LOAN AND SECURITY AGREEMENT
$75,000,000 Credit Facility
provided by
CREDIT SUISSE FIRST BOSTON MORTGAGE CAPITAL LLC
to
RESORT FUNDING, INC.
As of February 11, 1998
TABLE OF CONTENTS
SECTION 1. DEFINITION OF TERMS .......................................... 1
1.1 Advance ...................................................... 1
1.2 Advance Request .............................................. 1
1.3 Affiliate .................................................... 1
1.4 Agreement .................................................... 2
1.5 Applicable Borrowing Base Percentage ......................... 2
1.6 Applicable Declaration........................................ 2
1.7 Applicable Jurisdiction ...................................... 2
1.8 Applicable Laws .............................................. 2
1.9 Applicable Mortgage .......................................... 2
1.10 Applicable Resort ............................................ 2
1.11 Applicable Timeshare Documents ............................... 2
1.12 Applicable Timeshare Owners' Association ..................... 3
1.13 Applicable Underlying Borrower ............................... 3
1.14 Applicable Underlying Guarantor .............................. 3
1.15 Applicable Underlying Loan ................................... 3
1.16 Applicable Underlying Loan Collateral ........................ 3
1.17 Applicable Underlying Loan Documents ......................... 3
1.18 Assignment ................................................... 4
1.19 Backup Servicer .............................................. 4
1.20 Backup Servicer's Agreement .................................. 4
1.21 Base Rate .................................................... 4
1.22 Borrower ..................................................... 4
1.23 Borrowing Base ............................................... 4
1.24 Borrowing Term ............................................... 5
1.25 Business Day ................................................. 5
1.26 Closing Date ................................................. 5
1.27 Code.......................................................... 5
1.28 Collateral.................................................... 5
1.29 Commitment.................................................... 7
1.30 Common Elements .............................................. 7
1.31 Common Furnishings ........................................... 7
1.32 Consumer Note Receivable ..................................... 7
1.33 Custodial Agreement .......................................... 8
1.34 Custodian .................................................... 8
1.35 Debtor Relief Laws ........................................... 8
1.36 Default ...................................................... 8
1.37 Default Rate ................................................. 8
1.38 Eligible Consumer Note Receivable ............................ 8
1.39 Eligible Note Receivable ..................................... 10
1.40 Encumbered Interval .......................................... 11
1.41 Encumbered Personal Property.................................. 12
1.42 Environmental Laws ........................................... 12
1.43 Event of Default.............................................. 12
1.44 Financial Statements ......................................... 12
1.45 GAAP.......................................................... 12
1.46 Guarantor .................................................... 13
1.47 Guaranty ..................................................... 13
1.48 Hazardous Materials .......................................... 13
1.49 Initial Advance .............................................. 13
1.50 Initial Underlying Loan Advance .............................. 13
1.51 Interest Rate ................................................ 13
1.52 Interval ..................................................... 13
1.53 Interval Mortgage ............................................ 13
1.54 Land.......................................................... 14
1.55 Lien.......................................................... 14
1.56 Loan.......................................................... 14
1.57 Loan Documents ............................................... 14
1.58 Loan-to-Value Ratio .......................................... 15
1.59 Lockbox Agent ................................................ 15
1.60 Lockbox Agreement ............................................ 15
1.61 Mandatory Prepayment ......................................... 15
1.62 Maturity Date ................................................ 15
1.63 Minimum Monthly Interest Payment ............................. 16
1.64 Minimum Net Worth Requirement ................................ 16
1.65 Note.......................................................... 16
1.66 Note Receivable .............................................. 16
1.67 Obligations .................................................. 16
1.68 Payment Authorization Agreement .............................. 16
1.69 Permitted Liens and Encumbrances ............................. 16
1.70 Person ....................................................... 16
1.71 Phase I Environmental Inspection ............................. 17
1.72 Pledged Consumer Note Receivable ............................. 17
1.73 Pledged Note Receivable ...................................... 17
1.74 Purchase Price ............................................... 17
1.75 Purchaser .................................................... 17
1.76 Prime Rate.................................................... 17
1.77 Qualified Borrower ........................................... 18
1.78 Qualified Borrower Underwriting Guidelines ................... 18
1.79 Qualified Loan ............................................... 18
1.80 Qualified Loan Underwriting Guidelines ....................... 18
1.81 Qualified Resort.............................................. 18
1.82 Qualified Resort Underwriting Guidelines...................... 18
1.83 Release Fee .................................................. 19
1.84 Servicing Agent .............................................. 19
1.85 Servicing Agreement .......................................... 19
1.86 Survey ....................................................... 19
1.87 Timeshare Construction Credit Facility ....................... 19
1.88 Underlying Guaranty .......................................... 19
1.89 Unit.......................................................... 19
SECTION 2. THE LOAN ..................................................... 20
2.1 Purposes ..................................................... 20
2.2 Qualified Loans .............................................. 20
2.3 Advances ..................................................... 20
2.4 Interest Rate ................................................ 21
2.5 Payments ..................................................... 22
2.6 Prepayments .................................................. 23
2.7 Guaranty ..................................................... 24
SECTION 3. COLLATERAL ................................................... 24
3.1 Grant of Security Interest ................................... 24
3.2 Security Interest in All Pledged Notes Receivable ............ 24
3.3 Financing Statements ......................................... 24
3.4 Location of Collateral........................................ 24
3.5 Protection of Collateral; Reimbursement ...................... 25
3.6 Cross-Collateralization and Default .......................... 26
SECTION 4. CONDITIONS PRECEDENT TO CLOSING AND FUNDING PROCEDURES ....... 26
4.1 The Loan ..................................................... 26
4.2 Applicable Underlying Loans .................................. 28
4.3 Funding Procedures ........................................... 33
4.4 Advances Do Not Constitute a Waiver .......................... 37
SECTION 5. GENERAL REPRESENTATIONS AND WARRANTIES ....................... 37
5.1 Organization, Standing, Qualification ........................ 37
5.2 Organization, Standing, Qualification ........................ 37
5.3 Authorization, Enforceability, Etc............................ 37
5.4 Financial Statements and Business Condition .................. 40
5.5 Taxes ........................................................ 40
5.6 Title to Properties; Prior Liens ............................. 41
5.7 Subsidiaries, Affiliates, and Capital Structure .............. 41
5.8 Litigation, Proceedings, Etc.................................. 41
5.9 Environmental Matters ........................................ 41
5.10 Full Disclosure .............................................. 41
5.11 Use of Proceeds/Margin Stock ................................. 42
5.12 No Defaults .................................................. 42
5.13 Restrictions of Borrower or Guarantors ....................... 42
5.14 Broker's Fees ................................................ 42
5.15 Tax Identification/Social Security Numbers ................... 43
5.16 Legal Compliance.............................................. 43
5.17 Applicable Resorts ........................................... 43
5.18 Applicable Timeshare Documents and Reports ................... 44
5.19 Continuation and Investigation ............................... 44
SECTION 6. COVENANTS .................................................... 44
6.1 Affirmative Covenants ........................................ 44
6.2 Negative Covenants ........................................... 54
6.3 Minimum Net Worth Requirement ................................ 55
SECTION 7. EVENTS OF DEFAULT ............................................ 56
7.1 The Loan ..................................................... 56
7.2 Applicable Underlying Loans .................................. 58
SECTION 8. REMEDIES ..................................................... 61
8.1 Remedies Upon Default ........................................ 61
8.2 Notice of Sale ............................................... 63
8.3 Application of Collateral; Termination of Agreements ......... 64
8.4 Rights of Lender Regarding Collateral ........................ 64
8.5 Delegation of Duties and Rights .............................. 64
8.6 Lender Not in Control ........................................ 65
8.7 Waivers ...................................................... 65
8.8 Cumulative Rights ............................................ 65
8.9 Expenditures by Lender ....................................... 65
8.10 Diminution in Value of Collateral ............................ 65
SECTION 9. CERTAIN RIGHTS OF LENDER ..................................... 66
9.1 Protection of Collateral ..................................... 66
9.2 Performance by Lender ........................................ 66
9.3 No Liability of Lender ....................................... 66
9.4 Right to Defend Action Affecting Security .................... 68
9.5 Expenses ..................................................... 68
9.6 Lender's Right of Set-Off .................................... 68
9.7 Right of Lender to Extend Time of Payment,
Substitute, Release Security, Etc ............................ 68
9.8 Assignment of Lender's Interest .............................. 68
9.9 Notice to Purchaser .......................................... 68
9.10 Collection of the Notes ...................................... 69
9.11 Power of Attorney ............................................ 69
9.12 Relief from Automatic Stay, Etc .............................. 70
9.13 Investigations and Inquiries ................................. 70
9.14 Verification of Use .......................................... 71
SECTION 10. TERM OF AGREEMENT ............................................ 71
SECTION 11. MISCELLANEOUS ................................................ 71
11.1 Notices ...................................................... 71
11.2 Survival ..................................................... 72
11.3 Governing Law ................................................ 72
11.4 Limitation on Interest ....................................... 72
11.5 Invalid Provisions ........................................... 73
11.6 Successors and Assigns ....................................... 73
11.7 Amendment .................................................... 74
11.8 Counterparts; Effectiveness .................................. 75
11.9 Lender Not a Fiduciary ....................................... 75
11.10 Release and Return of Notes Receivable ....................... 75
11.11 Accounting Principles ........................................ 75
11.12 Entire Agreement ............................................. 75
11.13 Litigation ................................................... 76
11.14 Incorporation of Exhibits and Schedules ...................... 76
11.15 Consent to Advertising and Publicity of
Applicable Timeshare Documents ............................... 76
11.16 Directly or Indirectly ....................................... 76
11.17 Captions ..................................................... 77
11.18 Gender ....................................................... 77
11.19 No Duty ...................................................... 77
11.20 Reimbursement for Taxes ...................................... 77
11.21 Submissions .................................................. 77
11.22 Confidentiality .............................................. 78
LIST OF EXHIBITS
EXHIBIT "A" Form of Hypothecation Loan Agreement
EXHIBIT "B" Backup Servicer's Agreement
EXHIBIT "C" Custodial Agreement
EXHIBIT "D" Form of Pledge and Assignment of Note Receivable and
Applicable Mortgage
EXHIBIT "E" Form of Pledge and Assignment of Consumer Notes
Receivable and Interval Mortgages
EXHIBIT "F" Form of Assignment of Underlying Guarantee
EXHIBIT "G" Form of Lockbox Agreement
EXHIBIT "H" Permitted Liens and Encumbrances
EXHIBIT "I" Qualified Borrower Underwriting Guidelines
EXHIBIT "J" Qualified Loan Underwriting Guidelines
EXHIBIT "K" Qualified Resort Underwriting Guidelines
EXHIBIT "L" Form of Servicing Agreement
EXHIBIT "M" Form of Advance Request
EXHIBIT "N" Pending Litigation
EXHIBIT "O" Form of Borrowing Base Report
EXHIBIT "P" Form of Assignment to Assignee
EXHIBIT "Q" Approval Time Frames
LOAN AND SECURITY AGREEMENT
This LOAN AND SECURITY AGREEMENT is made and entered into as of February
11, 1998, by and among RESORT FUNDING, INC., a Delaware corporation
("Borrower"), EQUIVEST FINANCE, INC., a Florida corporation ("Guarantor"), and
CREDIT SUISSE FIRST BOSTON MORTGAGE CAPITAL LLC, a Delaware limited liability
company ("Lender").
In consideration of the mutual covenants and agreements contained herein
and other good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, the parties to this Agreement, intending to be legally
bound, hereby agree as follows:
SECTION 1. DEFINITION OF TERMS
The capitalized terms used in this Agreement are defined in this Section
1. The definitions include the singular and plural forms of the terms defined.
1.1 Advance. A portion of the proceeds of the Loan advanced from time to
time by Lender to Borrower in accordance with the terms of this Agreement.
1.2 Advance Request. Defined in Section 4.3 of this Agreement.
1.3 Affiliate.
(a) Any shareholder, officer, director, general partner, or member
of Borrower; and
(b) Any Person that, directly or indirectly, through one (1) or more
intermediaries, controls, is controlled by, or is under common control with
Borrower or for which any other Affiliate of Borrower is an officer, director,
shareholder, general partner, or member. For purposes of the definition of
"Affiliate:" (i) a Person that, either alone or pursuant to an arrangement or
understanding with one (1) or more other Persons, (A) owns, controls, or has the
power to vote (including by proxy) greater than fifty percent (50%) of any class
of voting securities of a corporation or that determines in any manner the
election or appointment of a majority of the directors thereof; or (B) has the
power or practical ability to exercise a controlling influence over the
management or policies of such corporation, shall be presumed to be in control
of said corporation; and (ii) a Person shall be deemed to be in control of a
Person other than a corporation if he or it, either alone or pursuant to an
arrangement or understanding with one (1) or more other Persons, (A) owns,
controls, or has the power to vote (including by proxy) greater than fifty
percent (50%) of the equity or beneficial interest of such Person; or (B) has
the power or practical ability to exercise a controlling influence over the
management or policies of such Person.
1.4 Agreement. This Loan and Security Agreement by and among Borrower,
Guarantor, and Lender (including the exhibits and schedules hereto), as it may
be amended and/or restated from time to time.
1.5 Applicable Borrowing Base Percentage. The lesser of (a) seventy-five
percent (75%); and one hundred percent (100%) of an Applicable Underlying Loan's
Loan-to-Value Ratio.
1.6 Applicable Declaration. With respect to an Applicable Resort, the
declaration of condominium, declaration of covenants, conditions, and
restrictions, master deed, or similar document, together with any amendments or
restatements thereof, that establishes the underlying form of ownership of such
Applicable Resort and is recorded in the appropriate public records of the
Applicable Jurisdiction.
1.7 Applicable Jurisdiction. With respect to an Applicable Resort, the
state, county, municipality, and/or other governmental jurisdiction in which
such Applicable Resort is located.
1.8 Applicable Laws. With respect to an Applicable Resort, any and all
federal, state, and local statutes, ordinances, rules, regulations, court orders
and decrees, administrative orders and decrees, and other legal requirements of
any and every conceivable type to which Borrower, Guarantor, such Applicable
Resort or any portion thereof, or all or any portion of the Collateral or any
Applicable Underlying Loan Collateral is or becomes subject from time to time.
1.9 Applicable Mortgage. A mortgage or deed of trust, if any, that secures
the payment by an Applicable Underlying Borrower of all principal, interest, and
other amounts owed to Borrower by such Applicable Underlying Borrower in
connection with an Applicable Underlying Loan.
1.10 Applicable Resort. A Qualified Resort in connection with which
Borrower has made a Qualified Loan to a Qualified Borrower.
1.11 Applicable Timeshare Documents. All Applicable Declarations and other
documents and instruments relating to an Applicable Resort and/or the Units,
Common Elements, Common Furnishings, and Intervals thereat, including but not
limited to the project documents, registrations and other approvals, business
licenses, Applicable Timeshare Owners' Association agreements and corporate
documents and other documents used in the marketing, sale, and financing of such
Intervals. Each Applicable Timeshare Document shall be in form and content
acceptable to Lender, in its sole discretion. Lender shall have received and
approved true, correct, and complete copies of all Applicable Timeshare
Documents as a condition precedent to any Advances hereunder in
respect of the Applicable Resort to which such Applicable Timeshare Documents
pertain.
1.12 Applicable Timeshare Owners' Association. With respect to each
Applicable Resort, a not-for-profit corporation or other legal entity organized
under the laws of the Applicable Jurisdiction.
1.13 Applicable Underlying Borrower. A Qualified Borrower that is the
maker of a Pledged Note Receivable.
1.14 Applicable Underlying Guarantor. Any Person that has executed and
delivered an Underlying Guaranty in favor of Borrower in connection with an
Applicable Underlying Loan.
1.15 Applicable Underlying Loan. A Qualified Loan as to which Lender has
agreed, in its sole and absolute discretion, to make certain Advances hereunder.
1.16 Applicable Underlying Loan Collateral. Any and all collateral granted
or available to Borrower to secure the payment by an Applicable Underlying
Borrower of all principal, interest, and other amounts owed to Borrower by such
Applicable Underlying Borrower in connection with an Applicable Underlying Loan.
1.17 Applicable Underlying Loan Documents. All documents and instruments
that evidence or secure an Applicable Underlying Loan, including but not limited
to any Notes Receivable, Applicable Mortgages, and Underlying Guarantees
executed and delivered to Borrower in connection therewith. The form and content
of each Applicable Underlying Loan Document shall be satisfactory to Lender, in
its sole and absolute discretion, and approved by Lender in writing prior to any
Advances hereunder in respect of the Applicable Underlying Loan to which such
Applicable Underlying Loan Document pertains. Lender hereby approves as one (1)
of the Applicable Underlying Loan Documents the form of Hypothecation Loan
Agreement attached as Exhibit "A" hereto and incorporated herein by this
reference. Borrower agrees not to amend, restate, or otherwise modify any
Applicable Underlying Documents in a material manner without Lender's prior
written consent, which consent may be granted or withheld, in Lender's sole and
absolute discretion. Copies of any such amended, restated, or otherwise modified
Applicable Underlying Loan Document, as so approved by Lender and fully executed
and delivered by Borrower, shall be provided to Lender and Servicing Agent
promptly following the effective date thereof. Modifications to incorporate
changes required for the financing of (a) Interval Mortgages secured by
Intervals which are timeshare licenses or timeshare estates which are undivided
interests, or (b) contracts for deed shall not be considered material
modifications.
1.18 Assignment. That certain Assignment, Release and Custodial Agreement
dated on or about November 24, 1997, by and among Lender, Borrower, BFICP
Corporation, ING (U.S.) Capital Corporation, ING (U.S.) Capital Markets, Inc.,
Holland Limited Securitization, Inc., First Trust of New York, N.A., and Concord
Servicing Corporation, together with the letter agreement dated November 24,
1997, between Borrower and Lender and any and all related documents or
instruments involving Lender and Borrower, among other parties.
1.19 Backup Servicer. Monterey Financial Services, Inc. or such other
Person as Lender, in its sole discretion, engages from time to time, at
Borrower's cost and expense, to exercise certain rights and perform certain
duties and responsibilities of Lender hereunder, including but not limited to
verifying Borrower's compliance with all of the terms, provisions, and
conditions hereof and of the other Loan Documents.
1.20 Backup Servicer's Agreement. An Agreement by and among Lender,
Borrower, and Backup Servicer in substantially the form of Exhibit "B" attached
hereto and incorporated herein by this reference, pursuant to which Backup
Servicer is engaged to perform the duties and responsibilities delegated to it
by Lender hereunder and thereunder.
1.21 Base Rate. On any given date, a fluctuating rate of interest equal to
the interest rate per annum offered for one (1) month deposits in U.S. dollars
in the London interbank market that appears on Telerate Page 3750 or such other
page as may replace Page 3750 on that service or such other service or services
as may be nominated by the British Bankers Association for the purpose of
displaying such rate (collectively, "Telerate Page 3750") as of 9:00 a.m. New
York time on the date in question (the "Libor Rate"); provided, however, that in
the event that (i) more than one (1) such Libor Rate is published, then the
average of such rates shall apply; or (ii) no such Libor Rate is published, then
the Libor Rate shall be determined from such comparable financial reporting
company as Lender, in its sole discretion, shall select.
1.22 Borrower. Resort Funding, Inc., a Delaware corporation, together with
its successors and assigns.
1.23 Borrowing Base. As to a particular Pledged Note Receivable, the
lesser of (a) seventy-five percent (75%) of the aggregate outstanding principal
balance of each of the Eligible Consumer Notes Receivable that comprise a
portion of Borrower's Applicable Underlying Loan Collateral for the Applicable
Underlying Loan; and (b) one hundred percent (100%) of the outstanding principal
balance of such Pledged Note Receivable, in each case as of the date of any
Advance by Lender in respect thereof. Notwithstanding the foregoing or any other
term, provision, or condition hereof to the contrary, under no circumstances
shall the outstanding principal balance of the Note ever exceed
ninety-five percent (95%) of the aggregate outstanding principal balance of all
Eligible Consumer Notes Receivable (the "Maximum Aggregate Advance Percentage").
1.24 Borrowing Term. A period of twenty-four (24) calendar months
following the earlier to occur of (a) the date of the Initial Advance; or (b)
April 11, 1998; provided, however, that within ninety (90) days prior to the
expiration thereof, Borrower may elect to extend the Borrowing Term for an
additional twelve (12) calendar months by so notifying Lender in writing and
paying Lender an extension fee equal to one percent (1%) of the amount by which
$75,000,000 exceeds the sum of the outstanding principal balance of the Note and
the outstanding principal balance of the Assignment as of the end of the initial
twenty-four (24) calendar month period of the Borrowing Term.
1.25 Business Day. Each day that is not a Saturday, Sunday, or a legal
holiday under the laws of the State of New York or the United States.
1.26 Closing Date. The date of this Agreement.
1.27 Code. The version of the Uniform Commercial Code in effect from time
to time in an Applicable Jurisdiction, as amended from time to time.
