Exhibit 10.7
LOAN AND SECURITY AGREEMENT
between
ALL SEASONS RESORTS, INC., as Borrower
and
CONTITRADE SERVICES L.L.C., as Lender
dated as of July 13, 1995
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS
1.1 Certain Defined Terms............................................... 1
1.2 Accounting Terms.................................................... 9
1.3 Other Definitional Provisions....................................... 9
ARTICLE II
REPRESENTATIONS, WARRANTIES AND COVENANTS
2.1 Representations and Warranties Relating to Borrower................ 10
A. Formation, Powers and Good Standing............................ 10
B. Authorization of Borrowing..................................... 10
C. Financial Condition............................................ 11
D. Material Adverse Changes....................................... 11
E. Title to Properties; Liens..................................... 11
F. Litigation; Adverse Facts...................................... 12
G. Payment of Taxes............................................... 12
H. Other Agreements, Performance.................................. 12
I. Governmental Regulation........................................ 13
J. Borrower's Securities Activities............................... 13
K. Employee Benefit Plans......................................... 13
L. Disclosure..................................................... 13
M. Compliance with State Law...................................... 00
X. Xxxxx of Business.............................................. 14
2.2 Borrower's Representations and Warranties as to Mortgage Loans..... 14
ARTICLE III
BORROWING AND REPAYMENTS; NOTE
3.1 Commitment Letter.................................................. 21
3.2 Certifications; Advances........................................... 21
A. Certifications................................................. 21
B. Advances....................................................... 21
3.3 Note; Interest..................................................... 22
A. Note........................................................... 22
B. Rate of Interest............................................... 22
C. Interest Payments.............................................. 22
D. Default Interest............................................... 00
X. Xxxxxxxxxxx of Interest........................................ 22
3.4 Prepayments and Payments........................................... 22
A. Monthly Payment of Principal................................... 22
B. Repayment...................................................... 23
C. Manner and Time of Payment..................................... 23
D. Payments on Non-Business Days.................................. 23
E. Prepayment..................................................... 23
A. Distributions............................................. 23
B. Payments Credited to Borrower............................. 24
ARTICLE IV
CONDITIONS TO THE ADVANCES
4.1 Conditions to the Effective Date and to the Initial Advance... 25
4.2 Conditions to All Advances.................................... 26
ARTICLE V
SECURITY
5.1 Grant of Security Interest.................................... 28
5.2 Lockbox Account............................................... 28
5.3 Lender Appointed Attorney-in-Fact............................. 29
5.4 Security for Obligations...................................... 29
5.5 Substitute Mortgage Loans..................................... 29
5.6 Original Mortgage Note........................................ 30
ARTICLE VI
COVENANTS OF BORROWER
6.1 Financial Statements and Other Reports........................ 31
6.2 Existence, Franchises......................................... 33
6.3 Payment of Taxes and Claims................................... 33
6.4 Inspection.................................................... 34
6.5 Compliance with Laws.......................................... 34
6.6 Restriction on Fundamental Changes; Non-Competition........... 34
6.7 Financial Covenants........................................... 34
A. Tangible Net Worth........................................ 34
B. Indebtedness Ratio........................................ 35
6.8 Notice of Change in Organizational Documents.................. 35
6.9 Further Assurances............................................ 35
6.10 Use of Proceeds............................................... 35
6.11 Independence of Covenants..................................... 35
6.12 Servicing of the Mortgage Loans............................... 35
6.13 Mortgage Payments Received by Borrower........................ 36
6.14 Events of Default............................................. 37
6.15 Dividends; Bonuses............................................ 37
6.16 No Liens...................................................... 37
ARTICLE VII
EVENTS OF DEFAULT
7.1 Events of Default............................................. 38
A. Failure to Make Payments When Due.......................... 38
B. Default in Other Agreements................................ 38
C. Breach of Covenants........................................ 38
D. Breach of Warranty......................................... 38
E. Other Defaults............................................. 39
F. Involuntary Bankruptcy, Appointment of Receiver........... 39
G. Voluntary Bankruptcy, Appointment of Receiver............. 39
H. Judgments and Attachments................................. 39
I. Dissolution............................................... 40
J. Failure of Security Interest.............................. 40
K. Material Change........................................... 40
7.2 Application of Proceeds....................................... 42
ARTICLE VIII
MISCELLANEOUS
8.1 Expenses...................................................... 44
8.2 Indemnity by Borrower......................................... 44
A. Indemnification by Borrower............................... 44
B. Claims.................................................... 45
8.3 Amendments and Waivers........................................ 45
8.4 Notices....................................................... 45
8.5 Attorneys' Fees............................................... 45
8.6 Survival of Warranties and Certain Agreements................. 46
A. Agreement................................................. 46
B. Termination............................................... 46
8.7 Failure or Indulgence Not Waiver; Remedies Cumulative......... 46
8.8 Severability.................................................. 46
8.9 Headings...................................................... 46
8.10 Applicable Law................................................ 46
8.11 Successors and Assigns: Subsequent Holders of Note............ 46
8.12 Counterparts; Effectiveness................................... 47
EXHIBITS
Exhibit A Form of Compliance Certificate
Exhibit B Form of Promissory Note
Exhibit C Form of Lender's Incumbency Certificate
Exhibit D Borrower's Officer's Certificates
Exhibit E Form of Mortgage and Mortgage Note
Exhibit F Borrower's Wire Instructions
Exhibit G Litigation Matters
Exhibit H Borrower's Underwriting Guidelines
Exhibit I Form of Servicing Report
Schedule A Affiliates of Borrower
LOAN AND SECURITY AGREEMENT
This LOAN AND SECURITY AGREEMENT (the "Agreement") is dated as of the date
set forth on the cover page hereof between ALL SEASONS RESORTS, INC., an Arizona
corporation ("Borrower") and CONTITRADE SERVICES L.L.C., a Delaware limited
liability company ("Lender").
RECITALS
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A. Borrower desires to finance originations and purchases of certain
mortgage loans, each secured by an interest in real property at one of the
Resorts (each, the "Timeshare Estate"). Lender desires to provide financing to
Borrower to enable Borrower to finance the originations and purchases of such
timeshare mortgage loans.
B. The timeshare mortgage loans pledged by Borrower to Lender shall be
held by LaSalle National Trust, N.A. ("Custodian").
NOW, THEREFORE, in consideration of the above Recitals and for other good
and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the parties hereto hereby agree as follows:
AGREEMENT
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ARTICLE I
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DEFINITIONS
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1.1 Certain Defined Terms.
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The following terms used in this Agreement shall have the following
meanings:
"Advance" means an amount, not less than $150,000, advanced by Lender to
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Borrower pursuant to Section 3.2.B.
"Advance Date" means the date of an Advance, which date shall be two
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Business Days after Lender's receipt of Borrower's request for an Advance. No
more than one Advance Date shall occur in any week.
"Advance Maturity Date" means July 13, 1996, as such date may be extended
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by Lender in its sole discretion by notice to be delivered to Borrower not later
than sixty (60) days prior to such date.
"Affiliate" means a Person (i) which directly or indirectly through one or
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more intermediaries controls, or is controlled by, or is under common control
with, Borrower or Lender; or (ii) five percent or more of the voting stock or
equity interest of which is beneficially owned or held by Borrower or Lender.
"Agreement" means this Loan and Security Agreement dated as of the date set
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forth on the cover page hereof, as it may from time to time be supplemented,
modified or amended.
"Business Day" means any day other than (a) a Saturday, Sunday or other day
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on which banks located in the City of New York, New York are authorized or
obligated by law or executive order to be closed, or (b) any day on which Lender
is closed for business.
"Capital Lease" means, as applied to any Person, any lease of any property
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(whether real, personal or mixed) by that Person as lessee which would, in
conformity with GAAP, be required to be accounted for as a capital lease on a
balance sheet of that Person (i.e.; not an operating lease in conformity with
GAAP).
"Code" means the Internal Revenue Code of 1986, as amended.
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"Collateral" means any Mortgage Loans, including, without limitation, the
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contractual right to service such Mortgage Loans and any subservicing agreement
with respect to such Mortgage Loans, whose pledge by Borrower to Lender is
accepted by Lender, in Lender's sole discretion, and all proceeds thereof.
"Collection Account" means the account created, maintained and denominated
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as such pursuant to the Custodial Agreement.
"Collection Period" means, with respect to each Distribution Date, the
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preceding calendar month until the Note shall be paid in full.
"Commitment Letter" means the letter agreement between ContiFinancial
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Services Corporation and Borrower dated as of the date hereof, as the same may
be amended or supplemented from time to time.
"Compliance Certificate" means a certificate substantially in the form of
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Exhibit A hereto delivered to Lender by Borrower pursuant to subsection (iii) of
Section 6.1.
"Contingent Obligation" means, as applied to any Person, any contingent or
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indirect liability of that Person with respect to any Indebtedness, lease,
dividend, letter of credit or other obligation of another, including, without
limitation, any such obligation guaranteed, endorsed (otherwise than for
collection or deposit in the ordinary course of business), co-made or discounted
or sold with recourse by that Person, or in respect of which that Person is
otherwise liable, including, without limitation, any such obligation for which
that Person is in effect liable through any agreement (contingent or otherwise)
to purchase, repurchase or otherwise acquire such obligation or any security
therefor, or to provide funds for the payment or discharge of such obligation
(whether in the form of loans, advances, stock purchases, capital contributions
or otherwise), or to maintain the solvency or any balance sheet item, level of
income or other financial condition of the obliger of such obligation, or to
make payment for any products, materials or supplies or for any transportation,
services or lease regardless of the non-delivery or non-furnishing thereof, in
any such case if the purpose or intent of such agreement is to provide assurance
that such obligation will be paid or discharged, or that any agreements relating
thereto will be complied with, or that the holders of such obligation will be
protected (in whole or in part) against loss in respect thereof. The amount of
any Contingent Obligation shall be equal to the amount of the obligation so
guaranteed or otherwise supported.
"Contractual Obligation" means, as applied to any Person, a provision of
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any agreement issued by that Person or of any indenture, mortgage, deed of
trust, contract, undertaking, agreement or other instrument to which that Person
is a party or by which it is or any of its properties is bound or to which it or
any of its properties is subject.
"Custody Agreement" means the Custody Agreement dated as of the date hereof
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among Lender, Borrower and Custodian, as may be amended from time to time.
"Current Principal Amount" means, with respect to any Distribution Date,
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other than the Advance Maturity Date, and the related Collection Period, an
amount equal to the sum of:
(i) the aggregate of the respective portions of Monthly P&I allocable
to principal actually collected from Mortgagors during such Collection
Period, and
(ii) the aggregate of the respective portions of Prepayments allocable
to principal of the related Mortgage Loans received during such Collection
Period.
On the Advance Maturity Date, the Current Principal Amount shall be an amount
equal to the outstanding Principal Amount of the Note.
"Defective Mortgage Loan" has the meaning set forth in Section 5.5 hereof.
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"Distribution Date" means the 15th day of each calendar month or, if such
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date is not a Business Day, the next succeeding Business Day, until the Note is
paid in full.
"Documents" means this Agreement, the Guaranty, the Custody Agreement, the
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Pledge Agreement, the Subservicing Agreement and the Commitment Letter.
"Dollar" means lawful currency of the United States of America.
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"Effective Date" means the date on or after which all the conditions set
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forth in Section 4.1 have been met and this Agreement becomes effective.
"Eligible Account" means an account that is either (i) maintained with a
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depository institution or trust company the long-term unsecured debt obligations
of which have credit ratings from a nationally recognized statistical rating
organization of the equivalent of "AA" or better, or which is the principal
subsidiary of a holding company the long-term unsecured debt obligations of
which are so rated or (ii) maintained with a depository institution or trust
company the commercial paper or other short-term debt obligations of which have
credit ratings from a nationally recognized statistical rating organization at
least equal to the equivalent of "A-1" or "P-1" or which is the principal
subsidiary of a holding company the commercial paper or other short-term debt
obligations of which are so rated; provided, however, that so long as an account
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is a trust account maintained with the Custodian, such account is deemed to be
an Eligible Account.
"Employee Benefit Plan" means any pension plan, any employee welfare
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benefit plan, or any other employee benefit plan which is described in Section
3(3) of ERISA and is maintained for employees of Borrower or any ERISA
Affiliate.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
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amended from time to time, and any successor statute.
"ERISA Affiliate" means, as applied to any Person, any trade or business
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(whether or not incorporated) which is a member of a group of which that Person
is a member and is under common control within the meaning of the regulations
promulgated under Section 414 of the Internal Revenue Code of 1986.
"Event of Default" means any of the events set forth in Section 7.1 hereof.
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"GAAP" means generally accepted accounting principles set forth in the
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opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as may be approved by a significant segment of the accounting
profession, which are applicable to the circumstances as of the date of
determination consistently applied.
"Guaranty" means any of the separate Guaranties, dated as of the date
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hereof, executed by Xxxx Xxxxxx and his wife, Xxxxxx Xxxxxx, Xxxx Xxxxxxx and
AVCOM International, Inc. in favor of Lender, as may be amended from time to
time.
"Indebtedness" means, total liabilities in accordance with GAAP.
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"LIBOR" means, as of 11:00 a.m. London time on any date of determination,
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the London interbank offered rate for one-month United States dollar deposits as
indicated on Telerate page 3750. If LIBOR cannot be so determined, then LIBOR
shall mean the rate so quoted on such date and time by the Union Bank of
Switzerland.
"Lien" means any lien, mortgage, pledge, security interest, charge or
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encumbrance of any kind (including any conditional sale or other title retention
agreement, any lease in the nature thereof, and any agreement to give any
security interest).
"Lockbox Account" means the segregated account maintained on behalf of
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Lender in accordance with Section 5.2A hereof.
"Lockbox Bank" means a depository institution named by Borrower and
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acceptable to Lender.
"Margin Stock" has the meaning assigned to that term in Regulation X of the
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Board of Governors of the Federal Reserve System as in effect from time to time.
"Monthly P&I" means, with respect to any Mortgage Loan and any Collection
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Period, the payment of principal and interest due in such Collection Period
pursuant to the related Mortgage Note, determined after giving effect to any
Prepayment with respect to such Mortgage Loan made prior to such Collection
Period.
"Mortgage" means an original mortgage, deed of trust or other instrument
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creating a first lien on the Mortgaged Property securing a Mortgage Loan.
"Mortgage Documents" means, with respect to each Mortgage Loan and each
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Mortgagor, the documents listed in clauses (a) through (f) of Section 1.1 of the
Custody Agreement.
"Mortgage Loan" means, as of any date of determination, each loan evidenced
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by a Mortgage Note and secured by a Mortgage referenced on the Mortgage Loan
Schedule which has been pledged by Borrower to Lender and originated in
conformity with the Underwriting Guidelines, or has been substituted under
Section 5.5, and has not been released by the Custodian under the terms of the
Custody Agreement.
"Mortgage Loan Documents" means, with respect to each Mortgage Loan and
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each Mortgagor, (i) the related Mortgage Documents, (ii) the original related
credit application, if any and (iii) the original related truth-in-lending
disclosure statement executed by such Mortgagor.
"Mortgage Loan Schedule" means the schedule of Mortgage Loans required by
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Section 1.1 of the Custody Agreement.
"Mortgage Note" means the original note or other instrument of indebtedness
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evidencing a Mortgage Loan.
"Mortgaged Property" means the Timeshare Estate which secures a Mortgage
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Loan.
"Mortgagor" means, collectively, the obligor or obligers on a Mortgage
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Note.
"Note" means the promissory note executed by Borrower in favor of Lender
----
pursuant to Section 3.3 hereof and substantially in the form of Exhibit B
hereto.
"Obligations" means all obligations of every nature of Borrower from time
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to time owed to Lender under this Agreement.
"Officer's Certificate" means a certificate executed on behalf of any
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entity by its Chief Executive Officer, President, Executive Vice President,
Senior Vice President or Portfolio Manager (each, an "Authorized
Representative").
"Outstanding" means the amount of an Advance outstanding and payable to the
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Lender at any time.
"Outstanding Principal Balance" means, as of any date of determination,
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with respect to any Mortgage Loan, the amount set forth as the Outstanding
Principal Balance of such Mortgage Loan on the Mortgage Loan Schedule, and
thereafter as reduced by the amount of principal payments made by the related
Mortgagor prior to such date of determination.
