EXHIBIT 10.2
PAYOFF AGREEMENT AND MUTUAL RELEASE
THIS PAYOFF AGREEMENT AND MUTUAL RELEASE (this "Agreement") is made
this 25th day of January, 2002, by and between FINOVA CAPITAL CORPORATION, a
Delaware corporation ("FINOVA"), SUNTERRA CORPORATION, a Maryland corporation
("Sunterra"), certain subsidiaries of Sunterra listed on Schedule A attached
----------
hereto (the "Subsidiaries"), and those parties listed on Schedule B attached
----------
hereto (the "Guarantors"). Sunterra and its Subsidiaries are sometimes
collectively referred to herein as the "Borrowers."
RECITALS
A. The Borrowers and FINOVA (including its affiliates, subsidiaries
and parties controlled by FINOVA) are parties to various financial arrangements,
including, but not limited to, the agreements set forth on Schedule C attached
----------
hereto, and various other financing, custodial and servicing arrangements
between FINOVA (including its affiliates, subsidiaries and parties controlled by
FINOVA) and the Borrowers (collectively, the "FINOVA Loans"). The FINOVA Loans
are evidenced by, among other things, various promissory notes secured by
certain instruments including, but not limited to, those mortgages and deeds of
trusts identified on Schedule G attached hereto, various UCC Financing
----------
Statements identified on Schedule H attached hereto, pledge agreements, security
----------
agreements, and other documents related thereto. The Guarantors guaranteed
various FINOVA Loans.
B. FINOVA, or its agents, designees or custodians, is currently
holding certain cash collateral of the Borrowers as partial security for the
FINOVA Loans. The nature and amount of the cash collateral is set forth on
Schedule D attached hereto (the "Cash Collateral").
----------
C. As partial collateral for the FINOVA Loans, certain Borrowers and
Guarantors pledged to FINOVA, among other things, certain purchase money notes,
mortgages, deeds of trust and related loan documents executed by purchasers of
individual timeshare interests in favor of the respective borrower/seller and
all related receivables and collateral, including, but not limited to, the
collateral described on Schedule E attached hereto (collectively, the "Pledged
----------
Collateral"). FINOVA is the holder or custodian of the original mortgage notes,
mortgages or deeds of trust, assignments of mortgage, and all other documents
for certain Pledged Collateral.
D. As additional collateral for the FINOVA Loans, the Borrowers are
currently holding certain cash proceeds in a segregated account ("Restricted
Cash") for the benefit of certain entities, including but not limited to FINOVA,
subject to the Orders of the Sunterra Bankruptcy Court (as defined below)
regarding use of such Restricted Cash.
E. Sunterra and certain of its subsidiaries (hereinafter sometimes
referred to as "Debtors in Possession"), have commenced cases (the "Chapter 11
Cases") under Chapter 11 of Title 11 of the United States Code in the United
States Bankruptcy Court for the District of Maryland, Baltimore Division (the
"Sunterra Bankruptcy Court").
F. Pursuant to an order executed May 31, 2000, the Sunterra
Bankruptcy Court authorized the joint administration of the bankruptcy estate of
each Borrower.
G. By virtue of the filing of the Chapter 11 case, certain rights
were and remain vested solely in the estates and the Debtors in Possession and
no independent causes of action may be brought by any other party to prosecute
such actions without specific authorization of the Sunterra Bankruptcy Court,
which has not granted such authority to any creditor or party-in-interest. Thus,
the claims which remain vested solely in the estates and the Debtors in
Possession, include, without limitation, all avoidance claims, fraudulent
transfer claims and other actions which might be asserted pursuant to state law
and/or pursuant to 506(c), 542, 544, 545, 547, 548, 550 and all equitable
subordination claims ("Vested Claims"). Borrowers and Guarantors have brought
certain complaints and other actions against FINOVA in the Chapter 11 Cases and
in the United States Bankruptcy Court for the District of Delaware in the
Chapter 11 Bankruptcy Case of FINOVA and its affiliates, Case Nos. 01-0697 (PJW)
through 01-0705 (PJW), as set forth on Schedule F (the "Litigation").
----------
H. Borrowers and Guarantors wish to either pay off or structure a
purchase of the FINOVA Loans or a combination thereof and discharge, in full,
all obligations, claims and liabilities of any kind or nature, known or unknown,
arising in connection with or in any way relating to the FINOVA Loans, the
documents that evidence or secure the FINOVA Loans and any and all other
documents, agreements, or instruments by and between or related to Sunterra, its
affiliates, related entities, Borrowers or Guarantors (the "Loan Documents") and
any other obligations, claims and liabilities between the Borrowers, the
Guarantors and FINOVA (collectively, the "Obligations") and the Borrowers and
FINOVA wish to enter into this Agreement in order to: (i) set forth the payoff
or sale amount; (ii) provide for the unconditional release of any and all
collateral that secures the FINOVA Loans; (iii) dismiss the Litigation with
prejudice; and (iv) release any and all claims between FINOVA and the Borrowers
and Guarantors.
I. Each and every such term and condition contained herein is a
critical and integral part of FINOVA's covenants and promises contained herein
including, without limitation, FINOVA's agreement to accept the Payoff Amount.
