LOAN AND SECURITY AGREEMENT
$30,000,000 Credit Facility
provided by CREDIT SUISSE FIRST BOSTON MORTGAGE CAPITAL LLC
to
RESORT FUNDING, INC.
As of November 14, 1997
TABLE OF CONTENTS
SECTION 1. DEFINITION OF TERMS ............................................ 1
1.1 Advance ........................................................ 1
1.2 Affiliate ...................................................... 1
1.3 Agreement ...................................................... 2
1.4 Applicable Approved Construction Budget ........................ 2
1.5 Applicable Approved Construction Schedule ...................... 2
1.6 Applicable Borrowing Base Percentage ........................... 2
1.7 Applicable Declaration.......................................... 2
1.8 Applicable Jurisdiction ........................................ 2
1.9 Applicable Laws ................................................ 2
1.10 Applicable Mortgage ............................................ 2
1.11 Applicable Resort .............................................. 2
1.12 Applicable Timeshare Documents ................................. 2
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 Approved Costs ................................................. 3
1.19 Architect ...................................................... 3
1.20 Base Rate ...................................................... 3
1.21 Borrower ....................................................... 4
1.22 Borrowing Base ................................................. 4
1.23 Borrowing Term ................................................. 4
1.24 Business Day ................................................... 4
1.25 Closing Date ................................................... 4
1.26 Code............................................................ 4
1.27 Collateral...................................................... 4
1.28 Commitment...................................................... 6
1.29 Common Elements ................................................ 6
1.30 Common Furnishings ............................................. 6
1.31 Construction Contract .......................................... 6
1.32 Construction Mortgage .......................................... 6
1.33 Custodial Agreement ............................................ 7
1.34 Custodian. Banker's Trust Company .............................. 7
1.35 Debtor Relief Laws ............................................. 7
1.36 Default ........................................................ 7
1.37 Default Rate ................................................... 7
1.38 Draw Request ................................................... 7
1.39 Eligible Note Receivable ....................................... 7
1.40 Encumbered Interval ............................................ 9
1.41 Encumbered Personal Property ................................... 9
1.42 Environmental Laws ............................................. 9
1.43 Event of Default................................................ 9
1.44 Financed Improvements .......................................... 10
1.45 Financial Statements ........................................... 10
1.46 GAAP............................................................ 10
1.47 Guarantor ...................................................... 10
1.48 Guaranty ....................................................... 10
1.49 Hazardous Materials ............................................ 10
1.50 Holdback Amount ................................................ 10
1.51 Holdback Balance................................................ 11
1.52 Initial Advance ................................................ 11
1.53 Initial Underlying Loan Advance ................................ 11
1.54 Interest Rate .................................................. 11
1.55 Interval ....................................................... 11
1.56 Inventory Mortgage ............................................. 11
1.57 Land............................................................ 11
1.58 Lien............................................................ 11
1.59 Loan............................................................ 12
1.60 Loan Documents ................................................. 12
1.61 Loan-to-Value Ratio ............................................ 12
1.62 Lockbox Agent .................................................. 13
1.63 Lockbox Agreement .............................................. 13
1.64 Mandatory Prepayment ........................................... 13
1.65 Maturity Date .................................................. 13
1.66 Minimum Monthly Interest Payment ............................... 13
1.67 Minimum Net Worth Requirement .................................. 13
1.68 Mortgaged Real Property ........................................ 13
1.69 Note............................................................ 14
1.70 Note Receivable ................................................ 14
1.71 Obligations .................................................... 14
1.72 Permitted Liens and Encumbrances ............................... 14
1.73 Person ......................................................... 14
1.74 Phase I Environmental Inspection ............................... 14
1.75 Plans .......................................................... 15
1.76 Pledged Note Receivable ........................................ 15
1.77 Prime Rate...................................................... 15
1.78 Qualified Borrower ............................................. 15
1.79 Qualified Borrower Underwriting Guidelines ..................... 15
1.80 Qualified Loan ................................................. 15
1.81 Qualified Loan Underwriting Guidelines ......................... 16
1.82 Qualified Resort................................................ 16
1.83 Qualified Resort Underwriting Guidelines........................ 16
1.84 Release Fee .................................................... 16
1.85 Servicing Agent ................................................ 16
1.86 Servicing Agreement ............................................ 17
1.87 Structuring Advisory Fee ....................................... 17
1.88 Subordination Agreement ........................................ 17
1.89 Survey ......................................................... 17
1.90 Timeshare Receivables Credit Facility .......................... 17
1.91 Underlying Guaranty ............................................ 17
1.92 Unit............................................................ 18
1.93 Verification Agent ............................................. 18
1.94 Verification Agent's Agreement ................................. 18
1.95 Warrants ....................................................... 18
SECTION 2. THE LOAN ....................................................... 18
2.1 Purposes ....................................................... 18
2.2 Qualified Loans ................................................ 18
2.3 Advances ....................................................... 19
2.4 Interest Rate .................................................. 20
2.5 Payments ....................................................... 20
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 ........................ 24
3.6 Cross-Collateralization and Default ............................ 25
SECTION 4. CONDITIONS PRECEDENT TO CLOSING AND FUNDING PROCEDURES.......... 26
4.1 The Loan ....................................................... 26
4.2 Applicable Underlying Loans .................................... 27
4.3 Funding Procedures ............................................. 37
4.4 Advances Do Not Constitute a Waiver ............................ 44
SECTION 5 GENERAL REPRESENTATIONS AND WARRANTIES ......................... 44
5.1 Organization, Standing, Qualification .......................... 44
5.2 Organization, Standing, Qualification .......................... 44
5.3 Authorization, Enforceability, Etc.............................. 45
5.4 Financial Statements and Business Condition .................... 46
5.5 Taxes .......................................................... 47
5.6 Title to Properties; Prior Liens ............................... 47
5.7 Subsidiaries, Affiliates, and Capital Structure ................ 47
5.8 Litigation, Proceedings, Etc.................................... 48
5.9 Environmental Matters .......................................... 48
5.10 Full Disclosure ................................................ 48
5.11 Use of Proceeds/Margin Stock ................................... 48
5.12 No Defaults .................................................... 49
5.13 Restrictions of Borrower ....................................... 49
5.14 Broker's Fees .................................................. 49
5.15 Tax Identification/Social Security Numbers ..................... 49
5.16 Legal Compliance................................................ 49
5.17 Continuation and Investigation ................................. 50
SECTION 6. COVENANTS ...................................................... 50
6.1 Affirmative Covenants .......................................... 50
6.2 Construction Covenants. ........................................ 61
6.3 Negative Covenants ............................................. 64
6.4 Minimum Net Worth Requirement .................................. 66
SECTION 7. EVENTS OF DEFAULT .............................................. 66
7.1 The Loan ....................................................... 67
7.2 Applicable Underlying Loans .................................... 69
SECTION 8. REMEDIES ....................................................... 72
8.1 Remedies Upon Default .......................................... 72
8.2 Notice of Sale ................................................. 74
8.3 Application of Collateral; Termination of Agreements ........... 74
8.4 Rights of Lender Regarding Collateral .......................... 75
8.5 Delegation of Duties and Rights ................................ 75
8.6 Lender Not in Control .......................................... 75
8.7 Waivers ........................................................ 76
8.8 Cumulative Rights .............................................. 76
8.9 Expenditures by Lender ......................................... 76
8.10 Diminution in Value of Collateral .............................. 76
SECTION 9. CERTAIN RIGHTS OF LENDER ....................................... 76
9.1 Protection of Collateral ....................................... 76
9.2 Performance by Lender .......................................... 77
9.3 No Liability of Lender ......................................... 77
9.4 Right to Defend Action Affecting Security ...................... 78
9.5 Expenses ....................................................... 79
9.6 Lender's Right of Set-Off ...................................... 79
9.7 Right of Lender to Extend Time of Payment, Substitute,
Release Security, Etc .......................................... 79
9.8 Assignment of Lender's Interest ................................ 79
9.9 Notice to Purchaser ............................................ 79
9.10 Collection of the Notes ........................................ 79
9.11 Power of Attorney .............................................. 80
9.12 Relief from Automatic Stay, Etc ................................ 81
9.13 Investigations and Inquiries ................................... 81
9.14 Verification of Use ............................................ 81
SECTION 10. TERM OF AGREEMENT .............................................. 82
SECTION 11. MISCELLANEOUS .................................................. 82
11.1 Notices ........................................................ 82
11.2 Survival ....................................................... 83
11.3 Governing Law .................................................. 83
11.4 Limitation on Interest ......................................... 83
11.5 Invalid Provisions ............................................. 84
11.6 Successors and Assigns ......................................... 85
11.7 Amendment ...................................................... 85
11.8 Counterparts; Effectiveness .................................... 85
11.9 Lender Not a Fiduciary ......................................... 85
11.10 Release and Return of Notes Receivable ......................... 86
11.11 Accounting Principles .......................................... 86
11.12 Entire Agreement ............................................... 86
11.13 Litigation ..................................................... 86
11.14 Incorporation of Exhibits and Schedules ........................ 87
11.15 Consent to Advertising and Publicity of Applicable
Timeshare Documents ............................................ 87
11.16 Directly or Indirectly ......................................... 87
11.17 Captions ....................................................... 87
11.18 Gender ......................................................... 87
11.19 No Duty ........................................................ 87
11.20 Reimbursement for Taxes ........................................ 87
11.21 Submissions .................................................... 88
11.22 Confidentiality................................................. 88
LIST OF EXHIBITS
EXHIBIT "A" - Custodial Agreement
EXHIBIT "B" - Form of Lockbox Agreement
EXHIBIT "C" - Permitted Liens and Encumbrances
EXHIBIT "D" - Qualified Borrower Underwriting Guidelines
EXHIBIT "E" - Qualified Loan Underwriting Guidelines
EXHIBIT "F" - Qualified Resort Underwriting Guidelines
EXHIBIT "G" - Form of Servicing Agreement
EXHIBIT "H" - Form of Subordination Agreement
EXHIBIT "I" - Form of Verification Agent's Agreement
EXHIBIT "J" - Form of Warrant to Purchase Shares of Common Stock of
Equivest Finance, Inc.