"Permitted Encumbrances" means, as to any Mortgaged Property, those liens
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and encumbrances set forth in the related title insurance policy, which liens
and encumbrances are limited to (a) the lien of current real property taxes and
assessments not yet due and payable, (b) covenants, conditions and restrictions,
rights of way, easements and other matters of public record as of the date of
recording of the related Deed of Trust acceptable to mortgage lending
institutions in the area in which the Resort is located, (c) the liens of the
appropriate timeshare association and (d) such other matters to which Timeshare
Estates are commonly subject and which do not individually or in the aggregate,
materially interfere with the benefits of the security intended to be provided
by the related Deed of Trust.
"Permitted Investments" means, with respect to the investment of amounts on
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deposit in the Lockbox Account or the Collection Account, any one or more of the
following obligations or securities, provided such investment may not mature
later than the next succeeding Distribution Date:
(a) direct obligations of, and obligations fully guaranteed as to
timely payment by, the United States of America or any agency or instrumentality
of the United States of America the obligations of which are backed by the full
faith and credit of the United States of America;
(b) demand and time deposits in, certificates of deposit of, bankers'
acceptances issued by, or federal funds sold by, any depository institution or
trust company (including the Trustee) incorporated under the laws of the United
States of America or any State thereof and subject to supervision and
examination by Federal and/or State banking authorities, so long as at the time
of such investment or contractual commitment providing for such investment (i)
the long-term unsecured debt obligations of such depository institution or trust
company (or, in the case of a depository institution that is the principal
subsidiary of a holding company, the long-term unsecured debt obligations of
such holding company) have credit ratings at least equal to "A" or an equivalent
rating by a nationally recognized statistical rating organization or (ii) the
commercial paper or other short-term debt obligations of such depository
institution or trust company (or, in the case of a depository institution that
is the principal subsidiary of a holding company, the short-term unsecured debt
obligations of such holding company) have credit ratings at least equal to the
equivalent of "A-1" or "P-1" or an equivalent rating by a nationally recognized
statistical rating organization;
(c) taxable money market mutual funds with assets under management of
at least $500,000,000 that (i) maintain a constant share price of $1 per share
net asset value and (ii) are rated in the highest applicable rating category for
money market mutual funds by a nationally recognized statistical rating
organization.
"Person" means and includes natural persons, corporations, limited
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partnerships, general partnerships, joint stock companies, limited liability
companies, joint ventures, associations, companies, trusts, banks, trust
companies, land trusts, business trusts or other organizations, whether or not
legal entities, and governments and agencies and political subdivisions thereof.
"Pledge Agreement" means the Pledge Agreement dated as of the date hereof
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among Lender and Xxxxxx Investment Company, L.L.C., as may be amended from time
to time.
"Potential Event of Default" means a condition or event which, after notice
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or lapse of time or both, would constitute an Event of Default if that condition
or event were not cured or removed within any applicable grace or cure period.
"Prepayment" means, with respect to any Mortgage Loan, any of the
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following: (i) payment by the Mortgagor of the Outstanding Principal Balance
plus all accrued interest with respect to such Mortgage Loan in advance of its
maturity date, (ii) payment by Borrower to Lender of the principal balance of
such Mortgage Loan pursuant to Section 5.5 or (iii) any partial prepayment of
principal received from the relevant Mortgagor.
"Resorts" means the respective land, buildings and appurtenant rights of
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Villas at Poco Diablo, Villas of Sedona, Sedona Springs Resort, Sedona Summit
Resort, Sedona Golf and Tennis, Scottsdale Villa Mirage Resort, Tahoe Beach and
Ski Club and St. Augustine Beach Club, each as created by a declaration of
condominium or similar document recorded in the public records of the county in
which such resort is located, or such other resort as Lender may approve, from
time to time, in its own discretion.
"Servicer Report Date" means the tenth day of each month in which a
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Distribution Date occurs; provided, however, that, if such tenth day is not a
Business Day, the Servicer Report Date shall be the Business Day next preceding
such tenth day.
"Servicing Report" means the servicing report provided by Borrower to
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Lender pursuant to Section 6.12(c) hereof, a form of which is attached hereto as
Exhibit I.
"Subservicer" means Concord Servicing, Inc. or such other subservicer
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appointed pursuant to the Subservicing Agreement.
"Subservicing Agreement" means the Subservicing Agreement dated the date
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hereof between Borrower and Subservicer.
"Substitute Mortgage Loan" means one or more Mortgage Loans substituted for
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one or more Defective Mortgage Loans under Section 5.5 having as of the time of
substitution an aggregate Outstanding Principal Balance equal to or greater than
the aggregate Outstanding Principal Balance of the Mortgage Loans for which they
are being substituted, and (b) otherwise satisfying the requirements of Section
2.2.
"Tangible Net Worth" means, as of any date of determination, total
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stockholders' equity, including but not limited to, the sum of the paid-in
capital, retained earnings, and capital stock minus intangibles and treasury
stock of Borrower, all as determined in accordance with GAAP.
"Underwriting Guidelines" means Borrower's underwriting and origination
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criteria as set forth in Exhibit H hereto.
1.2 Accounting Terms.
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For purposes of this Agreement, all accounting terms not otherwise defined
herein shall have the meanings assigned to them in conformity with GAAP.
1.3 Other Definitional Provisions.
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References to "Sections" and "Subsections" shall be to Sections and
Subsections, respectively, of this Agreement unless otherwise specifically
provided. Any of the terms defined in Section 1.1 may, unless the context
otherwise requires, be used in the singular or the plural depending on the
reference.
ARTICLE II
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REPRESENTATIONS, WARRANTIES AND COVENANTS
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2.1 Representations and Warranties Relating to Borrower. Borrower
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represents, warrants to and covenants with Lender at the time of execution of
this Agreement and at the time any Advance is made to Borrower from Lender that:
A. Formation, Powers and Good Standing.
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(i) Formation and Powers. Borrower is duly organized, validly existing
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and in good standing under the laws of the state of Arizona and has all
requisite power and authority to own and operate its properties, to carry on its
business as now conducted and proposed to be conducted, and the Borrower has all
requisite power and authority to enter into the Documents, to issue the Note and
to carry out the transactions contemplated hereby and thereby.
(ii) Good Standing. Borrower is in good standing wherever necessary to
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carry on its business and operations, except in jurisdictions in which the
failure to be in good standing has and will have no material adverse effect on
the business, operations, properties, assets, condition (financial or otherwise)
or prospects of Borrower.
B. Authorization of Borrowing.
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(i) Authorization of Borrowing. The execution, delivery and
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performance of the Documents, and the issuance, delivery and payment of the
Note, and the consummation of the transactions contemplated hereby and thereby,
have been duly authorized by all necessary action by Borrower.
(ii) No Conflict. The execution, delivery and performance by Borrower
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of the Documents and the issuance, delivery and payment of the Note, and the
consummation of the transactions contemplated hereby and thereby, do not and
will not (a) violate any provision of law applicable to Borrower, the Articles
of Incorporation or Bylaws of Borrower (the "Organizational Documents"), or any
order, judgment or decree of any court or other agency of government binding on
Borrower, (b) conflict with, result in a breach of or constitute (with due
notice or lapse of time or both) a default under any Contractual Obligation of
Borrower, (c) result in or require the creation or imposition of any Lien,
charge or encumbrance of any nature whatsoever upon any of its properties or
assets except the Lien in favor of Lender pursuant to Section 5.1, or (d)
require any approval or consent of any Person under any Contractual Obligation
of Borrower other than approvals or consents which have been obtained and
disclosed in writing to Lender.
(iii) Governmental Consents. The execution, delivery and performance
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by Borrower of the Documents and the issuance, delivery and payment of the Note,
and the consummation of the transactions contemplated hereby and thereby, do not
and will not require any registration with, consent or approval of, or notice
to, or other action to, with or by, any Federal, state or other governmental
authority or regulatory body or other Person except those that have been
obtained and disclosed in writing to Lender.
(iv) Binding Obligation. This Agreement is, and the Note when executed
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and delivered hereunder will be, the legally valid and binding obligations of
Borrower, enforceable against it in accordance with their respective terms,
except as enforcement may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws or equitable principles relating to or limiting
creditors' rights generally.
C. Financial Condition. Borrower has heretofore delivered to Lender
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financial statements prepared in accordance with Section 6.1 hereof for the
fiscal year ended December 31, 1994.
D. Material Adverse Changes. Since December 31, 1994, there has been
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no materially adverse change, either in any case or in the aggregate, in the
business, operations, properties, assets, condition (financial or otherwise) or
prospects of Borrower.
E. Title to Properties; Liens. Borrower has good, sufficient,
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marketable and legal title to all the properties and assets reflected in the
balance sheet dated December 31, 1994, referred to in subsection C of Section
2.1 (including all Collateral pledged pursuant to this Agreement and all assets
held by Borrower on the date hereof but acquired subsequent to the date of such
balance sheet), except for assets disposed of in the ordinary course of
business. The pledge and assignment of the Collateral pursuant to this Agreement
creates a valid security interest in the Collateral and the Lien on the
Collateral created by this Agreement will be at the time of delivery of the
Collateral to the Lender a first priority Lien thereon, superior to all other
Liens. Except for the due filing of any financing statement with respect to the
Collateral (and except for delivery to Lender of any Collateral as to which
possession is the only method of perfecting a security interest in such
Collateral), no further action need be taken in order to establish and perfect
the security interest of Lender in all the Collateral.
F. Litigation; Adverse Facts. There is no material action, other than
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those matters set forth on Exhibit G hereto, suit, proceeding or arbitration
(whether or not purportedly on behalf of Borrower) at law or in equity or before
or by any Federal, state, municipal or other governmental department,
commission, board, bureau, agency or instrumentality, domestic or foreign,
pending or, to the knowledge of Borrower, threatened against or affecting
Borrower, or any of its properties, or any proposed tax assessment and there is
no basis known to Borrower for any action, suit or proceeding which would have
such an effect. Borrower is not (i) in violation of any applicable law which
violation materially adversely affects or may materially adversely affect the
business, operations, properties, assets, condition (financial or otherwise) or
prospects of Borrower, or (ii) subject to or in default with respect to any
final judgment, writ, injunction, decree, rule or regulation of any court or
Federal, state, municipal or other governmental department, commission, board,
bureau, agency or instrumentality, domestic or foreign, which would have a
material adverse effect on the business, operations, properties, assets,
condition (financial or otherwise) or prospects of Borrower. There is no action,
suit, proceeding or investigation pending or, to the knowledge of Borrower,
threatened against or affecting Borrower which questions the validity or the
enforceability of this Agreement or the Note.
G. Payment of Taxes. Borrower and each Guarantor has filed, or has
----------------
properly filed for an extension of, all tax returns that are required to be
filed by Borrower, and all taxes, assessments, fees and other governmental
charges upon Borrower as set forth in such returns and upon its properties and
assets which are due and payable have been paid when due and payable, except to
the extent permitted by Section 6.3.
H. Other Agreements, Performance.
-----------------------------
(i) Agreements. Borrower is not, and at the Effective Date will not
----------
be, a party to or subject to any Contractual Obligation or charter or other
internal restriction materially adversely affecting the business, properties,
assets, operations, condition (financial or otherwise) or prospects of Borrower.
(ii) Performance. Borrower is not, and at the Effective Date will not
-----------
be, in default in the performance, observance or fulfillment of any of the
obligations, covenants or conditions contained in any Contractual Obligation of
Borrower, and no condition exists which, with the giving of notice or the lapse
of time or both, would constitute such a default, except where the consequences,
direct or indirect, of such default or defaults, if any, would not have a
material adverse effect on the business, properties, assets, operations,
condition (financial or otherwise), or prospects of Borrower. To the best
knowledge of Borrower, the other parties to each Contractual Obligation of
Borrower are not in default thereunder, except where the consequences, direct or
indirect, of such default or defaults, if any, would not have a material adverse
effect on the business, properties, assets, operations, condition (financial or
otherwise) or prospects of Borrower.
I. Governmental Regulation. Borrower is not, and at the Effective
-----------------------
Date will not be, subject to regulation under the Investment Company Act of 1940
or to any Federal or state statute or regulation limiting its ability to incur
Indebtedness.
J. Borrower's Securities Activities. Borrower is not, and at the
--------------------------------
Effective Date will not be, engaged in the business of extending credit for the
purpose of purchasing or carrying any Margin Stock. Neither Borrower nor any
agent acting on its behalf has taken any action which might cause this Agreement
or the Note to violate Regulation X or any other regulation of the Board of
Governors of the Federal Reserve System as in effect now or as may hereafter be
in effect on the date of any Advance.
K. Employee Benefit Plans. Borrower is in compliance in all material
----------------------
respects with all applicable provisions of ERISA and the Code, as amended and
the regulations and published interpretations thereunder with respect to all
Employee Benefit Plans.
L. Disclosure. No representation or warranty of Borrower contained
----------
in this Agreement or any other document, certificate or written statement
furnished to Lender by or on behalf of Borrower for use in connection with the
transactions contemplated by the Documents contains any untrue statement of a
material fact or omits to state a material fact (known to Borrower in the case
of any document not furnished by it) necessary in order to make the statements
contained herein or therein not misleading. There is no fact known to Borrower
(other than matters of a general economic nature) which materially adversely
affects the business, operations, property, assets, condition (financial or
otherwise) or prospects of Borrower, which has not been disclosed herein or in
such other documents, certificates and statements furnished to Lender for use in
connection with the transactions contemplated hereby.
M. Compliance with State Law. Borrower is in compliance with the
-------------------------
laws, regulations and rules of each State of the United States of America, and
with any other jurisdiction which may be applicable to Borrower, to the extent
necessary to ensure the enforceability of the Collateral. Borrower has obtained
all permits and licenses necessary to carry on its business and operations.
N. Place of Business. Borrower's principal place of business and
-----------------
chief executive office is, and for the past one (1) year, has been, located at
000 Xxxxxxx 000, Xxxxxx, Arizona.
2.2 Borrower's Representations and Warranties as to Mortgage Loans.
--------------------------------------------------------------
Borrower hereby represents and warrants to Lender with respect to each
Mortgage Loan, at the time of execution of this Agreement and at the time each
Advance is made to Borrower from Lender that:
A. All Federal, state and local laws, rules and regulations,
including, without limitation, those relating to usury, truth-in-lending,
real estate settlement procedure (except as noted in counsel's opinion
letter and subject to Lender's satisfaction), land sales, the offer and
sale of securities, consumer credit protection and equal credit opportunity
or disclosure, applicable to such Mortgage Loan or the sale of the
Timeshare Estate securing such Mortgage Loan have been complied with in all
material respects.
B. The Timeshare Estate mortgaged by each Mortgagor constitutes a fee
interest in real property at one of the Resorts. The related Mortgage has
been duly filed and recorded with all appropriate governmental authorities
in all jurisdictions in which such Mortgage is required to be filed and
recorded to create a valid, binding and enforceable first Lien on the
related Mortgaged Property and such Mortgage creates a valid, binding and
enforceable first Lien on the related Mortgaged Property, subject only to
Permitted Encumbrances; and Borrower, to the extent applicable, is in
compliance with any Permitted Encumbrances respecting the right to the use
of such Mortgaged Property. Each of the assignments of such related
Mortgage and each related endorsement of the related Mortgage Note
constitutes a duly executed, legal, valid, binding and enforceable
assignment or endorsement, as the case may be, of such related Mortgage and
related Mortgage Note, and all monies due or to become due thereunder, and
all proceeds thereof.
C. Immediately prior to the pledge to Lender of a Mortgage Loan,
Borrower will own full legal and equitable title to such Mortgage Loan,
free and clear of any Lien or participation or ownership interest in favor
of any other Person.
D. Each of the related Assignment, related Mortgage, related Mortgage
Note and each other related Mortgage Loan Document is genuine and is the
legal, valid and binding obligation of the maker thereof, enforceable in
accordance with its terms (except as such enforceability may be limited by
bankruptcy, insolvency, reorganization, or other similar laws affecting the
enforcement of creditors' rights in general and by general principles of
equity, regardless of whether such enforceability shall be considered in a
proceeding in equity or at law), and, to the best of Borrower's knowledge,
is not subject to any dispute, right of rescission, setoff, abatement,
diminution, recoupment, counterclaim or defense of any kind.