FINOVA asserts that it is owed substantially more than the Payoff Amount and is
willing to accept the material discount contemplated in this Agreement only upon
receipt of the Payoff Amount (together with the releases and other benefits
contained herein) no later than January 25, 2002. This Agreement and each of its
terms are to be taken as a whole and nothing contained herein shall or shall be
deemed to be an admission of any liability or responsibility whatsoever of
FINOVA with respect to any matter, including, without limitation, its claims,
liens on the Pledged Collateral and any other collateral pledged to FINOVA to
secure the FINOVA Loans, the Vested Claims or the Litigation.
NOW, THEREFORE, Borrowers, Guarantors and FINOVA agree as follows:
1. Recitals. The Recitals set forth above are true, correct and
--------
complete, constitute a material part of this Agreement, are not merely prefatory
hereto, and are hereby incorporated herein by this reference.
2
2. Payoff of FINOVA Loans and All Obligations Owing to FINOVA. In
----------------------------------------------------------
consideration of the total sum of One Hundred Five Million Dollars
($105,000,000.00) (less Five Million Dollars ($5,000,000.00) of Cash Collateral
previously delivered to or made available to FINOVA) (the "Payoff Amount"),
FINOVA agrees and acknowledges that upon receipt by FINOVA of the Borrowers'
Payment (as hereinafter defined), the Obligations of Borrowers and Guarantors to
FINOVA shall be forever satisfied and paid in full and fully discharged, and
agrees that upon receipt of the Borrowers' Payment, as hereinafter defined,
Borrowers and Guarantors shall be deemed to be automatically released and
discharged from any and all Obligations to FINOVA which exist as of the date of
this Agreement, including any obligations under the Loan Documents. FINOVA
acknowledges that it has received Five Million Dollars ($5,000,000.00), pursuant
to that certain CONSENT ORDER RE: (I) STANDSTILL OF MATTERS PENDING AGAINST
FINOVA CAPITAL CORPORATION; AND (II) LIMITED USE OF FINOVA'S CASH COLLATERAL
dated December 5, 2001. Further, on the Closing Date (as hereinafter defined),
but only so long as FINOVA has received the Borrowers' Payment, FINOVA shall be
deemed to have released any and all interests and claims in and to the
Restricted Cash. The Payoff Amount is a final and absolute amount and shall not
accrue interest. At least three (3) business days prior to the Closing Date,
FINOVA shall provide an accounting of all Cash Collateral then held, applied or
maintained by FINOVA, which shall then be fixed for purposes of Closing (the
"Fixed Cash Collateral Amount"). At Closing, the Fixed Cash Collateral Amount
shall be applied to the Payoff Amount. Borrowers shall pay to FINOVA, in
immediately available funds, the difference between the Payoff Amount and the
Fixed Cash Collateral Amount ("Borrowers' Payment"). Notwithstanding anything
herein to the contrary, FINOVA agrees and acknowledges that the Borrowers shall
have the unfettered right to apply any amount of the Restricted Cash towards the
Payoff Amount. At any time after the Closing Date, FINOVA agrees to immediately
deliver to Sunterra or its designee, any sums of money, or any other assets in
which the Borrowers or Guarantors have any right or interest, received by it or
its agents or designees related to the Obligations or received by it pursuant to
any servicing or custodial agreements with or related to the Borrowers or any
other money or property whatsoever to which the Borrowers are entitled,
including all sums of Cash Collateral received by FINOVA which are not included
in the Fixed Cash Collateral Amount. All sums representing the Payoff Amount
shall be deemed to be paid by Borrowers and applied to the Obligations The
Closing Date shall be the later of: (i) three (3) business days after the entry
of final non-appealable bankruptcy court order, which contains a full release of
FINOVA, as set forth herein, by Borrowers, Guarantors, the estates of Sunterra
and each of its Chapter 11 Subsidiaries, and the Official Committee of Unsecured
Creditors, and any subsequently appointed Chapter 11 or Chapter 7 Trustee,
except for the Bank of America Matter (as hereinafter defined) entered in the
Sunterra Bankruptcy Court approving this Agreement ("Final Order"); (ii) the
date on which FINOVA has delivered all the releases, assignments and closing
documents required under this Agreement; and (iii) the date FINOVA has received
the Payoff Amount in immediately available funds ("Closing Date").
Notwithstanding the foregoing, in no event shall the Closing Date be prior to
January 3, 2002 or after January 25, 2002. The closing of the transaction
contemplated by this Agreement (the "Closing") shall occur in the offices of
Xxxxxxxx & Xxxxx, Citigroup Center, 000 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000-0000.