EXHIBIT "K" - Form of Draw Request
EXHIBIT "L" - Pending Litigation
EXHIBIT "M" - Form of Borrowing Base Report
EXHIBIT "N" - Approval Time Frames
EXHIBIT "O" - Form of Pledge and Assignment of Note Receivable and
Applicable Mortgage
LOAN AND SECURITY AGREEMENT
THIS LOAN AND SECURITY AGREEMENT is made and entered into as of November
14, 1997, 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 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.
1.3 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.
1.4 Applicable Approved Construction Budget. The budget relating to the
cost of the Financed Improvements at a particular Applicable Resort in form and
substance acceptable to Lender, in its sole discretion.
1.5 Applicable Approved Construction Schedule. The schedule relating to
the time frame for construction of the Financed Improvements at a particular
Applicable Resort in form and substance acceptable to Lender, in its sole
discretion.
1.6 Applicable Borrowing Base Percentage. The lesser of (a) seventy-six
and one half percent (76.5%); and (b) eighty-five percent (85%) of an Applicable
Underlying Loan's Loan-to-Value Ratio.
1.7 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.
1.8 Applicable Jurisdiction. With respect to an Applicable Resort, the
state, county, municipality, and/or other governmental jurisdiction in which
such Applicable Resort is located.
1.9 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.
1.10 Applicable Mortgage. An Inventory Mortgage or a Construction
Mortgage.
1.11 Applicable Resort. A Qualified Resort in connection with which
Borrower has made a Qualified Loan to a Qualified Borrower.
1.12 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 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.
1.13 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, Underlying Guarantees, and Applicable Mortgages
executed and delivered to Borrower in connection therewith, together with the
Applicable Approved Construction Schedule and Applicable Approved Construction
Budget. 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.
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, shall be provided
to Lender and Verification Agent promptly following the effective date thereof.
1.18 Approved Costs. Defined in Section 4.2(m) of this Agreement.
1.19 Architect. A licensed architect in an Applicable Jurisdiction who is
acceptable to Lender, in its sole discretion.
1.20 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.
1.21 Borrower. Resort Funding, Inc., a Delaware corporation, together with
its successors and assigns.
1.22 Borrowing Base. As to a particular Pledged Note Receivable, the
lesser of (a) eighty-five percent (85%) of the outstanding principal balance
thereof as of the date of any Advance by Lender in respect thereof; and (b)
seventy-six and one half percent (76.5%) of the fair market value of the
Applicable Underlying Loan Collateral that secures such Pledged Note Receivable
as determined by the appraisal referenced in Section 4.2(k) hereof, the form and
substance of which shall be satisfactory to Lender, in its sole discretion, as
such appraisal may be updated from time to time, at Borrower's sole cost and
expense, upon the reasonable request of Lender in the event that a Default,
pursuant to Section 7.2 hereof, has occurred or if Lender, in good faith,
believes that such a Default is likely to occur. Notwithstanding the foregoing
or any other term, provision, or condition hereof to the contrary, under no
circumstances shall the weighted average of the Loan-to-Value Ratios of all
Applicable Underlying Loans ever exceed eighty-five percent (85%) (the "Maximum
Weighted Average").
1.23 Borrowing Term. A period of twenty-four (24) calendar months
following the date of the Initial Advance.
1.24 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.
1.25 Closing Date. The date of this Agreement.
1.26 Code. The version of the Uniform Commercial Code in effect from time
to time in an Applicable Jurisdiction, as amended from time to time.
1.27 Collateral. Collectively, the Pledged Notes Receivable, 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, including but not
limited to the following (to the extent applicable):
(a) The Applicable Mortgages;
(b) First priority Liens in and to any and all Encumbered Personal
Property, together with the cash and non-cash proceeds thereof, with appropriate
non-disturbance language relating to common area furniture, furnishings,
equipment, and fixtures;
(c) Absolute and unconditional first assignments of any and all
leases, subleases, licenses, concessions, entry fees, and other agreements that
grant a possessory interest in and to, or the right to use, any Mortgaged Real
Property, Encumbered Intervals, Encumbered Personal Property, or any portion
thereof (collectively, the "Resort Leases");
(d) Absolute and unconditional first assignments of all of the
rents, revenues, income, proceeds, royalties, profits, and other amounts payable
for using, leasing, licensing, possessing, operating from or in, or otherwise
enjoying all or any portion of any Mortgaged Real Property, Encumbered Personal
Property, or Encumbered Intervals, including, without limitation, damages
received upon the occurrence of a default under any of the Resort Leases and all
proceeds payable under any policy of insurance covering loss of rents with
respect thereto (collectively, the "Resort Income");
(e) Absolute and unconditional first assignments 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 Mortgaged Real Property, Encumbered Personal
Property, or Encumbered Intervals, 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;
(f) First priority assignments of all of Borrower's rights in and to
all Plans, all agreements for the furnishing of architectural, engineering,
and/or design services, and all construction contracts and other agreements for
the furnishing of labor and/or materials in connection with the development and
construction of the Financed Improvements;
(g) First priority assignments of all of Borrower's rights 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;
(h) First priority Liens in all inventory, supplies, accounts,
chattel paper, and general intangibles owned or hereafter acquired by Borrower
or any
Underlying Borrower, used or useful in connection with, and placed or to be
placed on or under any of the Mortgaged Real Property, including but not limited
to the Units contained therein, and the Encumbered Intervals, together with the
cash and non-cash proceeds thereof;
(i) First priority Liens in and to all documents, instruments,
accounts, chattel paper, and general intangibles relating to the Pledged Notes
Receivable and the other Collateral, including the cash and non-cash proceeds
thereof;
(j) First priority Liens in and to all books, records, reports,
computer tapes, computer disks, and software relating to all or any portion of
the Collateral;
(k) 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; and
(l) All now owned or hereafter acquired right, title, and interest
of Lender in and to any and all of the collateral for the Timeshare Receivables
Credit Facility and any other timeshare-related loan or credit facility between
Lender and Borrower or an Affiliate of Borrower.
1.28 Commitment. The term sheet issued by Lender to Borrower, dated July
29, 1997, and subsequently accepted by Borrower on behalf of itself and
Guarantor.
1.29 Common Elements. The common areas and facilities as shown on the
Plans for each Applicable Resort, as defined or provided for in the Applicable
Declaration 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.
1.30 Common Furnishings. All furniture, furnishings, fixtures, appliances,
carpeting, and equipment located in a Unit or elsewhere within an Applicable
Resort.
1.31 Construction Contract. Defined in Section 4.2(l) of this Agreement.
1.32 Construction Mortgage. A mortgage or deed of trust that creates a
valid and enforceable first priority Lien against the Mortgaged Real Property
identified therein (which Mortgaged Real Property shall be situated within an
Applicable Resort) and secures in part the payment of all principal, interest,
and other amounts owed by an Applicable Underlying Borrower to Borrower,
pursuant to a Pledged Note Receivable and all related Applicable Underlying Loan
Documents.
1.33 Custodial Agreement. That certain Amended and Restated Custodial
Agreement dated as of August 1, 1997, by and between Lender and Custodian, a
copy of which is attached as Exhibit "A" hereto and incorporated herein by this
reference, pursuant to which Custodian will maintain custody of all original
Applicable Underlying Loan Documents and take certain actions in connection
therewith.
1.34 Custodian. Banker's Trust Company 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 Draw Request. Defined in Section 4.3 of this Agreement.
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 acquiring, developing,
constructing, improving, or providing working capital in connection with, a
Qualified Resort;
(c) The Applicable Underlying Loan Documents have been approved in
writing by Lender;
(d) Borrower is the sole payee;
(e) It is secured by an Inventory Mortgage and/or a Construction
Mortgage;
(f) Principal and interest payments on it are payable to Borrower in
legal tender of the United States;
(g) 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;
(h) Neither the Applicable Underlying Borrower nor the Applicable
Underlying Guarantor, if any, is an Affiliate of Borrower or Guarantor;
(i) The Applicable Underlying Loan Documents provide for accelerated
partial releases from the Lien of the Applicable Mortgage that are no less than
one hundred ten percent (110%) of the Applicable Underlying Borrower's cost
basis in the Unit or Interval being released;
(j) It requires such minimum amortization of principal as Lender, in
its sole discretion, shall deem sufficient and approve in writing;
(k) 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;
(l) 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
(m) 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 Loan shall in no event exceed $5,000,000
without Lender's prior written consent, which consent may be granted or withheld
in Lender's sole and absolute discretion; and
(ii) In no event shall Lender be required to make Advances
hereunder of more than $15,000,000 against or with respect to Units and/or other
Financed Improvements for which no certificate of occupancy or its legal
equivalent in the Applicable Jurisdiction has been issued, nor shall Lender be
required to designate a particular loan as a Qualified Loan hereunder if
Advances in connection therewith, when added to all other Advances made by
Lender hereunder, would likely cause the foregoing $15,000,000 threshold to be
exceeded, in Lender's sole discretion.
1.40 Encumbered Interval. Any Interval that is encumbered by the Lien of
an Inventory Mortgage, whether or not the applicable mortgagee has executed a
non-disturbance or subordination agreement in connection therewith.
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 Mortgaged Real
Property or 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 Financed Improvements. All Units, Common Elements, and other
buildings, structures, recreational facilities, and appurtenances thereto now
located on, or to be constructed on, any Mortgaged Real Property with the
proceeds of any Advances hereunder.
1.45 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(h) hereof.
1.46 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.
1.47 Guarantor. Equivest Finance, Inc., a Florida corporation, together
with its successors and assigns.
1.48 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.
1.49 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.
