credit or other information with respect thereto.
Agent shall not be responsible to any Lender for any recitals, statements,
representation or warranties herein or in any document, certificate or other
writing delivered in connection herewith (unless made by Agent) or for the
execution, effectiveness, genuineness, validity, enforceability, collectibility,
priority or sufficiency of this Agreement (except with respect to Agent’s
obligations hereunder) or the Loan Documents or the financial condition of
Borrower or the value of the Collateral. Except as expressly herein provided
with respect to its duties as agent, Agent shall not be required to make any
inquiry concerning either the performance or observance of any of the terms,
provisions or conditions of this Agreement or the Loan Documents, the financial
condition of Borrower, or the existence or possible existence of any Event
of
Default.
13.7 Indemnification.
Each
Lender agrees to indemnify Agent (to the extent not reimbursed by Borrower),
ratably in accordance with each Lender’s Pro Rata Payment Percentage, from and
against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses, or disbursements of any kind or
nature whatsoever which may be imposed on, incurred by, or asserted against
Agent in any way relating to or arising out of this Agreement or any action
taken or omitted by Agent under this Agreement; provided, however, that no
Lender shall be liable for any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses, or disbursements
resulting from Agent’s gross negligence or willful misconduct. Without limiting
the generality of the foregoing, each Lender agrees to reimburse Agent (to
the
extent not reimbursed by Borrower) ratably in accordance with Lender’s Pro Rata
Payment Percentage, promptly upon demand, for any out-of-pocket expenses
(including reasonable counsel fees) incurred by Agent in connection with the
administration, modification, amendment or enforcement (whether through
negotiations, legal proceedings or otherwise) of, or legal advice in respect
of
its rights or responsibilities under, this Agreement. The rights of Agent under
this Section 13.7
shall
survive the termination of this Agreement. For purposes of this paragraph,
the
term “Agent” shall include Agent, its affiliates and their respective officers,
directors, employees and agents.
13.8 Successor
Agent.
Agent
may resign at any time by giving thirty days notice thereof to Lenders and
Borrower. Upon any such resignation, Lenders, including WFF, shall have the
right to appoint a successor Agent, and such resignation shall not be effective
until such successor Agent is appointed and has accepted such appointment.
If no
successor Agent shall have been so appointed and accepted such appointment
within seventy-five (75) days after Agent’s giving of notice of resignation,
then Agent may, on behalf of Lenders, appoint a successor Agent, which successor
Agent shall be experienced in the types of transactions contemplated by this
Agreement. Upon the acceptance of any appointment as Agent hereunder by a
successor Agent, such successor Agent shall thereupon succeed to and become
vested with all of the rights, powers, privileges and duties of the retiring
Agent, and the retiring Agent shall be discharged from all further duties and
obligations under this Agreement. After any retiring Agent’s resignation
hereunder as Agent, the provisions of this Section
13
shall
inure to its benefit as to any actions taken or omitted to be taken by it while
it was Agent under this Agreement.
13.9 Duty
of Care.
Agent
shall endeavor to exercise the same care in its administration of the Loan
Documents as it exercises with respect to similar transactions in which it
is
involved and where no other co-lenders are involved; provided that the liability
of Agent for failing to do so shall be limited as provided in the preceding
paragraphs of this Section
13.
13.10 Delegation
of Agency.