E. All parties to the related Mortgage and the related Mortgage Note
had legal capacity to enter into such Mortgage Loan and to execute and
deliver such related Mortgage and related Mortgage Note, and such related
Mortgage and related Mortgage Note have been duly and properly executed by
such parties. No amendments to such related Mortgage, related Mortgage Note
or any other related Mortgage Loan Document were required as a result of
any mergers involving Borrower or, to the best of its knowledge, its
predecessors, to maintain the rights of Borrower or its predecessors
thereunder as a mortgagee.
F. At the time Borrower made such Mortgage Loan to the related
Mortgagor, Borrower had full power and authority to originate such Mortgage
Loan and the Mortgagor had good and marketable fee simple title to the
Mortgaged Property securing such Mortgage Loan, free and clear of all
Liens, except for Permitted Encumbrances.
G. The related Mortgage contains customary and enforceable provisions
so as to render the rights and remedies of the holder thereof adequate for
the realization against the related Mortgaged Property of the benefits of
the security interests intended to be provided thereby, including (a) if
the Mortgage is a deed of trust, by trustee's sale,
including power of sale and/or (b) otherwise by judicial foreclosure or
power of sale. There is no exemption available to the related Mortgagor
which would interfere with the mortgagee's right to sell at a trustee's
sale or power of sale or right to foreclose such related Mortgage.
H. The related Mortgage Note is not and has not been secured by any
collateral except the Lien of the related Mortgage.
I. Such Mortgage Loan is covered by a lender's title insurance policy
issued by a title insurer qualified to do business in the jurisdiction
where the related Mortgaged Property is located in a form generally
acceptable to prudent originators of similar mortgage loans, insuring
Borrower or its predecessor and its successors and assigns, as to the first
priority mortgage Lien of the related Mortgage in an amount equal to the
original principal balance of such Mortgage Loan. Borrower or its assign is
the sole named insured of such lender's title insurance policy. Such
lender's title insurance policy is in full force and effect. No claims have
been made under such lender's title insurance policy, and, to the best of
Borrower's knowledge, no prior holder of such Mortgage Loan has done or
omitted to do anything which would impair the coverage of such lender's
title insurance policy. Full premiums for such lender's title insurance
policy, endorsements or all special endorsements have been paid.
J. Borrower has not taken (or omitted to take), and has no notice
that the related Mortgagor has taken (or omitted to take), any action that
would impair or invalidate the coverage provided by any hazard, title or
other insurance policy relating to such Mortgage Loan or the related
Mortgaged Property.
K. The related Mortgage Note evidences a fully amortizing debt
obligation which bears a fixed rate of interest and provides for level
monthly payments of principal and interest. The related Mortgage Note is
payable in Dollars. Interest is calculated on a simple interest basis on
the basis of a 365-day year.
L. The maximum original term of the related Mortgage Note is less
than or equal to ten years.
M. No Mortgage Note is 59 or more days delinquent in respect of any
payment of principal or interest as of the date of any Advance.
N. All applicable intangible taxes and documentary stamp taxes were
paid as to the related Mortgage Note and the related Mortgage.
O. The proceeds of each Mortgage Loan have been fully disbursed,
there is no obligation to make future advances or to lend additional funds
under the originator's commitment or the documents and instruments
evidencing or securing the Mortgage Loan and no such advances or loans have
been made since the origination of the Mortgage Loan.
P. The terms of each Mortgage and Mortgage Note have not been
impaired, waived, altered or modified in any respect, except by written
instruments which are part of the related Mortgage Documents. No other
instrument has been executed or agreed to which would effect any such
impairment, waiver, alteration or modification. No Mortgagor has been
released from liability on or with respect to any Mortgage Loan, in whole
or in part, except in such cases where such release would not materially
and adversely affect the mortgagee's security for the related Mortgage
Loan, and any such release is reflected by a written instrument which is a
part of the related Mortgage Documents. If required by law or prudent
originators of similar mortgage loans in the jurisdiction where the related
Mortgaged Property is located, all waivers, alterations and modifications
have been filed and/or recorded in all places necessary to perfect,
maintain and continue a valid first priority lien of the Mortgage subject
only to Permitted Encumbrances.
Q. Each Mortgage Loan is principally and directly secured by an
interest in real property.
R. Except as approved in writing by Lender, each Mortgage Loan was
originated by Borrower in the normal course of its business. Each Mortgage
Loan originated by Borrower was underwritten in accordance with the
Underwriting Guidelines. The origination, servicing and collection
practices used by Borrower and its Affiliates with respect to each Mortgage
Loan have been in all respects, legal, proper, prudent and customary.
S. The related Mortgage is assignable to and by the mortgagee without
the consent of any other Person (including any condominium association or
timeshare association), and there are no other restrictions on resale
thereof.
T. The related Mortgage is and will be prior to any Lien on, or other
interests relating to, the related timeshare estate.
U. The related Mortgagor is not an Affiliate of Borrower.
V. There are no delinquent or unpaid taxes, ground rents, water
charges, sewer rents, assessments outstanding with respect to any of the
Mortgaged Properties, nor any other outstanding Liens or charges affecting
the Mortgaged Properties that would result in the imposition of a Lien on
the Mortgaged Property affecting the Lien of the Mortgage or otherwise
materially affecting the interests of Lender in the related Mortgage Loans.
W. The Mortgaged Properties and the project in which the Mortgaged
Properties are located are free of material damage and waste and are in
good repair and fully operational. There is no proceeding pending or
threatened for the total or partial condemnation of or affecting the
Mortgaged Property or taking of the Mortgaged Properties by eminent domain.
To the best of Borrower's knowledge, the Mortgaged
Properties and the project in which the Mortgaged Properties are located
are lawfully used and occupied under applicable law by the owner thereof.
X. The portions of the project in which the Mortgaged Properties are
located which represent the common facilities are free of material damage
and waste and are in good repair and condition, ordinary wear and tear
excepted.
Y. To the best of Borrower's knowledge, there has been no default,
breach, violation or event of acceleration existing under any Mortgage, the
related Mortgage Note or any other document or instrument evidencing,
guaranteeing, insuring or otherwise securing the Mortgage Loan, and no
event which, with the lapse of time or with notice and the expiration of
any grace or cure period, would constitute a material default, breach,
violation or event of acceleration thereunder; and Borrower has not waived
any such material default, breach, violation or event of acceleration under
the Mortgage, the Mortgage Note or any other related document.
Z. Neither the Mortgagor nor any other Person has the right, by
statute, contract or otherwise, to seek the partition of the Mortgaged
Property.
AA. No Mortgage Loan has been satisfied, canceled, rescinded or
subordinated, in whole or in part; no portion of the Mortgaged Property has
been released from the lien of the Mortgage, in whole or in part; no
instrument has been executed that would effect any such satisfaction,
cancellation, rescission, subordination or release. The terms of the
Mortgage do not provide for a release of any portion of the Mortgaged
Property from the lien of the Mortgage except upon the payment of the
Mortgage Loan in full.
AB. To the best of Borrower's knowledge, each party which has had an
interest in the Mortgage is (or, during the period in which such party held
and disposed of such interest, was) in compliance with any and all
applicable filing, licensing and "doing business" requirements of the laws
of the state wherein the Mortgaged Property is located to the extent
necessary to permit Borrower to maintain or defend actions or proceedings
with respect to the Mortgage Loan in all appropriate forums in such state
without any further act on the part of any such party.
AC. To the best of Borrower's knowledge, there is no current
obligation on the part of any other person to make payments on behalf of
the Mortgagor in respect of the Mortgage Loan, except for any persons who
may have purchased the related Mortgaged Property subject to the Mortgage
but in connection with which purchase no assumption agreement is included
in the related Custodian's Mortgage File (as such term is defined in the
Custody Agreement).
AD. The related Mortgage and related Mortgage Note are substantially
in the respective forms set forth as Exhibit E hereto.
---------
AE. The entry with respect to such Mortgage Loan as set forth on the
Mortgage Loan Schedule is true and correct as of the date hereof.
AF. The timeshare association relating to the Resort in which the
Mortgaged Property is located was duly organized and, to the best of
Borrower's knowledge, is validly existing. RPM Management, Inc. ("Manager")
manages such Resort and performs services for the timeshare association,
pursuant to an agreement between Manager and the respective timeshare
association, such contract being in full force and effect. A true and
correct copy of the management agreement between Manager and the timeshare
association has been furnished to Lender. Manager and the timeshare
association have performed in all material respects all obligations under
such agreement and are not in default under such agreement.
AG. The Resort in which the Mortgaged Property is located is insured
through the timeshare association, in the event of fire or other casualty
for the full replacement value thereof, and in the event that the Mortgaged
Property should suffer any loss covered by casualty or other insurance,
upon receipt of any insurance proceeds, the timeshare association is
required, during the time such Mortgaged Property is covered by such
insurance, under the applicable governing instruments either to repair or
rebuild the portions of the project in which the Mortgaged Property is
located or to pay such proceeds to the holders of any Mortgage secured by a
timeshare estate in the portions of the project in which the Mortgaged
Property is located.
AH. The related Mortgage or deed of trust is and will be prior to any
Lien other than Permitted Encumbrances.
AI. The related Mortgage or deed of trust gives the mortgagee the
right to receive and direct the application of insurance and condemnation
proceeds received in respect of the Mortgaged Property, except where the
related timeshare declarations or applicable state law provide that
insurance and condemnation proceeds be applied to restoration of the
improvements.
AJ. No mortgagor is a Person that is affiliated with the Guarantor,
the Borrower, the Subservicer, or any of their respective Affiliates.
ARTICLE III
-----------
BORROWING AND REPAYMENTS; NOTE
------------------------------
3.1 Commitment Letter. Concurrent with the execution of this Agreement,
-----------------
Borrower and Lender have entered into the Commitment Letter. In any direct
conflict between this Agreement and the Commitment Letter, this Agreement shall
prevail.
3.2 Certifications; Advances.
------------------------
A. Certifications. On each date that Lender makes an Advance to
--------------
Borrower, Borrower shall be deemed to certify that (i) the representations and
warranties of Borrower contained herein are accurate and complete in all
material respects to the same extent as though made on and as of the date of
such Advance; (ii) no Event of Default or Potential Event of Default has
occurred and is continuing hereunder or will result from the proposed borrowing;
(iii) Borrower has delivered or will cause to be delivered to Lender all
documents required to be delivered to Lender pursuant to this Agreement; and
(iv) Borrower has performed in all respects all agreements and satisfied all
conditions hereunder provided to be performed or satisfied by it on or before
the date of such Advance.
B. Advances. On each Advance Date, if all conditions set forth in
--------
Section 4.2 of this Agreement have been satisfied, Lender shall make an Advance
to Borrower by causing an amount of immediately available funds equal to the
amount of the proposed Advance (which amount shall not be greater than 90% of
the Outstanding Principal Balance of the Mortgage Loans to be pledged as
Collateral for such Advance) to be paid in accordance with Borrower's wire
instructions set forth on Exhibit F hereto. If the Commitment Letter is in
effect and Borrower satisfies all the conditions of Section 4.2 of this
Agreement after 11:00 a.m., New York City time, on a Business Day, Lender shall
use its best efforts to make an Advance to Borrower not later than 4:30 p.m.,
New York City time, on the next succeeding Business Day, but in no event later
than 4:30 p.m., New York City time, on the second succeeding Business Day. If
the Commitment Letter is not in effect, Lender will have no obligation to make
an Advance to Borrower even if Borrower has satisfied all the conditions set
forth in Section 4.2. Lender will send, via facsimile transmission, a copy of
the schedule attached to the Note updated to reflect such Advance and the
applicable rate of interest. To the extent that an Advance is made by Lender to
Borrower on the Interest Maturity Date of a prior Advance, Lender shall
calculate the net amount payable and shall send Borrower a confirmation
detailing Lender's calculation and setting forth the net amount to be received
or paid by Borrower including, without limitation, amounts payable under the
Note.
3.3 Note; Interest.
--------------
A. Note.
----
(i) Borrower shall execute and deliver to Lender, not later than the
Effective Date, the Note.
(ii) Upon repayment in full of all amounts due and payable under the
Note, Lender shall promptly cancel the Note and return the cancelled Note to
Borrower.
B. Rate of Interest. Subject to subsection D of this Section 3.3, each
----------------
Advance shall bear interest on the unpaid principal amount thereof from the date
made through maturity (whether by acceleration or otherwise) at a rate per annum
calculated on each Interest Maturity Date, of each month, equal to one month
LIBOR plus 300 basis points.
C. Interest Payments. Subject to subsection D of Section 3.3, interest
-----------------
shall be payable on each Advance on the related Distribution Date and on the
Advance Maturity Date.
D. Default Interest. If any amount due hereunder is not paid when due or
----------------
within any applicable grace period (whether at stated maturity, by notice of
prepayment, by acceleration or otherwise) to the extent permitted by applicable
law, such amount shall thereafter bear interest payable on demand at a default
interest rate of one month LIBOR plus 500 basis points.
E. Computation of Interest. Interest on each Advance shall be computed on
-----------------------
the basis of a 360-day year and the actual number of days elapsed in the period
during which it accrues on the principal balance of the loan outstanding. In
computing interest on each Advance, the date of the making of such Advance shall
be included and the date of payment shall be excluded.
3.4 Prepayments and Payments.
------------------------
A. Monthly Payment of Principal. On each Distribution Date, Borrower
----------------------------
shall pay to Lender the Current Principal Amount due with respect to such
Distribution Date.
B. Repayment. Borrower shall repay the entire Outstanding amount of each
---------
Advance on any of (i) the Advance Maturity Date, (ii) ninety (90) days after the
Advance Maturity Date or (iii) a date, after the Advance Maturity Date but prior
to ninety (90) days after the Advance Maturity Date, provided Borrower has
notified Lender of such date not less than five (5) days prior to the such date.
C. Manner and Time of Payment. All payments of principal, interest and
--------------------------
any fees hereunder and under the Note shall be made in immediately available
funds and delivered to Lender for its own account, not later than 2:00 p.m., New
York City time (for any payments to be received from Custodian), and 3:30 p.m.,
New York City time (for any payments to be received from Borrower), on a
Business Day; funds received by Lender after that time shall be deemed to have
been paid by Borrower on the next succeeding Business Day.
D. Payments on Non-Business Days. Whenever any payment to be made
-----------------------------
hereunder or under the Note shall be stated to be due on a day which is not a
Business Day, such payment shall be made on the next succeeding Business Day and
such extension of time shall be included in the computation of the payment of
interest hereunder or under the Note.
E. Prepayment. Except as set forth in this Section 3.4 or in connection
----------
with a securitization transaction, which shall have been consented to in writing
by Lender prior to the effectiveness thereto, Borrower shall not prepay any
portion of the principal balance of the Note.
3.5 Distributions made by Custodian.
-------------------------------
A. Distributions. On each Distribution Date the Custodian shall
-------------
distribute, pursuant to the Custody Agreement, all amounts in the Collection
Account (including any income from Permitted Investments) on such Distribution
Date, in the following order of priority:
first, to the payment to Lender of any accrued but unpaid interest,
-----
with respect to prior Distribution Dates;
second, to the payment to Lender of interest currently due on the
------
Note;
third, to the payment to Lender of the Current Principal Amount;
-----
fourth, to the payment to itself of the custodial fee due pursuant to
------
the Custody Agreement;
fifth, to the payment to Subservicer of any subservicing fee due
-----
pursuant to the Subservicing Agreement; and
sixth, to the payment to Borrower of the remainder, if any, of the
-----
amount in the Collection Account for such Distribution Date.
B. Payments Credited to Borrower. To the extent distributions are
-----------------------------
received by Lender pursuant to this Section 3.5, such amounts will be credited
to amounts due to Lender from Borrower under the Note and Sections 3.3 and 3.4
hereof.