1.50 Holdback Amount. An amount equal to a minimum of ten percent (10%) of
(a) the amounts due a General Contractor under a Construction Contract; and/or
(b) the amounts due to any subcontractor, materialman, or other
Person under any and all subcontracts or other agreements entered into in
connection with the construction of any Financed Improvements, which amount
shall be retained by Lender and Borrower as a holdback until such time as such
Financed Improvements have been one hundred percent (100%) completed in
accordance with the applicable Plans and all Applicable Laws, as certified in
the manner provided in Section 4.3(f) hereof, and all other conditions set forth
in Section 4.3(f) hereof have been fully satisfied. Notwithstanding the
foregoing provisions of this Section 1.50, the Holdback Amount in connection
with a particular Applicable Underlying Loan may be reduced to a minimum of five
percent (5%) of the amounts specified in Sections 1.50(a) and (b) above once the
Financed Improvements in question have been fifty percent (50%) completed in
accordance with the applicable Plans and all Applicable Laws, based upon a
certification from the Architect or other evidence satisfactory to Borrower and
Lender.
1.51 Holdback Balance. The balance of any Holdback Amount retained by
Lender and Borrower and not paid to an Applicable Underlying Borrower, a General
Contractor, or a subcontractor, materialman, or other Person in connection with
the construction of any Financed Improvements, all in accordance with the
Applicable Underlying Loan Documents.
1.52 Initial Advance. The first Advance by Lender hereunder.
1.53 Initial Underlying Loan Advance. As to a particular Applicable
Underlying Loan, the first Advance by Lender hereunder in connection therewith.
1.54 Interest Rate. The Base Rate plus 2.90% 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.
1.55 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, together
with all rights, benefits, privileges, and interests appurtenant thereto,
including but not limited to the right to use and occupy a Unit within the
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.
1.56 Inventory Mortgage. A mortgage or deed of trust that creates a valid
and enforceable first priority Lien against the Encumbered Intervals identified
therein (which Encumbered Intervals relate to an Applicable Resort)
and secures in part the payment of all principal, interest, and other amounts
owed by an Applicable Underlying Borrower to Borrower, pursuant to a Pledged
Note Receivable and all related Applicable Underlying Loan Documents.
1.57 Land. The real property upon which any of the Financed Improvements
or other portions of an Applicable Resort are situated.
1.58 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.
1.59 Loan. The subject revolving credit facility in the maximum principal
amount of $30,000,000 as described in this Agreement and evidenced and secured
by the Loan Documents.
1.60 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) Pledges and Assignments of Notes Receivable and Applicable
Mortgages (in the form of Exhibit "O," attached hereto and incorporated herein
by this reference;
(e) Assignments of the Underlying Guarantees;
(f) The Subordination Agreement;
(g) The Custodial Agreement;
(h) The Verification Agent's Agreement;
(i) The Lockbox Agreement;
(j) The Warrant to Purchase Shares of Common Stock of Equivest
Finance, Inc.;
(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.
1.61 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 by the then
current fair market value of all Applicable Underlying Loan Collateral that
secures such Pledged Note Receivable as determined by the appraisal referenced
in Section 4.2(k) hereof, the form and substance of which shall be satisfactory
to Lender, in its sole discretion, as such appraisal may be updated from time to
time, at Borrower's sole cost and expense, upon the reasonable request of Lender
in the event that a Default, pursuant to Section 7.2 hereof, has occurred or if
Lender, in good faith, believes that such a Default is likely to occur.
1.62 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.
1.63 Lockbox Agreement. That certain agreement by and among Lender,
Borrower, and Lockbox Agent in substantially the form of Exhibit "B," 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.
1.64 Mandatory Prepayment. Any prepayment of the Loan required by Section
2.6(b) of this Agreement.
1.65 Maturity Date. The date that is twelve (12) calendar months following
the expiration of the Borrowing Term.
1.66 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.
1.67 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 $3,400,000; provided,
however, that said amount shall be increased to $20,000,000 upon the conversion
of the Subordinated Debt to common stock in Guarantor, as referenced in Section
6.3(e) hereof.
1.68 Mortgaged Real Property. All of Borrower's right, title, and interest
in and to any Land, Unit, Common Element, Interval, and other real property of
any and every type, together with all easements and other appurtenances thereto,
that is encumbered by the Lien of a Construction Mortgage or an Inventory
Mortgage and located within an Applicable Resort.
1.69 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.
1.70 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 is secured in part by an Inventory
Mortgage and/or a Construction Mortgage.
1.71 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.
1.72 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 "C,"
attached hereto and incorporated herein by this reference, as amended or
restated from time to time.
1.73 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.
1.74 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.
1.75 Plans. Plans for the development and construction of any Financed
Improvements, together with all specifications and drawings in respect thereof
and all modifications, amendments, additions, and supplements thereto. Said
Plans, which shall be prepared by an Architect, shall indicate the location of
the Financed Improvements, the configuration and dimensions of the Applicable
Resort, the means of access thereto, street lines, easements, the Common
Elements, and other relevant details.
1.76 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.
1.77 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.
1.78 Qualified Borrower. The developer of an interval ownership,
condominium, timeshare, or vacation ownership project, the creditworthiness for
an acquisition, development, and/or construction 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.
1.79 Qualified Borrower Underwriting Guidelines. Those general
underwriting criteria and guidelines set forth or to be set forth in Exhibit
"D," 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.
1.80 Qualified Loan. An acquisition, development, construction, inventory,
or working capital 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.
1.81 Qualified Loan Underwriting Guidelines. Those general criteria and
guidelines set forth or to be set forth in Exhibit "E," 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.
1.82 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.
1.83 Qualified Resort Underwriting Guidelines. Those general underwriting
criteria and guidelines set forth or to be set forth in Exhibit "F," 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.
1.84 Release Fee. Any fee or amount 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 a
Construction Mortgage or an Inventory 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.
1.85 Servicing Agent. For so long as no Event of Default has occurred
hereunder, Borrower or an Affiliate of Borrower; thereafter, 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 Release Fees and all other
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.
1.86 Servicing Agreement. An agreement by and among Lender, Borrower, and
Servicing Agent (if different from Borrower) in substantially the form of
Exhibit "G," attached hereto and incorporated herein by this reference, that
provides for the servicing of each Applicable Underlying Loan.
1.87 Structuring Advisory Fee. An amount equal to $300,000 that is due and
payable in immediately available U.S. funds by Borrower to Lender in two (2)
installments as follows:
(a) $150,000 on the Closing Date; and
(b) $150,000 on or prior to December 20, 1997.
The Structuring Advisory Fee is non-refundable to Borrower and payable to
Lender in consideration for the provision by Lender of certain advisory services
in connection with the structuring of the Loan, the underwriting thereof, and
Lender's due diligence analysis, which Structuring Advisory Fee shall be deemed
to have been fully earned by Lender as of the Closing Date.
1.88 Subordination Agreement. That certain agreement of even date herewith
by and among Borrower, Guarantor, Lender, and The ▇▇▇▇▇▇▇ Funding Group, Inc.,
pursuant to which, subject to the provisions hereof and thereof, Borrower,
Guarantor, and such other parties have agreed that until certain Senior Debt has
been paid and otherwise satisfied in full, Borrower will not make any payments
to a Subordinated Party in respect of any of the Subordinated Debt, as all such
capitalized terms are defined in said Subordination Agreement.
1.89 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.
1.90 Timeshare Receivables Credit Facility. The $75,000,000 timeshare
receivables credit facility as evidenced in part by that certain Assignment,
Release and Custodial Agreement dated on or about November 13, 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 any and all
related contemporaneous or subsequent transactions involving Lender and
Borrower, among other parties.
1.91 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. The term "Underlying Guaranty"
shall further include any document or instrument executed by an Applicable
Underlying Guarantor and delivered to Borrower, pursuant to which the completion
of construction of certain Improvements in accordance with the relevant Plans
and all Applicable Laws is guaranteed.
1.92 Unit. An apartment, condominium unit, or other structure that is
affixed to real property 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.
1.93 Verification Agent. Midland Loan Services, L.P. or such other Person
as Lender, in its sole discretion, engages from time to time, at Lender's cost
and expense (subject to Section 2.3(c) hereof), 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.
1.94 Verification Agent's Agreement. That certain Interim Servicing
Agreement dated as of June 30, 1995, by and between Lender and Verification
Agent, as amended by that certain Addendum to Interim Servicing Agreement of
even date herewith by and between Lender and Verification Agent, both of which
are attached as Exhibit "I" hereto and incorporated herein by this reference,
pursuant to which Verification Agent is engaged to perform the duties and
responsibilities delegated to it by Lender hereunder and thereunder.
1.95 Warrants. The warrants in Guarantor granted to Lender, pursuant to
that certain Warrant to Purchase Shares of Common Stock of Equivest Finance,
Inc. in substantially the form of Exhibit "J," attached hereto and incorporated
herein by this reference.
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 acquisition, development, construction, inventory, and working
capital 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 "D," "E," and "F"
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 Section 1.39 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 $30,000,000; 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 $30,000,000. 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 only; (ii) be in amounts of not less than $500,000
each; and (iii) occur no more frequently than three (3) times per month;
provided, however, that Borrower shall pay Verification Agent a fee of $250.00
for each Advance of the Loan in excess of five (5) in any particular calendar
month in consideration of the performance by Verification Agent of its duties
and responsibilities with respect to such additional Advance, pursuant to the
Verification Agent's Agreement.
(d) Maximum Applicable Underlying Loan Advance Percentage. Under no
circumstance 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 (i)
the cost of labor, materials, and services actually incorporated into the
Financed Improvements at the Applicable Resort in a manner acceptable to Lender;
plus (ii) the purchase price actually paid for any uninstalled materials to be
utilized in the construction of such Financed Improvements and to be stored upon
the Mortgaged Real Property; plus (iii) any Holdback Balance then due to the
applicable General Contractor and/or any subcontractor, materialman, or other
Person, provided that all conditions for the release of any such Holdback
Balance as set forth in Section 1.50 hereof and the Applicable Underlying Loan
Documents have been fully satisfied, less (A) the applicable Holdback Amount
required to be retained from the Applicable Underlying Borrower's draw request,
pursuant to Section 1.50 hereof and the terms of the Applicable Underlying Loan
Documents; and (B) all prior Advances made by Lender for the payment of the
costs of labor, materials, and services actually incorporated into the
Applicable Resort's Financed Improvements, it being the intent of the parties
hereto that Borrower will advance its own funds in the amount of any portion of
an Applicable Underlying Borrower's funding request not Advanced by Lender
hereunder.