1.28 Collateral. Collectively, the Pledged Notes Receivable and Applicable
Mortgages (if any), together with all accounts, chattel paper, and general
intangibles related thereto and the cash and non-cash proceeds thereof, and all
now owned or hereafter acquired right, title, and interest of Borrower in and to
all Applicable Underlying Loan Collateral for any and all of the Pledged Notes
Receivable and Applicable Mortgages (if any), including but not limited to the
following (to the extent applicable):
(a) An absolute and unconditional first collateral assignment of all
of Borrower's right, title, and interest in all Applicable Mortgages (if any)
that secure any Pledged Notes Receivable;
(b) An absolute and unconditional first collateral assignment in and
pledge of all of Borrower's right, title, and interest in all Pledged Consumer
Notes Receivable generated from the sale of Intervals at a Qualified Resort,
together with all accounts, chattel paper, and general intangibles related
thereto and the cash and non-cash proceeds thereof;
(c) An absolute and unconditional first collateral assignment of all
of Borrower's right, title, and interest in and to all Interval Mortgages that
secure the payment of Pledged Consumer Notes Receivable;
(d) An absolute and unconditional first collateral assignment of all
of Borrower's right, title, and interest in and to the Encumbered Intervals,
together with all appurtenant rights and interests, including, without
limitation,
appurtenant rights and interests in and to the Common Elements and Common
Furnishings and all easement, license, and use rights in and to all Applicable
Resort facilities and amenities, all as described and set forth in the
Applicable Timeshare Documents;
(e) An absolute and unconditional first collateral assignment and
pledge in and to all of Borrower's right, title, and interest in all documents,
instruments, accounts, chattel paper, and general intangibles relating to the
Pledged Consumer Notes Receivable, the Interval Mortgages, and the other
Applicable Underlying Loan Collateral (including the cash and non-cash proceeds
thereof);
(f) An absolute and unconditional first collateral assignment and
pledge in and to all of Borrower's right, title, and interest in all furniture,
furnishings, and fixtures of every kind and description (and all improvements
and accessions thereto, including, without limitation, the Common Furnishings)
located in or on or used in connection with any Encumbered Interval;
(g) An absolute and unconditional first collateral assignment of all
other agreements to which any Applicable Underlying Borrower is or becomes a
party or holds any interest and which in any way relate to the use, occupancy,
maintenance, or enjoyment of any Encumbered Intervals or Encumbered Personal
Property, including but not limited to utility contracts, maintenance
agreements, management agreements, service contracts, and any agreement
guaranteeing the performance of the obligations contained in any of the
foregoing agreements (to the extent that assignments thereof are obtained by
Borrower from the Applicable Underlying Borrower);
(h) An absolute and unconditional first collateral assignment of all
of Borrower's right, title, and interest in and to any and all easements,
contracts, leasehold interests (whether as lessor or lessee), permits, licenses,
and approvals in respect of all or any portion of an Applicable Resort;
(i) First priority Liens in and to all of Borrower's right, title,
and interest in and to all books, records, reports, computer tapes, computer
disks, and software relating to all or any portion of the Collateral;
(j) 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, and all rights in or under insurance policies and to the proceeds of
any insurance policies covering any of the other Collateral, all rights to
unearned or refunded insurance premiums, and the proceeds of any condemnation
awards or any claims regarding any of the other Collateral;
(k) An absolute and unconditional first collateral assignment of all
of Borrower's right, title, and interest in and to any rights inuring to an
Applicable Underlying Borrower related to easements, leasehold interests
(whether as lessor or lessee), franchises, permits, approvals, licenses,
facilities, and amenities on, affecting, or appur-tenant to the Applicable
Resorts and rights to occupy, use, and enjoy any such facilities or amenities
and any Encumbered Intervals;
(l) An absolute and unconditional first collateral assignment of all
of Borrower's right, title, and interest in, to and under all Payment
Authorization Agreements signed and delivered by or on behalf of a Purchaser of
an Encumbered Interval and all accounts and proceeds relating thereto or
deriving therefrom;
(m) An absolute and unconditional first collateral assignment of all
of Borrower's right, title, and interest in and to any rights inuring to an
Applicable Underlying Borrower or Borrower pursuant to any designation of such
Applicable Underlying Borrower or Borrower as an "institutional mortgagee," an
"institutional lender," or a "mortgagee" in connection with any Encumbered
Interval as provided in the Applicable Underlying Timeshare Documents; and
(n) All now owned or hereafter acquired right, title, and interest
of Borrower as previously assigned or pledged to Lender in and to any and all of
the collateral for the Timeshare Construction Credit Facility and any other
timeshare-related loan or credit facility between Lender and Borrower or an
Affiliate of Borrower.
1.29 Commitment. The term sheet issued by Lender to Borrower, dated July
24, 1997, and subsequently accepted by Borrower on behalf of itself and
Guarantor.
1.30 Common Elements. The common areas and facilities, as defined or
provided for in the Applicable Declaration and/or other Applicable Timeshare
Documents, including, without limitation, the Land and all improvements thereto
except for the Units that have been dedicated to the condominium or comparable
form of ownership, as well as any limited common elements, as those terms are
defined and used in the Applicable Declaration.
1.31 Common Furnishings. All furniture, furnishings, fixtures, appliances,
carpeting, and equipment located in a Unit or elsewhere within an Applicable
Resort and available for use by Purchasers in accordance with the terms and
conditions of the Applicable Timeshare Documents.
1.32 Consumer Note Receivable. A promissory note, installment sales
contract, or other evidence of indebtedness made and executed by a Purchaser
in favor of an Applicable Underlying Borrower in connection with such
Purchaser's acquisition of an Interval.
1.33 Custodial Agreement. That certain Custodial Agreement dated as of
February 11, 1998, by and among Lender, Borrower, and Custodian, a copy of which
is attached as Exhibit "C" hereto and incorporated herein by this reference,
pursuant to which Custodian will maintain custody of all original Applicable
Underlying Loan Documents including, without limitation, all Pledged Consumer
Notes Receivable and related collateral documents and take certain actions in
connection therewith.
1.34 Custodian. First Trust of New York, N.A. or such other Person as
Lender, in its sole discretion, engages from time to time, at Borrower's sole
cost and expense, to maintain custody of all original Applicable Underlying Loan
Documents and take certain actions in connection therewith.
1.35 Debtor Relief Laws. Any applicable liquidation, conservatorship,
receivership, 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.
1.36 Default. An event or condition, the occurrence of which immediately
is or, with the lapse of time or the giving or notice or both, would become, an
Event of Default hereunder.
1.37 Default Rate. The Interest Rate plus four percent (4%) per annum;
provided, however, that the Default Rate shall in no event exceed the highest
interest rate permitted to be charged under any applicable usury laws.
1.38 Eligible Consumer Note Receivable. A Pledged Consumer Note Receivable
that satisfies each of the following criteria:
(a) The Applicable Underlying Borrower is the sole payee;
(b) It arises from a bona fide sale by an Applicable Underlying
Borrower of one (1) or more Intervals;
(c) The Interval sale from which it arises has not been canceled by
the Purchaser, any statutory or other applicable cancellation or rescission
period has expired, and the Interval sale otherwise complies fully with the
terms, provisions, and conditions of this Agreement, the other Loan Documents,
the Applicable Underlying Loan Documents, and all Applicable Laws;
(d) It is secured by an Interval Mortgage on the purchased Interval,
which Interval Mortgage has been assigned to Borrower by the Applicable
Underlying Borrower and then assigned by Borrower to Lender;
(e) Principal and interest payments on it are payable to the
Applicable Underlying Borrower in legal tender of the United States;
(f) Payments of principal and interest on it are due 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 and/or other cash payments have been
received by the Applicable Underlying Borrower from the Purchaser or the maker
of the Pledged Consumer Note Receivable in an amount equal to at least ten
percent (10%) of the original purchase price of the relevant Interval, and the
Purchaser has received no cash or other rebates of any kind;
(i) No monthly installment due with respect to the Pledged Consumer
Note Receivable is more than thirty (30) days' contractually past due at the
time of an Advance in respect of such Pledged Consumer Note Receivable or more
than the lesser of (A) ninety (90); or (B) the comparable number set forth in
the definition of "eligible note receivable" or its equivalent in the Applicable
Underlying Loan Documents, days' contractually past due thereafter;
(j) The interest rate on the Pledged Consumer Note Receivable is not
less than fifty (50) basis points in excess of the interest rate charged by
Borrower to the Applicable Underlying Borrower as set forth in the Applicable
Underlying Loan Documents;
(k) The Purchaser of the relevant Interval has access to a Unit
within the Applicable Resort during any use period reserved by or assigned to
such Purchaser, all in accordance with the Applicable Timeshare Documents;
(l) Neither the Purchaser of the relevant Interval nor any other
maker of the Consumer Note Receivable is an Affiliate of, or related to, or
employed by the Applicable Underlying Borrower or Borrower;
(m) The Purchaser or other obligor has no claim against the
Applicable Underlying Borrower, Borrower, or any Affiliate of the Applicable
Underlying Borrower or Borrower, or any defense, set-off, or counterclaim with
respect to the Consumer Note Receivable;
(n) The maximum outstanding principal balance of such Consumer Note
Receivable does not exceed $25,000 (or such greater amount as may be approved in
writing in advance by Lender);
(o) The Consumer Note Receivable is executed by a U.S. or Canadian
resident; provided, however, that no more than ten percent (10%) of the
aggregate outstanding principal balance of all Eligible Consumer Notes
Receivable from any Applicable Resort or Applicable Underlying Borrower shall at
any time be comprised of Consumer Notes Receivable executed by Canadian
residents, with all remaining obligors being U.S. residents;
(p) The original of the Consumer Note Receivable and all related
documents have been endorsed by the Applicable Underlying Borrower to Borrower
and then endorsed by Borrower to Lender in the manner prescribed by Lender and
delivered to Lender or Custodian as provided in this Agreement, and the terms
thereof and all instruments related thereto shall comply in all respects with
all Applicable Laws;
(q) Each Unit in the Applicable Resort which the relevant Purchaser
has the right to occupy, pursuant to the Applicable Timeshare Documents, has
been completed and furnished in accordance with the terms and provisions of such
Purchaser's purchase contract, the Applicable Resort's public offering
statement, and the other Applicable Timeshare Documents, a certificate of
occupancy for each such Unit (or the building in which the Unit is located) has
been issued, and such Unit is not subject to any Lien (other than the Lien
created by such Interval Mortgage and the Permitted Liens and Encumbrances) that
has not previously been consented to in writing by Lender; and
(r) The forms of promissory note, mortgage, federal truth-in-lending
disclosure statement, purchase contract, and other documents and instruments
relating to the Interval purchase transaction giving rise to such Consumer Note
Receivable have been approved in advance by Lender in writing.
1.39 Eligible Note Receivable. A Pledged Note Receivable that satisfies
each of the following criteria:
(a) The Applicable Underlying Loan that it evidences was originated
by Borrower in the ordinary course of its business;
(b) Advances by Borrower under such Note Receivable may be used by
the Applicable Underlying Borrower solely for purposes of providing purchase
money financing to a Purchaser in connection with an Interval at the Qualified
Resort related to such Applicable Underlying Borrower, to pay down or pay off
loans secured by such Qualified Resort or otherwise in compliance with the
Applicable Underlying Loan Documents;
(c) The Applicable Resort's Applicable Underlying Loan Documents
have been approved in writing by Lender in its sole and absolute discretion;
(d) Borrower is the sole payee;
(e) Principal and interest payments on it are payable to Borrower in
legal tender of the United States;
(f) It provides for the payment to Borrower of interest at the
minimum floating rate of (i) the Libor Rate plus 3.5% per annum; or (ii) the
Prime Rate plus 1.0% per annum, in each case redetermined no less frequently
than quarterly;
(g) Neither the Applicable Underlying Borrower nor the Applicable
Underlying Guarantor, if any, is an Affiliate of Borrower or Guarantor;
(h) No monthly installment or other amount due with respect to the
Note Receivable is more than thirty (30) days' contractually past due at the
time of its pledge to Lender hereunder, and no such monthly installment becomes
more than sixty (60) days' contractually past due thereafter;
(i) Neither the Applicable Underlying Borrower nor the Applicable
Underlying Guarantor, if any, has any claim against Borrower, Guarantor, or any
Affiliate thereof, and no defense, set-off, or counterclaim exists with respect
to the Note Receivable at the time of any Advance in respect thereof; and
(j) The original of the Note Receivable and all related documents
and instruments, the terms of each of which shall comply fully with all
Applicable Laws, have been endorsed in the manner prescribed by Lender and
delivered to Custodian.
Notwithstanding a particular Note Receivable's satisfaction of all
of the foregoing criteria or any terms, provisions, or conditions hereof to the
contrary:
(i) Lender's Advances in connection with any one (1)
particular Applicable Underlying Borrower shall in no event exceed $20,000,000
without Lender's prior written consent, which consent may be granted or withheld
in Lender's sole and absolute discretion; and
(ii) Lender's Advances in connection with any one (1)
particular Applicable Resort shall in no event exceed $10,000,000 without
Lender's prior written consent, which consent may be granted or withheld in
Lender's sole and absolute discretion.
1.40 Encumbered Interval. Any Interval that is encumbered by the Lien of
an Interval Mortgage.
1.41 Encumbered Personal Property. All furniture, furnishings, fixtures,
appliances, equipment, inventory, supplies, accounts, chattel paper, and general
intangibles at any time located at, arising out of the use of, and/or used or
useful in connection with the management or operation of any Encumbered
Interval, whether now owned or hereafter acquired by Borrower or an Applicable
Underlying Borrower, together with all improvements and accessions thereto and
replacements thereof and the cash and non-cash proceeds thereof, a Lien against
which constitutes Applicable Underlying Loan Collateral for a Pledged Note
Receivable.
1.42 Environmental Laws. The 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, and any and all comparable statutes or ordinances enacted in an
Applicable Jurisdiction, as all of the foregoing laws may be amended from time
to time, and any rules or regulations promulgated pursuant to the foregoing;
together with any similar local, state or federal statutes, ordinances, rules,
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 that 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, ordinance, regulation, rule, policy, or determination pertaining to
health, hygiene, the environment, or environmental conditions.
1.43 Event of Default. Defined in Section 7 of this Agreement.
1.44 Financial Statements. The tax returns, balance sheets, and statements
of income and expense of Borrower and Guarantor and the related notes and
schedules delivered by Borrower prior to the Closing Date, together with the
financial statements and reports of Guarantor delivered to Lender prior
to the Closing Date; and the monthly and annual financial statements and reports
required to be provided to Lender pursuant to Section 6.1(g) hereof.
1.45 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 under the
circumstances as of the date in question.
1.46 Guarantor. Equivest Finance, Inc., a Florida corporation, together
with its successors and assigns.
1.47 Guaranty. That certain Guaranty executed by Guarantor and delivered
to Lender concurrently with Borrower's and Guarantor's execution and delivery of
this Agreement. The Guaranty shall be the absolute and unconditional guaranty of
payment and performance of the Loan and all amounts secured by or under the Loan
Documents.
1.48 Hazardous Materials. "Hazardous substances," "hazardous waste,"
"hazardous constituents," "toxic substances," or "solid waste," as defined in
the Environmental Laws, and any other contaminant or any material, waste, or
substance that is petroleum or petroleum based, asbestos, polychlorinated
biphenyls, flammable explosives, or radioactive materials.
1.49 Initial Advance. The first Advance by Lender hereunder.
1.50 Initial Underlying Loan Advance. As to a particular Applicable
Underlying Loan, the first Advance by Lender hereunder in connection therewith.
1.51 Interest Rate. The Base Rate plus 1.90% per annum. The Interest Rate
charged for each calendar month shall be fixed based upon the Base Rate
published or otherwise determined prior to and in effect as of the first
Business Day of such calendar month. The Interest Rate shall be calculated based
on a 360 day year and charged for the actual number of days elapsed.
1.52 Interval. An undivided fee simple timeshare interest in a particular
Unit or in an entire Applicable Resort as a whole, as a tenant in common with
other owners of undivided interests in such Unit or Applicable Resort, or a
lease, license, or other form of "right-to-use" timeshare interest, including
but not limited to a points-based vacation club membership, together with all
rights, benefits, privileges, and interests appurtenant thereto, including but
not limited to the right to use and occupy a Unit within an Applicable Resort
and the Common Elements and Common Furnishings appurtenant to such Unit and/or
the Applicable Resort during a reserved or assigned use period, all as more
specifically described in the Applicable Declaration and/or other Applicable
Timeshare Documents.
1.53 Interval Mortgage. A properly recorded or registered mortgage, deed
of trust, contract for deed, or other security instrument acceptable to Lender,
in its sole discretion, that creates a valid and enforceable first priority Lien
against the Encumbered Interval identified therein in accordance with all
Applicable Laws (which Encumbered Interval relates to an Applicable Resort) and
secures in part the payment of all principal, interest, and other amounts owed
by a Purchaser to an Applicable Underlying Borrower, pursuant to a Pledged
Consumer Note Receivable.
1.54 Land. The real property upon which any portion of an Applicable
Resort is situated.
1.55 Lien. Any mortgage, security interest, or other interest in property
securing an obligation owed to, or valid claim by, a Person other than the owner
of such property, whether such interest arises in equity or is based on common
law, statute, or contract.
1.56 Loan. The subject revolving credit facility in the maximum principal
amount of $75,000,000 as described in this Agreement and evidenced and secured
by the Loan Documents.
1.57 Loan Documents. Collectively, the following documents and
instruments, as each may be amended, renewed, extended, restated, or
supplemented from time to time:
(a) This Agreement;
(b) The Note;
(c) The Guaranty;
(d) The Pledges and Assignments of Notes Receivable and Applicable
Mortgages (in the form of Exhibit "D," attached hereto and incorporated herein
by this reference;
(e) The Pledges and Assignments of Consumer Notes Receivable and
Interval Mortgages (in the form of Exhibit "E," attached hereto and incorporated
herein by this reference);
(f) Assignments of the Underlying Guarantees (in the form of Exhibit
"F," attached hereto and incorporated herein by this reference);
(g) The Custodial Agreement;
(h) The Servicing Agreement;
(i) The Backup Servicer's Agreement;
(j) The Lockbox Agreement;
(k) UCC-1 and UCC-3 financing statements covering the Collateral, to
be recorded in the appropriate public records of each Applicable Jurisdiction
and filed in the office of the Secretary of State of each Applicable
Jurisdiction in which any of the Collateral is located; and
(l) All such other assignments, agreements, documents, instruments,
certificates, and materials as Lender may require in order to evidence or secure
the Obligations, to evidence and perfect the rights, Liens, and security
interests of Lender contemplated by the Loan Documents, and otherwise to
effectuate the transactions contemplated hereby.
1.58 Loan-to-Value Ratio. As to each Applicable Underlying Loan, the
percentage determined by dividing the outstanding principal balance of the
Pledged Note Receivable evidencing such Applicable Underlying Loan as of the
date in question by the aggregate outstanding principal balance of all Eligible
Consumer Notes Receivable which comprise a portion of the Applicable Underlying
Loan Collateral for such Pledged Note Receivable as of such date.
1.59 Lockbox Agent. OnBank & Trust Company or such other Person as Lender
engages, in its sole discretion, at Borrower's sole cost and expense, to
receive, deposit, and disburse all amounts paid by or on behalf of each
Applicable Underlying Borrower and each Applicable Underlying Guarantor in
accordance with the terms, provisions, and conditions hereof, of the Lockbox
Agreement, and of the Applicable Underlying Loan Documents.
1.60 Lockbox Agreement. That certain agreement by and among Lender,
Borrower, and Lockbox Agent in substantially the form of Exhibit "G," attached
hereto and incorporated herein by this reference, pursuant to which Lockbox
Agent is engaged, at Borrower's sole cost and expense, to receive, deposit, and
disburse all amounts paid by or on behalf of each Applicable Underlying Borrower
and each Applicable Underlying Guarantor in accordance with the terms,
provisions, and conditions hereof, of the Lockbox Agreement, and of the
Applicable Underlying Loan Documents.
1.61 Mandatory Prepayment. Any prepayment of the Loan required by Section
2.6(b) of this Agreement.
1.62 Maturity Date. The date that is twelve (12) calendar months following
the expiration of the Borrowing Term; provided, however, that in the
event that Borrower elects to extend the Borrowing Term for an additional twelve
(12) calendar months in the manner provided in Section 1.24 hereof, the Maturity
Date shall be the last day of such extended Borrowing Term.
1.63 Minimum Monthly Interest Payment. The total amount of interest
computed at the Interest Rate that has accrued on the outstanding principal
balance of the Loan during the immediately preceding calendar month.
1.64 Minimum Net Worth Requirement. A tangible net worth as determined in
accordance with GAAP, without taking into consideration any amounts due Borrower
from Guarantor or any other Affiliate of Borrower, of $20,000,000.
1.65 Note. That certain Promissory Note that evidences the Loan, dated as
of the Closing Date, made and executed by Borrower to the order of Lender and
delivered to Lender concurrently with Borrower's and Guarantor's execution of
this Agreement.
1.66 Note Receivable. A promissory note that is now or hereafter made and
executed by an Applicable Underlying Borrower to the order of Borrower,
evidences an Applicable Underlying Loan, and may be secured in part by an
Applicable Mortgage.
1.67 Obligations. All present and future indebtedness, liabilities,
obligations, and responsibilities, both financial and otherwise, to which
Borrower is subject under any of the Loan Documents, whether direct or indirect,
absolute or contingent, including but not limited to all amounts due or becoming
due to Lender in respect of the Loan or any of the Loan Documents, including
principal, interest, prepayment premiums, contributions, taxes, insurance
premiums, loan charges, custodial fees, attorneys' and paralegals' fees and
expenses and other fees or expenses incurred by Lender or advanced to or on
behalf of Borrower by Lender, pursuant to any of the Loan Documents or in
connection with Lender's enforcement of the prompt and complete payment and
performance by Borrower and Guarantor of all indebtedness, liabilities,
obligations, and responsibilities owed by Borrower, pursuant to this Agreement,
any of the other Loan Documents, or otherwise.
1.68 Payment Authorization Agreement. The pre-authorized electronic debit
agreement (or provision of a Consumer Note Receivable) by a Purchaser which
provides for payment of a Consumer Note Receivable to the Applicable Underlying
Borrower.
1.69 Permitted Liens and Encumbrances. Those liens and encumbrances
affecting all or a portion of the Collateral or any Applicable Underlying Loan
Collateral to which Lender consents in writing, as set forth on Exhibit "H,"
attached hereto and incorporated herein by this reference, as amended or
restated from time to time.
1.70 Person. A natural person, corporation, partnership, limited liability
company, joint venture, association, estate, trust, government, governmental
subdivision or agency, other legal entity, or any combination thereof.
1.71 Phase I Environmental Inspection. A Phase I environmental assessment
of an Applicable Resort, including, without limitation, the relevant Land and
all improvements thereto. In the event that any Phase I Environmental Assessment
of an Applicable Resort is unacceptable to Lender for any reason or is not
available, Borrower shall provide Lender with a written report or reports
covering such Applicable Resort, prepared by one (1) or more appropriate
licensed professionals acceptable to Lender, which confirm(s):
(a) The absence of any Hazardous Materials of any kind or nature at
the Applicable Resort, except for commercially reasonable amounts thereof
commonly found at residential and resort properties in the Applicable
Jurisdiction; and
(b) That the applicable engineering 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 such other information as Lender may reasonably require, all of
which information shall confirm that there is no known or suspected hazardous or
toxic waste located at the Applicable Resort or in such proximity thereto as to
create a material risk of contamination of all or any portion of the Collateral
or any Applicable Underlying Loan Collateral.
1.72 Pledged Consumer Note Receivable. A Consumer Note Receivable that has
been and remains pledged to Borrower by an Applicable Underlying Borrower,
pursuant to the Applicable Underlying Loan Documents, and which has then been
pledged and remains pledged to Lender by Borrower, pursuant to this Agreement or
any of the other Loan Documents.