ARTICLE IV
----------
CONDITIONS TO THE ADVANCES
--------------------------
The obligation of Lender to make or maintain each Advance hereunder is
subject to the satisfaction of all of the following conditions:
4.1 Conditions to the Effective Date and to the Initial Advance. The
-----------------------------------------------------------
obligation of Lender to make or maintain any Advance on or after the Effective
Date is, in addition to the conditions precedent specified in Section 4.2,
subject to prior or concurrent satisfaction of the following conditions:
A. On or before the Effective Date, Borrower shall deliver to Lender:
(i) a resolution of its Board of Directors approving and authorizing
the execution, delivery and performance of the Documents and approving and
authorizing the execution, delivery and payment of the Note;
(ii) an Officer's Certificate substantially in the form of Exhibit C;
(iii) executed copies of the Documents and the executed Note relating
to the Advance with appropriate insertions and such opinions of counsel and
Officer's Certificates as reasonably required by Lender's counsel with respect
to the Documents.
(iv) such executed financing statement as Lender may require for
filing pursuant to the Uniform Commercial Code;
(v) the initial Collateral; and
(vi) one Business Day prior to the Effective Date, a form of Servicing
Report.
B. Lender and its counsel shall have received the favorable written
opinion of counsel to Borrower, substantially in the form of Exhibit D,
satisfactory to Lender and its counsel, dated as of the Effective Date.
C. Borrower shall have performed all agreements which the Documents
provide shall be performed on or before the Effective Date except for the
requirement in Section 2.1.C. to provide the balance sheet and the related
statements of income, shareholders' equity and statement of cash flows for the
period ended March 31, 1995, which statements shall be provided no later than
three (3) weeks after the Effective Date.
D. All actions and documents required to create and perfect the
Lender's first priority security interest and Liens in the Collateral shall have
been duly authorized and executed and delivered or taken and all filings with
governmental agencies shall have been made or taken and completed.
E. Lender shall have received written instructions from Borrower in
the form of Exhibit F hereto.
F. Lender shall have received the initial $45,000 installment of its
$225,000 commitment fee (the "Commitment Fee"), in immediately available funds,
which fee, if not previously paid, shall be netted out of the initial Advance.
The remainder of such Commitment Fee shall be paid by Borrower monthly in four
equal monthly installments of $45,000, on or prior to the later of the date of
the first Advance or the fifteenth day of each month, beginning in August 1995,
until the Commitment Fee has been paid in full.
G. Lender and Concord Servicing, Inc. shall have entered into the
Subservicing Agreement.
H. Borrower or Subservicer shall have established the Lockbox
Account.
I. Custodian shall have established the Collection Account.
4.2 Conditions to All Advances. The obligation of Lender to make any
--------------------------
Advance is subject to the following further conditions precedent:
A. At and as of each Advance Date:
(i) the representations and warranties of Borrower contained herein
shall be accurate and complete to the same extent as though made on and as of
that date;
(ii) no event shall have occurred and be continuing or would result
from the consummation of the proposed Advance which would constitute an Event of
Default or a Potential Event of Default;
(iii) Borrower shall have performed all agreements and satisfied all
conditions which the Documents provide shall be performed by it on or before
such date (including the payment of each monthly installment of the Commitment
Fee, which, if not previously paid, shall be netted out of the first Advance to
be made in the month such installment is due);
(iv) no order, judgment or decree of any court, arbitrator or
governmental authority shall purport to enjoin or restrain Lender from making
that Advance;
(v) there shall not be pending or, to the knowledge of Borrower
threatened, any action, suit, proceeding, governmental investigation or
arbitration against or affecting Borrower or any property of Borrower, which has
not been disclosed by Borrower to Lender in writing prior to the execution of
this Agreement or prior to the making of the last preceding Advance, and there
shall have occurred no development not disclosed by Borrower to Lender in
writing prior to the execution of this Agreement or prior to the making of the
last preceding Advance in any such action, suit, proceeding, governmental
investigation or arbitration so disclosed, which, in either event, in the
opinion of Lender, would reasonably be expected to (a) materially and adversely
affect the business, operations, properties, assets, condition (financial or
otherwise) or prospects of Borrower, or (b) impair the ability of Borrower to
perform the Obligations or of Lender to enforce the Obligations;
(vi) Lender shall have received a request for Advance specifying the
amount of such Advance.
ARTICLE V
---------
SECURITY
--------
5.1 Grant of Security Interest. To secure the payment of the
--------------------------
Advances and the performance of the other Obligations, Borrower pledges and
hypothecates to Lender and grants a continuing lien on and a first priority
security interest in favor of Lender, in all of Borrower's right, title and
interest in and to the Collateral.
5.2 Lockbox Account.
---------------
A. Prior to the Effective Date, the Borrower shall open and maintain
or cause Subservicer to open and maintain, a trust account denominated "Lockbox
Account -- LaSalle National Trust, N.A., as Custodian for ContiTrade Services
L.L.C.". The Lockbox Account shall at all times be an Eligible Account, shall
relate solely to the Mortgage Loans and Permitted Investments and Custodian and
Lender shall have the exclusive right to withdraw funds therefrom pursuant to
the terms of Custody Agreement.
B. Borrower shall (and shall direct Subservicer to) use its best
efforts to cause Mortgagors to make all payments on the Mortgage Loans, whether
by check or by direct debit of the Mortgagor's bank account, to be made directly
to the Lockbox Bank. Borrower shall (and shall direct Subservicer to) use its
best efforts to cause any Lockbox Bank to deposit all payments on the Mortgage
Loans in the Lockbox Account no later than the Business Day after receipt.
C. Prior to the Effective Date, Borrower shall (and shall direct
Subservicer to) notify each Mortgagor that makes its payments on the Mortgage
Loans by check to make such payments thereafter directly to the Lockbox Bank
(except in the case of Mortgagors that have already been making such payments to
the Lockbox Bank), and shall have provided each such
Mortgagor with remittance advices in order to enable such Mortgagors to make
such payments directly to the Lockbox Bank for deposit into the Lockbox Account,
and Borrower will continue (or direct Subservicer to continue), not less than
often than every three months, to so notify those Mortgagors who have failed to
make payments to the Lockbox Bank.
D. The Lockbox Bank shall invest all or a portion of the amounts in
the Lockbox Account in obligations or securities of the type set forth in
paragraph (c) of the definition of Permitted Investments.
E. On or prior to the effective date, Borrower shall (or shall direct
Subservicer to) issue irrevocable instructions to the Lockbox Bank to wire all
amounts in the Lockbox Account to the Collection Account no less than weekly.
5.3 Lender Appointed Attorney-in-Fact. Upon the occurrence of and
---------------------------------
during the continuance of an Event of Default, Borrower appoints Lender, as
Borrower's attorney-in-fact, with full power of substitution, for the purpose of
taking such action and executing such documents, in the name of Borrower or
otherwise, as Lender may deem necessary or advisable to accomplish the purposes
of this Agreement, which appointment is coupled with an interest and is
irrevocable. Lender agrees promptly to notify Borrower after any such action or
execution of instruments, provided that the failure to give such notice shall
not affect the validity of such action or execution of instruments.
5.4 Security for Obligations. This Agreement shall create a
------------------------
continuing security interest in the Collateral and shall (i) remain in full
force and effect until payment in full of all Obligations, (ii) be binding upon
Borrower, its successors and assigns, and (iii) inure to the benefit of Lender
and its successors, transferees and assigns. Upon the payment in full of the
Obligations, Borrower shall be entitled to the return, upon its request and at
its expense, of such of the Collateral as shall not have been sold or otherwise
applied pursuant to the terms hereof.
5.5 Substitute Mortgage Loans. If, while the Commitment Letter is in
-------------------------
effect, a Mortgage Loan shall fail to comply with the representations and
warranties set forth in Section 2.2 or shall become 90 or more days delinquent
in respect of any payment of principal or interest or if Custodian does not
receive an original Mortgage Note with respect to a Mortgage Loan pursuant to
Section 5.6 hereof (each, a "Defective Mortgage Loan"), Borrower shall, within
five (5) Business Days from the date each such Mortgage Loan became a Defective
Mortgage Loan, either (i) immediately prepay to Lender under the Note (in
immediately available funds) an amount equal to 90% of the Outstanding Principal
Balance of the related Mortgage Note plus interest at the rate specified in
Section 3.3 hereof on the principal amount being repaid from the date of the
Advance relating to such Mortgage Loan or the most recent Interest Maturity Date
(whichever is later) to the date of such prepayment or (ii) pledge to Lender, in
substitution for such Defective Mortgage Loan, a Substitute Mortgage Loan. A
substitution of a Mortgage Loan shall be effective upon the receipt by Lender of
a Trust Receipt from the Custodian pursuant to the terms of the Custody
Agreement.
5.6 Original Mortgage Note. If, pursuant to the Custody Agreement,
----------------------
Custodian does not receive an original Mortgage Note from Escrow Agent (as
defined in the Custody
Agreement), Lender shall promptly give Borrower written notice thereof and
Borrower shall have five (5) Business Days to provide Custodian with such
original Mortgage Note. If such Mortgage Note is not so provided, the related
Mortgage Loan shall become a Defective Mortgage Loan.
ARTICLE VI
----------
COVENANTS OF BORROWER
---------------------
Borrower covenants and agrees that until the payment in full of all
Obligations, unless Lender shall otherwise give prior written consent, Borrower
will perform all covenants in this Article VI.
6.1 Financial Statements and Other Reports. Borrower and AVCOM
--------------------------------------
International, Inc. ("Parent") will maintain a system of accounting established
and administered in accordance with sound business practices to permit
preparation of financial statements in conformity with GAAP. Borrower will
deliver, or cause to be delivered, to Lender the following:
(i) as soon as practicable and in any event within ninety (90) days
after the end of the first three calendar quarters of each fiscal year of Parent
ending December 31, (a) a consolidated balance sheet of Parent and its
subsidiaries as at the end of such period and the related statements of income,
shareholder's equity and statement of cash flows of Parent and its subsidiaries
for such quarter and for the period from the beginning of the current fiscal
year to the end of such quarter, setting forth in each case in comparative form
the figures for the corresponding periods of the previous fiscal year, all in
reasonable detail and certified by the authorized representative of Parent that
they fairly present the financial condition and results of operations of Parent
and its subsidiaries, subject to changes resulting from audit and normal year-
end adjustments as at the end of and for the period covered thereby and (b) a
financial statement of Borrower and its consolidated subsidiaries, containing
the information required in clause (a), but which may be unaudited;
(ii) as soon as practicable and in any event within one hundred twenty
(120) days after the end of each fiscal year of Parent, (a) a consolidated
balance sheet of Parent and its subsidiaries as at the end of such fiscal year
and the related statements of income, shareholder's equity and statement of cash
flows of Parent and its subsidiaries for such fiscal year, setting forth in each
case in comparative form the figures for the previous year, all in reasonable
detail and audited by independent certified public accountants of recognized
national standing selected by Parent and satisfactory to Lender, stating in
writing that such financial statements present fairly the financial position of
Parent and its subsidiaries as at the dates indicated and the results of its
operations and statement of cash flows for the periods indicated in conformity
with GAAP applied on a basis consistent with prior years (except as otherwise
stated therein) and that the examination by such accountants in connection with
such financial statements has been made in accordance with generally accepted
auditing standards, provided, that each such financial statement shall include a
footnote thereto containing an unconsolidated financial statement of Parent and
(b) a financial statement of Borrower and its consolidated subsidiaries,
containing the information required in clause (a), but which may be unaudited.
As
of the date hereof, Ernst & Young, L.L.P. is an independent certified public
accountant that is acceptable
(iii) (a) together with each delivery of financial statements
pursuant to subdivisions (i) and (ii) above, a Compliance Certificate, (I)
stating that the signers of the Compliance Certificate have reviewed the terms
of this Agreement and the Note and have made, or caused to be made under their
supervision, a review in reasonable detail of the transactions and condition of
Parent and its subsidiaries during the accounting period covered by such
financial statements and that such review has not disclosed the existence during
or at the end of such accounting period, and that the signers do not have
knowledge of the existence as of the date of the Compliance Certificate, of any
condition or event which constitutes an Event of Default or Potential Event of
Default, or, if any such condition or event existed or exists, specifying the
nature and period of existence thereof and what action Borrower has taken, is
taking and proposes to take with respect thereto and (II) demonstrating in
reasonable detail compliance during and at the end of such accounting period
with the restrictions contained in Section 6.7 and (b) together with each
delivery of financial statements pursuant to subdivision (ii) above, a letter
from Parent's independent certified public accountants stating that such
accountants do not have knowledge of the existence as of the date of such letter
of any condition or event which constitutes an Event of Default or Potential
Event of Default, or, if any such condition or event existed or exists,
specifying the nature and period of existence thereof;
(iv) copies of all filings made by Borrower and/or Guarantor to the
Securities and Exchange Commission (the "SEC") at the same time as delivered to
the SEC;
(v) copies of any press releases issued by Borrower or any Affiliate
at the same time as such releases are released to the press;
(vi) promptly upon any officer or director of Borrower obtaining
knowledge (a) of any condition or event which constitutes an Event of Default or
Potential Event of Default, (b) that any Person has given any notice to Borrower
or taken any other action with respect to a claimed default or event or
condition of the type referred to in subsection B of Section 7.1, or (c) of the
institution of any litigation involving an alleged liability of Borrower equal
to or greater than $50,000, or any adverse determination in any litigation
involving a potential liability of Borrower equal to or greater than $50,000, or
any adverse determination in any litigation which would materially adversely
affect the business, operations, properties, assets, condition (financial or
otherwise) or prospects or the validity or enforceability of this Agreement or
Borrower's ability to perform the Obligations, an Officers' Certificate
specifying the nature and period of existence of any such condition or event, or
specifying the notice given or action taken by such holder or Person and the
nature of such claimed default, Event of Default, Potential Event of Default,
event or condition, and what action Borrower has taken, is taking and proposes
to take with respect thereto; and
(vii) together with each delivery of financial statements pursuant to
subdivisions (i) and (ii) above, a letter from an officer of Parent stating that
Borrower is a wholly-owned subsidiary of Parent; that all other subsidiaries
included in Parent's consolidated financial statements are subsidiaries of
Borrower; that Parent is a non-operating holding company, whose
only asset is its investment in Borrower and Borrower's subsidiaries; and
stating the assets, liabilities (contingent or otherwise) and net worth of
Parent.
6.2 Existence; Franchises. Borrower will at all times preserve and
---------------------
keep in full force and effect its existence and all rights, licenses and
franchises material to its business.
6.3 Payment of Taxes and Claims. Borrower will pay all taxes,
---------------------------
assessments and other governmental charges imposed upon it or any of its
properties or assets before any penalty or interest accrues thereon, and all
claims (including, without limitation, claims for labor, services, materials and
supplies) for sums which have become due and payable and which by law have or
may become a Lien upon any of its properties or assets, prior to the time when
any penalty or fine shall be incurred with respect thereto; provided that no
such charge or claim need be paid if being contested in good faith by
appropriate proceedings promptly instituted and diligently conducted and if such
reserve or other appropriate provision, if any, as shall be required in
conformity with GAAP shall have been made therefor.
6.4 Inspection. Borrower will permit any authorized representatives
----------
of Lender to visit and inspect any of the properties of Borrower including its
financial and accounting records, and to make copies and take extracts
therefrom, and to discuss its affairs, finances, prospects and accounts with
authorized representatives of the Borrower and, with the permission of Borrower
(which may not be unreasonably withheld), its independent public accountants,
all upon reasonable notice and at such reasonable times during normal business
hours and as often as may be reasonably requested; provided that no permission
of Borrower shall be required in order to discuss Borrower's affairs, finances,
prospects and accounts during an Event of Default or Potential Event of Default.
6.5 Compliance with Laws. Borrower will exercise all due diligence
--------------------
in order to comply with the requirements of all applicable laws, rules,
regulations and orders of any governmental authority, noncompliance with which
would materially adversely affect the business, properties, assets, operation,
prospects or condition (financial or otherwise) of Borrower.