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 the Applicable Underlying Borrower and Applicable
Underlying Guarantor, if any, in writing, to pay Lockbox Agent all interest,
principal, Release Fees, 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 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").
Immediately following any advance by Borrower of an Applicable Underlying Loan
or any receivables 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, to Lockbox Agent, as and when such amounts are
received by Borrower (and in the form so received, properly endorsed to Lockbox
Agent, if appropriate), to be included within the Aggregate Weekly Collections
deposited into the Lockbox Account. On each Business Day, Lockbox Agent shall
remit, via wire transfer, all amounts then deposited in the Lockbox Account to
Verification Agent, to be held in a collection account (the "Collection
Account") and disbursed by Verification Agent in accordance with the terms,
provisions, and conditions hereof and of the Verification Agent's Agreement.
(ii) On each Monday prior to the Maturity Date, provided that
no Event of Default exists hereunder and Verification Agent has been provided
with each and every document, instrument, certificate, and other item
required to be furnished to Verification Agent pursuant hereto and the
Verification Agent's Agreement, including but not limited to the written report
referenced in the last paragraph of this Section 2.5(a)(ii), Verification Agent
will:
(A) First, pay Lender, via wire transfer, by 5:00 p.m.
Syracuse, New York time, one hundred percent (100%) of the portion of the
Aggregrate Weekly Collections received by Lockbox Agent with respect to each
Applicable Underlying Loan during the seven (7) days ending at 5:00 p.m.
Syracuse, New York time on the immediately preceding Friday and subsequently
transferred to the Collection Account that is allocated to interest owed
Borrower pursuant to the Applicable Underlying Loan Documents as reflected on
the applicable week's Weekly Allocation Report; provided, however, that in any
particular calendar month, once Lender has received the Minimum Monthly Interest
Payment due Lender with respect to the immediately preceding calendar month, the
balance of all Aggregate Weekly Collections received by Lockbox Agent with
respect to each Applicable Underlying Loan during the preceding seven (7) days
and subsequently transferred to the Collection Account that are allocated to
interest owed Borrower, pursuant to the Applicable Underlying Loan Documents as
reflected on the applicable week's Weekly Allocation Report (the "Excess
Interest"), shall be paid to Borrower; and
(B) Then, pay Lender, via wire transfer, by 5:00 p.m.
Syracuse, New York time, the Applicable Borrowing Base Percentage of the portion
of the Aggregate Weekly Collections received by Lockbox Agent with respect to
each Applicable Underlying Loan during the seven (7) days ending at 5:00 p.m.
Syracuse, New York time on the immediately preceding Friday and subsequently
transferred to the Collection Account that is allocated to principal and other
amounts owed Borrower (other than interest) pursuant to the Applicable
Underlying Loan Documents as reflected on the applicable week's Weekly
Allocation Report, and pay Borrower the remaining Aggregate Weekly Collections
for the seven (7) days in question; provided, however, that if the sum of (1)
the Aggregate Weekly Collections available for disbursement by Verification
Agent on a particular Monday with respect to all Applicable Underlying Loans,
pursuant to this Sub-paragraph 2.5(a)(ii)(B); and (2) the amount of Excess
Interest for the preceding week, is less than $50,000, such sum shall not be
disbursed in the foregoing manner but shall instead be added to and be deemed a
portion of the immediately succeeding week's Aggregate Weekly Collections that
are allocated to principal and other amounts (other than interest) and disbursed
to Lender and Borrower with respect to such succeeding week, notwithstanding the
total amount thereof.
Each disbursement by Verification Agent from the Collection
Account shall be based upon the Weekly Allocation Report described in Section
6.1(g)(i) hereof and a detailed written report prepared by Borrower and
delivered to Verification Agent that shows all relevant calculations and other
methodologies to be used by Verification Agent in properly allocating Aggregate
Weekly Collections between Lender and Borrower with respect to each Applicable
Underlying Loan. Both such reports shall be sent to Verification Agent by no
later than 10:00 a.m. Syracuse, New York time each Monday prior to the Maturity
Date. Verification Agent shall be responsible for reviewing such calculations
and methodologies and notifying Lender that the same are consistent with the
terms, provisions, and conditions hereof.
(iii) Notwithstanding the foregoing provisions of this Section
2.5(a) to the contrary, upon the occurrence of a Default or Event of Default
hereunder, Verification Agent will immediately pay to Lender one hundred percent
(100%) of the Aggregate Weekly Collections received by Lockbox Agent and
subsequently transferred to Verification Agent and deposited into the Collection
Account with respect to all Applicable Underlying Loans during the preceding
seven (7) days. In the event that such Default is subsequently cured in
accordance with the terms, provisions, and conditions of Section 7 hereof and no
other Default or Event of Default hereunder exists, said Aggregate Weekly
Collections shall thenceforth be allocated between Lender and Borrower in the
manner provided for in Section 2.5(a)(ii) above.
(iv) All amounts received by Lender pursuant to this Section
2.5(a) shall be applied by Lender in the following order of priority (i) 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 Verification Agent's fee as set forth in
Section 2.3(c) hereof for any Advances hereunder in excess of five (5) per
calendar month; (ii) second, to pay Lender all accrued but unpaid interest due
under the Note; and (iii) third, to reduce the outstanding principal balance of
the Loan.
(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 received by Lender from Verification Agent with respect
to such immediately preceding calendar month, pursuant to Section 2.5(a) hereof.
(c) Partial Releases. Under no circumstances shall Borrower execute
and deliver any partial releases from the Lien of an Applicable Mortgage unless
and until the Release Fee that corresponds to the Unit or Interval in question,
pursuant to the Applicable Underlying Loan Documents, has been paid to and
received by Lockbox Agent or if a default or event of default has occurred under
such Applicable Underlying Loan Documents. Lender shall not be
responsible for any of the costs incident to the preparation and recording of
partial releases.
(d) 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 the Note exceeds the aggregate amount of the
Borrowing Base, then, within five (5) 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 prepay
the outstanding principal balance of the Note in an amount equal to the
difference between the outstanding principal balance of the Note and the
aggregate amount of the 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 may collect
and shall receive all payments made under or in respect of all Pledged Notes
Receivable,
including Eligible 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. 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 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 November 14, 1997, by
and among Credit Suisse First Boston Mortgage Capital LLC, Resort Funding, Inc.,
and Equivest Finance, Inc." 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 and Applicable Mortgages 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, Verification Agent, 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
Receivables 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 Receivables Credit
Facility shall be cross-defaulted such that any event of default with respect to
the Timeshare Receivables 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 or the Commitment.
(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, including but not limited to the initial installment of the
Structuring Advisory Fee, pursuant to Section 1.87 hereof.
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 Verification 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. 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, the first priority of the Lien of
the Applicable Mortgage upon the subject Mortgaged Real Property and/or
Encumbered Intervals, 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 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 insurance policies
delivered at the time of each advance of the Applicable Underlying Loan must
insure that the Applicable Mortgage creates a first priority Lien in and to the
subject Mortgaged Real Property and/or Encumbered Intervals in favor of
Borrower, together with its successors and assigns, with such exceptions and
conditions to title as Borrower and Lender shall have approved in writing.
All such Title Policies 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, against all mechanics' and
materialmen's liens arising from or out of construction of the Financed
Improvements 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 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.
(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.
(d) Applicable Underlying Borrower's Background Documents. The
Applicable Underlying Borrower has delivered to Borrower and Borrower has
approved each of the following:
(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. A survey, dated within ninety (90) days prior to
the date of closing of the Applicable Underlying Loan, 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. Foundation perimeters
are to be added to the survey by the surveyor as soon as they are in place for
all buildings. 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 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, shall
include a legal description of the Mortgaged Real Property, 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.
(vi) Soil Tests. A report as to soil and compaction condition
and analysis made at the Land by a soil testing firm satisfactory to Borrower
and Lender. The number and location of such borings shall be in accordance with
the recommendations of the soil testing firm and must also be satisfactory to
Lender and also shall include a sinkhole analysis of the Applicable Resort. The
report shall include the recommendations of the soil testing firm as to the
preparation of the soil needed in order to adequately support the Financed
Improvements. During the course of construction, the Applicable Underlying
Borrower shall also provide such reports as to concrete tests and such
additional soil tests as are required by Borrower or Lender.
(e) 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 Financed Improvements and
the Encumbered Intervals. In addition, Borrower has received written evidence
that the Applicable Underlying Borrower has obtained and is maintaining 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.
(f) Applicable Laws. Borrower has received evidence satisfactory to
Borrower and Lender that all existing and contemplated Financed Improvements 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.
(g) 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.
(h) 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.
(i) 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 an 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.
(j) 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.
(k) Appraisal. Borrower has furnished Lender with an MAI appraisal
of the Applicable Resort, including but not limited to all real and personal
property contemplated to become Mortgaged Real Property, Encumbered Intervals,
or Encumbered Personal Property hereunder, prepared
by a nationally recognized appraisal firm and in form and content acceptable to
Borrower and Lender, in the sole discretion of each.