(a) If
at any
time or times it shall be necessary or prudent in connection with the exercise
or protection of Agent’s rights hereunder in order to conform to any law of any
jurisdiction in which any of the Collateral shall be located, or Agent shall
be
advised by counsel that it is so necessary or prudent in the interest of
Lenders, or Agent shall deem it necessary for its own protection in the
performance of its duties hereunder Agent and, to the extent required by Agent,
Borrower shall execute and deliver all instruments and agreements reasonably
necessary or proper to constitute another bank or trust company, or one or
more
individuals approved by Agent (each an “Approved Delegate”), either to act as
co-agent or co-agents or trustee of all or any of the Collateral, jointly with
Agent originally named herein or any successor, or to act as separate agent
or
agents or trustee of any such Collateral. Every separate agent and every
co-agent and every trustee, other than any agent which may be appointed as
successor to Agent, shall, to the extent permitted by applicable law, be
appointed to act and be such, subject to the following provisions and
conditions, namely:
(i) except
as
otherwise provided herein, all rights, remedies, powers, duties and obligations
conferred upon, reserved or imposed upon Agent in respect of the custody,
control and management of moneys, paper or securities shall be exercised solely
by Agent hereunder;
(ii) all
rights, remedies, powers, duties and obligations conferred upon, reserved to
or
imposed upon Agent hereunder shall be conferred, reserved or imposed and
exercised or performed by Agent except to the extent that the instrument
appointing such separate agent or separate agents or co-agent or co-agents
or
trustee shall otherwise provide, and except to the extent that under any law
of
any jurisdiction in which any particular act or acts are to be performed, Agent
shall be incompetent or unqualified to perform such act or acts, in which event
such rights, remedies, powers, duties and obligations shall be exercised and
performed by such separate agents or co-agent or co-agents to the extent
specifically directed in writing by Agent;
(iii) no
power
given thereby to, or which it is provided hereby may be exercised by, any such
separate agent or separate agents or co-agent or co-agents or trustee shall
be
exercised hereunder by such separate agent or separate agents or co-agent or
co-agents or trustee except jointly with, or with the consent in writing of,
anything herein contained to the contrary notwithstanding;
(iv) no
separate agent or co-agent or trustee constituted under this Section
13.10
shall be
personally liable by reason of any act or omission of any other agent, separate
agent, co-agent or trustee hereunder; and
(v) Agent,
at
any time by an instrument in writing, executed by it, may accept the resignation
of or remove any such separate agent or co-agent or trustee of Agent, and in
that case, by an instrument in writing executed by Agent and Borrower (to the
extent necessary or requested by Agent) jointly may appoint a successor to
such
separate agent or co-agent or trustee, as the case may be, anything therein
contained to the contrary notwithstanding. In the event that Borrower shall
not
have joined in the execution of any such instrument with a Person or entity
within ten (10) days after the receipt of a written request from Agent to do
so,
Agent, acting alone, may appoint a successor and may execute any instrument
in
connection therewith, and Borrower hereby irrevocably appoints Agent its agent
and attorney to act for it in such connection in either of such
contingencies.
In
the
event that Borrower shall not have joined in the execution of such instruments
or agreements with any Approved Delegate within thirty (30) Business Days after
the receipt of a written request from Agent to do so, Borrower hereby
irrevocably appoints Agent as its agent and attorney to act for it under the
foregoing provisions of this Section 13.10
in such
contingency, it being understood that the power of attorney granted hereunder
is
coupled with an interest.
(b) Agent
may
execute any of its duties under the Loan Documents by or through agents or
attorneys-in-fact and shall be entitled to advice of counsel, and other
specialists and advisors (including affiliates of such Agent) selected by it,
concerning all matters pertaining to such duties. Agent shall not be responsible
for the negligence or misconduct of any such agents, attorneys-in-fact, counsel
and other specialists and advisors selected by it with reasonable
care.
13.11 Agent’s
Responsibilities.
(a) Each
subsequent holder of any Note by its acceptance thereof irrevocably joins in
the
designation of WFF as agent for Lenders as provided herein with the same force
and effect as if it were an original Lender hereunder and signatory hereto.
WFF
hereby accepts such designation and appointment as agent. Agent, acting as
such
under the provisions of this Agreement, or under any other instrument or
document delivered pursuant hereto, shall not be liable or responsible, directly
or indirectly, for any action taken, or omitted to be taken, by it in good
faith, nor shall Agent be liable or responsible for the consequences of any
oversight or error of judgment on its part, but Agent shall only be liable
or
responsible for any loss suffered by any of Lenders hereunder provided such
loss
was caused by Agent’s gross negligence or willful misconduct. Agent shall not,
by any action or inaction hereunder, be deemed to make any representation or
warranty regarding the legality, legal effect or sufficiency of any act of
Borrower in connection with, or under any of the provisions of, this Agreement,
or any instrument or document delivered pursuant thereto, or the validity or
enforceability of any instrument or document furnished to Agent pursuant to
this
Agreement. Agent shall have no liability or responsibility in connection with
the collection or payment of any sums due to Lenders by Borrower, the sole
responsibility of Agent being to account to Lenders only for monies actually
received by it. Agent shall have no obligation to make any application of any
funds received by it until such funds are immediately available at Agent’s
office. Any monies received by Agent need not be segregated from other funds
except to the extent required by law, and Agent shall not be liable for interest
on any funds received by it. Agent shall not be charged with knowledge of any
facts which would prohibit the making of any payment of monies in accordance
with the provisions of this Agreement unless and until Agent shall have received
written notice thereof at its office from Borrower or any Lender. The duties
of
Agent shall be mechanical and administrative in nature, Agent shall not, by
reason of this Agreement, be deemed a fiduciary in respect of Lenders, and
nothing in this Agreement shall impose upon Agent any obligations in respect
of
this Agreement except as expressly herein set forth.