1.73 Pledged Note Receivable. A Note Receivable that has been and remains
pledged to Lender by Borrower, pursuant to this Agreement or any of the other
Loan Documents.
1.74 Purchase Price. The total purchase price of an Interval, as set forth
in a Purchaser's purchase contract, pursuant to which such Purchaser agrees to
purchase and the Applicable Underlying Borrower agrees to sell such Interval.
1.75 Purchaser. Any Person who purchases one or more Intervals and is the
maker of a Consumer Note Receivable.
1.76 Prime Rate. The prime or reference rate of interest as announced or
published from time to time by Chase Manhattan Bank, N.A. If such bank shall,
for any period, cease to announce or publish its prime or reference rate, then
Lender shall, during such period, determine the Prime Rate based upon the prime
rates announced or published by such other bank as is reasonably acceptable to
Borrower.
1.77 Qualified Borrower. The developer of an interval ownership,
condominium, timeshare, or vacation ownership project, the creditworthiness for
a receivables/hy-pothecation loan and other qualifications of which are
satisfactory to Lender, in its reasonable discretion, based upon the Qualified
Borrower Underwriting Guidelines, Borrower's recommendations, and any other
factors that Lender deems relevant. No Person shall be deemed a Qualified
Borrower hereunder unless and until Lender has so designated such Person in
writing.
1.78 Qualified Borrower Underwriting Guidelines. Those general
underwriting criteria and guidelines set forth or to be set forth in Exhibit
"I," attached hereto and incorporated herein by this reference, upon which
Lender will rely in part in determining whether a particular Person shall be
deemed a Qualified Borrower hereunder.
1.79 Qualified Loan. A receivables/hypothecation loan made by Borrower to
a Qualified Borrower in connection with a Qualified Resort. Each Qualified Loan
must satisfy the Qualified Loan Underwriting Guidelines and be designated as
such by Lender in writing.
1.80 Qualified Loan Underwriting Guidelines. Those general criteria and
guidelines set forth or to be set forth in Exhibit "J," attached hereto and
incorporated herein by this reference, upon which Lender will rely in part in
determining whether a particular loan shall be deemed a Qualified Loan
hereunder.
1.81 Qualified Resort. An interval ownership, condominium, timeshare
project, and/or vacation ownership project that satisfies the Qualified Resort
Underwriting Guidelines consisting of, among other things, certain Land, Units,
Common Elements, and Intervals, whether now existing or hereafter added, in one
(1) or more buildings or phases, and all related Common Furnishings, easements,
licenses, rights, interests, and other appurtenances, as more fully described in
the Applicable Declaration and the other Applicable Timeshare Documents, as the
same may be amended from time to time. Without the prior written approval of
Lender, which approval may be granted or withheld by Lender, in its sole and
absolute discretion, every Qualified Resort shall be
located in the United States, countries that are under the legal jurisdiction of
the United States, Canada, Caribbean islands that are under the legal
jurisdiction of Great Britain or the Netherlands, the Bahamas, or Ireland.
1.82 Qualified Resort Underwriting Guidelines. Those general underwriting
criteria and guidelines set forth or to be set forth in Exhibit "K," attached
hereto and incorporated herein by this reference, upon which Lender will rely in
part in determining whether a particular interval ownership, condominium,
timeshare project, and/or vacation ownership project shall be deemed a Qualified
Resort hereunder.
1.83 Release Fee. A fee or amount, if any, required to be paid by an
Applicable Underlying Borrower to Borrower in consideration for the release of
all or a portion of any Applicable Underlying Loan Collateral from the Lien of
an Applicable Mortgage or any other Lien in favor of Borrower. For purposes of
this Agreement, the term "Release Fee" shall include any other payments, however
denominated, required to be made by an Applicable Underlying Borrower to
Borrower upon the sale of an Interval at an Applicable Resort, pursuant to the
Applicable Underlying Loan Documents.
1.84 Servicing Agent. For so long as no Event of Default has occurred
hereunder, Borrower or an Affiliate of Borrower; thereafter, Backup Servicer or
such other Person as Lender engages, in its sole discretion, at Borrower's sole
cost and expense. Servicing Agent shall service each Applicable Underlying Loan,
which shall include but not be limited to the collection of all amounts owed
Borrower by the Applicable Underlying Borrower, pursuant to the Applicable
Underlying Loan Documents, subject to the terms, provisions, and conditions of
Section 2 hereof and of the Servicing Agreement and the Lockbox Agreement.
1.85 Servicing Agreement. An agreement by and among Lender, Borrower, and
Servicing Agent (if different from Borrower and Backup Servicer) in
substantially the form of Exhibit "L," attached hereto and incorporated herein
by this reference, that provides for the servicing of each Applicable Underlying
Loan.
1.86 Survey. An as-built survey of an Applicable Resort prepared in
accordance with the ALTA/ACSM 1988 Minimum Survey Requirements by a licensed
surveyor and certified by the applicable surveyor to the Applicable Underlying
Borrower.
1.87 Timeshare Construction Credit Facility. The $30,000,000 timeshare
construction credit facility as evidenced in part by that certain Loan and
Security Agreement dated as of November 14, 1997, by and among Borrower,
Guarantor, and Lender.
1.88 Underlying Guaranty. A document or instrument executed by an
Applicable Underlying Guarantor and delivered to Borrower, pursuant to which one
(1) or more Persons guarantees the absolute and unconditional payment and
performance of the Applicable Underlying Loan and all amounts secured by or
under the Applicable Underlying Loan Documents.
1.89 Unit. An apartment, condominium unit, or other structure that is
affixed to real property at an Applicable Resort and designed and available,
pursuant to applicable law, for use and occupancy as a vacation residence by one
(1) or more individuals, together with all related Common Elements, Common
Furnishings, easements, and other appurtenances thereto.
SECTION 2. THE LOAN
Lender hereby agrees to make the Loan, including Advances thereunder, in
accordance with all of the terms, provisions, and conditions hereof and of the
other Loan Documents.
2.1 Purposes. The proceeds of the Loan shall be used exclusively to enable
Borrower to make Qualified Loans to Qualified Borrowers in connection with
Qualified Resorts or to reimburse Borrower for Advances previously made for
Qualified Loans to Qualified Borrowers in connection with Qualified Resorts.
2.2 Qualified Loans. Pending the amendment hereof to include the Qualified
Borrower Underwriting Guidelines, the Qualified Loan Underwriting Guidelines,
and the Qualified Resort Underwriting Guidelines, Exhibits "I," "J," and "K"
hereto, respectively (if not already attached hereto as of the Closing Date),
Lender shall have the right, in its sole and absolute discretion, to determine
whether a particular loan constitutes a Qualified Loan hereunder. Thereafter,
Lender shall make such determinations in its reasonable discretion, based
generally upon the Qualified Loan Underwriting Guidelines, the Qualified
Borrower Underwriting Guidelines, the Qualified Resort Underwriting Guidelines,
and upon the analysis and recommendations of Borrower. However, Lender shall
have the absolute and unconditional right to conduct its own due diligence with
respect to each loan that Borrower proposes be deemed a Qualified Loan
hereunder, the reasonable costs of which shall be borne by Borrower. As part of
such due diligence, Lender may, in its sole discretion, make or cause to be
made, at Borrower's sole cost and expense, Lender's own physical inspection of
the Applicable Resort and all contemplated Applicable Underlying Loan
Collateral. No loan shall be deemed a Qualified Loan hereunder unless and until
Lender has so designated it in writing.
2.3 Advances.
(a) Borrowing Term. No Advances of the Loan will be made by Lender
hereunder after the last day of the Borrowing Term.
(b) Maximum Amount of Loan. Upon the terms and provisions and
subject to the conditions set forth in this Agreement, including but not limited
to Sections 1.39 and 2.3(e) hereof, and provided that no Event of Default then
exists, Lender shall advance to Borrower, and Borrower may borrow, repay, and
reborrow, principal under the Loan in an amount not to exceed at any time the
lesser of the aggregate amount of the Borrowing Base or $75,000,000 (subject to
Section 2.3(e) below); provided, however, that for purposes of this Section, the
Borrowing Base of any Applicable Underlying Loan in connection with which (i) a
monthly payment is more than sixty (60) days' contractually past due; or (ii) an
Event of Default listed in Section 7.2 hereof has occurred, shall be deemed
zero. Lender shall have no obligation whatsoever to make any Advance that would
cause the aggregate outstanding principal balance of the Loan to exceed
$75,000,000 (subject to Section 2.3(e) below). In the event that the proceeds of
the Loan and any other amounts required to be paid by Borrower hereunder are
insufficient to pay all costs to which it is contemplated hereunder that such
proceeds will be applied, or if the use of the Loan proceeds varies materially
(as determined reasonably and in good faith by Lender) from the uses described
herein, then Lender shall have no obligation to fund (or continue funding) the
Loan or any portion thereof. The proceeds of the Loan will be disbursed by
Lender solely for the purposes set forth in Section 2.1 hereof.
(c) Minimum Advance Amounts; Frequency of Advances. Without the
prior written consent of Lender, Advances of the Loan shall (i) be in respect of
Eligible Notes Receivable that are secured in part by pledges of Eligible
Consumer Notes Receivable and collateral assignments of Interval Mortgages from
the Applicable Underlying Borrower to Borrower which are then collaterally
assigned by Borrower to Lender; (ii) be in amounts of not less than $500,000
each; and (iii) occur no more frequently than on a weekly basis.
(d) Maximum Applicable Underlying Loan Advance Percentage. Under no
circumstances shall Lender be obligated to make any Advance hereunder in respect
of a funding request submitted to Borrower by or on behalf of an Applicable
Underlying Borrower that exceeds the Applicable Borrowing Base Percentage of the
aggregate outstanding principal balance of all Eligible Consumer Notes
Receivable with respect to which such funding request and Advance are made.
(e) Maximum Amount Outstanding Under the Loan and the ING
Agree-ment. Under no circumstances (and irrespective of the aggregate amount of
the Borrowing Base) shall the sum of (i) the outstanding principal amount of the
Note as of a particular date; plus (ii) the total amount funded by Lender as of
such date pursuant to the Assignment, ever exceed Seventy-Five Million Dollars
($75,000,000) (the "Maximum Funded Amount"). Borrower expressly acknowledges and
agrees that if, for example, Lender has funded a total of Forty Million Dollars
($40,000,000) pursuant to the Assignment as of a particular date,
then the maximum outstanding principal balance of the Note as of such date shall
not exceed Thirty Five Million Dollars ($35,000,000), subject to Sections 1.23
and 2.3(b) hereof.
2.4 Interest Rate. The aggregate principal amount of all Advances of the
Loan that are outstanding from time to time shall bear interest at a rate equal
to the Interest Rate. The average monthly outstanding principal balance of the
Loan shall bear interest in arrears as of Lender's wiring of funds through its
actual receipt of repayment of the Loan (if received by Lender later than 12
noon, E.S.T., then interest accrual shall be through the next Business Day
following such receipt). Immediately upon the occurrence of an Event of Default,
any and all principal and other amounts owed Lender hereunder or pursuant to the
Note or any of the other Loan Documents may, in Lender's sole discretion, bear
interest at the Default Rate.
2.5 Payments. Borrower agrees punctually to pay or cause to be paid to
Lender, via wire transfer, all principal and interest due under the Note or
otherwise in respect of the Loan. Borrower shall make the following payments on
the Loan:
(a) Weekly.
(i) Upon the closing of each Applicable Underlying Loan,
Borrower shall direct or otherwise cause the Applicable Underlying Borrower and
Applicable Underlying Guarantor, if any, in writing: (a) to direct or otherwise
cause the Purchasers and makers of all Pledged Consumer Notes Receivables to pay
all monies due thereunder to the Lockbox Agent in accordance with the terms of
the Applicable Underlying Loan Documents; and (b) to pay Lockbox Agent all
interest, principal, Release Fees, if any, prepayments (both voluntary and
mandatory), and other amounts of any and every description payable to Borrower
by or on behalf of such Applicable Underlying Borrower or Applicable Underlying
Guarantor, if any, pursuant to the applicable Pledged Note Receivable or any
other Applicable Underlying Loan Documents (hereinafter collectively referred to
as the "Aggregate Weekly Collections"). The Aggregate Weekly Collections shall
be deposited by Lockbox Agent into the lockbox account established and
maintained by Lockbox Agent in accordance with the provisions of the Lockbox
Agreement (the "Lockbox Account"). Following any advance by Borrower of an
Applicable Underlying Loan from Borrower to the Applicable Underlying Borrower
from which any Release Fees and/or other amounts due Borrower from the
Applicable Underlying Borrower under the Applicable Underlying Loan Documents
have been subtracted, Borrower shall pay all such subtracted amounts, together
with any additional amounts paid to or otherwise received from time to time by
Borrower in connection with an Applicable Underlying Loan, including but not
limited to any amounts received by Borrower upon its realization upon any
Applicable Underlying Loan Collateral, directly to Lender (in the form so
received, properly endorsed to Lender, if
appropriate), to be included within the Aggregate Weekly Collections and applied
by Lender in the manner set forth below, upon the earlier of: (A) the date as of
which the total of such subtracted and other amounts paid to or received by
Borrower equals or exceeds $100,000; or (B) the Friday immediately following the
date as of which any such amount was subtracted from an advance to the
Applicable Underlying Borrower or otherwise paid to or received by Borrower. On
each Business Day, Lockbox Agent shall remit, via wire transfer, all amounts
then deposited in the Lockbox Account directly to Lender, to be held in a
collection account (the "Collection Account") and applied by Lender in
accordance with the terms, provisions, and conditions hereof.
(ii) On each Friday prior to the Maturity Date, Lender will
apply one hundred percent (100%) of the Aggregate Weekly Collections wired to
the Collection Account or paid by Borrower directly to Lender during the seven
(7) day period ending at 9:00 a.m. New York time on such Friday, in the
following order of priority: (A) first, to reimburse Lender for all costs,
expenses, and other amounts due Lender hereunder or pursuant to the other Loan
Documents other than principal and interest, including but not limited to Backup
Servicer's fee, if any; (B) second, to pay Lender all interest which has accrued
and is owed Lender, pursuant to the Note, with respect to such seven (7) day
period; and (C) third, to reduce the outstanding principal balance of the Note.
(b) Monthly. Notwithstanding any provision of Section 2.5(a) above
or any other term, provision, or condition hereof or of any other Loan Document
to the contrary, on or before the fifteenth (15th) day of each calendar month,
Borrower shall pay Lender via wire transfer, in arrears, the Minimum Monthly
Interest Payment due with respect to the immediately preceding calendar month,
commencing with the month immediately succeeding the month in which the Closing
Date occurs, to the extent that said Minimum Monthly Interest Payment exceeds
the sum of all amounts applied on a weekly basis by Lender to interest which has
accrued and is owed Lender, pursuant to the Note, with respect to such preceding
calendar month, pursuant to Section 2.5(a) hereof.
(c) Final Payment. Notwithstanding any term, provision, or condition
hereof to the contrary, the entire outstanding principal balance of the Loan,
together with any and all accrued but unpaid interest thereon and all other
Obligations, shall immediately be paid via wire transfer by Borrower to Lender
and otherwise be satisfied in full on or before the earlier to occur of (i) the
occurrence of an Event of Default hereunder; or (ii) the Maturity Date.
2.6 Prepayments.
(a) Voluntary. Borrower may prepay the Loan, in whole or in part,
without premium or penalty, at any time, in its sole discretion.
(b) Mandatory. If at any time and for any reason, the outstanding
unpaid principal balance of a particular Pledged Note Receivable exceeds such
Pledged Note Receivable's Borrowing Base, then, within ten (10) days following
Borrower's receipt of telecopied notice from Lender of the occurrence of such
excess over Borrowing Base or, absent such telecopied notice, within fifteen
(15) days after the end of the calendar month in which such excess first
occurred, Borrower shall either (A) prepay the outstanding principal balance of
such Pledged Note Receivable in an amount equal to the difference between the
outstanding principal balance of the Pledged Note Receivable and such Pledged
Note Receivable's Borrowing Base; or (B) collaterally assign to Lender, all of
Borrower's right, title, and interest in and to additional Eligible Consumer
Notes Receivable as Collateral for such Pledged Note Receivable so that the
outstanding principal balance of such Pledged Note Receivable is equal to or
less than such Pledged Note Receivable's Borrowing Base. Any such pledge and
delivery to Lender of additional Eligible Consumer Notes Receivable shall comply
with the document delivery and recordation requirements set forth in Section 4.2
of this Agreement and shall be accompanied by Borrower's written certification
to the effect that such additional Pledged Consumer Notes Receivable are
Eligible Consumer Notes Receivable and that, after giving effect to the pledge
to Lender of such additional Eligible Consumer Notes Receivable, the outstanding
principal balance of the applicable Pledged Note Receivable is equal to or less
than such Pledged Note Receivable's Borrowing Base.
No prepayment premium or penalty shall be due Lender in connection with
any voluntary or mandatory prepayment of the Loan.
2.7 Guaranty. Payment and performance by Borrower of one hundred percent
(100%) of all of the Obligations shall be unconditionally guaranteed, jointly
and severally, by Guarantor.
SECTION 3. COLLATERAL
3.1 Grant of Security Interest. To secure the prompt and complete payment
and performance when due of all of the Obligations, for value received, Borrower
hereby unconditionally and irrevocably assigns, pledges, and grants to Lender a
continuing first priority Lien and security interest in and to the Collateral.
3.2 Security Interest in All Pledged Notes Receivable. Notwithstanding
that Lender is obligated, subject to the terms and conditions set forth herein
and in the other Loan Documents, to make Advances only in respect of Eligible
Notes Receivable, Lender shall have a continuing first priority Lien and
security interest in and to all of the Pledged Notes Receivable and Pledged
Consumer Notes Receivable (by virtue of a collateral assignment to Lender of all
of Borrower's right, title, and interest thereto) and may collect and shall
receive all payments made under or in respect of all Pledged Notes Receivable
and by virtue of a
collateral assignment of all of Borrower's right, title, and interest in and to
the Pledged Consumer Notes Receivable, including Eligible Notes Receivable and
Eligible Consumer Notes Receivable that may become ineligible, until any of the
same are released by Lender, if at all, pursuant to Section 11.10 below.
3.3 Financing Statements. Borrower agrees, at its own expense, to execute
the UCC-1 and UCC-3 financing statements provided for by the Code, together with
any and all other appropriate instruments and documents, and to take such other
action as may be required to perfect and to continue the perfection of Lender's
first priority Liens and security interests in the Collateral. In addition,
unless prohibited by law, Borrower hereby authorizes Lender to execute and file
any such financing statements on Borrower's behalf.
3.4 Location of Collateral. Except for Encumbered Personal Property that
is replaced in the ordinary course of business, all tangible Collateral (other
than Collateral delivered to Lender or Custodian) shall remain, at all times,
within the Applicable Resort at which it is located on the Closing Date, and
Borrower may not transfer or cause the transfer of any such Collateral from such
premises without the prior written approval of Lender.
3.5 Protection of Collateral; Reimbursement. The portion of the Collateral
consisting of (a) the original Pledged Notes Receivable; (b) the original
Applicable Mortgages; and (c) all other original Loan Documents shall be
delivered, at Borrower's expense, to Lender at its address as set forth in
Section 11.1 hereof and, except as otherwise expressly provided herein to the
contrary, held in Lender's possession, custody, and control until all of the
Obligations have been fully satisfied. The portion of the Collateral consisting
of (i) the original Pledged Consumer Notes Receivable; (ii) true copies of fully
executed Interval Mortgages, originals of which shall be delivered to Lender or
Custodian promptly following the recordation or registration thereof; (iii) the
original purchase contract (including any addenda thereto) related to such
Pledged Consumer Notes Receivable and Interval Mortgages; and (iv) originals or
true copies of the related truth-in-lending disclosure statements and, if
required by Lender, loan applications, Interval deeds, the related Purchaser's
acknowledgments, receipts, owner's policies of title insurance, Payment
Authorization Agreements, and exchange company applications and disclosures,
shall be delivered, at Borrower's expense, to Lender at its address set forth in
Section 11.1 hereof and, except as otherwise expressly provided herein to the
contrary, held in Lender's possession, custody, and control until all of the
Obligations have been fully satisfied. Alternatively, Lender, in its sole
discretion, may elect for Custodian to maintain possession, custody, and control
of all such documents and instruments during such period of time. Each original
Pledged Note Receivable and original Pledged Consumer Note Receivable delivered
to Lender shall be duly endorsed with the words: "Pay to the order of Credit
Suisse First Boston Mortgage Capital LLC, with recourse to the maker of the
promissory note to which this allonge is attached but without recourse to Resort
Funding, Inc.,
except to the extent provided in that certain Loan and Security Agreement dated
February 11, 1998, by and among Credit Suisse First Boston Mortgage Capital LLC,
Resort Funding, Inc., and Equivest Finance, Inc." Each original Pledged Consumer
Note Receivable, prior to its endorsement by Borrower to Lender, shall be duly
endorsed in a manner approved by Lender by the Applicable Underlying Borrower to
Borrower. The portion of the Collateral delivered to Lender or Custodian as
described above shall be segregated by Lender or Custodian, as the case may be,
and stored in a secure, fire-resistant filing cabinet, access to which is
limited in a commercially reasonable manner. Borrower and Guarantor agree that
such storage is and shall be deemed to constitute reasonable care by Lender with
respect to such Collateral. Except to the extent expressly included in the
Custodian's fee as set forth in the Custodial Agreement, all insurance and other
expenses of protecting the Collateral, including, without limitation, storing,
warehousing, insuring, handling, maintaining, and shipping the Collateral, and
any and all excise, property, intangible, sales, and use taxes imposed by any
state, federal, or local governmental authority on any of the Collateral or in
respect of the sale thereof shall be paid by Borrower. Any and all other amounts
for which Borrower may become liable hereunder and all costs and expenses
(including attorneys' and paralegals' fees, legal expenses, and court costs)
that Lender 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 in respect to any of the transactions to
be had hereunder or thereunder, until paid by Borrower to Lender with interest
at the Default Rate, shall be included among the Obligations and, as such, shall
be secured by all of the Collateral. Provided that Lender or Custodian retains
the original Pledged Notes Receivable, Applicable Mortgages and original Pledged
Consumer Notes Receivable, delivered to it in a secure, fire-resistant filing
cabinet as provided above, Lender 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 any
warehouseman, carrier, forwarding agency, Lockbox Agent, Backup Servicer,
Custodian, or any other Person whomsoever, excluding damages or losses that
occur as a result of Lender's gross negligence or willful misconduct.