(l) Construction Contract. To the extent applicable, a general
construction contract (the "Construction Contract"), in form and content
acceptable to Borrower and Lender, has been executed by and between the
Applicable Underlying Borrower and a general contractor acceptable to Borrower
and Lender (the "General Contractor"), to construct the Financed Improvements in
accordance with the Plans therefor and all Applicable Laws. The Construction
Contract shall contain, in addition to any other provisions relating to
construction of the Financed Improvements that Borrower or Lender may reasonably
require, the following provisions:
(i) An agreement to supply and/or furnish all labor,
supervision, materials, supplies, and equipment necessary to complete the
construction of the Financed Improvements, on or before the date which is
eighteen (18) months following the date of the Initial Underlying Loan Advance
(the "Completion Date"), for not more than a guaranteed maximum fixed price
acceptable to Borrower and Lender;
(ii) A provision that the General Contractor and each
subcontractor and materialman shall, as a precondition to the filing of a claim
of mechanics' lien or the assertion of any related rights, provide Borrower and
Lender with thirty (30) days' prior written notice thereof;
(iii) A provision for such Holdback Amount as Borrower and
Lender consider appropriate under the circumstances, which Holdback Amount shall
be released in the manner set forth in the Applicable Underlying Loan Documents,
the form and content of which are approved by Lender in writing;
(iv) A provision that prior to final payment under the
Construction Contract, the General Contractor shall deliver to the Applicable
Underlying Borrower, Borrower, and Lender (A) a final and complete release of
Liens signed by the General Contractor and all subcontractors and materialmen
performing work or supplying materials; and (B) a certificate of substantial
completion or its legal equivalent with a punch list executed by the Applicable
Underlying Borrower, the General Contractor, and the Architect;
(v) A provision that the Construction Contract may not be
terminated by the General Contractor until thirty (30) days after delivery of a
written notice of the Applicable Underlying Borrower's default to Borrower and
Lender (or such longer period after said delivery as may be reasonably necessary
to cure a default thereunder) and may not be terminated by the General
Contractor by reason of the bankruptcy or insolvency of the Applicable
Underlying Borrower;
(vi) A provision that, upon the occurrence of a default or an
event of default under the Construction Contract, the General Contractor will,
at the request of Borrower or Lender, continue to perform thereunder until
construction of the Financed Improvements has been completed; and
(vii) Such other commercially reasonable provisions as
Borrower or Lender shall require.
(m) Applicable Approved Construction Budget. Borrower has received
and approved the Applicable Approved Construction Budget consisting of a
breakdown certified by the Applicable Underlying Borrower and the General
Contractor, in form, scope, and content acceptable to Borrower and Lender,
setting forth all acquisition, construction, and other costs of developing the
Financed Improvements, including, without limitation, financing costs, costs of
acquisition of the Land, costs of construction of the Financed Improvements, and
other hard and soft costs incidental to the construction of the Financed
Improvements and the development of the Applicable Resort and specifying which
items are to be funded from sources other than the proceeds of the Applicable
Underlying Loan. The Applicable Approved Construction Budget shall serve as the
basis upon which advances of the Applicable Underlying Loan are made on account
of each of the categories set forth therein (the costs disclosed on the
Applicable Approved Construction Budget and approved in writing by Lender shall
hereinafter be referred to as the "Approved Costs"). Subject to Section 6.2(c)
hereof, if, in the judgment of Borrower, Lender, or Verification Agent, the
total estimated costs of constructing the Financed Improvements exceed the
maximum principal amount of the Applicable Underlying Loan, then the Applicable
Underlying Loan Documents shall require the Applicable Underlying Borrower to
invest immediately the amount of the difference in accordance with the
requirements of the Applicable Underlying Loan Documents. The Applicable
Underlying Loan Documents shall further require that if any specific amount set
forth in the Applicable Approved Construction Budget is insufficient for its
intended purpose, then the Applicable Underlying Borrower shall immediately cure
such monetary deficiency by paying the amount thereof to Borrower or providing
Borrower with other financial assurances deemed adequate by Borrower, in its
sole discretion, that such monetary deficiency will be satisfied. The Applicable
Approved Construction Budget shall be accompanied by the Applicable Approved
Construction Schedule, in form and content acceptable to Borrower and Lender,
setting forth the dates on which the Applicable Underlying Borrower expects to
request advances of the Applicable Underlying Loan and specifying the work,
materials, and other costs to be paid with the proceeds of each such advance.
The Applicable Underlying Loan Documents shall require that upon any change in
the Applicable Approved Construction Budget or the Applicable Approved
Construction Schedule, the Applicable Underlying Borrower shall immediately
deliver to Borrower a copy of such revised Applicable Approved Construction
Budget or Applicable Approved
Construction Schedule, both of which must be acceptable to Borrower and Lender,
in the sole discretion of each.
(n) Architect's Contract. Borrower has received and approved a copy
of the contract by and between the Applicable Underlying Borrower and the
Architect, which contract includes the services of an engineer retained by the
Architect in connection with and as part of Architect's work under such
contract, which shall be in form and content acceptable to Borrower and Lender
and which provides that the Architect shall submit to Borrower all certificates,
as-built plans, specifications, and other information as a prerequisite to
Borrower's advances of Applicable Underlying Loan proceeds, including the final
advance thereof. Among other provisions, said Architect's contract shall
prohibit the Applicable Underlying Borrower from agreeing to or permitting any
material amendment, modification, waiver, or other material change to or of any
of the foregoing without the prior written consent of Borrower. Borrower shall
also have received from the Applicable Underlying Borrower a written certificate
from the Architect covering such matters as may be required by Borrower or
Lender and stating that the proposed Financed Improvements, when completed in
accordance with the Plans, will comply with all Applicable Laws, together with
an agreement by the Architect, in form and content acceptable to Borrower and
Lender, that upon the occurrence of an event of default under the Applicable
Underlying Loan Documents, the Architect will, at Borrower's request: (A) assign
to Borrower all of the Architect's right, title, and interest in any engineering
contract in respect of the Financed Improvements; (B) continue performance
pursuant to its agreement with the Applicable Underlying Borrower until the
completion of construction of the Financed Improvements, provided that Borrower
shall compensate the Architect from the date of Borrower's assumption of such
agreement in accordance with said agreement for all such services rendered; and
(C) permit Borrower to use the Plans and any materials obtained by the Architect
from any engineer retained by the Architect at no cost to Borrower. All costs of
the Architect shall be paid by the Applicable Underlying Borrower or Borrower.
(o) Subcontracts. Every contract, in form and content acceptable to
Borrower and Lender, that has been executed by and between the General
Contractor and a construction manager, subcontractor, materialman, or supplier
that is to provide labor and/or materials in connection with the development and
construction of the Financed Improvements in accordance with the Plans with a
value of $5,000 or more (a "Material Subcontractor") contains the agreement of
the Subcontractor to perform its respective contract for Borrower following the
occurrence of an event of default pursuant to the Applicable Underlying Loan
Documents. Furthermore, Borrower has received from the Applicable Underlying
Borrower a list of all Material Subcontractors working on the Financed
Improvements, together with copies of their respective contracts, and showing
the name, address, and telephone number of each Material Subcontractor, the work
or material performed or supplied thereby, and
the total amount of each relevant contract and subcontract and amounts paid
through the date upon which such list was completed.
(p) Plan and Cost Review. Borrower has completed a written plan and
cost review covering such matters as may be required by Lender and confirming
that the proposed Financed Improvements can feasibly be constructed within the
cost limitations set forth in the Applicable Approved Construction Budget and
that the proposed Financed Improvements, when completed in accordance with the
Plans, will comply with all applicable zoning and other Applicable Laws.
(q) Permits and Approvals. Borrower has received copies of building
permit(s) and other satisfactory evidence that the Land and the Financed
Improvements and the intended uses of the Applicable Resort are in compliance
with all Applicable Laws, including, without limitation: (i) Environmental Laws;
(ii) erosion control ordinances; (iii) doing-business and/or licensing laws;
(iv) laws protecting disabled or handicapped persons; and (v) zoning laws. All
permits and approvals granted to the Applicable Underlying Borrower shall
continue to be legally valid and shall remain in full force and effect for so
long as the Applicable Underlying Loan is outstanding.
(r) Plans. Borrower has received and approved complete and detailed
Plans which shall be satisfactory to Borrower and Lender, in the sole discretion
of each, and Verification Agent, including any changes or modifications thereto
and including Plans for architectural, structural, mechanical, plumbing,
electrical, and site development (including storm drainage, utility lines,
erosion control, and landscaping) work. All Plans must be stamped with all
required approvals from all applicable governmental authorities, certified under
seal by the Architect, and signed by the Applicable Underlying Borrower and the
General Contractor to be true copies of the Plans architecturally and
structurally approved by all authorities and agencies having jurisdiction
thereover. No change shall be made thereafter in the Plans without the prior
written consent of Borrower and Lender, except as otherwise provided in the
Applicable Underlying Loan Documents as approved by Lender.
(s) Certificate of Architect. Borrower has received a Certificate of
Architect from the Architect who prepared the Plans addressed to Borrower and
stating that (i) any necessary soil testing has been performed, and soil
conditions are satisfactory for the structural support of the Financed
Improvements; (ii) that there is adequate ingress and egress to the Applicable
Resort and the Financed Improvements; (iii) that the Plans have been approved by
all applicable governmental authorities, meet all state construction, energy
conservation, and Environmental Laws, and comply with all federal laws and
regulations adopted pursuant to the Fair Housing Act of 1968 (as amended), the
Americans with Disabilities Act of 1990, and all other Applicable Laws; (iv)
that provisions have been made for the handicapped in accordance with all state
and
local ordinances, rules, and regulations; (v) that the zoning is proper; (vi)
that all utilities necessary to service the Financed Improvements and the
Applicable Resort are available with adequate capacity; and (vii) that all
required governmental permits and approvals have been obtained; and such
additional items as may reasonably be required by Borrower or Lender.
(t) Lien Waivers. Borrower has received a certificate or affidavit
of the Applicable Underlying Borrower certifying that within the past ninety
(90) days, no work has been performed on the Applicable Resort for which payment
has not been made in full and for which a Lien could be filed, together with
such indemnity as the Title Insurance Company may require to issue affirmative
mortgagee's title insurance against mechanics' and materialmen's Liens,
including, without limitation, waivers of Lien from each and every contractor,
subcontractor, laborer, or material supplier performing services or supplying
material to the Applicable Resort within the past ninety (90) days and an
affidavit listing all of said entities and certifying that no work has been
performed and no materials have been supplied for which the costs remain unpaid
prior to the date of closing of the Applicable Underlying Loan or the date of
the applicable advance; provided, however, that no such lien waiver need be
delivered by any subcontractor, laborer, or material supplier performing
services or supplying material with a value of less than $5,000 until such time
as the aggregate value of labor or materials supplied or services performed by
such subcontractors, laborers, or suppliers exceeds $50,000.
(u) 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.
(v) Management and Property Contract. Borrower has received a copy
of the management contract for the Applicable Resort (the "Management Contract")
and determined to its satisfaction that the Applicable Resort is being managed
by a professional management company acceptable to Borrower and Lender.