(b) Agent
shall have the right to exercise all the rights granted to, and exercisable
by,
it under this Agreement and any instrument or document delivered pursuant to
this Agreement, in such manner from time to time, as Agent in its sole
discretion, shall deem proper.
(c) Agent
agrees to provide each Lender with notice (and copies of documents, as
appropriate) of the any amendment waiver or modification of the terms of this
Agreement entered in accordance with Section 0;
(d)
Except
as
otherwise provided in this Agreement, Agent shall be entitled, at its option,
from time to time and at any time, to enter into any amendment of, or waive
compliance with the terms of this Agreement without obtaining prior approval
from any Lender, provided that, without the prior approval of each Lender in
each instance, Agent may not take any of the following actions with respect
to
the Loan: (i) reduce the principal amount of any Loans; (ii) expressly change
the advance rate; (iii) change the definition of Eligible Notes Receivable;
(iv)
decrease the Applicable Interest Rate; (v) extend the Final Maturity Date of
the
Loan; or (vi) release any material Collateral or any material third party
obligor (except as expressly authorized by this Agreement in the normal course
of Borrower’s business); Notwithstanding the foregoing, Agent may take any such
actions referred to in such preceding sentences and each Lender shall be bound
thereby with the consent of such Lenders (including Agent as a Lender for this
purpose) whose total Pro Rata Payment Percentage is equal to or exceeds
sixty-six and two-thirds percent (66 2/3%) of the outstanding principal balance
of the Loan.
Notwithstanding
the foregoing, in the event that a Lender does not consent to any of the
amendments or waivers requiring sixty-six and two-thirds percent (66 2/3%)
consent under the previous paragraph, then such Lender shall not be obligated
to
fund any additional Advances hereunder but it shall continue to receive its
Pro
Rata Payment Percentage of each repayment of principal and interest on the
Loan
in accordance with the terms of this Agreement and shall be repaid in full
over
a period not to exceed the then existing Final Maturity Date under the Loan.
Furthermore, in the event a Lender does not consent to any amendment or waivers
regarding: (i) reduction of the principal amount of any Loans; (ii) reduction
of
the Interest Rate; or (iii) any subordination or release of any material
Collateral, except as set forth in this Agreement or the Loan Documents, then
in
any of such events any such modification shall be applicable only to new money
advanced by Agent and such changes shall not be applicable in any way to the
existing balance due under the Loan as of the date of such change.
Notwithstanding anything to the contrary contained in this Section13.11(d),
Agent may, in its sole and absolute discretion, require that the Lenders
(including WFF) unanimously consent to the approval of any such action(s)
referred to in this Section 13.11(d) before any such action(s) is taken.
Borrower acknowledges and agrees that in the event that a Lender does not
consent to any of the amendments or waivers requiring sixty-six and two-thirds
percent (66 2/3%) consent under the previous paragraph and such Lender is not
obligated to fund any additional Advances hereunder, the Commitment will be
reduced by an amount equal to the amount of any unused portion of such Lender’s
Commitment.
13.12 Power
of Attorney.
Each
Lender does hereby irrevocably constitute and appoint Agent as its true and
lawful agent and attorney-in-fact, with full power of substitution, for and
in
its name, place and stead, or otherwise, to (a) demand and receive from time
to
time any and all property, rights, titles, interests and liens hereby sold,
assigned and transferred, or intended so to be, and to give receipts for same,
(b) from time to time to institute and prosecute in Agent’s own name any
and all proceedings at law, in equity, or otherwise, that Agent may deem proper
in order to collect, assert or enforce any claim, right or title, of any kind,
in and to the property, rights, titles, interests and liens hereby sold,
assigned or transferred, or intended so to be, and to defend and compromise
any
and all actions, suits or proceedings in respect of any of the said property,
rights, titles, interests and liens, and (c) generally to do all and any
such acts and things in relation to the Loans, the Collateral and this Agreement
as Agent shall in good ▇▇▇▇▇ ▇▇▇▇ advisable. Each Lender hereby declares that
the appointment made and the powers granted pursuant to this Section
13.12
are
coupled with an interest and are and shall be irrevocable by it in any manner,
or for any reason, unless and until the repayment in full of the
Obligation.