3. Termination and Release of Loan Documents. On or prior to the
-----------------------------------------
Closing Date, FINOVA shall escrow with an escrow agent acceptable to FINOVA and
Sunterra: (i) all
3
promissory notes evidencing the FINOVA Loans and all original promissory notes
and guaranties related to the FINOVA Loans or any other Obligations due to
FINOVA; (ii) executed releases of any existing mortgages or deeds of trust in
favor of FINOVA or trustees for the benefit of FINOVA in form and content
sufficient to release of record all such instruments, including, but not limited
to, with respect to those mortgages and deeds of trust identified on Schedule G
----------
attached hereto; (iii) fully executed UCC financing statement terminations in
form and content sufficient to terminate financing statements wherever they are
recorded or filed, including, but not limited to, those UCC Financing Statements
identified on Schedule H attached hereto; (iv) release of any pledge or
----------
assignment of the Pledged Collateral, Cash Collateral, or Loan Documents pledged
or assigned to others by FINOVA pursuant to the approved final plan of
reorganization in FINOVA'S bankruptcy proceeding in form satisfactory to
Sunterra and its lenders; and (v) such other releases, cancellations,
terminations, and other documents as the Borrowers and the Guarantors may
reasonably require. FINOVA shall provide specific written instructions to the
escrow agent providing for cancellation of promissory notes and the receipt of
releases and termination statements at Closing only so long as FINOVA confirms
in writing the receipt of Borrowers' Payment and the satisfaction of the other
conditions contained herein.
4. Further Assurances. Following the Closing Date, FINOVA shall
------------------
execute and deliver to Sunterra or its designee, within five (5) days of written
request therefor, any releases, cancellations, terminations or other documents
with respect to any notes, mortgages, deeds of trusts, financing statements,
pledges, security interests, litigation, claims, or any other matter which
represents an acknowledgment of the termination of the Obligations and any
collateral therefor and has not yet been properly released or assignments,
endorsements or other documents evidencing an assignment or sale of the FINOVA
Loans and Loan Documents, if such an election is exercised.
5. Pledged Collateral. On the Closing Date, but only so long as
------------------
FINOVA has received the Borrowers' Payment, FINOVA shall deliver to Sunterra, or
its designee, all Pledged Collateral and any and all personal property
collateral held by FINOVA or its nominee, agent, bailee, or custodian in
connection with the Obligations. Following the execution of this Agreement,
FINOVA and the Borrowers shall use their best efforts to cooperate and to
provide for the transfer of the servicing functions performed by FINOVA with
respect to any portion of the Pledged Collateral as soon as practicable
following the Closing Date. Until such servicing transfer is completed, FINOVA
shall use its best efforts to continue servicing such portion of the Pledged
Collateral consistent with past practices and in accordance with any agreements
governing such servicing obligations. Upon entry of the order approving the
Agreement, Sunterra will pay the outstanding invoices for servicing fees owed to
FINOVA for October-November, 2001 and shall pay for the preparation of all 1099
statements for customers serviced by FINOVA. Sunterra acknowledges that such
amounts are administrative expenses of the Chapter 11 Cases. Servicing shall be
transferred to a new servicing agent by no later than February 28, 2002 unless
FINOVA, Borrowers and Guarantors enter into a written servicing agreement,
satisfactory to all parties, which is approved by the Sunterra Bankruptcy Court.
If servicing is not transferred by January 31, 2002, Sunterra shall pay the
December 2001 invoice for servicing by no later than February 1, 2002.
Following the execution of this Agreement, FINOVA shall provide
Borrowers and their designees, reasonable access to the Pledged Collateral and
related documentation, files and
4
reports, during normal business hours, for purposes of reviewing such Pledged
Collateral and related documentation, files and reports. FINOVA shall provide
reasonable assistance and cooperation as necessary for Sunterra to complete such
review and to prepare for the Closing.
FINOVA and the Borrowers shall use their best efforts to coordinate
and complete, as soon as reasonably possible, all of the activities necessary to
consummate and complete the transactions contemplated by this Agreement,
including but not limited to, the transfer of pledged assets, servicing and
custodial arrangements, post-closing receipts of funds and notices to be
delivered to timeshare owners with respect to the new address of the payee.
Further, FINOVA and the Borrowers shall enter into such additional agreements
and undertakings as the parties shall deem reasonably necessary in furtherance
of their obligations under this Agreement.
6. Tolling of Litigation; Dismissal of Litigation.
----------------------------------------------
a. On the Closing Date, Sunterra and certain of its subsidiaries in
the Chapter 11 Cases, shall file voluntary motions to dismiss the Litigation in
the Chapter 11 Cases, with prejudice, in the forms attached hereto as Schedule
--------
J.
-
b. Provided FINOVA is not in breach of this Agreement, then following
the Closing, Borrowers and Guarantors agree not to oppose any motion or,
opposition or other action by FINOVA in the Chapter 11 Cases against any other
party in connection with the FINOVA Loans.
7. Mutual Release; Waiver of all Claims. Except for any covenants
------------------------------------
and obligations contained herein, upon the Closing Date and the receipt of the
Borrowers Payment by FINOVA, this Agreement shall constitute a full and
unconditional release by FINOVA, its successors and assigns, employees, agents,
attorneys, officers, directors and trustees from any and all actions, suits,
liens, debts, dues, trespasses, damages, injuries, sums of money, claims,
contracts and demands whatsoever which it may have against the Borrowers or
Guarantors (including their respective affiliates and subsidiaries, officers,
directors, agents, attorneys and employees), jointly, severally, or jointly and
severally, whether known or unknown, from the beginning of the world to the
Closing Date, and, particularly, but not by way of limitation of the foregoing
general terms, all lawsuits, damages, injuries, claims, debts, dues, liens,
demands and sums of money arising out of or related to the Loan Documents and
the Obligations, including, but not limited to, their negotiation, execution,
enforcement and any other matters related thereto.