(w) 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 Verification 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. Verification 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 Draw Requests (as such term is
defined in Section 4.3 below) pertain; provided, however, that in the event that
Verification Agent fails to provide Lender with such written acknowledgment of
receipt and recommendation of approval or, alternatively, notification that
Verification Agent does not recommend Lender's approval of each such item,
within ten (10) Business Days following Verification Agent's actual receipt of
all applicable documents, instruments, forms, opinions, and other materials,
then, for purposes of this Section 4.2, Verification Agent 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 a "Draw Request") in
substantially the form of Exhibit "K," attached hereto and incorporated herein
by this reference. Provided that no Event of Default hereunder then exists, each
Advance approved by Lender and Verification Agent shall be made within ten (10)
Business Days following the last to occur of (a) Lender's receipt of the
applicable Draw 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); and (b) Verification Agent's written
notification to Lender that all items submitted to Verification Agent for its
review pursuant hereto and the Verification Agent's Agreement are acceptable;
provided, however, that in the event that Verification Agent fails to provide
Lender with such written notification or, alternatively, notification that
Verification Agent has not determined each such item to be acceptable, within
ten (10) Business Days following Verification Agent'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, Verification Agent shall be deemed to have provided Lender with
written notification that all items submitted to Verification Agent for its
review, pursuant hereto and the Verification Agent's Agreement, are acceptable.
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 Draw 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 Draw 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
Draw 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 Draw 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 Verification Agent at its address as set forth in the
Verification Agent's 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 the Applicable Underlying Borrower's
advance request on a completed AIA requisition form that describes the total
cost budget in detail by line item categories of the Applicable Approved
Construction Budget, the percentage of work completed, the total dollar amount
required to complete construction of the Financed Improvements, and such other
information as Borrower or Lender may reasonably require;
(B) It has verified the appropriateness of all advance
requests theretofore made by the Applicable Underlying Borrower in connection
with the Applicable Underlying Loan, including but not limited to the items set
forth in Section 4.2 above, together with all other information deemed
reasonably necessary by Borrower or Lender relating to the progress of
construction of the Financed Improvements within the Applicable Resort;
(C) It has verified that the progress of construction is
in accordance with the Plans, the Applicable Approved Construction Budget, and
all Applicable Laws, that the aggregate amount of advances of the
Applicable Underlying Loan does not exceed the cost of work already completed,
that the balance of Applicable Underlying Loan proceeds remaining to be
disbursed by Borrower are sufficient to complete all Financed Improvements in
accordance with the Plans and all Applicable Laws, and that the Financed
Improvements will be completed on or before the Completion Date;
(D) With respect to Advances that relate to the
construction of any new building or of exterior structural improvements,
promptly upon the completion of construction of the foundations of the Financed
Improvements, it has received a foundation survey that shows the locations of
such foundations, accompanied by a certification of the surveyor as to the
absence of encroachments from or onto the Land and compliance of the Financed
Improvements, as then constructed, with all setback requirements and other
relevant restrictions;
(E) It has obtained an endorsement to the Title Policy
insuring that, or, if no such endorsement is available, then a certificate of
the Architect certifying that, no building location is in violation of any
easement of record, and no building location is in violation of any setback
restriction;
(F) It has received (or Borrower has delivered or caused
to be delivered to the Title Insurance Company, in escrow) a fully executed
release of Lien from the General Contractor and from each Material Subcontractor
to be paid with the proceeds of such Advance, pursuant to which the General
Contractor and each such Material Subcontractor relinquishes its right to file a
mechanics' Lien against the Land or the Financed Improvements in exchange for
payment for work completed to date;
(G) It has received a current endorsement to the Title
Policy that indicates that since the effective date of the Title Policy (or the
effective date of the last such update, if any), there has been no change in the
status of title to the Applicable Resort as set out in the Title Policy, that
the Lien of the Applicable Mortgage remains a first priority mortgage Lien on
the subject Mortgaged Real Property and Encumbered Intervals (if applicable) and
is free and clear of any mechanics' Liens or any other encumbrances not
permitted by Borrower and Lender, and which has the effect of increasing the
coverage of the Title Policy by an amount equal to the advance being made,
unless the Title Policy expressly provides automatically and unconditionally for
such increase in coverage upon each such disbursement;
(H) It has received written documentation that
satisfactorily accounts to Borrower for the expenditure of funds allocated to
the payment of the soft costs set forth in the Applicable Approved Construction
Budget;
(I) It has no knowledge of any asserted or threatened
defense, offset, counterclaim, discount, or allowance in respect of any Pledged
Note Receivable; and
(J) It has received such additional items as Lender
shall reasonably require.
(b) Review and Approval by Verification 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
Verification Agent by Borrower, and Verification 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, and the other Loan Documents have been fully satisfied by Borrower,
including but not limited to the proper recordation of the Pledges and
Assignments of Notes Receivable and Applicable Mortgages and other Loan
Documents 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) Not more than two (2) Advances under the Loan have
previously been made in the same calendar month in which such requested Advance
is to be made, unless Lender, in its sole discretion, agrees to make an
additional such Advance during such calendar month;
(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, does not exceed $30,000,000, that each Pledged Note
Receivable as to which such Advance is sought remains an Eligible Note
Receivable hereunder, and that the Maximum Weighted Average 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; and
(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.
(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, make payments directly to the General Contractor, any
subcontractor, or any other party that has supplied labor, material, or services
in connection with or incidental to the construction of any of the Financed
Improvements, or for the payment of other costs set forth in the Applicable
Approved Construction Budget or 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.
(e) Miscellaneous Conditions. In connection with any Applicable
Underlying Loan, Lender shall not make any disbursement for construction of any
of the Financed Improvements unless (i) such Financed Improvements have
satisfactory access to dedicated and completed streets unencumbered by Liens;
(ii) the Applicable Mortgage constitutes a first priority Lien on the Mortgaged
Real Property, the Encumbered Intervals (if applicable), and such Financed
Improvements; and (iii) except as otherwise specifically provided herein to the
contrary, there exists no Lien of any sort, whether prior or inferior, other
than the Lien of the Applicable Mortgage with respect to the Mortgaged Real
Property, Encumbered Intervals, and such Financed Improvements, except for Liens
with respect to which an appropriate bond or other financial assurance that
totally protects Lender's first priority Lien and right, title, and interest in
and to such Mortgaged Real Property, Encumbered Intervals, and Financed
Improvements has been issued, the inchoate Liens for property taxes not yet due
and the exceptions permitted by Lender in the Title Policy. Lender shall also be
under no obligation to make an Advance in respect of the Applicable Underlying
Loan (i) if Lender reasonably determines that construction of the Financed
Improvements cannot be completed in accordance with the Applicable Approved
Construction Schedule; (ii) if Lender is not reasonably satisfied that the
proceeds of the Applicable Underlying Loan remaining undisbursed will be
sufficient to complete all of the Financed Improvements according to the Plans
and to pay for all labor, material, and costs and all other costs and
disbursements required to complete the Financed Improvements, including interest
and other non-construction costs; (iii) if the Applicable Resort has been
materially damaged by fire or other casualty; or (iv) after the Completion Date.
(f) Conditions Precedent to Final Disbursements. The final Advance
of the Loan in connection with an Applicable Underlying Loan shall be disbursed
by Lender only upon Borrower's fulfillment of all of the following conditions
(to the extent applicable):
(i) Evidence of Completion. Receipt by Lender of a certificate
of completion from the Architect or other satisfactory evidence confirming the
completion of the Financed Improvements substantially in accordance with the
Plans and all Applicable Laws and the approval of such completion by the
applicable local governmental authorities. Such certificate or other evidence
shall be duly executed by the General Contractor and the Applicable Underlying
Borrower. In addition, Borrower shall furnish Lender with copies of all
occupancy permits or other permits, the issuance of which by the appropriate
governmental authority is required for the lawful use, occupancy, and operation
of the completed Financed Improvements;
(ii) As-Built Survey. As to the final Advance with respect to
a particular Applicable Underlying Loan, receipt by Lender of three (3) copies
of a satisfactory "as-built" survey prepared by a licensed surveyor satisfactory
to Lender and the Title Insurance Company, in accordance with the Plans and
showing all of the Units and other improvements in place, including, without
limitation, striping of parking areas, a statement as to the number of parking
spaces, and such other matters as Lender shall require. The survey shall be
prepared in accordance with the standards set forth by ALTA/ACSM 1988 Minimum
Survey Requirements, shall be certified to Borrower and the Title Insurance
Company, and shall include a narrative metes and bounds or platted description
of the boundaries of the Land, the area of the Land, and of the
Financed Improvements and the location and dimensions of all easements and
Financed Improvements. The surveyor must include on the survey a signed
statement certifying the existence or a narrative statement certifying the
existence or nonexistence of any encroachment from or onto the Land and must
include the date of the survey and the surveyor's registration number and seal
and such other matters as the Title Insurance Company may require, in form and
substance satisfactory to Borrower, Lender, and the Title Insurance Company;
(iii) Final Release of Lien; General Contractor's Affidavit.
Receipt by Lender (or by the Title Insurance Company, in escrow) of final and
complete releases of Lien executed by the General Contractor and all Material
Subcontractors performing work or supplying materials and paid for by such final
Advance, in form and content acceptable to Lender, together with any and all
additional affidavits of all such parties, sufficient in the opinion of Lender
and Lender's counsel to remove or insure over any and all mechanics' and
materialmen's Liens (inchoate or otherwise) affecting the title to any of the
Mortgaged Real Property, the Encumbered Intervals, or the Financed Improvements,
except for Liens with respect to which an appropriate bond or other financial
assurance that totally protects Lender's first priority Lien and right, title,
and interest in and to such Mortgaged Real Property, Encumbered Intervals, and
Financed Improvements has been issued.
(iv) Certificates Regarding Non-Unit Improvements.