3.6 Cross-Collateralization and Default. The Collateral shall secure all
of the Obligations as well as Borrower's obligations pursuant to the Timeshare
Construction Credit Facility, and all Liens, pledges, assignments, mortgages,
security interests, and collateral granted to or for the benefit of Lender
pursuant thereto or any other related documents or instruments shall also secure
the Obligations. In addition, the Loan and the Timeshare Construction Credit
Facility shall be cross-defaulted such that any event of default with respect to
the Timeshare Construction Credit Facility shall constitute an Event of Default
hereunder, and vice versa.
SECTION 4. CONDITIONS PRECEDENT TO CLOSING AND FUNDING PROCEDURES
The obligation of Lender to enter into this Agreement and to make any
Advances of the Loan shall be subject to the complete satisfaction of each of
the conditions precedent set forth in the Commitment, in addition to all of the
conditions precedent set forth below and elsewhere in the Loan Documents:
4.1 The Loan. On or prior to the Closing Date:
(a) Execution and Delivery. Borrower and Guarantor shall execute and
cause to be notarized, witnessed, and attested, as appropriate, and delivered to
Lender the Loan Documents, together with such additional documents and
certifications as Lender and its counsel may reasonably require in order to
ensure that all conditions precedent to the closing of the Loan and the making
of Advances hereunder have been satisfied in all respects.
(b) Opinion of Borrower's Counsel. Lender shall have received from
duly licensed counsel for Borrower and Guarantor acceptable to Lender such legal
opinions in form and substance satisfactory to Lender, dated as of the Closing
Date, as may be required by Lender, in its reasonable discretion.
(c) Representations, Warranties, Covenants, and Agreements. The
representations and warranties contained in the Loan Documents and in any
certificates delivered to Lender in connection with the closing shall be true
and correct in all material respects, and all covenants and agreements required
to have been complied with and performed by Borrower shall have been fully
complied with and performed to the satisfaction of Lender.
(d) No Prohibitions. Neither Borrower nor Guarantor shall have taken
any action or permitted any condition to exist that would have been prohibited
by any provision of this Agreement, the Commitment, or the Assignment.
(e) Borrower's and Guarantor's Background Documents. Borrower shall
have delivered to Lender, and Lender shall have approved each of the following:
(i) Borrower's and Guarantor's Organizational Documents.
Copies of Borrower's and Guarantor's organizational documents, including but not
limited to their respective articles of incorporation and bylaws, together with
any amendments thereto, certified to be true and complete by Borrower's and
Guarantor's Secretaries, respectively.
(ii) Good Standing Certificates. Current good standing
certificates issued by the Delaware and Florida Secretaries of State for
Borrower and Guarantor, respectively.
(iii) Resolutions. Certified resolutions of Borrower's and
Guarantor's boards of directors authorizing the execution of all Loan Documents
and the performance of all Obligations thereunder.
(f) Financial Statements. Lender shall have received and approved
the Financial Statements required pursuant hereto to be delivered to Lender, or
otherwise required by Lender, for Borrower and Guarantor, all in form and
substance satisfactory to Lender.
(g) Proceedings Satisfactory. All actions taken in connection with
the execution and delivery of the Loan Documents, and all documents and papers
related thereto, shall be completely satisfactory to Lender and its counsel.
Lender and its counsel shall have received copies of all such documents and
papers as Lender or its counsel may reasonably request in connection therewith,
all in form and substance satisfactory to Lender and its counsel, in their sole
discretion.
(h) Expenses. Borrower shall have paid all fees, expenses, and other
amounts required to be paid prior to or on the Closing Date, pursuant to this
Agreement.
4.2 Applicable Underlying Loans. At least ten (10) Business Days prior to
the date of each Initial Underlying Loan Advance, Borrower shall deliver to
Lender and Servicing Agent a sworn written certificate, in form and content
satisfactory to Lender, in its sole discretion, confirming, to the extent
applicable, that:
(a) Applicable Underlying Loan Documents. The Applicable Underlying
Borrower and the Applicable Underlying Guarantor have executed and delivered to
Borrower the Applicable Underlying Loan Documents.
(b) Title Policies. To the extent available and commonly required by
lenders in the Applicable Jurisdiction in connection with loans similar to the
Applicable Underlying Loan, the Applicable Underlying Borrower has delivered to
Borrower a commitment to issue an ALTA extended coverage lender's policy of
title insurance insuring in favor of Borrower, together with its successors and
assigns, including but not limited to Lender, to the extent of its interest in
the Applicable Underlying Loan, the first priority of the Lien of each
applicable Interval Mortgage in and to each applicable Encumbered Interval,
without exception for filed or unfiled mechanics' liens or claims or for matters
that an accurate survey would disclose, subject only to such exceptions and
conditions to title as Borrower and Lender shall have approved in writing and
such affirmative coverage as Borrower or Lender deems reasonably necessary
(the "Title Policy"). Such Title Policy shall be in an amount not less than the
original principal amount of the applicable Note Receivable and be issued by a
title insurance company satisfactory to Borrower and Lender in all respects (the
"Title Insurance Company"). Final Title Policies delivered at the time of each
advance of the Applicable Underlying Loan must insure that each applicable
Interval Mortgage creates a first priority Lien in and to the applicable
Encumbered Interval in favor of Lender, to the extent of its interest in the
Applicable Underlying Loan, and Borrower, with such exceptions and conditions to
title as Borrower and Lender shall have approved in writing.
Each such Title Policy shall contain such affirmative coverage as
Lender deems reasonably necessary, including but not limited to an affirmative
statement that the Title Policy insures Borrower, together with its successors
and assigns, including but not limited to Lender, to the extent of its interest
in the Applicable Underlying Loan, against all mechanics' and materialmen's
liens arising from or out of construction of the Applicable Resort, and, to the
extent available and commonly required by lenders in the Applicable
Jurisdiction, shall contain endorsements in form and content acceptable to
Lender: (A) insuring against matters that would be disclosed on an accurate
survey of the Land; (B) insuring that no building restriction or similar
exception to title disclosed on the Title Policy has been violated and that any
violation thereof would not create or result in any reversion, reverter, or
forfeiture of title; (C) a zoning endorsement in the form typically issued in
the Applicable Jurisdiction; and (D) insuring over any environmental superlien
or similar lien upon all or any portion of the Applicable Resort. Such Title
Policy shall provide that Borrower and Lender, to the extent of its interest,
shall receive an endorsement to the Title Policy on the date of each advance of
the Applicable Underlying Loan: (i) indicating that since the date of the
immediately preceding advance, there has been no change in the state of title
and no mechanics' or materialmen's lien, claim, or lien or similar notice has
been filed against any of the Applicable Underlying Loan Collateral; (ii)
updating the Title Policy to the date of such advance; and (iii) increasing the
coverage of the Title Policy by an amount equal to the amount of such advance if
the Title Policy does not by its own terms provide for such an increase. The
condition of title to all Applicable Underlying Loan Collateral must be
satisfactory to Lender in all respects, in its sole discretion, as a condition
precedent to Lender's obligation to make any Advances hereunder in respect of
the Applicable Underlying Loan that is secured by Borrower's Lien in and to such
Applicable Underlying Loan Collateral.
In lieu of the Title Policy required by this Section, Lender may, in its
sole and absolute discretion, accept a title opinion rendered by a completely
independent attorney for the Applicable Underlying Borrower which fully
satisfies all of the general requirements of this Section.
(c) Opinions of Applicable Underlying Borrower's Counsel. Borrower
has received from counsel for the Applicable Underlying Borrower and
the Applicable Underlying Guarantor, licensed in the Applicable Jurisdiction and
acceptable to Borrower and Lender, legal opinions in form and substance
satisfactory to Borrower and Lender, dated as of the date of closing of the
Applicable Underlying Loan, covering such items as may be required by Borrower
and Lender, including, without limitation, that the Applicable Underlying Loan
Documents are valid, binding, and enforceable in accordance with their terms and
that they do not violate any applicable usury or other Applicable Laws. Each
such legal opinion shall also be addressed to Lender and expressly state that it
may be relied upon by Lender for any and all purposes.
(d) Applicable Underlying Borrower's Background Documents. The
Applicable Underlying Borrower has delivered to Borrower and Borrower has
approved each of the following (to the extent that Borrower has previously
delivered any of these documents with respect to the Applicable Underlying
Borrower or the Applicable Resort in connection with the Timeshare Construction
Credit Facility, Lender may waive delivery in connection with the Applicable
Underlying Loan):
(i) Applicable Underlying Borrower's Organizational Documents.
Copies of the Applicable Underlying Borrower's organizational documents,
including but not limited to its articles of incorporation, bylaws, partnership
agreement, and other relevant documents, as applicable, together with any
amendments thereto, certified to be true and complete by the Applicable
Underlying Borrower's Secretary or other authorized representative.
(ii) Good Standing Certificates. Current good standing
certificates issued by the appropriate Secretaries of State for the Applicable
Underlying Borrower and the Applicable Underlying Guarantor.
(iii) Resolutions. Certified resolutions of the Applicable
Underlying Borrower's and Applicable Underlying Guarantor's boards of directors
or general partners, as applicable, or such other evidence of authority as is
appropriate for the Applicable Underlying Borrower's and Applicable Underlying
Guarantor's form of business organization, authorizing the execution of all
Applicable Underlying Loan Documents and the performance of all obligations of
the Applicable Underlying Borrower and Applicable Underlying Guarantor
thereunder.
(iv) Survey. An as-built survey satisfactory to Borrower and
Lender and prepared by a licensed surveyor satisfactory to Borrower, Lender, and
the Title Insurance Company in accordance with Borrower's requirements, of the
Applicable Resort's Land, showing the location and dimensions of all Units,
Common Elements, and other improvements thereto and indicating the routes of
ingress and egress for public access to the Applicable Resort, all utility
lines, walks, drives, recorded or visible easements and rights-of-way on such
Land, and showing that there are no encroachments,
improvements, projections, or easements (recorded or unrecorded) on the property
lines. The survey shall certify the acreage of the Land and shall indicate
whether the Land is located within any flood hazard area. The survey must be
prepared in accordance with the standards set forth by ALTA/ACSM and those of
any and all surveyors' bureaus or associations of the Applicable Jurisdiction as
well as any and all Applicable Laws and must be certified to Borrower, Lender,
and the Title Insurance Company. The surveyor's certificate placed on the survey
shall include a statement that said survey locates any and all such items set
forth as exceptions in the Title Policy as Borrower may require, and otherwise
satisfy all of Borrower's and Lender's survey requirements, and shall include
any other information required by Lender, Borrower, or the Title Insurance
Company.
(v) Environmental Report. An environmental report or reports
covering the Applicable Resort, including all Mortgaged Real Property,
confirming (to the extent relevant, in Lender's reasonable discretion):
(A) The absence of Hazardous Materials on, under, or
affecting the Land or any other real property or personal property comprising
the Applicable Resort, except for commercially reasonable amounts thereof
commonly found at residential and resort properties in the Applicable
Jurisdiction;
(B) That the engineering or environmental consulting
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 such other information as
Borrower or Lender may reasonably require, including, without limitation, a
Phase I Environmental Inspection, 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 the Applicable Resort or in such proximity thereto
as to create a material risk of contamination of any the Applicable Underlying
Loan Collateral, except for commercially reasonable amounts thereof commonly
found at residential and resort properties in the Applicable Jurisdiction;
(C) The absence of radon gas at the Applicable Resort,
including all of the Units, or, if radon gas is found to be present in any part
of the Applicable Resort or the Units, that such presence is of a nature or
magnitude so as to be fully in compliance with applicable standards under the
Environmental Laws and all other applicable laws or standards; and
(D) The absence of friable asbestos within the Units,
Common Elements, or elsewhere at the Applicable Resort or, if asbestos is found
to be present in any part of the Applicable Resort, that such presence is of a
nature or magnitude that is able to be removed by a licensed removal
contractor for a guaranteed maximum sum satisfactory to Borrower and Lender and
included in the Applicable Approved Construction Budget.
(d) Evidence of Insurance. Borrower has received certified copies of
all insurance policies and endorsements thereto or other evidence satisfactory
to Borrower and Lender, in the sole discretion of each, relating to the
Applicable Resort, including but not limited to the Encumbered Intervals. In
addition, Borrower has received written evidence that the Applicable Underlying
Borrower has obtained and is maintaining or has caused the Applicable Timeshare
Owners' Association to obtain and maintain all policies of insurance required by
and in accordance with Section 6.1(c) hereof, including but not limited to
copies of the most current paid insurance premium invoices for such policies.
(e) Applicable Laws. Borrower has received evidence satisfactory to
Borrower and Lender that all Encumbered Intervals at the Applicable Resort are
and will be in compliance with all applicable zoning, building, and other
Applicable Laws in connection with the construction, development, establishment,
and operation of the Applicable Resort and the sale, use, marketing, and
occupancy of Units and Intervals thereat.
(f) Litigation. Borrower has received evidence satisfactory to
Borrower and Lender that there exists no pending or threatened bankruptcy,
foreclosure, or other material litigation or judgments outstanding against or
with respect to the Applicable Resort, all or any portion of the Applicable
Underlying Loan Collateral, the Applicable Underlying Borrower, or the
Applicable Underlying Guarantor (each a "Material Party"). The term "other
material litigation" as used herein shall not include matters in which (i) a
Material Party is a plaintiff and no counterclaim is pending; or (ii) Borrower
and Lender determine, in their sole discretion, that such litigation is
immaterial due to settlement, insurance coverage, frivolity, or amount or nature
of claim. Borrower shall have obtained an independent search, at Borrower's or
the Applicable Underlying Borrower's expense, confirming that no such
bankruptcy, foreclosure action, or other material litigation or judgment exists.
(g) Code/Other Searches. Borrower has obtained such searches of the
applicable public records as it deems necessary under all Applicable Laws to
verify that it has a first and prior perfected Lien and security interest
covering all of the Applicable Underlying Loan Collateral.
(h) Taxes and Assessments. Borrower has received copies of the most
current tax bills related to the Applicable Resort, together with evidence
satisfactory to it that all taxes and assessments owed by or for which the
Applicable Underlying Borrower or the Applicable Timeshare Owners' Association
is responsible for collection have been paid, which taxes and assessments
include, without limitation, sales taxes, room occupancy taxes,
payroll taxes, personal property taxes, excise taxes, intangible taxes, real
property taxes, income taxes, and any assessments related to the Applicable
Resort and/or the Units or Intervals thereat. Borrower shall also have received
information satisfactory to Borrower and Lender disclosing the tax
identification numbers, tax rates, estimated tax values, assessment ratios, and
estimated assessment values or amounts with respect to the Applicable Resort and
the Land and the identities of the taxing authorities having jurisdiction over
the Land and the Applicable Resort as well as the instrumentalities and entities
having the power and jurisdiction to impose assessments against the Land or the
Applicable Resort.
(i) Financial Statements. Borrower has received the financial
statements required by the Applicable Underlying Loan Documents to be delivered
to Borrower, or otherwise required by Borrower, for the Applicable Underlying
Borrower and the Applicable Underlying Guarantor, all in form and substance
satisfactory to Borrower and Lender.
(j) Interval Sales. To the extent applicable, Borrower has received
written evidence to the effect that the Applicable Underlying Borrower has
complied in all respects with all Applicable Laws relating to the marketing and
sale of Intervals, including but not limited to any Encumbered Intervals, at the
Applicable Resort, including but not limited to timeshare registration statutes,
rules, and regulations.
(k) Management and Property Contract. Borrower has received a copy
of the management contract for the Applicable Resort (the "Management Contract")
and Borrower and Lender have determined to their mutual satisfaction that the
Applicable Resort is being managed by a professional management company
acceptable to Borrower and Lender.
(l) Miscellaneous. Such other matters as Lender shall reasonably
require.
True copies or, to the extent required hereby, originals of all of the
above-referenced documents, instruments, forms, opinions, and other materials
shall be delivered to Servicing Agent, either prior to or contemporaneously with
Borrower's execution and delivery to Lender of the sworn written certificate
required by this Section 4.2. Servicing Agent's written acknowledgment of
receipt and recommendation of approval of each such item is an absolute
condition precedent to Lender's obligation to make any Advances hereunder in
respect of the Applicable Underlying Loan(s) to which Borrower's Initial
Underlying Loan Request and any subsequent Advance Requests (as such term is
defined in Section 4.3 below) pertain; provided, however, that in the event that
the initial Servicing Agent has been replaced by Backup Servicer and Backup
Servicer fails to provide Lender with such written acknowledgment of receipt and
recommendation of approval or, alternatively, notification that Backup Servicer
does not recommend Lender's approval of each such item, within ten (10) Business
Days following Backup Servicer's actual receipt of all applicable documents,
instruments, forms, opinions, and other materials, then, for purposes of this
Section 4.2, Backup Servicer shall be deemed to have provided Lender with its
recommendation of approval of each such item in connection with the relevant
Advance.
4.3 Funding Procedures. Subject to Section 2.3 hereof, from time to time
during the Borrowing Term, Borrower may submit to Lender a written request for
an Advance hereunder (hereinafter sometimes called an "Advance Request") in
substantially the form of Exhibit "M," attached hereto and incorporated herein
by this reference. Provided that no Event of Default hereunder then exists, each
Advance approved by Lender and Servicing Agent shall be made within ten (10)
Business Days following the last to occur of (a) Lender's receipt of the
applicable Advance Request and all items required to be submitted to Lender
hereunder, including but not limited to those items referenced in this Section
4.3 (to the extent applicable); (b) Servicing Agent's written notification to
Lender that all items submitted to Servicing Agent for its review pursuant
hereto and the Servicing Agreement are acceptable; provided, however, that in
the event that the initial Servicing Agent has been replaced by Backup Servicer
and Backup Servicer fails to provide Lender with such written notification or,
alternatively, notification that Backup Servicer has not determined each such
item to be acceptable, within ten (10) Business Days following Backup Servicer's
actual receipt of all applicable documents, instruments, forms, opinions, and
other materials required to be furnished thereto by Borrower hereunder, then,
for purposes of this Section 4.3, Backup Servicer shall be deemed to have
provided Lender with written notification that all items submitted to Backup
Servicer for its review, pursuant hereto and the Backup Servicer's Agreement,
are acceptable, and (c) Lender's receipt of a written certification from
Custodian that confirms that Custodian has in its possession each of the
documents, instruments, and other items required to be delivered to Custodian
pursuant to Section 3.5 hereof (unless Lender, in its sole discretion, has
elected to take possession of such documents, instruments, and other items
itself).
In particular, the obligation of Lender to make any Advance hereunder
shall be subject to the satisfaction of all of the following conditions
precedent:
(a) Requests for Advances. Each Advance Request shall:
(i) Be in writing;
(ii) Be accompanied by a sworn written certificate containing
all of the certifications required to be included in the certificate described
in Section 4.2 above and dated as of the date of such Advance Request;
(iii) Specify the principal amount of the Advance requested,
and designate the Applicable Underlying Loan(s) to which the proceeds of such
Advance pertain;
(iv) Certify the amount of the then current Borrowing Base of
the Applicable Underlying Loan(s) in question;
(v) Confirm that all representations and warranties of
Borrower contained in this Agreement are true and correct as of the date of the
Advance Request and, after giving effect to the making of the requested Advance,
will be true and correct as of the date on which the requested Advance is to be
made;
(vi) State that no Default or Event of Default exists as of
the date of the Advance 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;
(vii) Be delivered to the office of Lender as set forth in
Section 11.1 hereof and to Servicing Agent at its address as set forth in the
Servicing Agreement at least ten (10) Business Days prior to the date of the
requested Advance;
(viii) Be signed by a duly authorized officer of Borrower;
(ix) As to each Applicable Underlying Loan in respect of which
the requested Advance is sought, contain Borrower's sworn written certificate to
the effect that, to the extent applicable:
(A) It has received no notice of any asserted or
threatened defense, offset, counterclaim, discount, or allowance in respect of
each Consumer Note Receivable to be pledged to Lender through a collateral
assignment of all of Borrower's right, title, and interest therein in connection
with such requested Advance or in respect of any previously Pledged Consumer
Notes Receivable;
(B) It has received no notice of any asserted or
threatened defense, offset, counterclaim, discount, or allowance in respect of
any Pledged Note Receivable; and
(C) It has received such additional items as Lender
shall reasonably require, including, without limitation, an aging report of the
Pledged Consumer Notes Receivable and a delinquency report showing which
Consumer Notes Receivable for the subject Advance are more than thirty (30)
days' contractually past due and the duration of each delinquency. Both reports
shall be in form and substance satisfactory to the Lender.
(b) Review and Approval by Servicing Agent. Each and every item
listed in Section 4.3(a) above, together with true copies of all documents,
instruments, forms, certificates, opinions, and other materials received by
Borrower from an Applicable Underlying Borrower in connection with a request for
an advance under an Applicable Underlying Loan has been delivered to Servicing
Agent by Borrower, and Servicing Agent has reviewed same and provided Lender
with its written acknowledgment of receipt, its recommendation of approval of
each such item, and its opinion concerning the complete satisfaction of any and
all requirements and conditions precedent to Advances hereunder in respect of
the Applicable Underlying Loan.