Except for the covenants and obligations of FINOVA contained
herein which are intended to survive the Closing Date, upon the Closing Date,
this Agreement shall constitute a full and unconditional release by Borrowers
and Guarantors, as debtors and as debtors in possession on behalf of their
respective bankruptcy estates, their affiliates, successors and assigns,
employees, agents, attorneys, officers, directors and trustees, any subsequently
appointed Chapter 7 or Chapter 11 Trustee and the Official Committee of
Unsecured Creditors from any and all actions, suits, liens, debts, dues,
trespasses, damages, injuries, sums of money, claims, contracts and demands
whatsoever except the Bank of America matter (as hereinafter defined) which they
may have against FINOVA (including its affiliates and subsidiaries, officers,
directors, agents, attorneys and employees), known or unknown, from the
beginning of the world to the Closing Date, and, particularly, but not by way of
limitation, all lawsuits, damages,
5
injuries, claims (including all Vested Claims and all claims in the Delaware
Bankruptcy Court and any claims relating to the rejection of the Loan Portfolio
Purchase Agreement relating to Xxxxxx Lake Tahoe, Powhatan and Green Springs),
debts, dues, liens, demands and sums of money arising out of or related to the
Loan Documents and the Obligations, including, but not limited to, their
negotiation, execution, enforcement and any other matters related thereto.
Borrowers and Guarantors hereby agree, absent a legal obligation to do so, that
they will not provide access to information, and, in no event will they assist
in the prosecution of any action, including those relating to the Vested Claims,
against FINOVA.
8. Representations, Warranties and Covenants of FINOVA. FINOVA
---------------------------------------------------
hereby represents and warrants to Borrowers and Guarantors that it is currently
the holder of the Loan Documents, the Pledged Collateral and the Cash Collateral
and has not assigned, pledged or transferred, impaired or encumbered them in any
way and is authorized to enter into this Agreement and transfer the Loan
Documents, Pledged Collateral, the Cash Collateral, the right to receive
payments due under the Loan Documents or any collateral or repayment rights
related to the Obligations or the FINOVA Loans. There are no participants or
other parties who would be required to execute this Agreement or releases,
terminations or other items which would evidence the discharge of the
Obligations and the release of any collateral. FINOVA makes such transfer and
pledge without recourse, "AS IS," "WHERE IS," and 'WITH ALL FAULTS." Except as
expressly set forth herein, FINOVA makes no other representations or warranties,
express or implied, including without limitation, any warranties regarding the
extent, validity, enforceability or priority of FINOVA's liens or claims, nor
the validity of any claim made by Bank of America against FINOVA concerning the
Loan Documents, Pledged Collateral or the Cash Collateral. FINOVA covenants and
agrees from and after the date hereof, unless required by Court order in
connection with any action taken against FINOVA, not (i) to release any
interests in the Pledged Collateral or waive any rights with respect to third
parties (except in connection with any payoff of any mortgage receivables
related to purchaser timeshare interest sales, in the ordinary course of
business); or (ii) to take any action or permit or consent to the taking of any
action, (or fail to take any action or fail to permit or consent to the taking
of any action), which action or failure might impair or encumber in any way the
Loan Documents, the Pledged Collateral, or the Cash Collateral or any rights of
Borrowers or Guarantors with respect to the Restricted Cash. Prior to Closing,
if FINOVA is required by Court order to take any action set forth in subsections
(i) or (ii) of the previous sentence, Sunterra shall, at its option, have the
right to terminate this Agreement.
9. Assignment of Loans.
-------------------
Upon the request of Sunterra, not less than three (3) business
days prior to the Closing Date, FINOVA shall, in lieu of the termination and
release of all of the FINOVA Loans pursuant to Section 3 above, assign all of
its right, title and interest in and to all or a portion of the FINOVA Loans,
including, but not limited to, its right, title and interest in all Loan
Documents, Obligations, Pledged Collateral, Restricted Cash, Cash Collateral,
liens, encumbrances, litigation, rights and benefits related to the FINOVA Loans
(the "FINOVA Loan Assignment"). In the event of a FINOVA Loan Assignment, then
the following provisions and all other terms and conditions herein, including
without limitation, the mutual releases and waiver of all claims set forth in
Section 7 above, shall apply to this Agreement:
6
a. The Payoff Amount shall be One Hundred Four Million Seven Hundred
and Fifty Thousand Dollars ($104,750,000.00) (less Five Million Dollars
($5,000,000.00) of Cash Collateral previously delivered or made available to
FINOVA). FINOVA acknowledges that it has received Five Million Dollars
($5,000,000.00), pursuant to that certain CONSENT ORDER RE: (I) STANDSTILL OF
MATTERS PENDING AGAINST FINOVA CAPITAL CORPORATION AND (II) LIMITED USE OF
FINOVA'S CASH/COLLATERAL dated December 5, 2001. The Cash Collateral then held
by FINOVA shall be applied to the Payoff Amount.