Certificates from the Architect, General Contractor, and Applicable Underlying
Borrower that all Financed Improvements required to be constructed as identified
on the Plans or as set forth in the Applicable Timeshare Documents have been
completed substantially in accordance with the Plans and all Applicable Laws;
(v) As-Built Plans. Two (2) sets of detailed as-built Plans
must be submitted to Lender as soon as they are completed but in no event later
than one (1) month following the issuance of the certificate(s) of occupancy (or
the legal equivalent) with respect to the Financed Improvements by the
applicable governmental authority, which Plans must be approved and identified
as such in writing by the Applicable Underlying Borrower, the Architect, and the
General Contractor and must include Plans for architectural, structural,
mechanical, plumbing, electrical, and all site development (including storm
drainage, utility lines, and landscaping) work;
(vi) Other Evidence. Such other evidence as Lender may
reasonably require in order to establish that the Financed Improvements and
their intended use comply with all applicable zoning and other Applicable Laws;
(vii) Insurance. Insurance coverage has been expanded to
include all forms of insurance reasonably required by Lender in form
satisfactory to Lender; and
(viii) Retainage. All conditions precedent to the release of
any Holdback Balance or retainage in connection with the Construction Contract,
pursuant to the Applicable Underlying Loan Documents, have been fully satisfied.
(ix) Review and Recommendation of Approval by Verification
Agent. Each and every item listed in this Section 4.3(f) has been timely
delivered to Verification Agent by Borrower, and Verification Agent has reviewed
same and provided Lender with its written acknowledgement 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
the final Advance hereunder in respect of the Applicable Underlying Loan.
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 "C" 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, the filing and
recordation of UCC-1 and UCC-3 financing statements in each Applicable
Jurisdiction, and the recordation of the Pledges and Assignments of Notes
Receivable and Applicable Mortgages and other Loan Documents 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 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) 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) To the best of Borrower's knowledge after good faith diligent
inquiry, the makers of the Pledged Notes Receivable have no defenses, offsets,
claims, or counterclaims, relating to the Pledged Notes Receivable or any of the
other Applicable Underlying Loan Documents.
(i) The Applicable Mortgages constitute and will continue to
constitute valid and enforceable first and exclusive Liens and security
interests on the Mortgaged Real Property and the Encumbered Intervals.
(j) 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.
(k) 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.
(l) 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, 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,
including but not limited to all Mortgaged Real Property and Encumbered
Intervals, 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 "L," 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: (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, 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: 59-23462702
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 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. Furthermore, to the best of
Borrower's knowledge after good faith diligent inquiry, all Applicable Resorts
and the improvements (including the Financed Improvements) thereat have been and
will continue to be constructed and operated in compliance with all applicable
zoning requirements, building codes, subdivision ordinances, licensing
requirements, all covenants, conditions, and restrictions of record, and all
other Applicable Laws. Borrower is not aware of any reasons (other than the
completion of all requisite applications therefor in the ordinary course of
business) why all Applicable Underlying Borrowers cannot obtain all necessary
permits, licenses, certificates, franchises, consents, exemptions, orders, and
approvals to develop and operate the Applicable Resorts and construct the
Financed Improvements thereat.
5.17 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
Verification 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. As to the Financed Improvements,
builder's risk insurance with extended coverage (with standard mortgagee clause
in favor of Lender), in an amount and with a company reasonably satisfactory to
Lender, and containing a provision allowing the insured to complete the work
provided for hereunder and covering the building materials on the Financed
Improvements during construction. Upon completion of all construction
activities, such insurance shall convert to, or shall be replaced with, the
above-described fire and extended coverage insurance covering the improvements,
all other property of any nature used for the construction of the Financed
Improvements and any personal property located in or on the Applicable Resort,
in an amount not less than the full replacement value of such Financed
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, shall not permit
co-insurance. All insurance shall specifically cover architect and engineering
fees necessary to repair or replace any insured portion of the Applicable Resort
and shall cover debris removal;
(ii) Public liability and property damage insurance covering
the Applicable Resort in amounts and on terms satisfactory to Lender;
(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; and
(iv) Borrower shall ensure that the Applicable Underlying Loan
Documents require the General Contractor to obtain and keep in full force and
effect insurance policies covering workmen's compensation, contingent liability,
and public liability, naming Lender as an additional insured thereunder and
protecting Borrower, Lender, the Applicable Underlying Borrower, and the General
Contractor against any liability for loss or damage to persons (including death)
or property in any way occurring during the process of the construction of the
Financed Improvements or in any way arising therefrom. The workmen's
compensation insurance shall cover the General Contractor's full statutory
liability as employer without limit, and the contingent liability and public
liability insurance shall be for amounts and with a company satisfactory to
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 steps as may be necessary 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 Mortgaged Real Property and 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 and, in the case of Weekly Allocation Reports, to
Verification Agent, in each case certified in writing by Borrower and Guarantor
as true and correct, the following:
(i) Weekly Allocation Reports. By no later than 10:00 a.m.
Syracuse, New York time each Monday, a report detailing all amounts of every
possible description received by or on behalf of Borrower with respect to each
Applicable Underlying Loan as of 5:00 p.m. Syracuse, New York time on the
immediately preceding Friday during the seven (7) calendar days ending on such
Friday, together with how such amounts were allocated between principal,
interest, and other categories.
(ii) 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 delinquency report on all Pledged Notes
Receivable; (iii) a Borrowing Base report substantially in the form of Exhibit
"M," attached hereto and incorporated herein by this reference; and (iv) monthly
reports from Lockbox Agent as required pursuant to the Lockbox Agreement;
(iii) 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;
(iv) 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;
(v) 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;
(vi) Sales Reports. In connection with any Applicable
Underlying Loan that is secured in part by an Inventory Mortgage, within ten
(10) days after the end of each month and within ninety (90) days after the end
of each Fiscal Year, Borrower shall deliver to Lender, monthly and annually, as
appropriate, a monthly or annual sales report from the Applicable Underlying
Borrower detailing the sales of all Encumbered Intervals for the period covered
thereby, together with all Encumbered Interval sales made by the Applicable
Underlying Borrower that have been canceled during such period. Such reports
shall also indicate the number of Encumbered Intervals that remain subject to
the Inventory Mortgage and the number of Intervals for which partial releases
from the Inventory Mortgage have been recorded during such period and during the
term of the Loan. Such reports shall be certified by the Applicable Underlying
Borrower to be true, correct, and complete and otherwise in a form approved by
Lender;
(vii) 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;
(viii) 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;
(ix) 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;
(x) 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
(xi) 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 and all of the other Collateral, and such files
shall contain true copies of each Pledged Note Receivable, as amended from time
to time, copies of all relevant credit memoranda relating to such Pledged 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 and Custodian
(subject to Section 2.3(c) hereof with respect to Verification Agent);
(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, appraisal fees, lien and judgment search costs, fees of
architects, engineers, environmental consultants, surveyors and any special
consultants, construction inspection fees, brokers fees, escrow fees, wire
transfer fees, and all travel and out-of-pocket expenses of 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 Construction Covenants. Borrower and Guarantor hereby covenant and
agree with Lender as follows:
(a) Construction Contract and Subcontracts. With respect to each
Construction Contract, Borrower shall not: (i) take any action that could result
in a default under the terms of the Construction Contract; (ii) waive any of the
General Contractor's obligations thereunder; (iii) take any action that could
relieve the General Contractor from its obligations to construct the Financed
Improvements according to the Plans; or (iv) consent to any amendment, other
than change orders as may be permitted hereunder and under the Construction
Contract, without Lender's prior written approval. With respect to any
applicable subcontracts, Borrower agrees not to: (1) take any action that could
result in any material default under the terms of the Subcontracts; (2) waive
any subcontractor's material obligations thereunder; (3) take any action that
could relieve any subcontractor of its obligations to construct the Financed
Improvements according to the Plans; or (4) consent to any material amendments,
other than change orders permitted by this Agreement or as Lender may approve in
writing, to any of the subcontracts without Lender's prior written consent.
(b) Application of Applicable Underlying Loan Proceeds. Borrower
shall use its best efforts to ensure that the proceeds of each Applicable
Underlying Loan are used solely for the purposes set forth in the respective
Applicable Underlying Loan Documents and for no other purposes.
(c) Additional Equity. Lender reserves the right to require, at any
time and from time to time, at Borrower's or an Applicable Underlying Borrower's
expense, a construction cost analysis by an expert in the construction cost
field designated by Borrower and approved by Lender (unless an Event of Default
exists hereunder, in which case Lender shall designate such expert and cause
such construction cost analysis to be performed, at Borrower's expense). Any
such construction cost analysis shall be delivered to Lender and Verification
Agent promptly upon its completion. If Lender or Borrower reasonably estimates,
at any time and from time to time, that the amount necessary to assure final
completion of construction of any of the Financed Improvements in accordance
with the Plans and all Applicable Laws, including but not limited to interest
and other soft or non-construction budget items during the term of the Loan,
exceeds the amount of the undisbursed proceeds of the Applicable Underlying Loan
in question plus the total amount of all equity investments made or scheduled to
be made by the Applicable Underlying Borrower with respect to such Financed
Improvements, then the party making such determination shall so notify the other
parties hereto in writing, whereupon Lender shall have the option of requiring
Borrower to direct the Applicable Underlying Borrower (i) to immediately deposit
with Verification Agent, to be held by Verification Agent in a non-interest
bearing, non-escrow account, the amount of any such difference, in cash, which
amount shall be disbursed and applied toward the costs set forth in the
Applicable Approved Construction Budget prior to any further Advance by Lender
in respect of such Applicable Underlying Loan; or (ii) to expend the amount of
any such difference for items included in the Applicable Approved Construction
Budget, with satisfactory evidence of such expenditure being provided to Lender
prior to any Advance by Lender in respect of such Applicable Underlying Loan.
Lender shall be assured at all times, to its complete satisfaction, that the
undisbursed proceeds of each Applicable Underlying Loan are sufficient to
complete the Financed Improvements in accordance with the Plans and all
Applicable Laws, the Applicable Underlying Loan Documents, and all Applicable
Laws. Lender reserves the right of continual verification of adequate equity
investments made by each Applicable Underlying Borrower, to the extent required
hereby. Each such deposit shall be expended before any or any other Applicable
Underlying Loan disbursements or Loan Advances in respect thereof shall be made,
and it shall be advanced as construction progresses.