(c) Other Conditions. In addition to the other conditions set forth
in this Agreement, the making of each Advance under the Loan shall be subject to
the satisfaction of all of the following conditions as of the date of such
Advance:
(i) All of the conditions set forth in the Commitment, this
Agreement, the Assignment, and the other Loan Documents have been fully
satisfied by Borrower, including but not limited to the proper recordation or
registration, pursuant to all Applicable Laws, of the Pledges and Assignments of
Notes Receivable and Applicable Mortgages (in the form of Exhibit "D" hereto)
and other Loan Documents, assigning to Lender all of Borrower's right, title and
interest in and to each such Pledged Note Receivable and the related Applicable
Mortgage and the Pledges and Assignments of Consumer Notes Receivable and
Interval Mortgages for each Applicable Underlying Loan, assigning to Lender all
of Borrower's right, title and interest in and to each such Pledged Consumer
Note Receivable and the related Interval Mortgage, in the Applicable
Jurisdictions and the filing of all appropriate UCC-1 and UCC-3 financing
statements in accordance with the provisions of the Code, this Agreement, and
the other Loan Documents (or the deposit of all such documents and instruments
in escrow with the Title Insurance Company, if appropriate);
(ii) No Default or Event of Default exists immediately prior
to the making of such requested Advance or, after giving effect thereto,
immediately after the making of such requested Advance;
(iii) Each document, instrument, contract, and agreement
required to have been executed and delivered in connection with any prior
Advance is consistent with the terms of this Agreement and remains in full force
and effect;
(iv) The date on which such requested Advance is to be made is
a Business Day;
(v) Advances shall be made not more often than on a weekly
basis;
(vi) Lender has determined that the requested Advance, when
added to the aggregate outstanding principal balance of all previous Advances,
if any, under the Loan, and the total amount funded by Lender pursuant to the
ING Agreement does not exceed the Maximum Funded Amount, that each Pledged Note
Receivable as to which such Advance is sought remains an Eligible Note
Receivable hereunder and is not in excess of the Borrowing Base, and that the
Maximum Aggregate Advance Percentage has not been exceeded;
(vii) All representations and warranties contained herein, in
the other Loan Documents, and in any certificates delivered to Lender in
connection with the Loan are true and correct in all material respects;
(viii) Lender has received evidence satisfactory to Lender, in
its sole but reasonable discretion, that the Applicable Resort, the Applicable
Underlying Loan Collateral, and the Applicable Underlying Borrower are in
compliance with all Applicable Laws; and
(ix) The Interval Mortgages, the collateral assignments
thereof to Borrower from the Applicable Underlying Borrower and to Lender from
Borrower and the UCC financing statements, if required by Lender, shall each
have been duly recorded or registered in the Applicable Jurisdiction in
accordance with all Applicable Laws. All of Borrower's right, title, and
interest in and to all Interval Mortgages and Pledged Consumer Notes Receivable
assigned by Borrower to Lender hereunder must have evidence thereon of payment
of all required documentary stamps and intangible taxes, if any are required.
The funding of the requested Advance, delivery of the Collateral, issuance of
the Title Policy, if any, and recording or registration of the collateral
assignments or any releases and the UCC financing statements may, in Lender'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
Lender.
(d) Payments by Lender. Lender may, at any time and without a
request therefor having been submitted by Borrower, advance Loan proceeds for
the purpose of paying interest on the Loan, real estate taxes, insurance
premiums, fees and expenses of Lender's counsel, or to cure an Event of Default.
After the occurrence of an Event of Default or of an event or the existence of a
condition which, with the giving of notice or the lapse of time or both, would
constitute an Event of Default hereunder, Lender may, as to an Applicable
Underlying Loan, pay the cost of any of Borrower's undertakings pursuant to the
Loan Documents. Notwithstanding the foregoing provisions of this Section 4.3(d)
and except as otherwise provided herein to the contrary, Lender shall furnish
Borrower with written notice of Lender's intent to take any of the foregoing
actions and afford Borrower ten (10) days in which to take such actions itself
prior to Lender's doing so.
4.4 Advances Do Not Constitute a Waiver. No Advance hereunder shall
constitute a waiver of any condition to Lender's obligation to make further
Advances hereunder.
SECTION 5. GENERAL REPRESENTATIONS AND WARRANTIES
Borrower and Guarantor, jointly and severally, hereby represent and
warrant to Lender as follows:
5.1 Organization, Standing, Qualification. Borrower (a) is a corporation
duly organized, validly existing, and in good standing under the laws of the
State of Delaware and as a foreign corporation under the laws of each
jurisdiction in which the character or location of the properties owned by it or
the business transacted by it requires licensing and qualification; and (b) has
all requisite power, corporate or otherwise, to conduct its business and to
execute, deliver, and perform its obligations under the Loan Documents.
5.2 Organization, Standing, Qualification. Guarantor is (a) a corporation
duly organized, validly existing, and in good standing under the laws of the
State of Florida and as a foreign corporation under the laws of each
jurisdiction in which the character or location of the properties owned by it or
the business transacted by it requires licensing and qualification; and (b) has
all requisite power, corporate or otherwise, to conduct its business and to
execute, deliver, and perform its obligations under the Loan Documents.
5.3 Authorization, Enforceability, Etc.
(a) The execution, delivery and performance by Borrower and
Guarantor of the Loan Documents has been duly authorized by all necessary
corporate actions by Borrower and Guarantor and does not and will not (i)
violate any provision of Borrower's or Guarantor's articles of incorporation,
bylaws, or any agreement, law, rule, regulation, order, writ, judgment,
injunction, decree, determination, or award presently in effect to which
Borrower or Guarantor 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 or Guarantor other than Liens in favor of Lender; or (iii) result in a
breach of, or constitute a default by Borrower or Guarantor under, any
indenture, loan, or credit agreement or any other agreement, document,
instrument, or certificate to which Borrower or Guarantor is a party or by which
it or any of its assets are bound or affected, including but not limited to any
loan from or agreement of any type with a third party lender.
(b) No approval, authorization, order, license, permit, franchise,
or consent of, or registration, declaration, qualification, or filing with, any
governmental authority or other Person is required in connection with the
execution, delivery, and performance by Borrower or Guarantor of any of the Loan
Documents.
(c) The Loan Documents constitute legal, valid, and binding
obligations of Borrower and Guarantor, enforceable against Borrower and
Guarantor in accordance with their respective terms. To the best of Borrower's
knowledge after good faith diligent inquiry, the Applicable Underlying Loan
Documents constitute legal, valid, and binding obligations of the relevant
Applicable Underlying Borrowers and Applicable Underlying Guarantors,
enforceable against each of them in accordance with the respective terms of such
Applicable Underlying Loan Documents.
(d) Borrower has good and marketable title to all of the Collateral,
free and clear of any Lien, security interest, charge, or encumbrance except for
the Liens or security interests created by this Agreement or any Loan Document
or otherwise created in favor of Lender or those Permitted Liens and
Encumbrances as set forth on Exhibit "H" hereto. 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
Lender.
(e) The execution and delivery of the Loan Documents, the delivery
and endorsement to Lender of the Pledged Notes Receivable and Pledged Consumer
Notes Receivable, the filing and recordation of UCC-1 and UCC-3 financing
statements in each Applicable Jurisdiction, and the recordation or registration
in the Applicable Jurisdiction in accordance with all Applicable Laws of the
Pledges and Assignments of Notes Receivable and the Pledges and Assignments of
Consumer Notes Receivable and Interval Mortgages create in favor of Lender valid
and perfected continuing first priority Liens and security interests in and to
all of the Collateral. The Collateral secures the full payment and performance
of the Obligations.
(f) To the best of Borrower's knowledge after good faith diligent
inquiry, none of the Pledged Notes Receivable or Pledged Consumer 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 this Agreement, none will be forged, or will have affixed thereto
any unauthorized signatures.
(g) To the best of Borrower's knowledge after good faith diligent
inquiry, there have been no material modifications or amendments whatsoever to
the Pledged Notes Receivable or the Applicable Mortgages, other than those
expressly approved by Lender in writing, the originals of which have been
delivered to Custodian.
(h) Borrower has received no notice that there have been any
material modifications or amendments to the Pledged Consumer Notes Receivable or
the Interval Mortgages.
(i) Borrower has received no notice that any of the makers of the
Pledged Notes Receivable and the Pledged Consumer Notes Receivable have any
defenses, offsets, claims, or counterclaims, relating to the Pledged Notes
Receivable, any of the other Applicable Underlying Loan Documents or the Pledged
Consumer Notes Receivable.
(j) The Applicable Mortgages, if any, constitute and will continue
to constitute valid and enforceable first and exclusive Liens and security
interests on the Encumbered Intervals.
(k) The Interval Mortgages constitute and will continue to
constitute valid and enforceable first and exclusive Liens and security
interests on the Encumbered Intervals.
(l) The Pledged Notes Receivable and the Applicable Mortgages are
and shall remain in full force and effect as valid and binding obligations of
the respective Applicable Underlying Borrowers in favor of Lender, as holder.
(m) The Pledged Consumer Notes Receivable and the Interval Mortgages
are and shall remain in full force and effect as valid and binding obligations
of the respective Purchasers in favor of Lender, as collateral assignee.
(n) The grant of the Liens and security interests described herein
by Borrower in favor of Lender has not adversely affected and will not adversely
affect the validity or enforceability of the obligations of the respective
Applicable Underlying Borrowers under any of the Applicable Underlying Loan
Documents.
(o) The grant of the Liens and security interests described herein
by the Applicable Underlying Borrowers to Borrower and by Borrower to Lender has
not affected and will not adversely affect the validity or enforceability of the
obligations of the respective makers of the Pledged Consumer Notes Receivable
under such Pledged Consumer Notes Receivable or the corresponding Interval
Mortgages.
(p) Lender is not and shall not be required to take, and Borrower
has taken, any and all required steps to protect Lender's Liens and security
interests in the Collateral (other than maintaining or causing Custodian to
maintain possession, custody, and control of the portion of the Collateral
constituting instruments and timely filing continuation statements for UCC
financing statements); and Lender is not and shall not be required to collect or
realize upon the Collateral or any distribution of interest or principal, nor
shall loss of, or damage to, any Collateral release Borrower or Guarantor from
any of the Obligations.
5.4 Financial Statements and Business Condition. The Financial Statements
fairly present the respective financial conditions and results of operations of
Borrower and Guarantor as of the date or dates thereof and for the periods
covered thereby. There are no material liabilities, direct or indirect, fixed or
contingent, of Borrower or Guarantor as of the dates of such Financial
Statements that are not reflected therein or in the notes thereto that have not
otherwise been disclosed to Lender in writing. Except for any such changes
heretofore expressly disclosed in writing to Lender, there have been no material
adverse changes in the respective financial conditions of Borrower or Guarantor
from the financial conditions shown in their respective Financial Statements,
nor have Borrower or Guarantor incurred any material liabilities, direct or
indirect, fixed or contingent, that are not shown in their respective Financial
Statements. Borrower and Guarantor are able to pay all of their respective debts
as they become due, and Borrower and Guarantor, as the case may be, will
maintain such solvent financial condition, giving effect to the Obligations, as
long as Borrower or Guarantor are obligated to Lender under this Agreement or
any of the other Loan Documents. Neither Borrower's nor Guarantor's Obligations
under this Agreement and the other Loan Documents will render Borrower or
Guarantor unable to pay their respective debts as they become due.
5.5 Taxes. Borrower represents and warrants that to the best of Borrower's
knowledge after good faith diligent inquiry, each Applicable Underlying
Borrower: (a) has paid in full all ad valorem taxes and other taxes and
assessments levied against the Applicable Underlying Loan Collateral, on or
before the due date of such taxes and assessments, and Borrower knows of no
basis for any additional taxes or assessments against any Applicable Resort or
Applicable Underlying Loan Collateral; and (b) 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, and all other taxes that are payable by it. To the best
of Borrower's knowledge after good faith diligent inquiry, no tax audit is
pending or threatened with respect to Borrower, Guarantor, any Applicable
Underlying Borrower, or any Applicable Underlying Guarantor.
5.6 Title to Properties; Prior Liens. To the best of Borrower's knowledge
after good faith diligent inquiry, the Applicable Underlying Borrowers have good
and marketable title to all of the Applicable Underlying Loan Collateral,
together with all rights, properties, and benefits appurtenant or related
thereto. Other than the Liens granted in favor of Lender, there are no Liens or
encumbrances against all or any portion of the Collateral or the Applicable
Underlying Loan Collateral, except for the Permitted Liens and Encumbrances.
5.7 Subsidiaries, Affiliates, and Capital Structure. Guarantor is involved
in the business operations of and derives financial benefit from Borrower. For
so long as Borrower is obligated to Lender under any of the Loan Documents,
there shall be no change of ownership of the shares of stock in Borrower. None
of the Affiliates of Borrower or Guarantor are parties to any proxies, voting
trusts, shareholder agreements, or similar arrangements, pursuant to which
voting authority, rights, or discretion with respect to Borrower or Guarantor is
vested in any other Person.
5.8 Litigation, Proceedings, Etc. There are no actions, suits,
proceedings, orders, or injunctions pending or, to the best of Borrower's
knowledge after good faith diligent inquiry, threatened against or affecting
Borrower, Guarantor, their respective Affiliates, or any Applicable Resort,
Applicable Underlying Borrower, or Applicable Underlying Guarantor, at law or in
equity, or before or by any governmental authority or other tribunal, that (a)
could have a material adverse effect on Borrower, Guarantor, any Affiliate of
Borrower or Guarantor, any Applicable Resort, any Applicable Underlying
Borrower, or any Applicable Underlying Guarantor; or (b) could have a material
adverse effect on all or any portion of the Collateral or any Applicable
Underlying Loan Collateral. Exhibit "N," attached hereto and incorporated herein
by this reference, describes all currently pending litigation against Borrower
or Guarantor.
5.9 Environmental Matters. To the best of Borrower's knowledge after good
faith diligent inquiry and as pertains to each Applicable Resort: (a) none of
the Applicable Resorts contain any Hazardous Materials, and no Hazardous
Materials are used or stored at or transported to or from any Applicable Resort,
except for commercially reasonable amounts thereof commonly found at residential
and resort properties in the Applicable Jurisdiction; (b) no Applicable
Underlying Borrower has received notice from any governmental agency or other
Person with regard to Hazardous Materials on, under, or affecting all or any
portion of the Applicable Underlying Loan Collateral; and (c) neither any
Applicable Underlying Borrower, any Applicable Resort, nor any Applicable
Underlying Loan Collateral are in violation of any Environmental Laws.
5.10 Full Disclosure. No information, exhibit, or written report or the
content of any schedule furnished by or on behalf of Borrower or Guarantor to
Lender in connection with the Loan, the Applicable Resorts, the Applicable
Underlying Borrowers, the Applicable Underlying Guarantors, the Applicable
Underlying Collateral, or the Collateral, and no representation or statement
made by Borrower or Guarantor in any Loan Document, 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. To the extent that any
such information, exhibit, report, or statement furnished or made to Lender was
obtained by Borrower from an Applicable Underlying Borrower or an Applicable
Underlying Guarantor, the representation and warranty made in this Section 5.10
is so made to the best of Borrower's knowledge after good faith diligent
inquiry. Neither Borrower nor Guarantor knows of any fact or condition that
could adversely affect the construction of the Financed Improvements or the
operation of all Applicable Resorts in accordance with all Applicable Laws, or
impede or preclude Borrower's or Guarantor's performance of its Obligations
pursuant to the Loan Documents.
5.11 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 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 this 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, U and X of
the Board of Governors of the Federal Reserve System, 12 C.F.R. Part 11. The
proceeds of the Loan will be disbursed only for the purposes set forth in
Section 2.1 hereof.
5.12 No Defaults. No Default or Event of Default exists, and there is no
breach or violation in any material respect of any term of any document,
contract, agreement, charter instrument, bylaws, or other instrument to which
Borrower or any Affiliate thereof is a party or by which it may be bound.
5.13 Restrictions of Borrower or Guarantors. Neither Borrower, Guarantor,
nor any Affiliate thereof is a party to any contract or agreement, or subject to
any Lien, charge, or restriction, that materially and adversely affects its
business. Neither Borrower nor Guarantor will be, on or after the Closing Date,
a party to any contract or agreement that restricts its right or ability to
incur indebtedness or prohibits Borrower's or Guarantor's execution and delivery
of, or compliance with the terms of, this Agreement or the other Loan Documents.
Borrower has not agreed or consented to cause or permit in the future (upon the
happening of any contingency or otherwise) any of the Collateral, whether now
owned or hereafter acquired, to be subject to a Lien except in favor of Lender
as provided hereunder.
5.14 Broker's Fees. Lender and Borrower represent to each other that
neither of them has made any commitment or taken any action that could result in
a claim for any broker's, finder's, or other similar fees or commissions with
respect to any of the transactions contemplated by this Agreement. Borrower
agrees to indemnify Lender and save and hold Lender harmless from and against
all claims of any Person for any broker's or finder's fee, commission, or
similar amount, and this indemnity shall include reasonable attorneys' fees and
legal expenses.
5.15 Tax Identification/Social Security Numbers. Borrower's and
Guarantor's respective federal taxpayer identification numbers are as follows:
Borrower: ▇▇-▇▇▇▇▇▇▇
Guarantor: ▇▇-▇▇▇▇▇▇▇
5.16 Legal Compliance. Borrower has, in all material respects, complied
fully with all Applicable Laws in connection with the Applicable Underlying
Loans. To the best of Borrower's knowledge after good faith diligent inquiry,
each Applicable Underlying Borrower has, in all material respects, similarly
complied with all Applicable Laws in connection with Applicable Resort and
Applicable Underlying Loan Collateral. In particular, Borrower is not aware of
any violation by an Applicable Underlying Borrower in connection with an
Applicable Resort of: (i) the Interstate Land Sales Full Disclosure Act; (ii)
any applicable state condominium and timeshare statutes, rules, and regulations,
including but not limited to those governing the administration and operation of
owners' associations and those requiring registration of any of the Encumbered
Intervals; (iii) Regulation Z of the Federal Reserve Board; (iv) the Equal
Credit Opportunity Act; (v) Regulation B of the Federal Reserve Board; (vi)
Section 5 of the Federal Trade Commission Act; (vii) all applicable state and
federal securities laws; (viii) all applicable usury laws; (ix) all applicable
trade practices, home and telephone solicitation, sweepstakes, lottery, and
other consumer credit and protection laws; (x) all applicable real estate sales
licensing, disclosure, reporting, and escrow laws; (xi) the Americans with
Disabilities Act; (xii) the Real Estate Settlement Procedures Act; and (xiii)
all amendments to and rules and regulations promulgated under the foregoing.
5.17 Applicable Resorts. To the best of Borrower's knowledge after good
faith diligent inquiry, all representations and warranties made by the
Applicable Underlying Borrower in the Applicable Underlying Loan Documents,
including but not limited to those set forth in Section 6.9 of the Hypothecation
Loan Agreement attached as Exhibit "A" hereto, are true and correct in all
material respects. In the event that Lender approves the use as an Applicable
Underlying Loan Document in connection with a particular Applicable Underlying
Loan of a loan agreement that is not in the form of Exhibit "A" hereto, then
Borrower shall nevertheless be deemed to have represented and warranted that to
the best of Borrower's knowledge after good faith diligent inquiry, all of the
representations and warranties set forth in Section 6.9 of Exhibit "A" hereto
are true and correct in all material respects in connection with the Applicable
Underlying Loan and the Applicable Resort.
5.18 Applicable Timeshare Documents and Reports. Each Applicable
Underlying Borrower has furnished to Borrower and Borrower shall furnish to
Lender, upon request, true and correct copies of the Applicable Timeshare
Documents which consist of all those placed on file by the Applicable Underlying
Borrower with the applicable regulatory authorities or any other appropriate
federal, state, or local regulatory or recording agencies, offices, or
departments, if required.
5.19 Continuation and Investigation. Each request by Borrower for an
Advance of the Loan shall constitute an affirmation that all representations and
warranties contained herein remain true and correct as of the date thereof. All
representations, warranties, covenants, and agreements made herein or in any
certificate or other document delivered to Lender by or on behalf of Borrower,
pursuant to or in connection with this Agreement, shall be deemed to have been
relied upon by Lender, notwithstanding any investigation heretofore or hereafter
conducted by or on behalf of Lender, and shall survive the making of any or all
Advances and payments contemplated hereby.
For purposes of this Section 5, to the extent applicable, Borrower shall
be presumed to have engaged in good faith diligent inquiry if it has acted
strictly in accordance with the Qualified Borrower Underwriting Guidelines, the
Qualified Loan Underwriting Guidelines, and/or the Qualified Resort Underwriting
Guidelines, as appropriate.
SECTION 6. COVENANTS
6.1 Affirmative Covenants. For so long as any of Borrower's Obligations
remain unsatisfied, Borrower hereby covenants and agrees with Lender as follows:
(a) Payment and Performance of Obligations. Borrower shall repay all
of the Loan and all related amounts 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
that are not prohibited by law to prevent the occurrence of any Default or Event
of Default hereunder; and Borrower will maintain an office or agency in the
State of New York where notices, presentations, and demands in respect of the
Loan Documents may be made upon Borrower.
(b) Maintenance of Existence, Qualification and Assets. Borrower
shall at all times (i) maintain its legal existence; (ii) maintain its
qualification, where required, to transact business and good standing in the
State of New York and in any other jurisdiction in which it conducts business;
and (iii) comply or cause its compliance with all Applicable Laws.
(c) Maintenance of Insurance. Borrower shall ensure that the
Applicable Underlying Loan Documents require that until all of Borrower's
Obligations have been fully satisfied, policies of insurance with premiums
therefor being paid when due, are maintained and, promptly upon receipt thereof
from each Applicable Underlying Borrower, shall deliver to Lender and Servicing
Agent originals of insurance policies issued by insurance companies (together
with paid premium invoices in respect thereof), in amounts, in form, and in
substance, and with expiration dates, all acceptable to Lender and containing
waivers of subrogation rights by the insuring company, non-contributory standard
mortgagee benefit clauses or their equivalents, and mortgagee loss payable
endorsements in favor of and satisfactory to Lender and breach of warranty
coverage, providing the following types of insurance on and with respect to each
Applicable Underlying Borrower and each Applicable Resort:
(i) As to all improvements that have already been completed as
of the date hereof, "All Risk Special Form" insurance coverage (including fire,
lightning, hurricane, tornado, wind and water damage, earthquake, vandalism and
malicious mischief coverage) covering all real and personal property that
comprises the Applicable Resort, 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 Lender, breach of warranty
coverage, and replacement cost endorsements satisfactory to Lender, and shall
not permit co-insurance.
(ii) Public liability and property damage insurance covering
the Applicable Resort in amounts and on terms satisfactory to Lender; and
(iii) Such other insurance on the Applicable Resort or any
replacements or substitutions therefor, including, without limitation, rent
loss, business interruption, flood insurance (if the Applicable Resort is or
becomes located in an area that 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 such terms as may from time to time reasonably be required by
Lender.
Lender shall expressly be named an insured and loss payee in each
insurance policy described in this Section 6.1(c). To the extent any
"institutional mortgagee," "institutional lender" or "mortgagee" (as defined or
used in an Applicable Declaration) other than Lender has any rights to approve
the form of insurance policies with respect to the Applicable Resort, 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 Applicable Resort 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 reasonable steps as may be necessary or
appropriate, in Lender's sole discretion, to ensure that Lender shall at all
times have a co-equal right with such other "institutional mortgagee,"
"institutional lender," or other "mortgagee"
(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 and shall use its best efforts to prohibit any changes with respect to
any insurance policies, insurers, coverage, attorney-in-fact or insurance
trustee, if any, without Lender's prior written approval.