b. At Closing, FINOVA shall deliver to Sunterra or its designee
satisfactory assignments of all or designated Loan Documents, its rights and
interests under the FINOVA Loans and all or designated Pledged Collateral,
pursuant to appropriate assignment documents and endorsements in form and
content reasonably satisfactory to Sunterra or its Designee and FINOVA and any
other necessary instruments customary for transactions of this nature and
reasonably acceptable to Sunterra and FINOVA. FINOVA shall deliver to Sunterra
or its designee all or designated Promissory Notes related to the FINOVA Loans,
all or designated Loan Documents, Pledged Collateral, title policies, surveys,
reports documents and information that FINOVA may possess, control or have
access to and any and all or designated Personal Property Collateral held by
FINOVA or its nominee, agent, bailee or custodian, except for any internal
reports, or confidential or privileged documents in connection with the
Obligations.
c. From and after the Closing Date, and to be incorporated into any
confirmed plan of reorganization, and provided that FINOVA has performed all of
its obligations hereunder, including but not limited to, the assignment of all
Pledged Collateral, Sunterra shall act timely and in good faith to indemnify,
protect, hold harmless and defend FINOVA from and against any and all claims or
expenses (including reasonable attorney's fees and expenses) of FINOVA arising
in or related to the COMPLAINT BY BANK OF AMERICA, N.A., FOR ITSELF AND AS
ADMINISTRATIVE AGENT, TO (i) DETERMINE EXTENT, VALIDITY AND PRIORITY OF LIENS ON
PROPERTY; AND (ii) COMPEL THE RELEASE OF LIENS BY FINOVA CAPITAL CORPORATION
FILED IN THE CHAPTER 11 CASES AS ADV. PROC. NO. 01-5052-JS ("Bank of America
Matter").
10. Bankruptcy Court Approval. Borrowers shall promptly file all
-------------------------
appropriate Bankruptcy motions and notices in the Sunterra Bankruptcy Court and
shall use commercially reasonable efforts to seek and obtain approval from the
Sunterra Bankruptcy Court of this Agreement and the consummation of the
transactions described herein.
It is a condition precedent to the Closing and to all releases,
discharges and such other covenants and agreements as are set forth herein, that
the Sunterra Bankruptcy Court, pursuant to final non-appealable court order: (i)
makes a finding and thereby orders that FINOVA holds a duly perfected, valid,
unavoidable and enforceable lien on the Pledged Collateral and such other
collateral as has been pledged to FINOVA to secure the FINOVA Loans; (ii)
authorizes the full and final payoff of the FINOVA Loans; (iii) authorizes the
discharge of any Obligations between the parties; (iv) authorizes the releases
of collateral and liability contemplated by this Agreement; and (v) authorizes
any and all terms of this Agreement.
7
11. Notices. Any and all notices and communications provided for
-------
hereunder shall be in writing and shall be mailed, telecopied or delivered, if
to any Borrower, at the following address:
Sunterra Corporation
0000 Xxxx Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxx 00000
Attention: Chief Financial Officer
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
and with copies to:
Sunterra Corporation
0000 Xxxx Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxx 00000
Attention: General Counsel
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
Xxxxxxxxx, Xxxxxx & Xxxxxxx L.L.P.
Xxxxx Xx. Xxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000-0000
Attention: Xxxx X. Xxxxxxxx, Esq.
and Xxxxxx X. Xxxxxxxx, Esq.
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
and with a copy to:
Greenwich Capital Markets, Inc.
000 Xxxxxxxxx Xxxx
Xxxxxxxxx, Xxxxxxxxxxx 00000
Attention: Xx. Xxxx X. Xxxxxxxx
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
If to FINOVA, at the following address:
8
FINOVA Capital Corporation
0000 Xxxx Xxxxxx Xxxxxx Xxxx, Xxxxx 000
Xxxxxxxxxx, Xxxxxxx 00000
Attention: Xxxxxxxx X. Xxxxxxxxxx
Chief Executive Officer
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
with a copy to:
Xxxxxx Xxxxxx Xxxxx
1999 Avenue of the Stars
Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxx Xxxxxxx Xxxxxx
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
or, as to each party, at such other address as shall be designated by such party
in a written notice to the other party complying as to delivery with the terms
of this Section. All such notices and other communication shall be effective (i)
if mailed, when received or three (3) days after deposited in the mails,
whichever occurs first, (ii) if telecopied when transmitted and confirmation
received, or (iii) if delivered, upon delivery.
12. Amendments. No amendment or waiver of any provision of this Agreement
----------
and no consent to any departure by the parties shall be effective unless the
same shall be in writing and signed by the parties.
13. Expenses. Each party shall bear the cost of their own respective
--------
professional fees, including accounting, legal and other professional costs and
fees in connection with this transaction, and Borrowers and Guarantors shall
bear the cost of filing and preparation of all initial drafts of all
assignments, documents, deeds of release, mortgage releases, financing statement
terminations, and other terminations of security interests which require filing
fees.
14. Counterparts. This Agreement may be executed in any number of
------------
counterparts and by different parties hereto in separate counterparts, each of
which shall be deemed to be an original, but all of which taken together shall
constitute one and the same agreement.