13.13 Ratification
and Confirmation.
Borrower hereby ratifies, confirms, assumes and agrees to be bound by all
statements, covenants and agreements set forth in the this Agreement and the
other Loan Documents. Borrower reaffirms, restates and incorporates by reference
all of the covenants and agreements made in the Loan Documents as if the same
were made as of this date. Borrower agrees to pay the Loan and all related
expenses, as and when due and payable in accordance with this Agreement and
the
other Loan Documents, and to observe and perform the Obligations, and do all
things necessary which are not prohibited by law to prevent the occurrence
of
any Event of Default. In addition, to further secure, and to evidence and
confirm the securing of, the prompt and complete payment and performance by
Borrower of the Loan and all of the Obligations, for value received, Borrower
unconditionally and irrevocably assigns, pledges and grants to Agent, and hereby
confirms or reaffirm the prior granting to Agent of, a continuing first priority
Lien, mortgage and security interest in and to all of the Collateral, whether
now existing or hereafter acquired. Also, as provided in the Loan Documents,
the
Loan is and shall be further secured by the Liens and security interests in
favor of Agent in the properties and interests relating to Additional Eligible
Resorts, which now or hereafter serve as collateral security for any
Obligations. On the date hereof and thereafter upon satisfaction of the
requirements for approval by Agent of Additional Eligible Resorts, Borrower
shall record, or cause to be recorded, such mortgages, deeds of trust, deeds
to
secure debt, assignments, pledges, security agreements and UCC Financing
Statements in the appropriate public records of the state in which each Resort
is located to further evidence and perfect Agent’s Lien on the Collateral.
Borrower agrees to deliver or cause to be delivered by its Affiliates, such
mortgages, deeds of trust, deeds to secure debt, assignments, pledges, security
agreements and UCC Financing Statements as Agent may deem necessary to further
evidence and perfect Agent’s Lien on the Collateral.
13.14 Estoppel.
The
Loan
constitutes valuable consideration to Borrower. This Agreement and the other
Loan Documents and the Loan modifications and transactions provided for or
contemplated hereunder or thereunder, shall in no way adversely affect the
Lien
or perfection or priority of any Lien of Agent as of the date hereof in and
to
any Collateral, and are not intended to constitute, and do not constitute or
give rise to, any novation, cancellation or extinguishment of any of Borrower’s
Obligations existing as of the Closing Date to Agent, or of any interests owned
or held by Agent (and not previously released) in and to any of the Collateral;
it being the intention of the parties that the transactions provided for or
contemplated herein shall be effectuated without any interruption in the
continuity of the value and consideration received by Borrower, and of the
attachment, perfection, priority and continuation in favor of Agent in and
to
all Collateral and proceeds.
13.15 Participation
Agreement.
Nothing
in this Section
13
shall
affect or limit any Participant’s rights or any of the Agent’s obligations under
each Participant’s respective participation agreement with the
Agent.
13.16 Withholding
Taxes.
(a) If
any
Lender is a “foreign person” within the meaning of the IRC and such Lender
claims exemption from, or a reduction of, U.S. withholding tax under Sections
1441 or 1442 of the IRC, such Lender agrees with and in favor of Agent and
Borrower, to deliver to Agent and Borrower:
(i) if
such
Lender claims an exemption from withholding tax pursuant to its portfolio
interest exception, (A) a statement of the Lender, signed under penalty of
perjury, that it is not a (I) a “bank” as described in Section 881(c)(3)(A) of
the IRC, (II) a 10% shareholder of Borrower (within the meaning of
Section 871(h)(3)(B) of the IRC), or (III) a controlled foreign corporation
related to Borrower within the meaning of Section 864(d)(4) of the IRC, and
(B)
a properly completed and executed IRS Form W-8BEN, before the first payment
of
any interest under this Agreement and at any other time reasonably requested
by
Agent or Borrower;
(ii) if
such
Lender claims an exemption from, or a reduction of, withholding tax under a
United States tax treaty, properly completed and executed IRS Form W-8BEN before
the first payment of any interest under this Agreement and at any other time
reasonably requested by Agent or Borrower;
(iii) if
such
Lender claims that interest paid under this Agreement is exempt from United
States withholding tax because it is effectively connected with a United States
trade or business of such Lender, two properly completed and executed copies
of
IRS Form W-8ECI before the first payment of any interest is due under this
Agreement and at any other time reasonably requested by Agent or Borrower;
and
(iv) such
other form or forms as may be required under the IRC or other laws of the United
States as a condition to exemption from, or reduction of, United States
withholding tax.