In the event of any insured loss or claim in respect of all or any
portion of an Applicable Resort, Borrower shall use its good faith commercially
reasonable efforts (within the scope of its role as lender) to cause all
proceeds of such insurance policies to be applied in a manner consistent with
the Applicable Timeshare Documents and all Applicable Laws.
All insurance policies required pursuant to this Agreement (or the
Applicable Timeshare Documents) 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 Lender and contain a provision
affirming Lender's rights and benefits thereunder, despite any violation of the
applicable policy terms by the Applicable Underlying Borrower or any other
Person. At least thirty (30) days prior to the expiration date of each policy
maintained pursuant to this Section 6.1(c), a certified copy of a renewal or
replacement thereof satisfactory to Lender shall be delivered to Lender, along
with evidence satisfactory to Lender that the premium therefor has been paid in
full. The delivery of any insurance policies hereunder shall constitute an
assignment of all unearned premiums as further security for the Obligations. In
the event that all required premium payments for all such insurance policies are
not paid at least thirty (30) days prior to the expiration date of each policy
maintained pursuant to this Section 6.1(c), Borrower shall immediately upon
receiving notice thereof notify Lender in writing of such failure to timely pay
the required insurance premiums. Borrower shall make a good faith inquiry on a
regular basis to each Applicable Underlying Borrower to determine whether the
required insurance premiums covering the Applicable Underlying Loan Collateral
have been paid. If Borrower determines upon such inquiry or otherwise that the
required insurance premiums have not been paid, Borrower shall immediately
notify Lender of such failure to timely pay the required insurance premium, and
Borrower shall have thirty (30) days from receipt of a written request from
Lender to cause the required insurance premiums to be paid. If the required
insurance premiums are not paid within such thirty (30) day period, Lender may,
in its sole discretion, without any obligation to do so, choose to pay such
required insurance premiums, in which case Borrower shall pay Lender interest at
the Default Rate for any amounts so advanced. Lender may also, in its sole
discretion, in the event the required insurance premiums are not paid when due,
establish an insurance escrow account from which Lender may make insurance
payments when insurance premiums shall become due. If the required insurance
premiums are not paid as required and Lender elects not to pay such insurance
premiums or establish an escrow account for payment thereof, such failure shall
constitute an Event of Default hereunder.
In the event of any fire or other casualty to or with respect to all
or any portion of the Applicable Resort, Borrower covenants that it shall use
its good faith commercially reasonable efforts (within the scope of its role as
lender) to cause the prompt restoration, repair, or replacement of the damaged
portion(s) or the Applicable Resort and the repair or replacement of any other
personal property to the same condition as immediately prior to such fire or
other casualty and, with respect to the real and personal property comprising
the Applicable Resort, in accordance with the terms of the Applicable Timeshare
Documents and all Applicable Laws. The insufficiency of any net insurance
proceeds shall in no way relieve Borrower or the Applicable Underlying Borrower
from their respective obligations as set forth herein. In Lender's sole
discretion, any and all insurance proceeds payable to or received by Lender
pursuant to the Applicable Declaration or the applicable insurance policies may
be applied to the payment of the Obligations, whether or not due and in whatever
order Lender elects, consistent with the terms of the applicable insurance
policy and the Applicable Declaration.
Borrower shall in good faith cooperate with Lender in obtaining for
Lender the benefits of any insurance or other proceeds lawfully or equitably
payable to any Applicable Underlying Borrower, Borrower, or Lender in connection
with the transactions contemplated hereby and in paying any Obligation
(including the payment by Borrower of the expense of an independent appraisal on
behalf of Lender in case of a fire or other casualty affecting the Applicable
Resort).
Borrower shall not waive any material insurance provision in any
Applicable Underlying Loan Document without Lender's prior written consent.
(d) Maintenance of Security. Borrower shall execute and deliver (or
cause to be executed and delivered) to Lender all security agreements, financing
statements, assignments, and such other agreements, documents, instruments, and
certificates, and all supplements and amendments thereto, and take all such
other actions, as Lender deems necessary or appropriate in order to maintain as
valid, enforceable, and perfected first priority Liens and security interests,
all Liens and security interests in the Collateral and Applicable Underlying
Loan Collateral granted to Lender to secure the Obligations. Borrower shall not
grant extensions of time for the payment of, or compromise for less than the
full face value or release in whole or in part, any Applicable Underlying
Borrower, Applicable Underlying Guarantor, 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.
(e) Payment of Taxes and Claims. Borrower agrees to use its best
efforts to cause to be paid, when due, all taxes and assessments of any
kind imposed on or with respect to the Loan or any of the Loan Documents, or the
Collateral, including but not limited to the Encumbered Intervals. Borrower
shall make good faith inquiry on a regular basis to determine whether all such
taxes and assessments have been paid. Borrower shall immediately notify Lender
in writing of any failure to timely pay all taxes and assessments due. In the
event that Lender determines (through notice from Borrower or otherwise) that
any such taxes or assessments have not been paid when due, Borrower shall have
thirty (30) days from receipt of a written request for payment from Lender to
cause the required taxes to be paid. If such required taxes (and any applicable
late charges, etc.) are not paid within such thirty (30) day period, Lender may,
in its sole discretion, without any obligation to do so, choose to pay such
taxes on behalf of Borrower or the Applicable Underlying Borrower, in which case
Borrower shall pay Lender interest at the Default Rate on any amounts so
advanced. In the event Lender elects not to pay the required taxes and the
required taxes are not paid as set forth above, such failure shall constitute an
Event of Default hereunder. Borrower shall pay, where applicable, or shall use
its best efforts to cause the Applicable Underlying Borrower or Applicable
Underlying Guarantor to pay all other charges and assessments levied against
such Applicable Underlying Borrower, the Applicable Underlying Loan Collateral,
or the Applicable Resort before any claim (including, without limitation, claims
for labor, services, materials, or supplies) arises for amounts that have become
due and payable.
(f) Inspections. Borrower shall, at any time and from time to time,
upon reasonable notice and at the expense of Borrower, including but not limited
to the travel expenses of Lender's agents, ensure that the Applicable Underlying
Loan documents permit, and use its good faith commercially reasonable efforts to
arrange for, Lender or its agents or representatives to inspect any Applicable
Resort, any Applicable Underlying Loan Collateral, or any of Borrower's or
Guarantor's assets, including but not limited to all documents, bank statements,
and other records within Borrower's possession, custody, or control, and to
examine and make copies and abstracts thereof; and to discuss its affairs,
finances and accounts with any of its officers, employees, Affiliates,
contractors or independent certified public accountants (and by this provision,
Borrower authorizes said accountants to discuss with Lender, its agents or
representatives, the affairs, finances, and accounts of Borrower).
Notwithstanding the foregoing provisions of this Section 6.1(f) to the contrary,
Lender will make no more than two (2) such inspections per year in connection
with any particular Applicable Underlying Loan unless an Event of Default
hereunder has occurred. Lender agrees to use reasonable efforts not to interfere
unreasonably with the Applicable Underlying Borrower's business operations in
connection with any such inspections. Without limiting the foregoing, Lender
shall have the right to make such credit investigations as Lender may deem
appropriate, in its sole discretion, in connection with its review of any
Applicable Underlying Loan Documents. Borrower shall make available to Lender
all such credit and other information in Borrower's possession or under its
control or to which it may have access with respect to Applicable Underlying
Borrowers and Applicable Underlying Guarantors as Lender may request.
(g) Reporting Requirements. For so long as any of the Obligations
remain unsatisfied, Borrower shall furnish (or cause to be furnished, as the
case may be) to Lender, in each case certified in writing by Borrower and
Guarantor as true and correct, the following:
(i) Monthly Financial Reports. As soon as available and in any
event within fifteen (15) days after the end of each calendar month: (i) a
report detailing all amounts of every possible description received by or on
behalf of Borrower with respect to each Applicable Underlying Loan during the
preceding calendar month and how such amounts were allocated between principal,
interest, and other categories; (ii) a current aging report on the Pledged
Consumer Notes Receivable; (iii) a report detailing collections on each of the
Pledged Notes Receivable (trial balance); (iv) a delinquency report on all
Pledged Notes Receivable and Pledged Consumer Notes Receivable; (v) a Borrowing
Base report substantially in the form of Exhibit "O," attached hereto and
incorporated herein by this reference; and (vi) monthly reports from Lockbox
Agent as required pursuant to the Lockbox Agreement;
(ii) Quarterly Financial Reports. As soon as available and in
any event within forty-five (45) days following the end of each calendar
quarter, unaudited statements of income and expense of Borrower and Guarantor
for the quarterly period in question and balance sheets of Borrower and
Guarantor as of the last day of such calendar quarter, all in such detail and
scope as may be reasonably required by Lender, prepared in accordance with GAAP
and on a basis consistent with prior accounting periods and certified as true
and correct by Borrower's and Guarantor's respective chief financial officers,
as appropriate;
(iii) Annual Audited Financial Reports. As soon as available
and in any event within one hundred twenty (120) days after the end of each of
calendar year or other fiscal year as may be applicable with respect to Borrower
and Guarantor (a "Fiscal Year"), statements of income and expense of Borrower
and Guarantor for the annual period ended as of the end of such Fiscal Year, and
balance sheets of Borrower and Guarantor as of the end of such Fiscal Year, all
in such detail and scope as may be reasonably required by Lender and prepared
and audited by an independent certified public accounting firm acceptable to
Lender in accordance with GAAP and on a basis consistent with prior accounting
periods. Each annual financial statement of Borrower and Guarantor shall be
certified by Borrower and Guarantor to be true, correct, and complete, and shall
otherwise be in form acceptable to Lender;
(iv) Officer's Certificate. Each set of annual Financial
Statements or reports delivered to the Lender pursuant to Sections 6.1(g)(i),
(ii),
(iii) and (iv) hereof shall be accompanied by a certificate of the President or
the Treasurer of Borrower or Guarantor, as appropriate, setting forth that the
signers have reviewed the relevant terms of this Agreement (and all other
agreements and exhibits between the relevant parties), have made, or caused to
be made, under their supervision, a review of the transactions and conditions of
Borrower and Guarantor from the beginning of the period covered by the Financial
Statements or reports being delivered therewith to the date of the certificate,
and that such review has not disclosed the existence during such period of any
condition or event that constitutes a Default or Event of Default or, if any
such condition or event existed or exists or will exist, specifying the nature
and period of existence thereof and what action Borrower or Guarantor has taken
or proposes to take with respect thereto;
(v) Audit Reports. Promptly upon receipt thereof, one (1) copy
of each other report submitted to Borrower or Guarantor by independent public
accountants or other Persons in connection with any annual, interim, or special
audit made by them of the books of Borrower or Guarantor;
(vi) Notice of Default or Event of Default. Promptly upon
becoming aware of the existence of any condition or event that constitutes a
Default or an Event of Default hereunder or any of the other Loan Documents, or
a default or event of default pursuant to any of the Applicable Underlying Loan
Documents, a written notice specifying the nature and period of existence
thereof and what action Borrower is taking or proposes to take with respect
thereto;
(vii) Notice of Claimed Default. Promptly upon becoming aware
that the holder of any material obligation or of any evidence of material
indebtedness of Borrower, Guarantor, or any Applicable Underlying Borrower or
Applicable Underlying Guarantor has given notice or taken any other action with
respect to a claimed default or event of default with respect thereto, 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 Borrower or Guarantor
is taking or proposes to take with respect thereto;
(viii) Material Adverse Developments. Promptly upon becoming
aware of any pending or threatened claim, action, proceeding, litigation,
development, or any other information, whether of the type referenced in Section
5.8 hereof or otherwise, that could materially and adversely affect Borrower,
Guarantor, any Applicable Underlying Borrower, any Applicable Underlying
Guarantor, any Applicable Resort, any Applicable Underlying Loan Collateral, or
all or any portion of the Collateral, including but not limited to the ability
of Borrower to perform its Obligations hereunder, Borrower shall provide Lender
with telephonic notice thereof, immediately followed by telecopied and mailed
written confirmation, specifying the nature of such development or information
and the anticipated effect thereof; and
(ix) Other Information. Borrower shall promptly deliver to
Lender any other available information related to the Loan, the Collateral, the
Applicable Underlying Loan Collateral, Borrower, Guarantor, the Applicable
Resorts, the Applicable Underlying Borrowers, or the Applicable Underlying
Guarantors as Lender may in good faith request.
(h) Records. Borrower shall keep detailed accurate books and records
of account in accordance with GAAP reflecting all financial transactions of
Borrower with respect to the Applicable Underlying Loans.
(i) Guarantor. Absent the prior written consent of Lender, which may
be granted or withheld in Lender's sole and absolute discretion, Guarantor shall
remain the owner and holder of one hundred percent (100%) of the authorized,
issued, and outstanding shares of stock of Borrower. Borrower shall not enter
into any proxies, voting trusts, shareholder agreements, or similar arrangements
for the purpose of vesting voting rights, authority, or discretion in any other
Person.
(j) Notices. Borrower shall notify Lender 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 Document would be incorrect or
materially misleading if made at that time; (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 other Loan Document; or (iii) which constitutes or, with
the passage of time, notice, or a determination by Lender would constitute, a
Default or an Event of Default.
(k) Other Documents. Borrower shall maintain to the satisfaction of
Lender, and make available to Lender, accurate and complete files relating to
the Pledged Notes Receivable, Pledged Consumer Notes Receivable and all of the
other Collateral, and such files shall contain true copies of each Pledged Note
Receivable and each Pledged Consumer Note Receivable, as amended from time to
time, copies of all relevant credit memoranda relating to such Pledged Notes
Receivable and Pledged Consumer Notes Receivable, and all collection information
and correspondence relating thereto.
(l) Further Assurances. Borrower shall 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 Lender
exercised in good faith, may be necessary or appropriate in order more
effectively to evidence or secure, and to ensure the performance of, the
Obligations. In addition, Borrower shall deliver to Lender from time to time,
upon request by Lender, such documents, instruments, and other materials or
items
as Lender may reasonably require to evidence Borrower's compliance with the
covenants set forth in this Section 6.1.
(m) Expenses and Closing Fees. Whether or not the transactions
contemplated hereunder are consummated, Borrower shall pay all reasonable
expenses of Lender relating to negotiating, preparing, documenting, closing, and
enforcing this Agreement and the other Loan Documents, 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 fees and disbursements of Lender's and Borrower's
counsel;
(iii) Lender's out-of-pocket expenses;
(iv) All fees and expenses (including fees and expenses of
Lender's counsel) relating to any amendments, waivers, consents, or subsequent
closings or other transactions pursuant to the provisions hereof;
(v) All costs, outlays, legal fees, and expenses of every kind
and character had or incurred in: (A) 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; (B)
the preparation for, negotiations regarding, consultations concerning, or the
defense or prosecution of legal proceedings involving any claim or claims made
or threatened against Lender arising out of this transaction or the preservation
or protection of the Collateral securing the Loan or Advances made hereunder,
expressly including, without limitation, the defense by Lender of any legal
proceedings instituted or threatened by any Applicable Underlying Borrower,
Applicable Underlying Guarantor, or other Person to seek to recover or set aside
any payment or set off theretofore received or applied by the Lender with
respect to the Obligations, and any and all appeals thereof; and (C) the
advancement of any expenses provided for under any of the Loan Documents;
(vi) All fees and expenses of Servicing Agent, Backup Servicer
(if applicable), and Custodian;
(vii) All costs and expenses incurred by Lender under the
Note, and all late charges payable under the Note; and
(viii) To the extent the same are not paid by an Applicable
Underlying Borrower, 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, lien and judgment search costs, brokers fees, escrow fees, wire
transfer fees, and all travel and out-of-pocket expenses of Lender to conduct
inspections or audits. Without limiting any of the foregoing, Borrower shall pay
the costs of Code and other searches, Code and other Loan Document recording and
filing fees, and applicable taxes and premiums on each mortgagee policy of title
insurance delivered to Lender pursuant to this Agreement, to the extent the same
are not paid by an Applicable Underlying Borrower.
(n) Indemnification of Lender. In addition to (and not in lieu of)
any other provisions hereof or of any other Loan Document providing for
indemnification in favor of Lender, Borrower hereby defends, indemnifies, and
holds harmless Lender, its subsidiaries, other Affiliates, officers, directors,
agents, employees, representatives, consultants, contractors, servants, and
attorneys, as well as the respective heirs, personal representatives,
successors, and assigns of any or all of them (hereinafter collectively referred
to as the "Indemnified Lender Parties"), from and against, and agrees promptly
to 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,
directly or indirectly, related or attributable to: (i) this Agreement, the
other Loan Documents, the Commitment, the Collateral, the Applicable Underlying
Loan Documents, or the Applicable Underlying Loan Collateral; (ii) the
transactions contemplated under any of the Loan Documents or the Applicable
Underlying Loan Documents, including, without limitation, those in any way
relating to or arising out of the violation of any Applicable Laws; (iii) any
breach of any covenant or agreement or the incorrectness or inaccuracy of any
representation or warranty of Borrower contained in this Agreement or any of the
other Loan Documents (including, without limitation, any certification of
Borrower delivered to Lender; (iv) any and all taxes, including real estate,
personal property, sales, mortgage, excise, intangible, or transfer taxes, and
any and all fees or charges that 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 or an Applicable Underlying
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 any
Applicable Resort of any Hazardous Materials (except to the extent that
liability of the Indemnified Lender Party with respect to such matter would not
exist but for the acts or omissions of such Indemnified Lender Party as
determined in a final, non-appealable adjudication by a court of competent
jurisdiction); (viii) the removal or remediation of any Hazardous Materials from
an Applicable Resort required to be performed pursuant to any Environmental Laws
or as a result of recommendations of any environmental consultant or as required
by Lender; (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 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 any Applicable
Resort; (x) the violation or claimed violation of any Environmental Laws in
regard to an Applicable Resort; (xi) the preparation of an environmental audit
or report on an Applicable Resort not to exceed one (1) per calendar year and
premised upon the Lender's reasonable belief of the existence of a violation of
Environmental Laws, whether conducted by Lender, Borrower, an Applicable
Underlying Borrower, or another Person; (xii) the exercise by Borrower of any
rights or remedies under the Applicable Underlying Loan Documents or any
Applicable Laws; or (xiii) the exercise by Lender of any rights or remedies
under this Agreement or any of the other Loan Documents. Such indemnification
shall not give Borrower or Guarantor any right to participate in the selection
of counsel for Lender or the conduct or settlement of any dispute or proceeding
for which indemnification may be claimed. 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.
(o) Loan Servicing. The Servicing Agreement shall be in form and
content satisfactory to Lender, in its sole discretion. Borrower may not
terminate the Servicing Agreement without's Lender's prior written approval. The
Servicing Agreement shall be cancelable by Lender immediately following the
occurrence of an Event of Default. If the Servicing Agent is Borrower or an
Affiliate of Borrower, no servicing fees shall be paid during or with respect to
any period of time in which a Default or Event of Default hereunder exists.
(p) Use of Borrower's Name. Borrower shall at all times during the
term of the Loan permit Lender to use the name of Borrower, any of its
Affiliates, and Guarantor in any press release, advertisement, or other
promotional material disseminated regarding the Loan.
6.2 Negative Covenants. For so long as any portion of the Obligations
remains unsatisfied, Borrower hereby covenants and agrees with Lender as
follows:
(a) Limitation on Other Debt/Further Encumbrances. Without the prior
written consent of Lender, which may be granted, withheld, or conditioned, in
Lender's sole and absolute discretion, Borrower shall not obtain financing or
grant Liens with respect to all or any portion of the Collateral (whether now
existing or created hereafter) other than those in favor of Lender.
(b) Restrictions on Transfers. Neither Borrower nor Guarantor shall,
without obtaining the prior written consent of Lender (which consent may be
given, withheld, or conditioned by Lender, in Lender's sole and absolute
discretion), whether voluntarily or involuntarily, by operation of law or
otherwise:
(i) transfer, sell, pledge, convey, hypothecate, factor, or assign all or any
portion of the Collateral; (ii) lease or license any portion of the Collateral,
or change the legal or actual possession or use thereof; or (iii) permit the
dilution, transfer, pledge, hypothecation, or encumbrance of any of the stock of
Borrower or Guarantor. Without limiting the generality of the preceding
sentence, and subject to the terms of this Agreement, the prior written consent
of Lender shall be required for (A) any transfer of the Collateral or any part
thereof to a subsidiary or other Affiliate of Borrower or otherwise; (B) any
corporate merger or consolidation, disposition, or other reorganization of
Borrower or Guarantor, or the reclassification of any of the capital stock of
Borrower or Guarantor; (C) any change in the ownership of Borrower or Guarantor;
and (D) any transfer of or change in Guarantor's status as the sole shareholder
of Borrower; provided, however, that notwithstanding the foregoing provisions of
this Section 6.2(b) to the contrary, Lender shall not unreasonably withhold its
consent to any of the actions specified in (A) through (D) above in the event
that the applicable successor to Borrower or Guarantor, as the case may be, is
an investment grade company with a minimum tangible net worth of not less than
$10,000,000 as determined in accordance with GAAP. In the event that Lender, in
Lender's sole discretion, is willing to consent to a transfer that would
otherwise be prohibited by this Section 6.2(b), Lender may condition its consent
on such terms as it desires, including, without limitation, an increase in the
Interest Rate and the requirement that Borrower pay a transfer fee, together
with any expenses incurred by Lender in connection with the granting of such
consent (including, without limitation, attorneys' fees and expenses). If
Borrower violates the terms of this Section 6.2(b), in addition to any other
rights or remedies which Lender may have hereunder, pursuant to any other Loan
Document, or at law or in equity, Lender may, upon written notice to Borrower,
increase, effective immediately as of the date of such violation, the Interest
Rate to the Default Rate.
(c) Use of Lender's Name. Without the prior written consent of
Lender, Borrower will not, and will not permit any Affiliate to, use the name of
Lender, of Credit Suisse First Boston Corporation, or of any other affiliate of
Lender in any press release, advertising, or other promotional materials of any
kind.
(d) Transactions with Affiliates. Without the prior written consent
of Lender, Borrower shall not enter into any transaction with any Affiliate
thereof in connection with the Collateral, including, without limitation,
relating to the purchase, sale, or exchange any assets or properties or the
rendering of any service.
(e) Name Change. Borrower shall not change its name, its chief
executive office, or the locations at which it does business without providing
Lender at least thirty (30) days' prior written notice thereof and executing, at
Borrower's sole expense, such UCC-3 amendments and all other documents and
instruments as Lender, in its sole discretion, deems reasonably necessary or
appropriate in order to continue the perfection of its Lien in and to all of the
Collateral; provided, however, that under no circumstances shall the name of
Borrower ever include the word "▇▇▇▇▇▇▇" in it.