15. Governing Law. This Agreement shall be governed by and construed in
-------------
accordance with the laws of the State of New York, exclusive of New York
conflicts of laws provisions (other than General Obligation Law (S) 5-1401 et.
seq.).
16. WAIVER OF JURY TRIAL. THE PARTIES HEREBY WAIVE ANY RIGHT TO A TRIAL
--------------------
BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM CONCERNING ANY RIGHTS UNDER
THIS AGREEMENT OR THE LOAN DOCUMENTS OR ANY AMENDMENT, WAIVER, CONSENT,
INSTRUMENT, DOCUMENT OR OTHER
9
AGREEMENT DELIVERED OR WHICH IN THE FUTURE MAY BE DELIVERED IN CONNECTION
THEREWITH, ARISING FROM ANY FINANCIAL RELATIONSHIP EXISTING IN CONNECTION WITH
THIS AGREEMENT, AND AGREE THAT ANY SUCH ACTION, PROCEEDINGS OR COUNTERCLAIM
SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY.
17. Jurisdiction and Venue. FINOVA hereby submits to the exclusive
-----------------------
jurisdiction of the United States Bankruptcy Court for the District of Maryland,
Baltimore Division in the Chapter 11 Cases over any suit, action or proceeding
arising out of or relating to this Agreement. FINOVA hereby irrevocably and
unconditionally waives any objection to the laying of venue of any such suit,
action or proceeding relating to this Agreement brought in such court as having
been brought in an inconvenient forum. FINOVA hereby consents to such court
exercising personal jurisdiction over FINOVA in any such suit, action or
proceeding and waives the defense of lack of personal jurisdiction on any
grounds, including without limitation, insufficient contacts with the forum in
which the Chapter 11 Cases are pending. FINOVA agrees that a final judgment in
any such suit, action or proceeding brought in any such court shall be
conclusive and binding upon it and may be enforced in any other courts to whose
jurisdiction FINOVA is or may be subject to, by suit upon such judgment. FINOVA
agrees and acknowledges that this Agreement is related to the Chapter 11 Cases
for the purposes of 28 U.S.C. (S)1334.
18. No Party Deemed Drafter. Each of the parties hereto agrees that no
-----------------------
party hereto shall be deemed to be the drafter of this Agreement.
19. Binding Effect. This Agreement shall become effective when it shall
--------------
have been executed by each party hereto and thereafter shall be binding upon and
inure to the benefit of the parties to this Agreement and their respective
successors and assigns.
20. Time is of the Essence. Time is of the essence of this Agreement and
----------------------
all of the provisions hereof.
21. Integration. This Agreement contains all the representations,
-----------
agreements, covenants, understandings and conditions of the parties, and there
are no other oral or written representations, agreements, covenants,
understandings or conditions that are not reflected herein.
22. Prevailing Parties. In the event that a dispute arises between the
------------------
parties which results in litigation, the non-prevailing party or parties shall
be held responsible for all of the prevailing party's or parties' costs and
expenses associated with the litigation, including legal fees and expenses.
10
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers as of the date first above written.
This Agreement is modified pursuant to the December 20, 2001 Transcript of the
Hearing on Approval of the Payoff Agreement and Mutual Release held in the
United States Bankruptcy Court for the District of Maryland Northern Division;
Chapter 11 Case No. 00-5-6-6931-JS and a certain letter agreement dated January
25, 2002 by and between FINOVA and Sunterra, copies of which are attached
hereto.
[SIGNATURES ON FOLLOWING PAGES]
LENDER:
------
FINOVA CAPITAL CORPORATION, A Delaware Corporation
By: /s/ Xxxxxxxx X. Xxxxxxxxxx
--------------------------------------
Name: Xxxxxxxx X. Xxxxxxxxxx
Title: Chief Executive Officer
BORROWERS:
---------
SUNTERRA CORPORATION, a
Maryland Corporation
By: /s/ Xxxxxxxx X. Xxxxx
-------------------------------------
Name: Xxxxxxxx X. Xxxxx
Title: Vice President And Chief Financial
Officer
AKGI LAKE TAHOE INVESTMENTS, INC.
By: /s/ Xxxxxxxx X. Xxxxx
-------------------------------------
Name: Xxxxxxxx X. Xxxxx
Title: Vice President
AKGI ST. MAARTEN N.V.
By: /s/ Xxxxxxxx X. Xxxxx
-------------------------------------
Name: Xxxxxxxx X. Xxxxx
Title: Vice President
ALL SEASONS PROPERTIES, INC.
By: /s/ Xxxxxxxx X. Xxxxx
----------------------------------------------
Name: Xxxxxxxx X. Xxxxx
Title: Vice President
ALL SEASONS REALTY, INC.
By: /s/ Xxxxxxxx X. Xxxxx
----------------------------------------------
Name: Xxxxxxxx X. Xxxxx
Title: Vice President
ALL SEASONS RESORTS, INC. (AZ)
By: /s/ Xxxxxxxx X. Xxxxx
----------------------------------------------
Name: Xxxxxxxx X. Xxxxx
Title: Vice President
ALL SEASONS RESORTS, INC. (TX)
By: /s/ Xxxxxxxx X. Xxxxx
----------------------------------------------
Name: Xxxxxxxx X. Xxxxx
Title: Vice President
ARGOSY GRAND BEACH, INC.