(d) Commencement and Completion of Construction. Borrower shall take
all reasonable steps to ensure that each Applicable Underlying Borrower
diligently pursues the construction of the Financed Improvements to completion
utilizing good workmanship and quality materials. Quality of construction is of
the essence, and each construction draw shall be subject to verification by
Verification Agent of the satisfactory quality and completion of work in place.
In particular, Borrower shall take all reasonable steps to ensure that each
Applicable Underlying Borrower supplies such sums of money and performs such
duties as may be necessary to complete the construction of the Financed
Improvements pursuant to the Plans and in full compliance with all terms and
conditions of the Applicable Underlying Loan Documents and all Applicable Laws,
all of which shall be accomplished prior to the applicable Completion Date, and
without any Lien, claim, or assessment (actual or contingent) asserted against
all or any portion of the Applicable Resort for any material, labor, or other
items furnished in connection therewith, and all in full compliance with all
applicable construction, use, building, zoning, and other
Applicable Laws. Borrower shall provide to Lender evidence of satisfactory
compliance with all of such requirements upon request therefor by Lender and
shall provide Lender with true and correct copies of all certificates of
occupancy issued by the Applicable Jurisdictions and all other governmental
entities and individuals immediately upon the issuance thereof. Completion of
construction shall include but not be limited to grading, landscaping, adequate
sewer, water, electrical, gas, telephone and other utility facilities, completed
streets, sidewalks, drainage and curbs, both on-site and off-site, public and
private. The construction and development of any building comprising the
Financed Improvements described herein shall be completed in accordance with the
Applicable Approved Construction Schedule. "Substantial Completion" shall be
deemed to have occurred when the Applicable Underlying Borrower has obtained a
certificate of completion issued by the Architect and approved by Lender and
Verification Agent stating that the Financed Improvements are substantially
complete, subject only to a "punch list" designating any minor incomplete work
or other performance remaining to be done under the Construction Contract to
accomplish Completion of the Financed Improvements (hereinafter defined) and
stating the amounts necessary to accomplish Completion of the Financed
Improvements. As used herein, "Completion of the Financed Improvements" shall
mean one hundred percent (100%) finished construction of the Financed
Improvements (not Substantial Completion as defined above) in accordance with
the Plans and all Applicable Laws, certified in writing to Lender by Borrower
and the Architect.
(e) Right of Lender to Inspect Property and Review Plans. Lender and
Verification Agent, at any reasonable time and from time to time, shall be
entitled to enter upon each Applicable Resort and to inspect the Financed
Improvements and all materials to be used in the construction thereof, and
Borrower shall cooperate and use its good faith commercially reasonable efforts
to cause each Applicable Underlying Borrower and each General Contractor to
cooperate with Lender and Verification Agent during such inspections (including
making available to Lender and Verification Agent working copies of the Plans,
together with all related supplementary materials); provided, however, that this
provision shall not be deemed to impose upon Lender any obligation to undertake
such inspections, and further provided that if no Event of Default exists
hereunder, such inspections shall be limited to two (2) times per year in
connection with each Applicable Resort. A licensed architect or engineer
satisfactory to Lender (the "Inspecting Engineer") shall be retained by
Borrower, at Borrower's or each Applicable Underlying Borrower's sole cost and
expense, for the purpose of performing inspections as work progresses,
certifying that each Applicable Underlying Loan draw request is not in excess of
the work completed, less retainage, certifying that the committed and
undisbursed Applicable Underlying Loan proceeds are sufficient to complete the
Financed Improvements, and covering such other matters as Lender shall
reasonably require. Any such inspections shall be for Lender's and Borrower's
sole benefit and shall not be relied upon by Borrower or any other Person. In
accordance
with the provisions hereof, the services to be performed by Verification Agent
shall include but not be limited to (i) a review of the Plans, any and all
construction contracts, any and all other documents in the possession or control
of an Applicable Underlying Borrower or a General Contractor relating to the
construction of Financed Improvements and all proposed changes to them; (ii) a
review of the Inspecting Engineer's written report to Borrower as described
above; (iii) an analysis of the foregoing to ensure conformity of the Financed
Improvements with the approved Plans and all Applicable Laws; and (iv) approval
of requests for Loan Advances in respect of each Applicable Underlying Loan.
(f) Notification of Claims by Subcontractors and Materialmen.
Borrower shall advise Lender promptly in writing if Borrower receives any
notice, written or oral, of any claim filed or asserted by any laborer,
subcontractor, or materialman in connection with any labor or materials
furnished in the construction of the Financed Improvements.
6.3 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 6.3(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 6.3(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 6.3(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) Subordinated Obligations. Pursuant to the Subordination
Agreement, neither Borrower nor Guarantor shall, directly or indirectly: (i)
make or permit any payment to be made in respect of any indebtedness, claims,
rights, liabilities, or obligations, direct or contingent, including, without
limitation, the Subordinated Debt (as defined in the Subordination Agreement) to
any of its shareholders or other Affiliates or their respective successors and
assigns; provided, however, that for so long as no Default or Event of Default
exists with respect to the Senior Obligations (as defined in the Subordination
Agreement) and payment of any such Subordinated Debt would not render either
Borrower or Guarantor insolvent, such Subordinated Debt may be repaid under such
regularly scheduled payment terms as are approved in writing by Lender; (ii)
breach any other term, provision, or condition of the Subordination Agreement.
Notwithstanding the foregoing provisions of this Section 6.3(e) to the contrary
and as provided in the Subordination Agreement, during any period of time in
which Borrower has a minimum of $7,000,000 in liquid assets as reflected in its
most recent financial statements furnished to Lender in accordance with the
provisions hereof, the requisite minimum Subordinated Debt of $23,800,000 may be
reduced by $1.00 for every $2.00 increase in Borrower's net worth (as determined
in accordance with GAAP, without taking into consideration any amounts due
Borrower from Guarantor or any other Affiliate of Borrower) in excess of the
Minimum Net Worth Requirement. Notwithstanding the foregoing
provisions of this Section 6.3(e) to the contrary, the Subordination Agreement
shall terminate and be of no further legal force or effect upon the entry of a
final, non-appealable order by the United States Bankruptcy Court for the
Northern District of New York in the case styled In Re: The ▇▇▇▇▇▇▇ Funding
Group, Inc., et al., Case Nos. 96-61376, 96-61377, 96-61378, and 96-61379,
approving the conversion of all of the Subordinated Debt to common stock in
Guarantor.
(f) 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.
(g) 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.
6.4 Minimum Net Worth Requirement. Borrower agrees to maintain 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 6.3 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 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) Deficiency. If, in Lender's reasonable opinion, the cost of
completing any of the Financed Improvements in accordance with the applicable
Plans exceeds the total amount set forth in the Applicable Approved Construction
Budget and the Applicable Underlying Borrower has failed to make arrangements
satisfactory to Lender, in its sole discretion, for the payment of such
additional costs.
(k) 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. 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.
(l) Abandonment or Cessation of Construction. If construction of the
Financed Improvements at any Applicable Resort, once started, is abandoned or
shall, for any reason, cease and not be resumed within fifteen (15) days
thereafter, unless such cessation is due to any force majeure events, provided
that such force majeure events do not delay construction for so long that the
Financed Improvements reasonably cannot be completed within the time allocated
for the completion thereof as set forth in the Applicable Approved Construction
Schedule.
(m) 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.
(n) 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, any Mortgaged Real Property, 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.
(o) Maximum Weighted Average. If the Maximum Weighted Average has
been exceeded.
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(o) hereof shall not be deemed to exist if within
thirty (30) days following the date as of which Lender notifies Borrower that
the Maximum Weighted Average has been exceeded, one (1) or more Applicable
Underlying Borrowers pay Lockbox Agent, via wire transfer, a sufficient amount
to be applied against the outstanding principal balance of the Applicable
Underlying Loan(s) such that the Maximum Weighted Average 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 an every assignment of an Applicable 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 Applicable 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 terms of the Applicable 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 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. 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, custodian, 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 Verification Agent. 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 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,
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 the Structuring Advisory Fee or any portion thereof actually paid by
Borrower to Lender.
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 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; (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 Verification
Agent (but neither Lender, Servicing Agent, Lockbox Agent, nor
Verification Agent 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, 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 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 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 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 in default and to foreclose each of the
Applicable Mortgages securing the payment thereof, and to enforce any other
remedies available to the holder of such Pledged 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; (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 Verification
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
With a copy to: Midland Loan Services, L.P.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇▇▇▇▇▇▇
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. In particular, Lender makes no representation and assumes no
obligation as to third parties concerning the quality of the construction of the
Financed Improvements by any Applicable Underlying Borrower or the absence
therefrom of defects. In this connection, Borrower agrees to and shall indemnify
Lender from any liability, claim, or loss, together with attorneys' fees and
costs, resulting from the disbursement of Loan proceeds or from the condition of
the Financed Improvements, whether related to the quality of construction or
otherwise, and whether arising during or after the term of the Loan. This
provision shall survive the repayment of the Loan and continue in full force and
effect so long as the possibility of such liability or claim exists.
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 hereunder are fully satisfied, then within a reasonable time
thereafter not to exceed thirty (30) days, Lender shall endorse the Pledged
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 November 14, 1997, by and among Resort Funding, Inc.,
Equivest Finance, Inc., and Credit Suisse First Boston Mortgage Capital LLC,"
and deliver such Pledged Notes Receivable, together with any other nonrecourse
Collateral reassignment documents requested and prepared by Borrower, at
Borrower's sole cost and expense, free and clear of any Liens or encumbrances by
any Person claiming by, through, or under Lender.
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.
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 "K," 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 "N," 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 "K" 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.
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:
WITNESS: RESORT FUNDING, INC., a
Delaware corporation
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By:
------------------------------------ Its:
Printed Name
LENDER:
CREDIT SUISSE FIRST BOSTON MORTGAGE
CAPITAL LLC, a Delaware limited
WITNESS: liability company
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By:
------------------------------------ Its:
Printed Name
GUARANTOR:
EQUIVEST FINANCE, INC, a
WITNESS: Florida corporation
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By:
------------------------------------ Its:
Printed Name