Such
Lender agrees promptly to notify Agent and Borrower of any change in
circumstances which would modify or render invalid any claimed exemption or
reduction.
(b) If
any
Lender claims exemption from, or reduction of, withholding tax under a United
States tax treaty by providing IRS Form W-8BEN and such Lender sells, assigns,
grants a participation in, or otherwise transfers all or part of the Obligations
of Borrower to such Lender, such Lender agrees to notify Agent of the percentage
amount in which it is no longer the beneficial owner of Obligations of Borrower
to such Lender. To the extent of such percentage amount, Agent will treat such
Lender’s IRS Form W-8BEN as no longer valid.
(c) If
any
Lender is entitled to a reduction in the applicable withholding tax, Agent
may
withhold from any interest payment to such Lender an amount equivalent to the
applicable withholding tax after taking into account such reduction. If the
forms or other documentation required by subsection (a) of this Section are
not
delivered to Agent, then Agent may withhold from any interest payment to such
Lender not providing such forms or other documentation an amount equivalent
to
the applicable withholding tax.
(d) If
the
IRS or any other Governmental Authority of the United States or other
jurisdiction asserts a claim that Agent did not properly withhold tax from
amounts paid to or for the account of any Lender (because the appropriate form
was not delivered, was not properly executed, or because such Lender failed
to
notify Agent of a change in circumstances which rendered the exemption from,
or
reduction of, withholding tax ineffective, or for any other reason) such Lender
shall indemnify and hold Agent harmless for all amounts paid, directly or
indirectly, by Agent as tax or otherwise, including penalties and interest,
and
including any taxes imposed by any jurisdiction on the amounts payable to Agent
under this Section, together with all costs and expenses (including attorneys
fees and expenses). The obligation of the Lenders under this subsection shall
survive the payment of all Obligations and the resignation or replacement of
Agent.
(e) All
payments made by Borrower hereunder or under any note will be made without
setoff, counterclaim, or other defense, except as required by Applicable Laws
other than for Taxes (as defined below). All such payments will be made free
and
clear of, and without deduction or withholding for, any present or future taxes,
levies, imposts, duties, fees, assessments or other charges of whatever nature
now or hereafter imposed by any jurisdiction (other than the United States)
or
by any political subdivision or taxing authority thereof or therein (other
than
of the United States) with respect to such payments (but excluding, any tax
imposed by any jurisdiction or by any political subdivision or taxing authority
thereof or therein (i) measured by or based on the net income or net profits
of
a Lender, or (ii) to the extent that such tax results from a change in the
circumstances of the Lender, including a change in the residence, place of
organization, or principal place of business of the Lender, or a change in
the
branch or lending office of the Lender participating in the transactions set
forth herein) and all interest, penalties or similar liabilities with respect
thereto (all such non-excluded taxes, levies, imposts, duties, fees, assessments
or other charges being referred to collectively as “Taxes”).
If
any Taxes are so levied or imposed, Borrower agrees to pay the full amount
of
such Taxes, and such additional amounts as may be necessary so that every
pay-ment of all amounts due under this Agreement or under any note, including
any amount paid pursuant to this Section 13.16(e)
after
withholding or deduction for or on account of any Taxes, will not be less than
the amount provided for herein; provided,
however,
that
Borrower shall not be required to increase any such amounts payable to Agent
or
any Lender (i) that is not organized under the laws of the United States, if
such Person fails to comply with the other requirements of this Section
13.16,
or (ii)
if the increase in such amount payable results from Agent’s or such Lender’s own
willful mis-conduct or gross negligence. Borrower will furnish to Agent as
promptly as possible after the date the payment of any Taxes is due pursuant
to
Applicable Laws certified copies of tax receipts evidencing such payment by
Borrower.
13.17
Agent
in Individual Capacity.
WFF
and
its Affiliates may make loans to, issue letters of credit for the account of,
accept deposits from, acquire equity interests in, and generally engage in
any
kind of banking, trust, financial advisory, underwriting, or other business
with
Borrower and its Subsidiaries and Affiliates and any other Person party to
any
Loan Documents as though WFF were not Agent hereunder, and, in each case,
without notice to or consent of the other Lenders. The other Lenders acknowledge
that, pursuant to such activities, WFF or its Affiliates may receive information
regarding Borrower or its Affiliates and any other Person party to any Loan
Documents that is subject to confidentiality obligations in favor of Borrower
or
such other Person and that prohibit the disclosure of such information to the
Lenders, and the Lenders acknowledge that, in such circumstances (and in the
absence
of a waiver of such confidentiality obligations, which waiver Agent will use
its reasonable
best efforts to obtain), Agent shall not be under any obligation to provide
such
information to them. The terms “Lender” and “Lenders” include WFF in its
individual capacity.