By: /s/ Xxxxxxxx X. Xxxxx
----------------------------------------------
Name: Xxxxxxxx X. Xxxxx
Title: Vice President
ARGOSY HILTON HEAD, INC.
By: /s/ Xxxxxxxx X. Xxxxx
---------------------------------------------
Name: Xxxxxxxx X. Xxxxx
Title: Vice President
ARGOSY PARTNERS, INC.
By: /s/ Xxxxxxxx X. Xxxxx
---------------------------------------------
Name: Xxxxxxxx X. Xxxxx
Title: Vice President
ARGOSY/KGI GRAND BEACH
INVESTMENT PARTNERSHIP
By: Argosy Grand Beach, Inc.,
Its General Partner
By: /s/ Xxxxxxxx X. Xxxxx
---------------------------------------------
Name: Xxxxxxxx X. Xxxxx
Title: Vice President
By: Argosy Partners, Inc.,
Its General Partner
By: /s/ Xxxxxxxx X. Xxxxx
-----------------------------------------
Name: Xxxxxxxx X. Xxxxx
Title: Vice President
By: KGI Grand Beach Investments Inc.,
Its Managing General Partner
By: /s/ Xxxxxxxx X. Xxxxx
-----------------------------------------
Name: Xxxxxxxx X. Xxxxx
Title: Vice President
ARGOSY/KGI PORT ROYAL PARTNERS
By: Argosy Hilton Head, Inc.
Its General Partner
By: /s/ Xxxxxxxx X. Xxxxx
--------------------------------
Name: Xxxxxxxx X. Xxxxx
Title: Vice President
By: KGI Port Royal, Inc.,
Its Managing General Partner
By: /s/ Xxxxxxxx X. Xxxxx
--------------------------------
Name: Xxxxxxxx X. Xxxxx
Title: Vice President
AVCOM INTERNATIONAL, INC.
BY: /s/ Xxxxxxxx X. Xxxxx
------------------------------------
Name: Xxxxxxxx X. Xxxxx
Title: Vice President
DESIGN INTERNATIONALE-RMI, INC.
BY: /s/ Xxxxxxxx X. Xxxxx
------------------------------------
Name: Xxxxxxxx X. Xxxxx
Title: Vice President
GRAND BEACH PARTNERS, L.P.
By: Argosy/KGI Grand Beach Investment
Partnership, Its General Partner
By: Argosy Partners, Inc.,
Its General Partner
By: /s/ Xxxxxxxx X. Xxxxx
-------------------------------
Name: Xxxxxxxx X. Xxxxx
Title: Vice President
By: Argosy Grand Beach, Inc.,
Its General Partner
By: /s/ Xxxxxxxx X. Xxxxx
-------------------------------
Name: Xxxxxxxx X. Xxxxx
Title: Vice President
By: KGI Grand Beach Investments, Inc.
Its Managing General Partner
By: /s/ Xxxxxxxx X. Xxxxx
-------------------------------
Name: Xxxxxxxx X. Xxxxx
Title: Vice President
GRAND BEACH RESORT,
LIMITED PARTNERSHIP
By: Grand Beach Partners, LP,
Its General Partner
By: Argosy/KGI Grand Beach
Investment Partnership, Its General
Partner
By: KGI Grand Beach
Investments, Inc.,
Its Managing General Partner
By: /s/ Xxxxxxxx X. Xxxxx
---------------------------
Name: Xxxxxxxx X. Xxxxx
Title: Vice President
By: Argosy Partners, Inc.,
Its General Partner
By: /s/ Xxxxxxxx X. Xxxxx
---------------------------
Name: Xxxxxxxx X. Xxxxx
Title: Vice President
By: Argosy Grand Beach, Inc.,
Its General Partner
By: /s/ Xxxxxxxx X. Xxxxx
---------------------------
Name: Xxxxxxxx X. Xxxxx
Title: Vice President
GREENSPRINGS ASSOCIATES
By: Plantation Resorts Group, Inc.,
Its Joint Venturer
By: /s/ Xxxxxxxx X. Xxxxx
-----------------------------------
Name: Xxxxxxxx X. Xxxxx
Title: Vice President
By: Greensprings Plantation Resort, Inc.,
Its Joint Venturer
By: /s/ Xxxxxxxx X. Xxxxx
-----------------------------------
Name: Xxxxxxxx X. Xxxxx
Title: Vice President
GREENSPRINGS PLANTATION
RESORT, INC.
By: /s/ Xxxxxxxx X. Xxxxx
--------------------------------------
Name: Xxxxxxxx X. Xxxxx
Title: Vice President
XXXXXX TAHOE DEVELOPMENT
By: Lakewood Development Inc.,
Its Managing General Partner
By: /s/ Xxxxxxxx X. Xxxxx
------------------------------------
Name: Xxxxxxxx X. Xxxxx
Title: Vice President
By: Ridgewood Development Inc.,
its General Partner
By: /s/ Xxxxxxxx X. Xxxxx
------------------------------------
Name: Xxxxxxxx X. Xxxxx
Title: Vice President
KGI GRAND BEACH INVESTMENTS, INC.