6.6 Restriction on Fundamental Changes; Non-Competition.
---------------------------------------------------
A. Neither Borrower nor Parent will enter into any transaction of
merger or consolidation, or liquidate, wind up or dissolve itself (or suffer any
liquidation or dissolution), or, except in the ordinary course of business,
convey, sell, lease, transfer or otherwise dispose of, in one transaction or a
series of transactions, all or any substantial part of its business, property or
assets, whether now owned or hereafter acquired, or acquire by purchase or
otherwise all or substantially all the business, property or fixed assets of, or
stock or other evidence of beneficial ownership of, any Person, nor shall
Borrower or any of its direct or indirect affiliates or any Guarantor engage in
any business, without the prior written consent of Lender, other than the
business of marketing, management and financing of Timeshare Estates; management
of timeshare resorts; the purchase and sale of timeshare mortgage loans; and the
acquisition, master planning, improvement, construction, remodeling, marketing
and management of: timeshare and other resort properties, including facilities
for golf, tennis, health
clubs and other resort-related amenities; residential sub-divisions and planned
residential communities; and incidental commercial office and retail properties
related to such resorts or residential developments.
B. Without the prior written consent of Lender, none of the
Guarantors shall directly or indirectly as an officer, director, more-than-5-
percent stockholder, employee, partner, proprietor or consultant engage in any
business that competes with the businesses of Borrower set forth in the prior
paragraph.
6.7 Financial Covenants.
-------------------
A. Tangible Net Worth. Borrower will not permit its Tangible Net
------------------
Worth at any time to be less than $3,000,000.
B. Indebtedness Ratio. Borrower will not permit the ratio of its
------------------
total liabilities (as calculated in accordance with GAAP) to Tangible Net Worth
(as calculated in accordance with GAAP) to equal or exceed 15 to 1.
6.8 Notice of Change in Organizational Documents. Borrower shall
--------------------------------------------
notify Lender of any anticipated change in the provisions of Borrower's
Organizational Documents.
6.9 Further Assurances. Borrower shall, at Borrower's expense, do
------------------
all such further acts, and execute, acknowledge and deliver all such further
documents as Lender reasonably shall require to more fully or effectively carry
out the intention or facilitate the performance of the Documents.
6.10 Use of Proceeds. Borrower shall use the proceeds of the
---------------
Advances (i) to pay off any existing Indebtedness; (ii) to purchase Mortgage
Loans; (iii) to repay amounts due hereunder; and (iv) for general corporate
purposes. No part of the proceeds of the Advance made hereunder will be used for
"purchasing" or "carrying" Margin Stock or for any purpose which violates, or
would be inconsistent with, the provisions of the Regulations of the Board of
Governors of the Federal Reserve System.
6.11 Independence of Covenants. All covenants in any of the
-------------------------
Documents shall be given independent effect so that if a particular action or
condition is not permitted by any of such covenants, the fact that it would be
permitted by an exception to, or be otherwise within the limitations of, another
covenant shall not avoid the occurrence of an Event of Default or Potential
Event of Default if such action is taken or condition exists.
6.12 Servicing of the Mortgage Loans.
-------------------------------
A. Borrower shall service and administer the Mortgage Loan with the
same degree of skill and care that Borrower exercises with respect to mortgage
loans similar to the Mortgage Loans owned and/or serviced by the Borrower for
its own account, but in no event lower than in accordance with prudent mortgage
loan servicing standards and procedures generally accepted
in the mortgage banking industry, provided that Borrower shall at all times
comply with applicable law.
B. (i) In connection with its servicing of the Mortgage Loans,
Borrower shall enter into one or more Subservicing Agreements with a Subservicer
to assist Borrower in the performance of its duties under the Documents.
References in this Agreement to actions taken or to be taken by Borrower in
servicing the Mortgage Loans include actions taken or to be taken by a
Subservicer on behalf of Borrower. Any Subservicing Agreement will be upon such
terms and conditions as Borrower and Lender may reasonably agree and as are not
inconsistent with the Documents. The Servicer shall be solely responsible for
any subservicing fees and the Subservicing Agreement shall provide that in no
event shall Subservicer seek compensation or reimbursement for performance of
its obligations under any Subservicing Agreement from Lender and that
Subservicer shall have no lien on, and shall not attempt to place a lien on any
of the Mortgage Loans or any files or other documents obtained by Subservicer
relating to the Mortgage Loans or any proceeds of any of the foregoing to secure
payment of its fees.
(ii) Borrower shall be entitled to terminate any Subservicing
Agreement that may exist in accordance with the terms and conditions of such
Subservicing Agreement and with the consent of Lender; provided, however, that
-------- -------
in the event of the termination of any Subservicing Agreement by Borrower or the
related Subservicer, Borrower shall enter into a Subservicing Agreement with a
successor subservicer acceptable to Lender in writing.
(iii) Notwithstanding any Subservicing Agreement, or any of the
provisions of this Agreement, Borrower shall remain obligated and liable for the
servicing and administering of the Mortgage Loans in accordance with the
provisions of this Agreement without diminution of such obligation or liability
by virtue of such Subservicing Agreement and to the same extent and under the
same terms and conditions as if Borrower alone were servicing and administering
the Mortgage Loans.
C. On each Servicer Report Date, the Borrower will deliver or cause
the Subservicer to deliver the Servicing Report to Lender and Custodian. The
Servicing Report shall be completed with the information specified therein for
the related Collection Period, shall contain updated information as to the
Mortgage Loans and shall contain such other information as may be reasonably
requested by Lender. Each such Servicing Report shall be accompanied by an
Officer's Certificate certifying the accuracy of the computations reflected in
such Servicing Report. Lender shall have five (5) days to review each Servicing
Report and give Borrower notice of any errors in writing. Borrower shall have
one (1) Business Day to correct any errors set forth in such notice.
6.13 Mortgage Payments Received by Borrower. Borrower shall remit
--------------------------------------
all payments by or on behalf of the Mortgagors received directly by Borrower to
the Lockbox Bank, without deposit into any intervening account and as soon as
practicable, but in no event later than the Business Day after receipt thereof.
6.14 Events of Default. Borrower shall immediately notify Lender if
-----------------
Borrower learns of the occurrence of an Event of Default hereunder.
6.15 Dividends; Bonuses. Neither Borrower nor any of its direct or
------------------
indirect subsidiaries shall, without the prior written consent of Lender, (i)
pay any cash dividend to its respective shareholders, (ii) pay cash bonuses to
any officer or director in excess of $250,000, or (iii) make any loans or
advances to, investments in, or guaranties of any obligations of, any Person,
except in the ordinary course of Borrower's business.
6.16 No Liens. Borrower shall not permit any Liens to be placed on
--------
any of its assets or properties, other than (i) liens placed on furniture,
fixtures and equipment arising in the ordinary course of business, (ii) liens
granted to lenders to secure loans to finance the acquisition of real property
or the construction of or improvements on real property, in each case to the
extent Borrower is permitted to engage in such activities pursuant to Section
6.6 hereof, (iii) receivables financings arising in the ordinary course of
business and (iv) as otherwise permitted in writing by Lender.
ARTICLE VII
------------
EVENTS OF DEFAULT
-----------------
7.1 Events of Default. If any of the following conditions or events
-----------------
("Events of Default") shall occur:
A. Failure to Make Payments When Due. Failure to (i) pay the
---------------------------------
principal of an Advance when due, whether at stated maturity, or by acceleration
or otherwise; or (ii) pay any installment of interest on the Advance or any
other amount due under this Agreement or the Note on the due date thereof and
such failure under this clause (ii) continues unremedied for a period of four
(4) Business Days; or
B. Default in Other Agreements. Failure of Borrower to pay or any
---------------------------
default in the payment of any amount of principal of or interest on any other
Indebtedness in the aggregate principal amount of $25,000 or more, or in the
payment of any Contingent Obligation in the aggregate principal amount of
$25,000 or more, beyond the later of any period of grace provided or fifteen
(15) days, unless a bond or other provision for payment thereof reasonably
satisfactory to Lender has been made; or breach or default with respect to any
other term of any evidence of any other Indebtedness or of any loan agreement,
mortgage, indenture or other agreement relating thereto, any Contingent
Obligation, or any other contract or agreement to which Borrower is a party, if
the effect of such default or breach is to cause Indebtedness of Borrower in the
aggregate amount of $25,000 or more to become or be declared due prior to its
stated maturity and such breach or default thereunder continues unremedied for a
period of fifteen (15) days; or
C. Breach of Covenants. Failure of Borrower to perform or comply
-------------------
with any term or condition applicable to it contained in the Documents, which
failure continues for a period of fifteen (15) days after written notice thereof
from Lender to Borrower, provided, however, that (1) with respect to the
covenants contained in subsection (i) or (ii) of Section 6.1, Lender shall give
Borrower ten (10) business days notice before such failure shall become an Event
of Default and (2) with respect to the covenants contained in subsection (iii),
(iv) or (v)
of Section 6.1 or in Section 6.8, Lender shall give Borrower five (5) business
days notice before such failure shall become an Event of Default; or
D. Breach of Warranty. Any of Borrower's representations or
------------------
warranties made or deemed made herein or in any statement, notice or certificate
at any time given by Borrower in writing pursuant hereto or in connection
herewith shall be false in any material respect on the date as of which made or
deemed made and such breach is not remedied as set forth in Section 5.5 hereof;
or
E. Other Defaults. Borrower shall default in the performance of or
--------------
compliance with any term contained in any of the Documents other than those
referred to above in subsections A, C or D of this Section 7.1, which failure
continues for a period of fifteen (15) days after written notice thereof from
Lender to Borrower; or
F. Involuntary Bankruptcy; Appointment of Receiver. (i) A court
-----------------------------------------------
having jurisdiction in the premises shall enter a decree or order for relief in
respect of Borrower, in an involuntary case under any applicable bankruptcy,
insolvency or other similar law now or hereafter in effect, which decree or
order shall not be stayed within 60 consecutive days of its date of issuance; or
(ii) any other similar relief shall be granted under any applicable Federal or
state law; or (iii) a decree or order of a court having jurisdiction in the
premises for the appointment of a receiver, liquidator, sequestrator, trustee,
custodian or other officer having similar powers over Borrower, or over all or a
substantial part of its property, shall have been entered; or (iv) the
involuntary appointment shall be made of an interim receiver, trustee or other
custodian of Borrower, for all or a substantial part of its property (by
petition, application, answer, consent or otherwise); or (v) a warrant of
attachment, execution or similar process shall be issued against any substantial
part of the property of Borrower; or
G. Voluntary Bankruptcy; Appointment of Receiver. Borrower shall
---------------------------------------------
have an order for relief entered with respect to it or commence a voluntary case
under any applicable bankruptcy, insolvency or other similar law now or
hereafter in effect, or shall consent to the entry of an order for relief in an
involuntary case, or to the conversion to an involuntary case, under any such
law, or shall consent to the appointment of or taking possession by a receiver,
trustee or other custodian for all or a substantial part of its property; the
making by Borrower of any assignment for the benefit of creditors; or the
inability or failure of Borrower, or the admission by Borrower in writing of its
inability, to pay its debts as such debts become due or the board of directors
of Borrower (or any committee thereof) adopt any resolution or otherwise
authorizes action to approve any of the foregoing; or
H. Judgments and Attachments. Any money judgment, writ or warrant of
-------------------------
attachment, or similar process involving in any case an amount in excess of
$50,000 shall be entered or filed against Borrower or any of its assets and
shall remain undischarged, unvacated, unbonded or unstayed for a period of 30
days or in any event later than five days prior to the date of any proposed sale
thereunder; or
I. Dissolution. Any order, judgment or decree shall be entered
-----------
against Borrower decreeing the dissolution or splitting up of Borrower;
J. Failure of Security Interest. The security interest of Lender in
----------------------------
any portion of the Collateral shall become impaired or unenforceable and one or
more Substitute Mortgage Loan(s) is not provided pursuant to Section 5.5; or
K. Material Change. If there shall occur any material adverse change
---------------
in the Collateral or in the business of Borrower or the operations, conduct,
financial condition or prospects thereof, that individually or in the aggregate,
would have a material adverse effect on the ability of the Borrower to perform
its obligations hereunder or under the Mortgage Note or Mortgage or on the value
of the Collateral or on the validity or enforceability of the pledge thereof to
the Lender;
THEN
(i) Upon the occurrence of any Event of Default described in
subsections F or G of Section 7.1, the unpaid principal amount of and accrued
interest on the Note and any fees due hereunder shall automatically become due
and payable, without presentment, demand, notice or other requirements of any
kind, all of which are hereby expressly waived by Borrower, and the obligation
of Lender to make any further Advances shall thereupon terminate.
(ii) Upon the occurrence of any Event of Default (other than those
described in subsection F or G of Section 7.1), Lender may, by written notice to
Borrower, declare the unpaid principal amount of and accrued interest on the
Note and any fees due hereunder to be due and payable whereupon the same shall
forthwith become due and payable, without presentment, demand, notice or other
requirements of any kind, all of which are hereby expressly waived by Borrower,
and the obligation of Lender to make any further Advances shall thereupon
terminate. Failure of Lender to provide any such notice shall not limit or
otherwise affect the rights of Lender hereunder.
(iii) Upon the occurrence of any Event of Default, Lender may do any
of the following:
(a) Collect by legal proceedings all interest, principal payments and
other sums payable with respect to any outstanding Advance.
(b) Foreclose upon or otherwise enforce its security interest in and
Lien on the Collateral pursuant to this Agreement.
(c) Sell the Collateral in one or more lots, at one or more times, at
public or private sales, in an established market therefor or otherwise, as
Lender may elect, at such prices and on such terms, as to cash or credit, as
Lender may deem proper, provided that every aspect of such sale or sales is
commercially reasonable. With respect to any such sale or sales, a
securitization of any or all of the Collateral shall be deemed to be
commercially reasonable. Any sale may be made at any place designated by Lender,
and Lender shall have the right to become the purchaser at any such sale which
is open to the public and, to the extent permitted by law, private sales. If
notice is given of the sale of any Collateral, it is agreed that notice shall be
satisfactorily given for all purposes if Lender sends, via facsimile
transmission, a copy of such
notice to Borrower not less than fifteen (15) days prior to such sale. The
foregoing notice provisions shall not preclude Lender's rights to foreclose upon
the Collateral in any other manner permitted under the Uniform Commercial Code
of the State of New York; provided that a sale of the Collateral in accordance
with such notice requirements shall be deemed a disposal of the Collateral in a
commercially reasonable manner. Lender shall have the right in connection with
the Collateral either to sell the same as above provided, or to foreclose, xxx
upon, or otherwise seek to enforce the same in its own name or in the name of
Borrower as provided herein. Subject to the foregoing provisions of this
paragraph, after an Event of Default shall occur and be continuing, Lender shall
have the right to renew, extend the time of payment of, or otherwise amend,
supplement, settle or compromise, in any manner, any obligations for the payment
of money included in the Collateral, any security therefor and any other
agreements, instruments, claims or chooses in action of any kind which may be
included in the Collateral. Each purchaser at any sale or other disposition
shall hold the Collateral free from any claim or right of whatever kind,
including any equity or right of redemption of Borrower, and Borrower
specifically waives (to the extent permitted by law) all rights of redemption,
stay or appraisal which it has or may have under any rule of law or statute now
existing or hereafter adopted.
(d) Take possession of all or any portion of the Collateral that is
not already in the possession of Lender, and Borrower agrees to assemble and
make available the Collateral to Lender at a convenient location. Lender may
manage and protect the Collateral, do any acts which Lender deems proper to
protect the Collateral as security hereunder, and xxx upon any contract or claim
relating to the Collateral and receive any payments due thereon or any damages
thereunder, and apply all sums received to the payment of the Obligations
secured hereby in accordance with Section 7.2.
(e) Be entitled, without regard to the adequacy of the security for
the Obligations secured hereby, to the appointment of a receiver by any court
having jurisdiction, and without notice, to take possession of and protect,
collect, manage, liquidate and sell the Collateral or any portion thereof,
collect the payments due with respect to the Collateral or any portion thereof,
and do anything that Lender is authorized with respect thereto to do.
(f) Grant extensions of time, make any compromise or settlement it
deems desirable with respect to the Collateral, or waive or release any security
interest in Collateral.
(g) Exercise all rights and remedies of a secured creditor under the
Uniform Commercial Code.
(h) Require Borrower to pursue, to the extent applicable, in its own
name but for the benefit of Lender, any one or more of the remedies described in
(a) through (g) above.
(i) All remedies are cumulative. Any failure on the part of Lender to
exercise or any delay in exercising any right hereunder shall not operate as a
waiver thereof, nor shall any single or partial exercise by Lender of any right
hereunder preclude any other exercise thereof or the exercise of any other
right.