(f) Collateral. Neither Borrower nor Guarantor shall take any action
(or permit or consent to the taking of any action) that might materially impair
the value of all or any portion of the Collateral or any of the rights of Lender
with respect to the Collateral, nor shall Borrower or Guarantor cause or permit
any material amendment to or modification of the form or terms of any of the
Pledged Notes Receivable, Applicable Mortgages, other Applicable Underlying Loan
Documents, or any Applicable Timeshare Documents, including but not limited to
the Applicable Declarations.
6.3 Minimum Net Worth Requirement. Borrower agrees to satisfy the Minimum
Net Worth Requirement at all times during the term of this Agreement.
SECTION 7. EVENTS OF DEFAULT
An "Event of Default" shall exist if any of the following occurs:
7.1 The Loan.
(a) Payment Default. If Borrower fails to make, as and when due,
whether by acceleration or otherwise, any payment or mandatory prepayment of
principal, interest, or other fees or amounts of any and every kind hereunder or
pursuant to any of the other Loan Documents. Notwithstanding the foregoing
sentence to the contrary, a payment by Borrower hereunder or pursuant to any of
the other Loan Documents shall not be deemed delinquent hereunder as long as the
entire requisite amount is actually received by Lender, without notice or demand
of any kind by Lender, within fifteen (15) days following the date upon which
such payment is due.
(b) Covenant Defaults. If Borrower fails fully and timely to perform
or observe any non-monetary covenant, agreement, or warranty contained in this
Agreement or in any of the other Loan Documents and such failure continues for a
period of thirty (30) days after notice of such failure is furnished by Lender;
provided, however, that if Borrower commences to cure such failure within such
thirty (30) day period but, because of the nature of such failure, cure cannot
be completed within thirty (30) days, notwithstanding Borrower's good faith best
efforts to do so, then, provided that Borrower diligently seeks to complete such
cure, an Event of Default shall not be deemed to have occurred unless such
failure continues for a total of ninety (90) days after notice of such failure
has been given by Lender, provided that such failure does not (i) result in
substantial financial hardship to Lender; or (ii) materially impair the value of
all or any portion of the Collateral, as determined in the reasonable judgment
of Lender.
(c) Warranties or Representations. If any statement or
representation made by or on behalf of Borrower or Guarantor in this Agreement,
in any of the other Loan Documents, or in any document, instrument, certificate,
opinion, or other item furnished pursuant to the Loan Documents, is false,
misleading, or incorrect in any material respect as of the date made or
reaffirmed; provided, however, that no Event of Default shall exist hereunder if
such false, misleading, or incorrect statement or representation was made by or
on behalf of Borrower or Guarantor in good faith reliance following diligent
inquiry upon a document, instrument, certificate, opinion, or other item
furnished to Borrower or Guarantor by or on behalf of an Applicable Underlying
Borrower or an Applicable Underlying Guarantor.
(d) Enforceability of Liens. If any Lien granted by Borrower to
Lender in connection with the Loan is or becomes invalid or unenforceable or is
not, or ceases to be, a perfected first priority Lien in favor of Lender
encumbering the asset which it is intended to encumber, and Borrower fails to
cause such Lien to become a valid, enforceable, first and prior Lien in a manner
satisfactory to Lender, in its sole discretion, within ten (10) days after
Lender delivers written notice thereof to Borrower.
(e) Involuntary Proceedings. If a case is commenced or a petition is
filed against Borrower or Guarantor under any Debtor Relief Law, a receiver,
conservator, liquidator, or trustee of Borrower or Guarantor or of any material
asset of Borrower or Guarantor 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 or Guarantor is sequestered by court order and such order remains in
effect for more than forty-five (45) days.
(f) Voluntary Proceedings. If either Borrower or Guarantor
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 to or suffers 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 all or any portion of the Collateral or any assets of Borrower
or Guarantor, of one (1) or more attachments, injunctions, executions, tax
liens, or judgments for the payment of money cumulatively in excess of $10,000,
that is not discharged in full or stayed within thirty (30) days after such
issuance, filing, levy, or seizure.
(h) Going Concern Reference. If either Borrower's or Guarantor's
annual audited financial statements required to be furnished to
Lender, pursuant to Section 6.1(g) hereof, make a "going concern" reference or
otherwise question Borrower's or Guarantor's continuing viability as a going
concern.
(i) Failure to Deposit Proceeds. If Borrower fails to deliver any
payments made under the Pledged Notes Receivable directly to Lender or Lockbox
Agent as required by Section 2.5 hereof (other than inadvertent failures that
are corrected immediately upon discovery), or if Borrower takes any other action
which Lender shall deem to be a conversion of all or any portion of the
Collateral or fraudulent with respect to Lender.
(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 any of the Loan
Documents or with the intent to hinder, delay, or defraud its creditors or any
of them, including, without limitation, Lender.
(k) Other Defaults. If a material default or event of default occurs
in connection with any other loans or financing arrangements that Borrower,
Guarantor, or any of their respective Affiliates may have with Lender, including
but not limited to the Timeshare Receivables Credit Facility.
(l) Material Adverse Change. If there occurs any material adverse
change in the financial condition of Borrower or Guarantor.
(m) Minimum Net Worth Requirement. Borrower's failure for any reason
to satisfy the Minimum Net Worth Requirement.
(n) Default by Borrower in Other Agreements. Any default by Borrower
(i) in the payment of any indebtedness to Lender; (ii) in the payment or
performance of other indebtedness for borrowed money or obligations in excess of
$50,000 secured by all or any portion of the Collateral; or (iii) in the payment
or performance of any other material indebtedness or obligations.
(o) Violation of Negative Covenants. If either Borrower or Guarantor
violates any negative covenant set forth in Section 6.2 hereof.
(p) Insolvency. If either Borrower or Guarantor becomes insolvent or
otherwise generally unable to pay its respective debts as and when they become
due or payable.
7.2 Applicable Underlying Loans.
(a) Payment Defaults. If any Applicable Underlying Borrower fails to
make, as and when due, whether by acceleration or otherwise, any
payment or mandatory prepayment of principal, interest, or other fees or amounts
of any and every kind, pursuant to the Applicable Underlying Loan Documents, and
such failure continues for a period of thirty (30) days after notice of such
failure is furnished by Borrower to the Applicable Underlying Borrower, which
notice shall be given by Borrower immediately upon the Applicable Underlying
Borrower's failure to make the required payment.
(b) Loss of Eligibility. A Pledged Note Receivable ceases being an
Eligible Note Receivable for any reason, pursuant to Section 1.39 hereof.
(c) Attachment; Judgment; Tax Liens. The issuance, filing, levy, or
seizure against any Applicable Resort of one or more attachments, injunctions,
executions, tax liens, or judgments for the payment of money cumulatively in
excess of $25,000, that is not discharged in full or stayed within sixty (60)
days after such issuance, filing, levy, or seizure.
(d) Applicable Timeshare Documents. If any Applicable Declaration or
a timeshare regime created thereby at an Applicable Resort is amended, restated,
or terminated (other than amendments which add a phase or are non-material)
without Lender's prior written consent.
(e) Insolvency. If any Applicable Underlying Borrower or Applicable
Underlying Guarantor becomes insolvent or otherwise generally unable to pay its
respective debts as and when they become due or payable.
(f) Involuntary Proceedings. If a case is commenced or a petition is
filed against and Applicable Underlying Borrower or Applicable Underlying
Guarantor under any Debtor Relief Law, a receiver, conservator, liquidator, or
trustee of such Applicable Underlying Borrower or Applicable Underlying
Guarantor or of any material asset thereof is appointed by court order and such
order remains in effect for more than forty-five (45) days, or if any material
asset of an Applicable Underlying Borrower or and Applicable Underlying
Guarantor is sequestered by court order and such order remains in effect for
more than forty-five (45) days.
(g) Voluntary Proceedings. If an Applicable Underlying Borrower or
an Applicable Underlying Guarantor 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
to or suffers the appointment of a receiver, trustee, liquidator, or conservator
for it or any part of its assets.
(h) Material Adverse Change. If there occurs any material adverse
change in the financial condition of any Applicable Underlying Borrower or
Applicable Underlying Guarantor.
(i) Enforceability. If any material term, provision, or condition of
an Applicable Underlying Loan Document becomes invalid or legally unenforceable
by Borrower and its successors and assigns, including Lender.
(j) Transfer of Property. Except for the sale of Encumbered
Intervals in the ordinary course of an Applicable Underlying Borrower's business
in accordance with the terms of the Applicable Underlying Loan Documents, and
except for transfers due to involuntary condemnation which do not render an
Applicable Resort useless for its intended purpose, if an Applicable Underlying
Borrower, without Borrower's and Lender's prior written consent, sells, conveys,
or further encumbers all or any part of its interest in the Applicable Resort or
in any of the personalty located thereon or used or intended to be used in
connection therewith except for phase amendments and any other non-material
amendments. For purposes of this paragraph, an assignment, sale, or transfer
shall also include the transfer of any stock of the Applicable Underlying
Borrower other than to an existing shareholder thereof.
(k) Lien Against Applicable Resort. Except for the Permitted Liens
and Encumbrances or as otherwise specifically provided herein to the contrary,
if Borrower or an Applicable Underlying Borrower grants any mortgage, Lien, or
other encumbrance upon all or any portion of an Applicable Resort or any
Applicable Underlying Loan Collateral other than in favor of Lender in
connection with the Loan, provided that such mortgage, Lien, or other
encumbrance has a material adverse effect upon the value of such Applicable
Underlying Loan Collateral or all or any portion of the Collateral, unless
approved by Lender in writing, in its sole and absolute discretion.
(l) Title. If any violation or breach shall occur in any agreement,
covenant, or restriction affecting title to all or any portion of an Applicable
Resort or any Encumbered Intervals, including but not limited to any Permitted
Liens and Encumbrances, and such violation or breach is not cured within any
time frame allowed under the Applicable Underlying Loan Documents.
(m) Maximum Aggregate Advance Percentage. If the Maximum Aggregate
Advance Percentage has been exceeded.
(n) Loss of License. The suspension, loss, revocation or failure to
renew or file for renewal of any legally required registration, approval,
license, permit, or franchise now held or hereafter acquired by an Applicable
Underlying Borrower or with respect to the unsold Intervals or the Encumbered
Intervals at an Applicable Resort, or the failure to pay any amount which is
necessary for the continued operation of the unsold Intervals or Encumbered
Intervals or any
Applicable Underlying Borrower's business in connection with an Applicable
Resort in the same manner as it is being conducted at the time of such loss,
revocation, failure to renew, or failure to pay, which loss, revocation, failure
to renew, or failure to pay is not cured within thirty (30) days following such
occurrence.
(o) Suspension of Sales. The issuance of any stay order, cease and
desist order, injunction, temporary restraining order, or other judicial or
nonjudicial sanction limiting or materially affecting any Interval marketing or
sales activities at an Applicable Resort or the enforcement of Lender's
remedies, which order or sanction is not terminated or dissolved within thirty
(30) days after issuance.
Notwithstanding the foregoing provisions of this Section 7.2 to the
contrary, an Event of Default hereunder shall not be deemed to exist if within
thirty (30) days following the occurrence of any of the Defaults set forth in
this Section 7.2, Borrower pays Lender the total amount of all Advances made by
Lender in respect of the Applicable Underlying Loan as to which such occurrence
pertained, together with any accrued but unpaid interest thereon and any other
amounts advanced by or otherwise owed to Lender in connection with such
Applicable Underlying Loan. Promptly following its receipt of all such amounts,
and provided that no Default or Event of Default then exists hereunder, Lender
shall release its Lien against all Applicable Underlying Loan Collateral that
secures the Applicable Underlying Loan in question. Furthermore, an Event of
Default pursuant to Section 7.2(m) hereof shall not be deemed to exist if within
thirty (30) days following the date as of which Lender notifies Borrower that
the Maximum Aggregate Advance Percentage has been exceeded, Borrower pays Lender
a sufficient amount to be applied against the outstanding principal balance of
the Note such that the Maximum Aggregate Advance Percentage is no longer
exceeded.
SECTION 8. REMEDIES
8.1 Remedies Upon Default. Should an Event of Default occur, Lender may
immediately take any one (1) or more of the actions described in this Section 8,
all without notice to Borrower or Guarantor:
(a) Acceleration. Declare the unpaid balance of the Loan, or any
part thereof, immediately due and payable, whereupon the same shall be due and
payable to Lender.
(b) Termination of Obligation to Advance. Terminate any commitment
or obligation of Lender to make Advances under this Agreement in its entirety,
or any portion of any such commitment, and/or terminate Lender's further
performance under this Agreement and/or any other document or instrument to
which Lender and Borrower or Guarantor (or any other Affiliate of
Borrower) are parties, without further liability or obligation to Borrower or
Guarantor, to the extent Lender shall deem appropriate, in its sole discretion,
all without notice to Borrower or any Guarantor.
(c) Termination of Obligation to Grant Partial Releases. Cease
granting or authorizing any Applicable Underlying Borrower partial releases from
the Lien of an Applicable Mortgage.
(d) Judgment. Reduce Lender's claim to judgment, foreclose, or
other-wise enforce each and every assignment of an Applicable Mortgage, Interval
Mortgage, and/or any other Lien or security interest in all or any part of the
Collateral by any available judicial or other procedure under law. Lender's
right to ▇▇▇ and recover a judgment, either before, after, or during the
pendency of any proceeding for the enforcement of the collateral assignment of
the Applicable Mortgage or Interval Mortgage and the right of Lender to recover
such judgment shall not be affected by any taking, possession, or foreclosure
sale hereunder or by the exercise of any other right, power, or remedy for the
enforcement of the collateral assignment of the Applicable Mortgage or Interval
Mortgage or the foreclosure of the Lien thereof.
(e) Sale of Collateral. Exercise all the rights and remedies of a
secured party under the Code (whether or not the Code applies to the affected
Collateral), including (i) require Borrower to, and Borrower hereby agrees that
it will, at its expense and upon request of Lender forthwith, assemble all or
part of the Collateral as directed by Lender and make it available to Lender at
a place to be designated by Lender that is reasonably convenient to both
parties; (ii) enter upon any premises of Borrower and take possession of the
Collateral; and (iii) sell the Collateral or any part thereof in one (1) or more
parcels at public or private sale, at any of Lender's offices or elsewhere, at
such time or times, for cash, on credit, or for future delivery, and at such
price or prices and upon such other terms as Lender may deem commercially
reasonable. Borrower agrees that, to the extent notice of sale shall be required
by law, ten (10) days notice of the time and place of any sale shall constitute
reasonable notification. At any sale of the Collateral, if permitted by law,
Lender may bid (which bid may be, in whole or in part, in the form of
cancellation of indebtedness) for the purchase of the Collateral or any portion
thereof for the account of Lender. Borrower shall remain liable for any
deficiency. Lender shall not be required to proceed against any Collateral but
may proceed against Borrower directly. To the extent permitted by law, Borrower
hereby specifically waives all rights of redemption, stay, or appraisal that it
has or may have under any law now existing or hereafter enacted.
(f) Retention of Collateral. At its discretion, retain such portion
of the Collateral as shall aggregate in value to an amount equal to the total
amount owed by the Borrower pursuant to the Loan Documents, in satisfaction
of the Obligations, whenever the circumstances are such that Lender is entitled
and elects to do so under applicable law.
(g) Purchase of Collateral. Buy all or any part of the Collateral at
any public or private sale.
(h) Exercise of Other Rights. 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 or Guarantor, the right to continue to collect all payments made on
the Pledged Notes Receivable and/or the Pledged Consumer Notes Receivable and to
apply such payments to the Obligations, and to ▇▇▇ in its own name an Applicable
Underlying Borrower or other maker of any defaulted Pledged Note Receivable or
the maker of any defaulted Pledged Consumer Notes Receivable. Lender may also
exercise any and all other rights or remedies afforded by any other Applicable
Laws or by the Loan Documents or, in the name and stead of Borrower, the
Applicable Underlying Loan Documents, as Lender 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 the Applicable Underlying Loan Documents or
in aid of the exercise of any right or remedy granted to Lender in the Loan
Documents. Lender shall also have the right to require Borrower to assemble any
of the Collateral not in Lender's possession, at Borrower's expense, and make it
available to Lender at a place to be determined by Lender that is reasonably
convenient to both parties, and Lender shall have the right to take immediate
possession of all or any portion of the Collateral or Applicable Underlying Loan
Collateral and may enter any Applicable Resort or any of the premises of
Borrower or an Applicable Underlying Borrower or wherever the Collateral or
Applicable Underlying Loan Collateral shall be located, with or without process
of law wherever the Collateral or Applicable Underlying Loan Collateral may be,
and, to the extent such premises are not the property of Lender, 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 Lender for use and occupancy, rent,
or storage of the Collateral, for a period of at least sixty (60) days after
sale or disposition of the Collateral or Applicable Underlying Loan Collateral).
8.2 Notice of Sale. Reasonable notification of the 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, Lender may
sell or otherwise dispose of the Collateral without advertisement or other
notice of any kind. It is agreed that notice sent not less than ten (10)
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 8.2. Lender shall have the right to
bid at any public or private sale on its own behalf. Out of money arising from
any such sale, Lender shall retain an amount equal to all costs and charges,
including attorneys' fees, that it has incurred or may incur 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 against the Obligations, and in the event of deficiency, Borrower shall
remain liable to Lender. 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 Lender, which in
Lender's sole discretion makes it advisable for Lender to seek counsel for the
protection and preservation of its Liens and security interests, or to defend
its own interest, such expenses and counsel fees shall be allowed to Lender, 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 certain Collateral may be
effected after an Event of Default, Borrower agrees that upon the occurrence or
existence of an Event of Default, Lender may, 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 those who will represent and agree
that they are purchasing for investment only and not for, or with a view to,
distribution. In so doing, Lender may solicit offers to buy such Collateral, or
any part of it for cash, from a limited number of investors deemed by Lender, in
its reasonable judgment, to be responsible parties who might be interested in
purchasing the Collateral, and if Lender solicits such offers from not less than
two (2) such investors, then the acceptance by Lender of the highest offer
obtained therefrom shall be deemed to be a commercially reasonable method of
disposition of such Collateral.
8.3 Application of Collateral; Termination of Agreements. Upon the
occurrence of any Event of Default, Lender may, with or without proceeding with
such sale or foreclosure or demanding payment or performance of the Obligations,
without notice, terminate Lender's further performance under this Agreement or
any other agreement or agreements between Lender and Borrower, Guarantor, or any
Affiliate of Borrower, without further liability or obligation by Lender, and
may also, at any time, appropriate and apply on any Obligations any and all
Collateral in its, Custodian's, or Lockbox Agent's possession, custody, or
control any and all balances, credits, deposits, accounts, reserves,
indebtedness, or other monies 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 Lender, but they shall, in all events, continue until
all of the Obligations have been satisfied in full.
8.4 Rights of Lender Regarding Collateral. In addition to all other rights
possessed by Lender, Lender, at its option, may from time to time after there
shall have occurred an Event of Default, and for so long as such Event of
Default remains uncured, in its sole discretion, take the following actions:
(a) Transfer all or any part of the Collateral into the name of
Lender or its nominee;
(b) Take control of the 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.
8.5 Delegation of Duties and Rights. Lender may perform 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, including but not limited to Backup Servicer. To the maximum
extent practicable in light of all relevant facts and circumstances, Lender will
attempt to avoid any duplication of effort and cost to Borrower in connection
with any such delegation on Lender's part.
8.6 Lender Not in Control. None of the covenants or other provisions
contained in this Agreement or in any other Loan Document shall give or be
interpreted as giving Lender the right or power to exercise control over the
affairs and/or management of Borrower or Guarantor.
8.7 Waivers. The acceptance by 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 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 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
exercises 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
Default, 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.
8.8 Cumulative Rights. All rights and remedies available to Lender under
the Loan Documents shall be cumulative of and in addition to all other rights
and remedies granted to Lender under any of the Loan Documents, at law, or in
equity, whether or not the Loan is due and payable and whether or not Lender
shall have instituted any suit for collection or other action in connection with
or pursuant to the Loan Documents.
8.9 Expenditures by Lender. Any amounts expended by or on behalf of Lender
pursuant to the exercise of any right or remedy provided herein or available at
law or in equity shall become part of the Obligations and shall bear interest at
the Default Rate from the date of such expenditure until the date repaid.
8.10 Diminution in Value of Collateral. Lender shall not have any
liability or responsibility whatsoever for any diminution or loss in value of
any of the Collateral or Applicable Underlying Loan Collateral, specifically
including that which may arise from Lender's negligence or inadvertence, whether
such negligence or inadvertence is the sole or contributing cause of any damage.
SECTION 9. CERTAIN RIGHTS OF LENDER
9.1 Protection of Collateral. Lender may, at any time and from time to
time, take such actions as Lender deems necessary or appropriate to protect
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 Lender'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 Lender 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 Lender's expenses of preserving
the Collateral and its Liens and security interests and rights therein shall be
added to the principal amount of the Loan and secured by the Collateral.
9.2 Performance by Lender. If Borrower fails to perform any agreement
contained herein, Lender may itself perform, or cause the performance of, such
agreement, and the expenses of Lender incurred in connection therewith shall be
payable by Borrower under Section 9.5 below. In no event, however, shall Lender
have any obligation or duty whatsoever to perform any covenant or agreement of
Borrower or any Applicable Underlying Borrower contained herein or in any of the
other Loan Documents, any Applicable Underlying Loan Documents, or any
Applicable Timeshare Documents, and any such performance by Lender shall be
wholly discretionary with Lender. The performance by Lender of any agreement or
covenant of Borrower or any Applicable Underlying Borrower on any occasion shall
not give rise to any duty on the part of Lender to perform any such agreements
or covenants on any other occasion or at any time. In addition, Borrower
acknowledges that Lender shall not at any time or under any circumstances
whatsoever have any duty to Borrower or to any other Person to exercise any of
Lender's rights or remedies hereunder.