[THE
REMAINDER OF THIS PAGE IS LEFT INTENTIONALLY BLANK]
IN
WITNESS WHEREOF,
Borrower and Lender have caused this Agreement to be duly executed and delivered
effective as of the date first above written.
| BORROWER: | ||
|
SILVERLEAF
RESORTS, INC.,
a
Texas
corporation
|
||
| |
|
|
| /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ | By: | /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇. |
|
|
|
|
|
Name:
▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
Title:
Chief Financial Officer
|
||
|
STATE
OF TEXAS
|
)
|
|
|
)
|
ss:
|
|
|
COUNTY
OF DALLAS
|
)
|
The
foregoing instrument was acknowledged before me this 16th
day of
December, 2005 by ▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇., Chief Financial Officer of
Silverleaf Resorts, Inc., a Texas corporation, on behalf of the
Corporation.
| By: | /s/ ▇▇▇ ▇. ▇▇▇▇▇▇▇ | |
|
|
||
|
Notary
Public
My Commission
Expires:
|
||
| LENDER: | ||
|
▇▇▇▇▇
FARGO FOOTHILL, INC.,
a
California corporation
|
||
| |
|
|
| /s/ | By: | /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ |
|
|
|
|
|
Name:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title:
Senior Vice President
|
||
|
STATE
OF GEORGIA
|
)
|
|
|
)
|
ss:
|
|
|
COUNTY
OF ▇▇▇▇▇▇
|
)
|
The
foregoing instrument was acknowledged before me this 16th day of
December, 2005 by _Russell
Bonder_____________,
___SVP_________________
of ▇▇▇▇▇ FARGO FOOTHILL, INC., a California corporation, on behalf of the
corporation.
| By: | /s/ PRECIOUS ▇. ▇▇▇▇▇▇▇▇ | |
|
|
||
|
Commissioner
of
the Superior Court
Notary Public
My Commission Expires: April 13,
2006
|
||
| AGENT: | ||
|
▇▇▇▇▇
FARGO FOOTHILL, INC.,
a
California corporation, as Agent
|
||
| |
|
|
| /s/ | By: | /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ |
|
|
|
|
|
Name:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title:
Senior Vice President
|
||
|
STATE
OF GEORGIA
|
)
|
|
|
)
|
ss:
|
|
|
COUNTY
OF ▇▇▇▇▇▇
|
)
|
The
foregoing instrument was acknowledged before me this 16th day of
December, 2005 by __Russell
Bonder_____________________,
____SVP________________
of ▇▇▇▇▇ FARGO FOOTHILL, INC., a California corporation, on behalf of the
corporation.
| By: | /s/ PRECIOUS ▇. ▇▇▇▇▇▇▇▇ | |
|
|
||
|
Commissioner
of
the Superior Court
Notary Public
My Commission Expires: April 13,
2006
|
||
List
of
Schedules and Exhibits to the Agreement and Not Filed Herewith:
SCHEDULES:
Schedule
1.0-Identification of Lenders and Their Respective Pro Rata
Percentage
Schedule
1.1(b)-CapitalSource Finance, LLC Documents
Schedule
1.1(c)-List of Resort Declarations
Schedule
1.1(d)-Underwriting Guidelines and Criteria
Schedule
1.1(e)-Resort Funding, LLC Documents
Schedule
1.1(f)- List of Textron Financial Corporation Documents
Schedule
1.1 (g)-List of Timeshare Owner Associations
Schedule
2.7(b)-List of Borrower’s Executive Management
Schedule
6.5-Permitted Liens
Schedule
6.7-Pending Material Litigation
Schedule
6.9-List of Environmental Matters
Schedule
6.19-List of Time Share Reports and Documents
EXHIBITS
Exhibit
A-Collateral Assignment of Notes and Mortgages
Exhibit
B- Borrowing Base Report
Exhibit
C-Closing Certificate
Exhibit
D-Certificate and Request for Advance
Exhibit
E-Inventory Control Procedures
Exhibit
F-Officer’s Certificate For Financial Statements