7.2 Application of Proceeds. Any money collected by Lender pursuant
-----------------------
to this Article VII (whether upon voluntary payment, foreclosure or otherwise)
shall be promptly applied as follows unless otherwise required by provisions of
applicable law:
(i) first, to the payment of all expenses incurred by Lender under
this Agreement and in enforcing its rights hereunder, including all costs and
expenses of collection, attorneys' fees, court costs, and foreclosure expenses;
(ii) next, to the payment of all principal and interest due and unpaid
on any Advance;
(iii) next, to the payment of any other Obligations owed by Borrower
to Lender; and
(iv) next, to Borrower or as a court of competent jurisdiction may
direct.
ARTICLE VIII
------------
MISCELLANEOUS
-------------
8.1 Expenses. Borrower agrees to pay on demand (i) all costs and
--------
expenses in connection with the preparation and negotiation of any Document, the
Custody Agreement, the Commitment Letter, the Guaranties and the Pledge
Agreement and any amendments hereto or thereto, including the legal fees and
expenses of counsel to Lender, (ii) all the actual costs and expenses of
creating and perfecting Liens in favor of Lender, pursuant to this Agreement,
including filing and recording fees and expenses, reasonable fees and expenses
of counsel for providing such opinions as Lender may reasonably request; and
(iii) after the occurrence of an Event of Default, all costs and expenses
(including reasonable attorneys' fees and costs of settlement) incurred by
Lender in enforcing any Obligations of or in collecting any payments due from
Borrower hereunder or under the Note by reason of such Event of Default.
Reasonable attorneys' fees, expenses and disbursements incurred in enforcing, or
on appeal from, a judgment pursuant hereto shall be recoverable separately from
and in addition to any other amount included in such judgment, and this clause
is intended to be severable from the other provisions of this Agreement and to
survive and not be merged into such judgment.
8.2 Indemnity by Borrower.
---------------------
A. Indemnification by Borrower. Borrower agrees to indemnify, pay
---------------------------
and hold harmless Lender and the officers, directors, employees and agents of
Lender and its Affiliates (collectively called the "Indemnitees"), from and
against any and all other liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, claims, costs, expenses and disbursements (including,
without limitation, the reasonable fees and disbursements of counsel for such
Indemnitees in connection with any investigative, administrative or judicial
proceeding, whether or not such Indemnitee shall be designated a party thereto),
which may be imposed on, incurred by, or asserted against such Indemnitee, in
any manner relating to or arising out of the use or intended use of the proceeds
of the Advances or on account of the Collateral taken hereunder (the
"Indemnified Liabilities"); provided that Borrower shall have no obligation
hereunder with
respect to Indemnified Liabilities arising from the gross negligence or willful
misconduct of any such Indemnitee. To the extent that the undertaking to
indemnify, pay and hold harmless set forth in the preceding sentence may be
unenforceable because it violates any law or public policy, Borrower shall
contribute the maximum portion which it is permitted to pay and satisfy under
applicable law, to the payment and satisfaction of all Indemnified Liabilities
incurred by the Indemnitees or any of them.
B. Claims. If any claim is made, or any action, suit or proceeding is
------
brought against any Person indemnified pursuant to this Section 8.2, the
Indemnitee shall notify Borrower of such claim or of the commencement of such
action, suit or proceeding, and Borrower will assume the defense of such action,
suit or proceeding, employing counsel selected by Borrower and reasonably
satisfactory to such Indemnitee and pay the fees and expenses of such counsel;
provided, however, that if counsel to the Indemnitee shall determine that, due
to conflicts in the liabilities or defenses of Borrower and Lender, Lender
should retain its own counsel, Lender shall have the right to retain counsel and
the reasonable fees and expenses of such counsel shall be for the account of
Borrower.
8.3 Amendments and Waivers. No amendment, modification, termination
----------------------
or waiver of any provision of this Agreement or of the Note, or consent to any
departure by Borrower therefrom, shall in any event be effective without the
written concurrence of Lender.
8.4 Notices. All notices, requests or demands required or permitted
-------
to be given hereunder shall be in writing, and shall be deemed effective (a)
upon hand delivery, if hand delivered; (b) one (1) business day after such are
deposited for delivery via Federal Express or other nationally recognized
overnight courier service; or (c) three (3) business days after such are
deposited in the United States mails, certified or registered mail, all with
delivery charges and/or postage prepaid, and addressed as set forth on the
signature page hereof, or to such other address as either party may, from time
to time, designate in writing. Written notice may be given by facsimile to the
facsimile number set forth on the signature page hereof, or to such other
facsimile number as either party may designate, from time to time, in writing,
provided that such notice shall not be deemed effective unless it is confirmed
within 24 hours by hand delivery, courier delivery or mailing or a copy of such
notice in accordance with the requirements set forth above.
8.5 Attorneys' Fees. Subject to Sections 8.1 and 8.2, if any party
---------------
hereto commences litigation for the interpretation, enforcement, termination,
cancellation or rescission hereof, or for damages for the breach hereof, the
prevailing party in such action shall be entitled to its reasonable attorneys'
fees and court and other costs incurred, to be paid by the losing party as fixed
by the court or in a separate action brought for that purpose.
8.6 Survival of Warranties and Certain Agreements.
---------------------------------------------
A. Agreement. All covenants, agreements, representations and
---------
warranties made herein shall survive the execution and delivery of this
Agreement, the making of the Advances hereunder and the execution and
delivery of the Note.
B. Termination. Notwithstanding anything in this Agreement or implied
-----------
by law to the contrary, the agreements of Borrower set forth in Sections
8.1 and 8.2 shall survive the payment of the Advances and the Note and the
termination of this Agreement.
8.7 Failure or Indulgence Not Waiver; Remedies Cumulative. No failure or
-----------------------------------------------------
delay on the part of Lender in the exercise of any power, right or privilege
hereunder or under the Note shall impair such power, right or privilege or be
construed to be a waiver of any default or acquiescence therein, nor shall any
single or partial exercise of any such power, right or privilege preclude other
or further exercise thereof or of any other right, power or privilege. All
rights and remedies existing under the Documents or the Note are cumulative to
and not exclusive of any rights or remedies otherwise available.
8.8 Severability. In case any provision in or obligation under this
------------
Agreement or the Note shall be invalid, illegal or unenforceable in any
jurisdiction, the validity, legality and enforceability of the remaining
provisions or obligations, or of such provision or obligations in any other
jurisdiction, shall not in any way be affected or impaired thereby.
8.9 Headings. Article, section and subsection headings in this Agreement
--------
are included herein for convenience of reference only and shall not constitute a
part of this Agreement for any other purpose or be given any substantive effect.
8.10 Applicable Law. This Agreement, the Commitment Letter, the Custody
--------------
Agreement and the Note shall be governed by, and shall be construed and enforced
in accordance with, the laws of the State of New York, without giving effect to
any conflict of laws principles thereof.
8.11 Successors and Assigns: Subsequent Holders of Note. This Agreement
--------------------------------------------------
shall be binding upon the parties hereto and their respective successors and
assigns and shall inure to the benefit of the parties hereto and the successors
and assigns of Lender. The terms and provisions of this Agreement shall inure to
the benefit of any assignee or transferee of the Note, and in the event of such
transfer or assignment, the rights and privileges herein conferred upon Lender
shall automatically extend to and be vested in such transferee or assignee, all
subject to the terms and conditions hereof. Borrower's rights, obligations or
any interest therein hereunder may not be assigned without the express written
consent of Lender.
8.12 Counterparts; Effectiveness. This Agreement and any amendments,
---------------------------
waivers, consents, or supplements may be executed in any number of counterparts,
and by different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed an original, but all such counterparts
together shall constitute but one and the same instrument.
8.13 SUBMISSION TO JURISDICTION; WAIVER OF TRIAL BY JURY. WITH RESPECT TO
---------------------------------------------------
ANY CLAIM ARISING OUT OF THIS AGREEMENT (A) EACH PARTY IRREVOCABLY SUBMITS TO
THE EXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK AND THE UNITED
STATES DISTRICT COURT FOR THE
SOUTHERN DISTRICT OF NEW YORK, AND (B) EACH PARTY IRREVOCABLY WAIVES ANY
OBJECTION WHICH IT MAY HAVE AT ANY TIME TO THE LAYING OF VENUE OF ANY SUIT,
ACTION OR PROCEEDING ARISING OUT OF OR RELATING HERETO BROUGHT IN ANY SUCH
COURT, IRREVOCABLY WAIVES ANY CLAIM THAT ANY SUCH SUIT, ACTION OR PROCEEDING
BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN ANY INCONVENIENT FORUM AND FURTHER
IRREVOCABLY WAIVES THE RIGHT TO OBJECT, WITH RESPECT TO SUCH CLAIM, SUIT, ACTION
OR PROCEEDING BROUGHT IN ANY SUCH COURT, THAT SUCH COURT DOES NOT HAVE
JURISDICTION OVER SUCH PARTY. TO THE EXTENT PERMITTED BY APPLICABLE LAW, THE
BORROWER AND LENDER EACH IRREVOCABLY WAIVE ALL RIGHT OF TRIAL BY JURY IN ANY
ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR IN CONNECTION WITH THIS
AGREEMENT OR ANY MATTER ARISING HEREUNDER.
8.14 Representation by Counsel. Borrower hereby acknowledges to Lender
-------------------------
that Borrower has been represented by counsel during the course of the
negotiation of this Agreement and the other Documents.
WITNESS the due execution hereof by the respective duly authorized officers
of the undersigned as of the date first written above.
ALL SEASONS RESORTS, INC.
Borrower
By: /s/ Xxxx X. Xxxxxx
-----------------------------
Name: Xxxx X. Xxxxxx
Title: President
Notice Address:
X.X. Xxx 0000
Xxxxxx, Xxxxxxx 00000
Attention: Chief Financial Officer
Telephone:_________________
Telecopier:________________
with a copy to:
the Attention of Portfolio Manager
CONTITRADE SERVICES L.L.C.
By: /s/ Xxxxxx X. Xxxxxxxx
---------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Authorized Signatory
By: /s/ Xxxxx Xxxxxx
----------------------------------
Name: Xxxxx Xxxxxx
Title: Authorized Signatory
Notice Address:
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Chief Counsel
Telephone: (212)
Telecopier: (212)
EXHIBIT B
PROMISSORY NOTE
$25,000,000.00 New York, New York
Dated: , 1995
FOR VALUE RECEIVED, the undersigned ALL SEASONS RESORTS, INC. having its
principal place of business at 000 Xxxxxxx 000, Xxxxxx, Xxxxxxx ("Borrower"),
promises to pay to the order of ContiTrade Services L.L.C., a Delaware limited
liability company, with its principal office at 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx 00000 ("Lender"), at Lender's principal office or at such other place as
the holder hereof may designate, in lawful money of the United States of America
and in immediately available funds, the principal sum TWENTY-FIVE MILLION and
00/100 DOLLARS ($25,000,000.00) or the unpaid principal amount of each advance
("Advance") made by Lender to Borrower and recorded on the schedule attached
hereto, whichever is less, plus interest, as provided herein.
Borrower shall pay to Lender interest on each Advance from time to time
outstanding at a rate per annum equal to that rate which is three percent
(3.00%) in excess of LIBOR (as defined below). Such interest shall be due and
payable monthly in arrears commencing on the first Distribution Date (as defined
in the Loan Agreement) following the applicable date of an Advance and
continuing on each Distribution Date until and including payment in full of the
unpaid principal amount of such Advance plus accrued interest thereon. As used
herein, the term "LIBOR" means, as of 11:00 a.m. London time on any date of
-----
determination, the London interbank offered rate for one month United States
dollar deposits as indicated on Telerate page 3750. If LIBOR cannot be so
determined, then LIBOR shall mean the rate so quoted on such date and time by
the Union Bank of Switzerland.
With respect to each Advance, Borrower shall pay to Lender on each
Distribution Date the Current Principal Amount (as defined in the Loan
Agreement) and on any of (i) the date set forth as the "Advance Maturity Date"
on the schedule attached hereto, (ii) ninety (90) days after the Advance
Maturity Date or (iii) a date, after the Advance Maturity Date but prior to
ninety (90) days after the Advance Maturity Date, provided Borrower has notified
Lender of such date not less than five (5) days prior to such date, in full the
outstanding principal amount of such Advance.
All Advances made by Lender hereunder and all payments made on account of
the principal hereof shall be recorded by Lender on the schedule attached to
this Note and any such recordation shall constitute prima facie evidence of the
----- -----
accuracy of the amount so recorded (provided that any failure by Lender to make
any such notation on such schedule shall not affect the obligations of Borrower
hereunder).
If any amount due hereunder is not paid when due (whether at stated
maturity, by acceleration or otherwise) or within any applicable grace period,
to the extent permitted by applicable law, such amount shall thereafter bear
interest payable on demand at a default interest rate of one month LIBOR plus
500 basis points.
Interest shall be computed for the actual number of days elapsed on the
basis of a 360-day year. In no event shall interest be chargeable or collectible
hereunder in excess of the maximum lawful rate under applicable law.
Borrower promises to pay the holder hereof all costs and expenses of
collection of this Note and to pay all reasonable attorney's fees incurred in
such collection or in any suit or action to collect this Note and any appeal
thereof.
The provisions of this Note shall inure to the benefit of Lender and its
successors and assigns and be binding on Borrower and its successors and
assigns. This Note shall in all respects be governed by, and construed in
accordance with, the laws of the State of New York, including all matters of
construction, performance and validity. Borrower waives presentment and demand
for payment, notice of dishonor, protest and notice of protest of this Note. No
failure or delays by Lender in the exercise of any power or right under this
Note shall operate as a waiver thereof, and no exercise or waiver of any single
power or right, or the partial exercise thereof, shall affect Lender's rights
with respect to any and all other rights and powers.
Borrower hereby irrevocably consents and submits to the nonexclusive
jurisdiction and venue of any State or Federal Court sitting in New York County
over any action or proceeding arising out of or relating to this Note or any
document or instrument delivered in connection herewith, and Borrower hereby
irrevocably agrees that all claims in respect of such action or proceeding may
be heard and determined in such State or Federal Court. Borrower waives any
objection to any action or proceeding in any State or Federal Court sitting in
New York County on the basis of forum non conveniens. Borrower hereby waives
the right to trial by jury, rights of set-off and rights to interpose
counterclaims of any nature, except for compulsory counterclaims. Borrower
agrees that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment or
in any other manner provided by law. Borrower further agrees that any action or
proceeding brought against Lender shall be brought only in any State or Federal
Court sitting in New York County. Borrower further agrees that in Lender's
discretion, it may serve legal process in any other manner permitted by law and
may bring any action or proceeding against Borrower or its property in the
courts of any other jurisdiction.
The unenforceability or invalidity of any provision or provisions of this
Note shall not render any other provision or provisions herein contained
unenforceable or invalid.
This Note evidences Indebtedness incurred under the Loan and Security
Agreement, dated as of July 13, 1995 ("Loan Agreement"), between Borrower and
Lender to which reference is made for a statement of the terms and conditions on
which the Borrower is permitted and required to make prepayments and repayments
of principal of the Indebtedness evidenced by this Note and on which such
Indebtedness may be declared to be immediately due and payable. Payment of this
Note is secured by the Collateral (as defined in the Loan Agreement), and
reference is hereby made to the Loan Agreement for a description of the
Collateral and the nature and extent of the collateral security and the rights
of the Lender in respect of such collateral security. Unless otherwise defined,
terms used herein have the meanings provided in the Loan Agreement.
This Note cannot be amended, modified or changed in any way except by a
written instrument executed by both Borrower and Lender.
ALL SEASONS RESORTS, INC.
By:_____________________________________
Name:
Title:
State of _____________ )
):
County of ____________ )
On this ____ day of ________________, 199__, before me personally appeared
____________________________________ to me known who, being duly sworn did
depose and say that he/she is the _________________ of
____________________________, the corporation described in and which executed
the foregoing instrument; that he knows the seal of said corporation; that the
seal affixed to said instrument is such corporate seal and that it was so
affixed by order of the Board of Directors of said corporation, and that he
signed his name thereto by like order.