9.3 No Liability of Lender. Lender is obligated to perform all covenants
and obligations of Lender hereunder, including but not limited to making
Advances to Borrower, subject to all of the terms, provisions, and conditions
hereof and of the other Loan Documents. However, neither the acceptance of this
Agreement by Lender nor the exercise of any rights hereunder by Lender shall be
construed in any way as an assumption by Lender of any obligations,
responsibilities, or duties of Borrower or any Applicable Underlying Borrower
arising in connection with any Applicable Resort, all or any portion of the
Collateral or Applicable Underlying Loan Collateral, under any Applicable
Timeshare Documents, or under any Applicable Laws, or in connection with any
other business of Borrower or the Collateral, nor shall it otherwise bind Lender
to the performance of any obligations with respect to an Applicable Resort, the
Collateral, or any Applicable Underlying Loan Collateral, it being expressly
understood that Lender shall not be obligated to perform, observe, or discharge
any obligation, responsibility, duty, or liability of Borrower or any Applicable
Underlying Borrower with respect to any Applicable Resort, any of the
Collateral, any of the Applicable Underlying Loan Collateral, under any of the
Applicable Timeshare Documents, or under any Applicable Laws, including but not
limited to appearing in or defending any action, expending any money, or
incurring any expense in connection therewith. Without limiting the foregoing,
neither this Agreement, any action or actions on the part of Lender taken
hereunder nor the acquisition of the Pledged Notes Receivable and/or the other
Collateral by Lender prior to or following the occurrence of an Event of Default
shall constitute an assumption by Lender of any obligations of Borrower with
respect to an Applicable Resort or such Collateral, or any documents or
instruments executed in connection therewith, including but not limited to the
Applicable Underlying Loan Documents, and Borrower shall continue to be liable
for all of its obligations thereunder or with respect thereto. Borrower and
Guarantor, jointly and severally, hereby agree to indemnify, protect, defend,
and hold 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 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 an Applicable Resort or all or any portion of the Collateral or
Applicable Underlying Loan Collateral; (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, the Pledged
Consumer Notes Receivable, the other Collateral, 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 Applicable Underlying
Borrowers or Lender, as the case may be, on the other; or (v) the Pledged Notes
Receivable, the Applicable Mortgages, the Pledged Consumer Notes Receivable, the
Interval Mortgages, or the management or operation of the Applicable Resorts.
The obligations of Borrower to indemnify, protect, defend, and hold 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
Lender is indemnified. The indemnity provisions in this Section 9.3 shall
survive the complete satisfaction of the Obligations and the termination of this
Agreement and remain binding and enforceable against Borrower, together with its
successors and 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, that might otherwise constitute legal or equitable discharges of its
obligations hereunder. If a court of competent jurisdiction should determine
that Borrower is entitled to recover damages from Lender for any reason or upon
any cause, claim, or counterclaim, in connection with the Loan or the
transactions provided for or contemplated pursuant to this Agreement or the
other Loan Documents, Borrower stipulates and agrees that any such damages or
awards shall be limited to the amount of interest theretofore paid to Lender
pursuant to the Note as of the date of such determination.
9.4 Right to Defend Action Affecting Security. Lender may, at Borrower's
expense, appear in and defend any action or proceeding, at law or in equity,
that Lender in good faith believes may affect the Liens or security interests
granted under this Agreement, including, without limitation, with respect to the
Pledged Notes Receivable, the Applicable Mortgages, the Pledged Consumer Notes
Receivable, the Interval Mortgages, the value of the Collateral, or Lender's
rights under any of the Loan Documents.
9.5 Expenses. All expenses payable by Borrower under any provision of this
Agreement shall be Obligations of Borrower, and if paid by Lender, shall be
repaid by Borrower to Lender, upon demand, and shall bear interest at the
Default Rate from the date of payment of such expense(s) by Lender until repaid
by Borrower.
9.6 Lender's Right of Set-Off. Lender shall have the right to set-off
against any or all of the Collateral any Obligations then due and unpaid by
Borrower.
9.7 Right of Lender to Extend Time of Payment, Substitute, Release
Security, Etc. Without affecting the liability of any Person or entity,
including, without limitation, any Applicable Underlying Borrower, for the
payment of any of the Obligations and without affecting or impairing Lender's
Lien and other rights in and to the Collateral, or the remainder thereof, as
security for the full amount of the Loan unpaid and the Obligations, Lender 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 in accordance with the Loan
Documents; (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; and/or (f) join in any
subordination or other agreement affecting this Agreement or the lien or charge
thereof.
9.8 Assignment of Lender's Interest. Lender shall have the right to assign
the Loan and all or any portion of its rights in or pursuant to this Agreement
or any of the other Loan Documents to any subsequent holder or holders of the
Note or the Obligations that assumes Lender's obligations hereunder and is a
bank, pension fund, insurance company, or other institutional investor.
9.9 Notice to Purchaser. Borrower authorizes either Lender or Backup
Servicer (but neither Lender, Servicing Agent, Lockbox Agent, nor Backup
Servicer shall be obligated) to communicate at any time and from time to time
with any Applicable Underlying Borrower or any other Person primarily or
secondarily liable under a Pledged Note Receivable with regard to the Lien of
the Lender thereon and any other matter relating thereto, and by no later than
the Closing Date, Borrower shall deliver to Lender notifications to the
Applicable Underlying Borrowers executed in blank by Borrower and in form
acceptable to Lender, pursuant to which the Applicable Underlying Borrowers (or
other obligors) are directed to remit all payments in respect of the Collateral
to Lockbox Agent or as Lender may otherwise require.
9.10 Collection of the Notes. Borrower hereby directs and authorizes each
Applicable Underlying Borrower and other Person liable for the payment of any
Pledged Note Receivable or Pledged Consumer Note Receivable, and promptly after
the Closing Date, shall direct in writing each such Person, to pay each
installment thereon to Lockbox Agent, pursuant to the Lockbox Agreement,
unless and until directed otherwise by written notice from Lender or, at
Lender's direction, from Borrower, after which such parties are and shall be
directed to make all further payments on the Pledged Notes Receivable or the
Pledged Consumer Notes Receivable in accordance with the directions of Lender.
Following the occurrence of an Event of Default, Lender shall have the right to
require that all payments becoming due under the Pledged Notes Receivable or the
Pledged Consumer Notes Receivable be paid directly to Lender, and Lender is
hereby authorized to receive, collect, hold, and apply the same in accordance
with the provisions of this Agreement but shall provide Borrower with
accountings of all such activity on at least as frequent a basis as Lockbox
Agent was obligated to provide accountings to Lender and Borrower, pursuant to
the Lockbox Agreement. In the event that following the occurrence of an Event of
Default, Lender or Lockbox Agent does not receive any installment of principal
or interest due and payable under any of the Pledged Notes Receivable or the
Pledged Consumer Notes Receivable on or prior to the date upon which such
installment becomes due, Lender may, at its election (but without any obligation
to do so), give or cause Lockbox Agent to give notice of such event of default
to the defaulting party or parties, and Lender 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 or Pledged Consumer Notes
Receivable in default and to foreclose each of the Applicable Mortgages and/or
Interval Mortgages securing the payment thereof, and to enforce any other
remedies available to the holder of such Pledged Notes Receivable or Pledged
Consumer Notes Receivable with respect to such event of default. Borrower hereby
further authorizes, directs, and empowers Lender (and Lockbox Agent or any other
Person as may be designated by Lender 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 had been
endorsed by Borrower.
9.11 Power of Attorney. Borrower does hereby irrevocably constitute and
appoint Lender 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 Lender as provided in Section 9.10 above;
(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) upon an Event of Default, to
collect all rent, revenues, and income, pursuant to the terms of any Applicable
Mortgage or Interval Mortgage; (d) from time to time, to institute and
prosecute, in Lender's own name, any and all proceedings at law, in equity, or
otherwise, that Lender 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; (e) upon an Event of
Default, to change Borrower's post office mailing address; and (f) generally to
do all and any such acts and things in relation to the Collateral as Lender
shall in good ▇▇▇▇▇ ▇▇▇▇ advisable. Borrower hereby declares that the
appointment made and the powers granted pursuant to this Section 9.11 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
Lender and duly recorded in the appropriate public records of Onondaga County,
New York.
9.12 Relief from Automatic Stay, Etc. To the fullest extent permitted by
law, in the event that Borrower or Guarantor shall make application for or seek
relief or protection under the federal bankruptcy code (the "Bankruptcy Code")
or any other Debtor Relief Laws, or in the event that any involuntary petition
is filed against the Borrower or Guarantor under such Code or other Debtor
Relief Laws and not dismissed with prejudice within forty-five (45) days, the
automatic stay provisions of Section 362 of the Bankruptcy Code are hereby
modified as to Lender to the extent necessary to implement the provisions hereof
permitting set-off and the filing of financing statements or other instruments
or documents; and Lender shall automatically and without demand or notice (each
of which is hereby waived by Borrower and Guarantor) 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 Lender as provided in the Loan Documents. In addition, in the event
that relief is sought by or against Borrower or Guarantor under the Bankruptcy
Code, Borrower and Guarantor agree not to seek, directly or indirectly, in any
ensuing bankruptcy proceeding, any extension of the exclusivity period otherwise
available to a debtor under the Bankruptcy Code, including, without limitation,
the exclusivity period provided for under Section 1121(b) of the Bankruptcy
Code.
9.13 Investigations and Inquiries. Borrower and Guarantor hereby authorize
Lender to conduct such investigations and inquiries concerning Borrower,
Guarantor, the Applicable Resorts, the Applicable Underlying Borrowers, the
Applicable Underlying Guarantors, the Collateral, and the Applicable Underlying
Loan Collateral as Lender shall, in its sole discretion, deems necessary or
desirable in connection with its monitoring of the Loan and the Collateral
therefor, and all such Persons of whom Lender may make such inquiry are
empowered to cooperate with, and to provide all requested information to,
Lender.
9.14 Verification of Use. Lender shall be under no duty or obligation to
ascertain the manner in which Borrower or any Applicable Underlying Borrower has
used or will use the proceeds of the Loan or those of any Applicable Underlying
Loan. Lender's sole obligation shall be to advance the proceeds of
the Loan subject to, and in strict accordance with, the terms, provisions, and
conditions of this Agreement and the other Loan Documents. At no time shall
Lender be obligated to disburse funds in excess of amounts recommended by
Servicing Agent. Lender's obligation to fund the Loan is limited to the
principal amount set forth herein and in the Note. Borrower is solely
responsible for obtaining any other financing that may be necessary in order to
enable it to fund the Applicable Underlying Loans or to repay the Loan on or
prior to the Maturity Date. It is expressly understood that Lender has no
responsibility or obligation whatsoever to provide to Borrower any further
financing, whether in connection with the Applicable Underlying Loans or
otherwise.
SECTION 10. TERM OF AGREEMENT
This Agreement shall continue in full force and effect, and the Liens and
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
either Borrower or Guarantor makes a payment to 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 and security interests
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 11. MISCELLANEOUS
11.1 Notices. All notices, requests, and other communications to either
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 Lender, Borrower, or Guarantor. 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, and 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 11.1:
If to Borrower: Resort Funding, Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇, Vice President
With a copy to: Resort Funding, Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.,
General Counsel
If to Guarantor: Equivest Finance, Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.,
General Counsel
If to Lender: Credit Suisse First Boston
Mortgage Capital LLC
▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇, Director
11.2 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 Lender and shall survive the delivery to Lender of such Loan Documents (and
each part thereof), regardless of any investigation made by or on behalf of
Lender.
11.3 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 NEW YORK, EXCLUSIVE OF ITS
CHOICE OF LAWS PRINCIPLES. BORROWER AND GUARANTOR HEREBY AGREE TO ACCEPT THE
STATE COURTS LOCATED IN ONONDAGA COUNTY, NEW YORK, AS HAVING PROPER JURISDICTION
AND BEING THE PROPER VENUE FOR ANY LEGAL PROCEEDINGS ARISING OUT OF THE LOAN
DOCUMENTS.
11.4 Limitation on Interest. Lender and Borrower intend to comply at all
times with all applicable usury laws. All agreements between 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 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 Lender shall ever receive anything
of value deemed interest by applicable law that 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 Lender 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 deemed an
expense, fee, premium, or penalty rather than interest. Lender hereby expressly
disclaims any intent to contract for, charge, or receive interest in an amount
that 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, and
this Section shall govern over all other provisions in any document or agreement
now or hereafter existing. This Section shall never be superseded or waived
unless there is a written document executed by Lender and 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.
11.5 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. Any provision of this Agreement or any other Loan Document that is
held to be illegal, invalid, or unenforceable in a particular Applicable
Jurisdiction shall remain valid and enforceable in all other Applicable
Jurisdictions. Furthermore, in lieu of any such illegal, invalid, or
unenforceable provision, there shall be added automatically as a part of this
Agreement and/or the other 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.
11.6 Successors and Assigns. This Agreement and the other Loan Documents
shall be binding upon and inure to the benefit of Borrower, Guarantor, and
Lender and their respective successors and assigns; provided, however, that
neither Borrower nor Guarantor may transfer or assign any of its rights or
obligations under this Agreement, the Commitment, or the other Loan Documents
without the prior written consent of Lender, which consent may be granted or
withheld in Lender's sole and absolute discretion. This Agreement and the
transactions provided for or contemplated hereunder or under any of the other
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, the Commitment, or the other Loan Documents except as
specifically set forth herein or otherwise provided in a written document signed
by Borrower and Lender. No Person other than Borrower shall have standing to
require satisfaction of such conditions in accordance with their terms or be
entitled to assume that Lender will refuse to make Advances in the absence of
strict compliance with any or all thereof, and no other Person, other than
Borrower, under any circumstances whatsoever, shall be deemed to be a
beneficiary of such conditions, any or all of which Lender freely may waive, in
whole or in part, at any time if, in its sole discretion, it deems it desirable
to do so.
Lender may, in the ordinary course of its business and in accordance
with applicable law, at any time assign to one (1) or more financial
institutions or other entities ("Assignees") all or any portion of its rights
hereunder or pursuant to the Note or any or all of the other Loan Documents. Any
such assignment shall be effected by Lender's execution of an assignment in
substantially the form of Exhibit "P," attached hereto and incorporated herein
by this reference, or in such other form as may be agreed to by the parties
thereto. The consent of Borrower shall not be required prior to any such
assignment's becoming effective. In the event of any such assignment by Lender
to an Assignee, Lender's obligations under the Loan Documents shall remain
unchanged, and Lender shall remain solely responsible to the other parties
hereto for the performance of such obligations. The foregoing notwithstanding,
Borrower shall be directly obligated to each Assignee with respect to the
Obligations assigned to such Assignee and shall have no rights of setoff or
other remedies against the Assignee as a consequence of Lender's acts or
omissions under this Agreement subsequent to such assignment.
Upon the consummation of any assignment to an Assignee pursuant to this
Section, Lender and Borrower shall, if Lender or Assignee desires that the
assignment be evidenced in part by a new promissory note, make appropriate
arrangements for a new promissory note or, as appropriate, a replacement
promissory note to be issued to Lender and for a new promissory note or, as
appropriate, a replacement promissory note, to be issued to Assignee, in each
case in principal amounts reflecting their respective rights to payment.
11.7 Amendment. This Agreement (including all exhibits and schedules
hereto) may not be amended or modified, and no term, provision, or condition
hereof may be waived, except by a written instrument that is signed by all of
the parties hereto.
11.8 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 Lender's receipt of one (1) or more
counterparts hereof signed by Borrower, Guarantor, and Lender.
11.9 Lender Not a Fiduciary. The relationship between Borrower and Lender
is solely that of debtor and creditor, and Lender has no fiduciary or other
special relationship with Borrower or Guarantor, and no term or provision of any
of the Loan Documents shall be construed so as to deem the relationship between
Borrower, Guarantor, and Lender to be other than that of debtor and creditor.
11.10 Release and Return of Notes Receivable. In the event that all
Obligations in connection with an Applicable Underlying Loan hereunder are fully
satisfied, then within a reasonable time thereafter not to exceed thirty (30)
days, Lender shall endorse the applicable Pledged Note Receivable and the
related Pledged Consumer Notes Receivable using the words "Pay to the order of
Resort Funding, Inc., without recourse, except to the extent provided in that
certain Loan and Security Agreement dated February 11, 1998, by and among Resort
Funding, Inc., Equivest Finance, Inc., and Credit Suisse First Boston Mortgage
Capital LLC," and deliver such Pledged Notes Receivable and Pledged Consumer
Notes Receivable, together with any other nonrecourse Collateral reassignment
documents requested and prepared by Borrower, at Borrower's sole cost and
expense, free and clear of any Liens or encumbrances by any Person claiming by,
through, or under Lender. In the event that all Obligations in connection with
the Loan are satisfied, Lender shall release all Collateral for the Loan as set
forth in this Section.
11.11 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.
11.12 Entire Agreement. This Agreement and the other Loan Documents,
including the exhibits and schedules to them, comprise the entire agreement
between the parties relating to the subject matter hereof and
supersede all prior agreements and understandings, both oral and written,
between the parties hereto relating to the subject matter hereof (including but
not limited to the Commitment, except as otherwise expressly provided herein),
may not be changed or terminated orally or by course of conduct, and shall be
deemed effective as of the Closing Date.
11.13 Litigation. TO THE FULLEST EXTENT NOT PROHIBITED BY APPLICABLE LAW
WHICH CANNOT BE WAIVED, EACH OF BORROWER, GUARANTOR, AND LENDER HEREBY
KNOWINGLY, VOLUNTARILY, INTENTIONALLY, AND IRREVOCABLY WAIVES 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 ORAL 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,
GUARANTOR, AND 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 AND
GUARANTOR HEREBY CERTIFY THAT NO REPRESENTATIVE OR AGENT OF LENDER, INCLUDING
LENDER'S COUNSEL, HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT LENDER WOULD
NOT, IN THE EVENT OF SUCH LITIGATION, SEEK TO ENFORCE THIS WAIVER OF RIGHT TO
JURY TRIAL PROVISION. BORROWER AND GUARANTOR ACKNOWLEDGE 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, Guarantor, and Lender in this
Section 11.13 shall survive the final payment or performance of all of the
Obligations and the resulting termination of this Agreement.
11.14 Incorporation of Exhibits and Schedules. This Agreement, together
with all exhibits and schedules hereto, constitute one (1) document and
agreement that is referred to herein by the use of the defined term "Agreement."
Such exhibits and schedules are incorporated herein as though fully set out in
this Agreement. The definitions contained in any part of this Agreement shall
apply to all parts of this Agreement.
11.15 Consent to Advertising and Publicity of Applicable Timeshare
Documents. Borrower hereby consents that Lender may issue and disseminate to the
public information describing the credit accommodation entered into pursuant to
this Agreement, consisting of the name and address of Borrower, the Loan's
amount, and the Collateral therefor.
11.16 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.
11.17 Captions. Section captions have been included in this Agreement for
convenience of reference only and should not be relied upon or used in
interpreting the meaning or intent of any provision hereof.
11.18 Gender. Words of any gender in this Agreement shall include each
other gender, where appropriate.
11.19 No Duty. All attorneys, accountants, appraisers, consultants,
custodians, and other professionals retained by Lender in connection with the
Loan shall have the right to act exclusively in the interest of Lender and shall
have no duty of disclosure, duty of loyalty, duty of care, or other duty or
obligation of any kind or nature whatsoever to Borrower, Guarantor, or any other
Person.
11.20 Reimbursement for Taxes. Borrower will promptly, upon written demand
from Lender, reimburse Lender for any taxes assessed against Lender by the State
of New York or any subdivision thereof that is on account of or measured by the
interest income received by Lender under the Pledged Notes Receivable and the
Applicable Mortgages assigned to Lender pursuant to this Agreement or in any way
imposed upon Lender in connection with the transactions contemplated hereunder,
including, without limitation, any general intangible tax or documentary tax;
provided, however, that Borrower shall not be responsible for paying any income
or profit-based tax assessed against Lender.
11.21 Submissions.
(a) All documents, agreements, reports, surveys, appraisals,
insurance policies, references, financial information, and other submissions
required to be furnished by Borrower or Guarantor to Lender hereunder or
pursuant to any of the other Loan Documents (collectively "Submissions") shall
be in form and content satisfactory to Lender, in its sole discretion, and
prepared at Borrower's or an Applicable Underlying Borrower's expense.
(b) Lender shall have the prior right of approval of any Person
responsible for preparing a Submission (a "Preparer") and may reject any
Submission if Lender, in its sole discretion, believes that the experience,
skill, or reputation of the applicable Preparer is unsatisfactory in any respect
whatsoever.
(c) All reports and appraisals required to be furnished by Borrower
or Guarantor to Lender hereunder or pursuant to any of the other Loan Documents
shall specifically be addressed to Lender and include the following statement:
THE UNDERSIGNED ACKNOWLEDGES THAT CREDIT SUISSE FIRST BOSTON MORTGAGE
CAPITAL LLC IS RELYING ON THE WITHIN INFORMATION IN CONNECTION WITH ITS
ADVANCES TO BORROWER ON THE SUBJECT PROPERTY.
(d) Whether or not expressly stated herein, all consents and
approvals granted by Lender hereunder shall be valid and effective only if
contained in a written document or instrument that has been signed by a duly
authorized representative of Lender; provided, however, that for those
categories of consents and approvals set forth in Exhibit "Q," attached hereto
and incorporated herein by this reference, if such consent, approval, or a
denial thereof is not communicated by Lender within the time frames set forth in
said Exhibit "Q," then Lender's consent or approval of the matter in question
shall be deemed to have been granted. Notwithstanding the foregoing sentence,
absolutely no deemed consents or approvals of any matters not expressly set
forth in Exhibit "Q" shall occur.
11.22 Confidentiality. Each party hereto acknowledges and agrees that the
material terms hereof and of the other Loan Documents are and shall remain
strictly confidential. No party hereto shall ever disclose the material terms
and provisions hereof without the express prior written consent of the other
parties; provided, however, that the disclosure of the material terms and
provisions of this Agreement to a party's shareholders, officers, directors,
principals, attorneys, accountants, or lenders, or if required by law or
subpoena, shall not constitute a breach of this Section 11.22. The parties
hereto shall take all appropriate measures to prevent the inadvertent or
unintentional disclosure of the material terms and provisions hereof.
[THE BALANCE OF THIS PAGE IS INTENTIONALLY OMITTED]
IN WITNESS WHEREOF, Borrower, Lender, and Guarantor have caused this
Agreement to be duly executed and delivered effective as of the date first above
written.
BORROWER:
RESORT FUNDING, INC., a Delaware corporation
By: _______________________
Its: ______________________
Printed Name:______________
LENDER:
CREDIT SUISSE FIRST BOSTON MORTGAGE
CAPITAL LLC, a Delaware limited
liability company
___________________________
By:________________________
Its: ______________________
Printed Name_______________
GUARANTOR:
EQUIVEST FINANCE, INC, a Florida
corporation
By:________________________
Its________________________