----------------------------
Notary Public
Form of Schedule to Promissory Note omitted
The following Exhibits are not included:
Exhibit A Form of Compliance Certificate
Exhibit C Form of Lender's Incumbency Certificate
Exhibit D Borrower's Officer's Certificates
Exhibit E Form of Mortgage and Mortgage Note
Exhibit F Borrower's Wire Instructions
Exhibit G Litigation Matters
Exhibit H Borrower's Underwriting Guidelines
Exhibit I Form of Servicing Report
Schedule A Affiliates of Borrower
AMENDMENT TO LOAN AND SECURITY AGREEMENT
----------------------------------------
This AMENDMENT TO LOAN AND SECURITY AGREEMENT (the "Agreement") is dated as
of January 10, 1996 between ALL SEASONS RESORTS, INC., an Arizona corporation
("Borrower") and CONTITRADE SERVICES L.L.C., a Delaware limited liability
company ("Lender").
RECITALS
--------
WHEREAS, Borrower and Lender entered into that certain Loan and Security
Agreement, dated as of July 13, 1995 (the "Loan Agreement"), to finance
originations and purchases of certain mortgage loans, each secured by an
interest in real property;
WHEREAS, Borrower desires to amend the Loan Agreement to finance the
acquisition and development of the Scottsdale Villa Mirage Resort Condominiums,
such financing to be secured by the mortgage loans securing the Loan Agreement
and certain additional collateral and Lender desires to provide such additional
financing to Borrower;
NOW THEREFORE, in consideration of the above Recitals and for other good and
valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the parties hereto hereby agree as follows:
AGREEMENT
---------
ARTICLE I
---------
DEFINITIONS
-----------
A. Certain Defined Terms. Capitalized terms used but not otherwise
---------------------
defined herein shall have the meanings ascribed to them in the Loan Agreement.
The following terms shall have the following meanings and such terms and
meanings shall replace in their entirety the respective terms in the Loan
Agreement:
"Advance Maturity Date" means December 15, 1996, as such date may be
extended by Lender in its sole discretion by notice to be delivered to Borrower
not later than sixty (60) days prior to such date.
"Additional Collateral" means all of (i) Borrower's right, title and
interest in and to the Marine Reserve Fund, the Membership Interests pledged to
Lender pursuant to the Collateral Assignment and the Membership Interest
Assignment, respectively, (ii) the Desert Guaranty, as secured by the Mortgage
(as defined herein) and (iii) Sangar's right, title and interest in and to the
Pledged Collateral (as such term is defined in the Pledge Agreement) pledged to
Lender pursuant to the Pledge Agreement.
"ASDI" means All Seasons Development, Inc.
"AVCOM" means AVCOM International, Inc.
"Construction Loan" means the $4,350,000 revolving loan secured by that
certain Deed of Trust and Assignment of Rents with Security Agreement and
Financing Statement from Desert Princess to Trustee (as defined therein) for the
benefit of Huntington Banks of Michigan, dated December 13, 1995.
"Collateral Assignment" means the Collateral Assignment of Reserve Account
and Payment Rights, dated January 10, 1996, between Borrower and Lender.
"Desert Guaranty" means the Guaranty Agreement, dated as of January 10,
1996, between Desert Princess and Lender.
"Desert Princess" means Desert Princess Resort L.L.C., an Arizona limited
liability company.
"Documents" means this Agreement, the Loan Agreement, the Guaranty, the
Custody Agreement, the Pledge Agreement dated July 13, 1995, the Pledge
Agreement dated as of the date hereof, the Subservicing Agreement, the
Commitment Letter, the Desert Guaranty, the Mortgage, the Profit Sharing
Agreement, the Escrow Agreement, the Membership Interest Assignment and the
Collateral Assignment.
"Escrow Agreement" means the Escrow Agreement, dated as of January 10, 1996,
among Transamerica Title Insurance Company, Borrower and Lender.
"Marine Reserve Fund" means (i) the Reserve Account established pursuant to
that certain Agreement of Finance between Marine Midland Bank, N.A. ("Marine")
and Borrower dated December 6, 1993, as amended, by which Borrower assumed the
liabilities of Villashare Partners Limited Partnership under that certain
Agreement of Finance, dated July 15, 1993; (ii) any interest differential to be
paid to Borrower by Marine pursuant to the Agreements (as such term is defined
in the Collateral Assignment) and (iii) the proceeds and products of the
foregoing.
"Membership Interest Assignment" means the Membership Interest Assignment
dated January 10, 1996, between Borrower, RPM and Lender.
"Membership Interests means all of Borrower's right, title and interest in
and to an Assignment of Members' Interests dated as of March 1, 1995.
"Mortgage" means the Deed of Trust, Security Agreement, Assignment of Rents
and Fixture Filing from Desert Princess to Transamerica Title Insurance Company
for the benefit of Lender, dated as of January 10, 1996 relating to the
Scottsdale Villa Mirage Timeshare Resort Land.
"Pledge Agreement" means the Pledge Agreement dated January 10, 1996 between
Xxxxxx Investment Company, L.L.C. and Lender.
"Profit Sharing Agreement" means the Profit Sharing Agreement, dated as of
January 10, 1996, between Desert Princess, Borrower and Lender.
"RPM" means RPM Services, Inc., a subsidiary of Borrower.
"Sales Agreement" means the Agreement, dated January 24, 1995, between A11
Seasons Development Incorporated ("ASDI") and Desert Princess Resorts L.L.C.,
("Desert Princess") as amended by the First Amendment to Agreement, dated
February 2, 1995, between ASDI and Desert Princess, as amended by the Second
Amendment to Agreement, dated February 24, 1995, between ASDI and Desert
Princess, as amended by the Third Amendment to Agreement, dated October 9, 1995,
between ASDI and Desert Princess.
"Xxxxxx" means Xxxxxx Investment Company, L.L.C., an Arizona limited
liability company.
"Scottsdale Villa Mirage Timeshare Resort Land" means the property described
in Exhibit A to the Mortgage.
ARTICLE II
----------
[intentionally left blank]
ARTICLE III
-----------
BORROWING AND REPAYMENTS; NOTE
------------------------------
A. Section 3.2B of the Loan Agreement is hereby deleted and the following
substituted therefore:
"B. Advances. On each Advance Date hereafter, if all conditions set forth
--------
in Section 4.2 of this Agreement have been satisfied, Lender shall make an
Advance to Borrower by causing an amount of immediately available funds equal to
the amount of the proposed Advance to be paid in accordance with Borrower's wire
instructions set forth on Exhibit F hereto. Until the Outstanding Principal
Balance of the Mortgage Loans to be pledged as Collateral for such Advance and
heretofore pledged as Collateral for Advances heretofore made in accordance with
the terms of the Loan Agreement is equal to $16 million, the amount of the
proposed Advance shall not exceed 100% of the Outstanding Principal Balance of
such Mortgage Loans. If the Outstanding Principal Balance of the Mortgage Loans
to be pledged as Collateral for such Advance and heretofore pledged as
Collateral for Advances heretofore made in accordance with the terms of the Loan
Agreement exceeds $16 million, the amount of the proposed Advance shall not
exceed 90% of the Outstanding Principal Balance of such Mortgage Loans. On the
date of this Amendment, Lender shall make an Advance in the amount of 10% of the
outstanding Principal Balance of the Mortgage Loans heretofore pledged as
Collateral, in an amount not to exceed $1.6 million (less any amounts to be
deducted therefrom pursuant to the terms hereof). If the Commitment Letter is in
effect and Borrower satisfies all the conditions of Section 4.2 of this
Agreement after 11:00 a.m., New York City time, on a Business Day, Lender shall
use its best efforts to make an Advance to Borrower not later than 4:30 p.m.,
New York City time, on
the next succeeding Business Day, but in no event later than 4:30 p.m., New York
City time, on the second succeeding Business Day. If the Commitment Letter is
not in effect, Lender will have no obligations to make an Advance to Borrower
even if Borrower has satisfied all the conditions set forth in Section 4.2.
Lender will send, via facsimile transmission, a copy of the schedule attached to
the Note updated to reflect such Advance and the applicable rate of interest. To
the extent that an Advance is made by Lender to Borrower on the Interest
Maturity Date of a prior Advance, Lender shall calculate the net amount payable
and shall send Borrower a confirmation detailing Lender's calculation and
setting forth the net amount to be received or paid by Borrower including,
without limitation, amounts payable under the Note."
ARTICLE IV
----------
CONDITIONS TO THE ADVANCES
--------------------------
A. The obligation of Lender to make or maintain any Advance on or after
the date hereof is, in addition to the conditions precedent specified in the
Loan Agreement, subject to prior or concurrent satisfaction of the following
conditions:
1. On or before the date hereof, Borrower shall deliver, or cause to be
delivered, to Lender:
(i) a resolution of its Board of Directors approving and authorizing the
execution, delivery and performance of the Documents;
(ii) a resolution of the members of Desert Princess approving and
authorizing the execution, delivery and performance of the Documents;
(iii) an Officer's Certificate substantially in the form of Exhibit C;
(iv) executed copies of the Collateral Assignment, Desert Guaranty,
Mortgage, Pledge Agreement, Profit Sharing Agreement, Escrow Agreement,
Membership Interest Assignment and this Agreement and such opinions of counsel
and Officer's Certificates as reasonably required by Lender's counsel with
respect to such documents;
(v) such executed financing statement as Lender may require for filing
pursuant to the Uniform Commercial Code;
(vi) the Additional Collateral;
(vii) executed copies of the consent from Huntington Banks of Michigan
relating to the Mortgage;
(vii) survey of Scottsdale Villa Mirage Resort Land certified to Lender and
in form acceptable to Lender;
(viii) title policy relating to Scottsdale Villa Mirage Resort Land in form
acceptable to Lender; and
(ix) executed copies of the subordination agreement relating to the mortgage
in connection with the Scottsdale Villa Mirage Resort Land held by RPM.
2. All actions and documents required to create and perfect the Lender's
security interest, in the case of the Marine Reserve Account, and second
priority security interest, in the case of the Scottsdale Villa Mirage Timeshare
Resort Land, and Liens in the Additional Collateral shall have been duly
authorized and executed and delivered or taken and all filings with governmental
agencies shall have been made or taken and completed.
3. Lender shall have received $200,000 from Borrower as a nonrefundable
commitment fee, in immediately available funds, which fee, if not previously
paid, shall be netted out of the Advance required to be paid to Borrower
hereunder.
ARTICLE V
---------
SECURITY
--------
A. Section 5.1 of the Loan Agreement is deleted in its entirety and the
following substituted therefore:
"5.1 Grant of Security Interest. To secure the payment of the Advances and
--------------------------
the performance of the other Obligations, Borrower pledges and hypothecates to
Lender and grants a continuing lien on and a first priority security interest in
favor of Lender, in all of Borrower's right, title and interest in and to the
Collateral and Additional Collateral; provided that with respect to the Marine
Reserve Fund and the Scottsdale Villa Mirage Timeshare Resort Land, Borrower
grants a second priority security interest in favor Lender in all of Borrower's
right, title and interest in and to the Marine Reserve Fund and the Scottsdale
Villa Mirage Timeshare Resort Land, respectively."
B. Section 5.4 of the Loan Agreement is hereby deleted in its entirety
and the following substituted therefore:
"5.4 Security for Obligations. This Agreement shall create a continuing
------------------------
security interest in the Collateral and the Additional Collateral and shall (i)
remain in full force and effect until payment in full of all Obligations, (ii)
be binding upon Borrower, its successors and assigns, and (iii) inure to the
benefit of Lender and it successors, transferees and assigns. Upon the payment
in full of the Obligations, Borrower shall be entitled to the return, upon its
request and at its expense, of such of the Collateral and Additional Collateral
as shall not have been sold or otherwise applied pursuant to the terms hereof;
provided that, when and if the amount of the Obligations is less than or equal
-------------
to 90% of the Outstanding Principal Balance of the Mortgage Loans to be pledged
as Collateral for any Advances made hereunder or heretofore pledged as
Collateral for any Advances heretofore made in accordance with the Loan
Agreement, Borrower shall be entitled to the return, upon its request and at its
expense, of such of the Additional Collateral as shall not have been sold or
otherwise applied pursuant to the terms hereof."
C. Section 5.5 of the Loan Agreement is hereby and deleted and the
following substituted therefore:
"5.5 Substitute Mortgage Loans. If, while the Commitment Letter is in
-------------------------
effect, a Mortgage Loan shall fail to comply with the representations and
warranties set forth in Section 2.2 or shall become 90 or more days delinquent
in respect of any payment of principal or interest or if the Custodian does not
receive an original Mortgage Note with respect to a Mortgage Loan pursuant to
Section 5.6 hereof (each, a "Defective Mortgage Loan"), Borrower shall within
five (5) Business Days from the date each such Mortgage Loan became a Defective
Mortgage Loan, either (i) immediately prepay to Lender under the Note (in
immediately available funds) an amount equal to 100% of the Outstanding
Principal Balance of the related Mortgage Note plus interest at the rate
specified in Section 3.3 hereof on the principal amount being repaid from the
date of the Advance relating to such Mortgage Loan or the most recent Interest
Maturity Date (whichever is later) to the date of such prepayment or (ii) pledge
to Lender, in substitution for such Defective Mortgage Loan, a Substitute
Mortgage Loan. A substitution of a Mortgage Loan shall be effective upon the
receipt by Lender of a Trust Receipt from the Custodian pursuant to the terms of
the Custody Agreement. Notwithstanding the foregoing, when and if the amount of
the Obligations is less than or equal to 90% of the Outstanding Principal
Balance of the Mortgage Loans pledged as Collateral for any Advances hereunder,
any prepayment under (i) above shall be an amount equal to 90% of the
Outstanding Principal Balance of the related Mortgage Note plus interest as
described therein."
ARTICLE VI
----------
COVENANTS OF BORROWER
---------------------
A. For so long as this Agreement is in effect, Borrower covenants and
agrees, unless Lender shall otherwise give prior written consent, not to amend,
alter, or change in any way the terms or provisions of the Construction Loan or
the Sales Agreement.
ARTICLE VII
-----------
EVENTS OF DEFAULT
-----------------
A. Section 7.1J. of the Loan Agreement is hereby amended by inserting "or
the Additional Collateral" following the word "Collateral" and preceding the
word "shall" in line two thereof.
B. Section 7.1K. of the Loan Agreement is hereby amended by inserting ",
the Additional Collateral" following the word "Collateral" and preceding the
"or" in line two thereof and inserting "or the Additional Collateral" following
the word "Collateral" and preceding the word "or" in line seven thereof.
C. Section 7.1K (iii)(b) of the Loan Agreement is hereby amended by
inserting "and the Additional Collateral" following the word "Collateral" and
preceding the word "pursuant" in line two thereof.
D. Section 7.1K.(iii)(c) of the Loan Agreement is hereby amended by
inserting "or the Additional Collateral" following the word "Collateral" and
preceding the word "in" in line one thereof, after the word "Collateral" and
preceding the word "shall" in line seven thereof, after the word "Collateral"
and preceding the word ", it" in line twelve thereof, after the word
"Collateral" and preceding the word "in" in line seventeen thereof, after the
word "Collateral" and preceding the word "in" in line twenty thereof, after the
word "Collateral" and preceding the word ""in" in line twenty-one thereof, after
the word "Collateral" and preceding the word "either" in line twenty-three
thereof, after the word "Collateral" and preceding the word ", any" in line
thirty-one thereof, after the word "Collateral" and preceding the word ". Each"
in line thirty-three thereof and after the word "Collateral" and preceding the
word "free" in line thirty-five thereof.
E. Section 7.1K.(iii)(d) of the Loan Agreement is hereby amended by
inserting "and the Additional Collateral" following the word "Collateral" and
preceding the word "that" in line two thereof, following the word "Collateral"
and preceding the word "to" in line four thereof, following the word
"Collateral" and preceding the word ", do" in line five thereof and following
the word "Collateral" and preceding the word "as" in line six thereof. Section
7.1K(iii)(d) of the Loan Agreement is hereby amended by inserting "or the
Additional Collateral" following the word "Collateral" and preceding the word
"and" in line seven thereof.
F. Section 7.1K (iii)(e) of the Loan Agreement is hereby amended by
inserting "and the Additional Collateral" following the word "Collateral" and
preceding the word "or" in line five thereof and following the word "Collateral"
and preceding the word "or" in line seven thereof.
G. Section 7.1K (iii)(f) of the Loan Agreement is hereby amended by
inserting "or the Additional Collateral" following the word "Collateral" and
preceding the word ", or" in line three thereof and following the word
"Collateral" and preceding the period in line four thereof.
ARTICLE VIII
------------
MISCELLANEOUS
-------------
A. Expenses. Borrower agrees to pay on demand (i) all costs and expenses
--------
in connection with the preparation and negotiation of this Agreement, the Desert
Guaranty, the Mortgage, the Profit Sharing Agreement, the Membership Interest
Assignment, the Pledge Agreement and the Collateral Assignment and any
amendments hereto or thereto, including the legal fees and expenses of counsel
to Lender, (ii) all the actual costs and expenses of creating and perfecting
Liens in favor of Lender, pursuant to this Agreement, including filing and
recording fees and expenses, fees and expenses of counsel for providing such
opinions as Lender may reasonably request.
B. Representation by Counsel. Borrower hereby acknowledges to lender
-------------------------
that Borrower has been represented by counsel during the course of the
negotiation of this Agreement and the other Documents.
WITNESS the due execution hereof by the respective duly authorized officers
of the undersigned as of the date first written above.
ALL SEASONS RESORTS, INC.
Borrower
By: /s/ Xxxx X. Xxxxxx
---------------------------------------
Name: Xxxx X. Xxxxxx
Title: President
Notice Address:
000 Xxxxxxx 000
Xxxxxx, Xxxxxxx 00000
Attention: Chief Financial Officer
Telephone:_________________
Facsimile:__________________
with a copy to:
the Attention of Portfolio Manager
CONTITRADE SERVICES L.L.C.
Lender
By: /s/ Xxxxx X. Xxxxx
-------------------------------
Name: Xxxxx X. Xxxxx
Title: Authorized Signatory
By: /s/ Xxxxxx X. Xxxxxxxx
-------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Authorized Signatory
Notice Address;
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Chief Counsel
Telephone:________________
Facsimile:_________________
SECOND AMENDMENT TO LOAN AND SECURITY AGREEMENT
THIS SECOND AMENDMENT TO LOAN AND SECURITY AGREEMENT (this "Amendment") is
dated as of September 10, 1996 between ALL SEASONS RESORTS, INC., an Arizona
corporation ("Borrower") and CONTITRADE SERVICES L.L.C., a Delaware limited
liability company ("Lender").
RECITALS
--------
WHEREAS, Borrower and Lender entered into that certain Loan and Security
Agreement, dated as of July 13, 1995 (the "Loan Agreement"), to finance
originations and purchases of certain mortgage loans, each secured by an
interest in real property;
WHEREAS, Borrower and Lender entered into that certain Amendment to the Loan
Agreement, dated January 10, 1996;
WHEREAS, Borrower desires to further amend the Loan Agreement to finance the
acquisition and development of the Magic Tree Resort in Osceola County, Florida,
Sunburst Condominiums in Steamboat Springs, Colorado, Villas on the Lake in
Xxxxxxxxxx, Texas, North Bay at Lake Arrowhead, Kauai Beach Villas in Kauai,
Hawaii and Tahoe Seasons Resort in South Lake Tahoe, California, such financing
to be secured by the mortgage loans securing the Loan Agreement and certain
additional collateral and Lender desires to provide such additional financing to
Borrower; and
WHEREAS, Borrower and Lender desire to further amend the Loan Agreement as
provided herein.
NOW THEREFORE, in consideration of the above Recitals and for other good and
valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the parties hereto hereby agree as follows:
AGREEMENT
---------
ARTICLE I
---------
DEFINITIONS
-----------
A. Certain Defined Terms. Capitalized Terms used but not otherwise
---------------------
defined herein shall have the meanings ascribed to them in the Loan Agreement.
The following terms shall have the respective meanings and such terms and
meanings shall replace in their entirety the respective terms in the Loan
Agreement:
"Advance Maturity Date" means September 16, 1997, as such date may be
extended by Lender in its sole discretion by notice to be delivered to Borrower
not later than sixty (60) days prior to such date.
"Note" means the Amended and Restated Promissory Note executed by Borrower
in favor of Lender pursuant to Section 3.3 hereof and substantially in the form
of Exhibit A to the Amendment to Loan and Security Agreement, dated as of
September 10, 1996, between Borrower and Lender.
"Resorts" means the respective land, buildings and appurtenant rights of
Villas at Poco Diablo, Villas of Sedona, Sedona Springs Resort, Sedona Summit
Resort, Sedona Golf and Tennis, Scottsdale Villa Mirage Resort, Tahoe Beach and
Ski Club, St. Augustine Beach Club, Magic Tree Resort, Sunburst Condominiums,
Tahoe Seasons Resort, Villas on the Lake and North Bay at Lake Arrowhead and
Kauai Beach Villas, each as created by a declaration of condominium or similar
document recorded in the public records of the county in which such resort is
located, or such other resort as Lender may approve, from time to time, in its
own discretion.
ARTICLE II
----------
BORROWER'S REPRESENTATIONS AND WARRANTIES
-----------------------------------------
AS TO MORTGAGE LOANS
--------------------
A. Section 2.2 of the Loan Agreement is hereby amended to add a new
Section 2.2(AK), that reads:
"AK. The aggregate Outstanding Principal Balance of Mortgage Loans relating
to all of Magic Tree Resort, Sunburst Condominiums, Tahoe Seasons Resort, Villas
on the Lake, North Bay at Lake Arrowhead, and Kauai Beach Villas does not exceed
10% of all Mortgage Loans."
B. Section 2.2 of the Loan Agreement is hereby further amended to add a
new Section 2.2(AL), that reads:
"AL. The aggregate Outstanding Principal Balance of Mortgage Loans relating
to any of Magic Tree, Sunburst Condominiums, Tahoe Seasons Resort, Villas on the
Lake, North Bay at Lake Arrowhead and Kauai Beach Villas, does not exceed 5.0%
of all Mortgage Loans."
C. Section 6.1(iii) of the Loan Agreement is hereby amended to add a new
Section 6.1(iii)(a)(III), that reads:
"and (III) stating the identity of the owner of Westpro Research Corporation
("Westpro") and that no more than $75,000 has been paid to Westpro during the
preceding calendar year."
D. Section 6.7(B) is hereby amended and restated to read in full as
follows:
"B. Indebtedness Ratio. Borrower will not permit the ratio of its
------------------
liabilities (defined as the sum of (i) liabilities as calculated in accordance
with GAAP and (ii) the sum of (1) the product of (x) contingent liabilities
related to the sale with recourse of Mortgage Loans related to Timeshare Estates
and (y) .20 and (2) all other contingent liabilities) to Tangible Net Worth (as
calculated in accordance with GAAP) to equal or exceed 15 to 1."
E. Section 6.15 is hereby amended and restated to read in full as follows:
"6.15 Dividends; Bonuses. Neither the Borrower, any of its direct or
------------------
indirect subsidiaries, nor the parent (AVCOM International, Inc.) shall, without
the prior written consent of Lender, (i) pay any cash dividend to its respective
shareholders, (ii) pay cash bonuses to any officer or director in excess of
$250,000, or (iii) make any loans or advances to, investments in, or guaranties
of any obligations of, any Person, except in the ordinary course of Borrower's
business."
F. Conditions to Effectiveness of this Amendment. (1) On or before the
---------------------------------------------
date of execution of this Amendment (the "Effective Date"), Borrower shall
deliver to Lender:
(i) A resolution of its Board of Directors approving and authorizing the
execution, delivery and performance of this Amendment and approving and
authorizing the execution, delivery and payment of the Note;
(ii) an Officer's Certificate substantially in the form of Exhibit B hereto;
(iii) an executed copy of this Amendment and the executed Note; and
(iv) the Collateral;
(2) All actions and documents required to create and perfect the Lender's first
priority security interest and Liens in the Collateral shall have been duly
authorized and executed and delivered or taken and all filings with
governmental agencies shall have been made or taken and completed.
(3) Lender shall have received the initial $30,000 installment of its $360,000
commitment fee (the "Commitment Fee"), in immediately available funds,
which fee, if not previously paid, shall be netted out of the first Advance
on or subsequent to the execution of this Amendment. The remainder of such
Commitment Fee shall be paid by Borrower in installments of $30,000 in each
of the months of October, November and December of 1996 and January and
February of 1997, and the then remaining unpaid balance of the Commitment
Fee shall be paid by Borrower in March of 1997.
G. Representation by Counsel. Borrower hereby acknowledges to Lender that
-------------------------
it was represented by counsel during the course of the negotiation of this
Amendment.
H. Separate Counterparts. This Amendment may be executed by the parties
---------------------
hereto in separate counterparts, each of which when so executed and delivered
shall be an original, but all such counterparts shall together constitute but
one and the same instrument.
I. Ratification. The terms and provisions set forth in this Amendment
------------
shall modify and supersede all inconsistent terms and provisions set forth in
the Loan Agreement and except as expressly modified and superseded by this
Amendment to the Loan Agreement, the Loan Agreement is ratified and confirmed in
all respects and shall continue in full force and effect.
WITNESS the due execution hereof by the respective duly authorized officers
of the undersigned as of the date first written above.
ALL SEASONS RESORTS, INC.
Borrower
By: /s/ Xxxxxx X. Xxxxxxxxx
------------------------------
Name: Xxxxxx X. Xxxxxxxxx
Title: Senior Vice President
Notice Address:
000 Xxxxxxx 000
Xxxxxx, Xxxxxxx 00000
Attention: Chief Financial Officer
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
with a copy to:
the Attention of Portfolio Manager
CONTITRADE SERVICES L.L.C.
Lender
By: /s/ Xxxxxx X. Xxxxxxxx
--------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Authorized Signatory
By: /s/ Xxxxx X. Xxxxxx
--------------------------------
Name: Xxxxx X. Xxxxxx
Title: Authorized Signatory
Notice Address:
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Chief Counsel
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
AMENDED AND RESTATED PROMISSORY NOTE
$40,000,000.00 New York, New York
Dated: September 10, 1996
FOR VALUE RECEIVED, the undersigned ALL SEASONS RESORTS, INC. having its
principal place of business at 000 Xxxxxxx 000, Xxxxxx, Xxxxxxx ("Borrower"),
promises to pay to the order of ContiTrade Services L.L.C., a Delaware limited
liability company, with its principal office at 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx 00000 ("Lender"), at Lender's principal office or at such other place as
the holder hereof may designate, in lawful money of the United States of America
and in immediately available funds, the principal sum of FORTY MILLION and
00/100 DOLLARS ($40,000,000.00) or the unpaid principal amount of each advance
("Advance") made by Lender to Borrower and recorded on the schedule attached
hereto, whichever is less, plus interest, as provided herein.
Borrower shall pay to Lender interest on each Advance from time to time
outstanding at the rate per annum equal to that rate which is three percent
(3.00%) in excess of LIBOR (as defined below). Such interest shall be due and
payable monthly in arrears commencing on the first Distribution Date (as defined
in the Loan Agreement) following the applicable date of an Advance and
continuing on each Distribution Date until and including payment in full of the
unpaid principal amount of such Advance plus accrued interest thereon. As used
herein, the term "LIBOR" means, as of 11:00 a.m. London time on any date of
-----
determination, the London interbank offered rate for one-month United States
dollar deposits as indicated on Telerate page 3750. If LIBOR cannot be so
determined, then LIBOR shall mean the rate so quoted on such date and time by
the Union Bank of Switzerland.
With respect to each Advance, Borrower shall pay to Lender on each
Distribution Date the Current Principal Amount (as defined in the Loan
Agreement) and on any of (i) the date set forth as the "Advance Maturity Date"
on the schedule attached hereto, (ii) ninety (90) days after the Advance
Maturity Date or (iii) a date, after the Advance Maturity Date but prior to
ninety (90) days after the Advance Maturity Date, provided Borrower has notified
Lender of such date not less than five (5) days prior to such date, in full the
outstanding principal amount of such Advance.
All Advances made by Lender hereunder and all payments made on account of
the principal hereof shall be recorded by Lender on the schedule attached to
this Note and any such recordation shall constitute prima facie evidence of the
----- -----
accuracy of the amount so recorded (provided that any failure by Lender to make
any such notation on such schedule shall not affect the obligations of Borrower
hereunder).
If any amount due hereunder is not paid when due (whether at stated
maturity, by acceleration or otherwise) or within any applicable grace period,
to the extent permitted by applicable law, such amount shall thereafter bear
interest payable on demand at a default interest rate of one month LIBOR plus
500 basis points.
Interest shall be computed for the actual number of days elapsed on the
basis of a 360-day year. In no event shall interest be chargeable or
collectible hereunder in excess of the maximum lawful rate under applicable law.
Borrower promises to pay the holder hereof all costs and expenses of
collection of this Note and to pay all reasonable attorney's fees incurred in
such collection or in any suit or action to collect this Note and any appeal
thereof.
The provisions of this Note shall inure to the benefit of Lender and its
successors and assigns and be binding on Borrower and it successors and assigns.
This Note shall in all respects by governed by, and construed in accordance
with, the laws of the State of New York, including all matters of construction,
performance and validity. Borrower waives presentment and demand for payment,
notice of dishonor, protest and notice of protest of this Note. No failure or
delays by Lender in the exercise of any power or right under this Note shall
operate as a waiver thereof, and no exercised or waiver of any single power or
right, or the partial exercise thereof, shall affect Lender's rights with
respect to any and all other rights and powers.
Borrower hereby irrevocably consents and submits to the nonexclusive
jurisdiction and venue of any State or Federal Court sitting in New York County
over any action or proceeding arising out of or relating to this Note or any
document or instrument delivered in connection herewith, and Borrower hereby
irrevocably agrees that all claims in respect of such action or proceeding may
be heard and determined in such State or Federal Court. Borrower waives any
objection to any action or proceeding in any State or Federal Court sitting in
New York County on the basis of forum non conveniens. Borrower hereby waives
the right to trial by jury, rights of set-off and rights to interpose
counterclaims of any nature, except for compulsory counterclaims. Borrower
agrees that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment or
in any other manner provided by law. Borrower further agrees that any action or
proceeding brought against Lender shall be brought only in any State or Federal
Court sitting in New York County. Borrower further agrees that in Lender's
discretion, it may serve legal process in any other manner permitted by law and
may bring any action or proceeding against Borrower or its property in the
courts of any other jurisdiction.
The unenforceability or invalidity of any provision or provisions of this
Note shall not render any other provision or provisions herein contained
unenforceable or invalid.
This Note evidences Indebtedness incurred under the Loan and Security
Agreement, dated as of July 13, 1995, as amended (the "Loan Agreement"), between
Borrower and Lender to which reference is made for a statement of the terms and
conditions on which the Borrower is permitted and required to make prepayments
and repayments of principal of the Indebtedness evidenced by this Note and on
which such Indebtedness may be declared to be immediately due and payable.
Payment of this Note is secured by the Collateral (as defined in the Loan
Agreement), and reference is hereby made to the Loan Agreement for a description
of the Collateral and the nature and extent of the collateral security and the
rights of the Lender in respect of such collateral security. Unless otherwise
defined, terms used herein have the meanings provided in the Loan Agreement.
This Note cannot be amended, modified or changed in any way except by a
written instrument executed by both Borrower and Lender.
ALL SEASONS RESORTS, INC.
By: /s/ Xxxxxx X. Xxxxxxxxx
--------------------------
Name: Xxxxxx X. Xxxxxxxxx
Title: Senior Vice President
STATE OF ARIZONA )
-----------
) :ss
COUNTY OF COCONINO )
------------
On this 12th day of September , 1996, before me personally appeared
-------- -------------- -
Xxxxxx X. Xxxxxxxxx to me known who, being duly sworn did depose and say that
----------------------
he/she is the Senior Vice President of All Seasons Resorts, Inc., the
--------------------------- -------------------------
corporation described in and which executed the foregoing instrument; that he
knows the seal of said corporation; that the seal affixed to said instrument is
such corporate seal and that it was so affixed by order of the Board of
Directors of said corporation, and that he signed his name thereto by like
order.
/s/ Xxxxxxxx Xxxxxxx
--------------------------------
Notary Public