By: /s/ Xxxxxxxx X. Xxxxx
---------------------------------------
Name: Xxxxxxxx X. Xxxxx
Title: Vice President
KGI PORT ROYAL, INC.
By: /s/ Xxxxxxxx X. Xxxxx
---------------------------------------
Name: Xxxxxxxx X. Xxxxx
Title: Vice President
KGK LAKE TAHOE DEVELOPMENT, INC.
By: /s/ Xxxxxxxx X. Xxxxx
-------------------------------------
Name: Xxxxxxxx X. Xxxxx
Title: Vice President
LAKE TAHOE RESORT PARTNERS, LLC
By: AKGI Lake Tahoe Investments, Inc.,
Its Managing Member
By: /s/ Xxxxxxxx X. Xxxxx
-------------------------------------
Name: Xxxxxxxx X. Xxxxx
Title: Vice President
By: KGK Lake Tahoe Development, Inc.,
Its Member
By: /s/ Xxxxxxxx X. Xxxxx
--------------------------------------
Name: Xxxxxxxx X. Xxxxx
Title: Vice President
LAKEWOOD DEVELOPMENT INC.
By: /s/ Xxxxxxxx X. Xxxxx
-------------------------------------------
Name: Xxxxxxxx X. Xxxxx
Title: Vice President
MMG DEVELOPMENT CORP.
By: /s/ Xxxxxxxx X. Xxxxx
-----------------------------------
Name: Xxxxxxxx X. Xxxxx
Title: Vice President
PLANTATION RESORTS GROUP, INC.
By: /s/ Xxxxxxxx X. Xxxxx
-----------------------------------
Name: Xxxxxxxx X. Xxxxx
Title: Vice President
POINTE PARTNERS LIMITED PARTNERSHIP
By: Xxxxxx Tahoe Developments,
its Managing General Partner
By: Lakewood Development Inc.,
Its Managing General Partner
By: /s/ Xxxxxxxx X. Xxxxx
-----------------------------------
Name: Xxxxxxxx X. Xxxxx
Title: Vice President
By: Ridgewood Development Inc.,
Its General Partner
By: /s/ Xxxxxxxx X. Xxxxx
-----------------------------------
Name: Xxxxxxxx X. Xxxxx
Title: Vice President
PORT ROYAL RESORT, L.P.
By: Argosy/KGI Port Royal Partners,
its General Partner
By: KGI Port Royal, Inc.,
its Managing General Partner
By: /s/ Xxxxxxxx X. Xxxxx
-----------------------------------
Name: Xxxxxxxx X. Xxxxx
Title: Vice President
By: Argosy Hilton Head, Inc.,
its General Partner
By: /s/ Xxxxxxxx X. Xxxxx
-----------------------------------
Name: Xxxxxxxx X. Xxxxx
Title: Vice President
POWHATAN ASSOCIATES
By: Plantation Resorts Group, Inc.,
its Joint Venturer
By: /s/ Xxxxxxxx X. Xxxxx
-------------------------------------
Name: Xxxxxxxx X. Xxxxx
Title: Vice President
By: Williamsburg Vacations, Inc.,
its Joint Venturer
By: /s/ Xxxxxxxx X. Xxxxx
-------------------------------------
Name: Xxxxxxxx X. Xxxxx
Title: Vice President
PREMIER VACATIONS, INC.
By: /s/ Xxxxxxxx X. Xxxxx
----------------------------------------
Name: Xxxxxxxx X. Xxxxx
Title: Vice President
RESORT CONNECTIONS, INC.
By: /s/ Xxxxxxxx X. Xxxxx
----------------------------------------
Name: Xxxxxxxx X. Xxxxx
Title: Vice President
RESORT MARKETING INTERNATIONAL, INC.
By: /s/ Xxxxxxxx X. Xxxxx
----------------------------------------
Name: Xxxxxxxx X. Xxxxx
Title: Vice President
RESORTS DEVELOPMENT INTERNATIONAL, INC.
By: /s/ Xxxxxxxx X. Xxxxx
----------------------------------------
Name: Xxxxxxxx X. Xxxxx
Title: Vice President
RIDGE POINTE LIMITED PARTNERSHIP
By: Pointe Partners Limited Partnership,
its Managing General Partner
By: Xxxxxx Tahoe Development,
its Managing General Partner
By: Lakewood Development Inc.,
its Managing General Partner
By: /s/ Xxxxxxxx X. Xxxxx
------------------------------
Name: Xxxxxxxx X. Xxxxx
Title: Vice President
By: Ridgewood Development Inc.,
its General Partner
By: /s/ Xxxxxxxx X. Xxxxx
-------------------------------
Name: Xxxxxxxx X. Xxxxx
Title:
RIDGEWOOD DEVELOPMENT INC.
By: /s/ Xxxxxxxx X. Xxxxx
------------------------------------------
Name: Xxxxxxxx X. Xxxxx
Title: Vice President
RKG, CORP.
By: /s/ Xxxxxxxx X. Xxxxx
------------------------------------------
Name: Xxxxxxxx X. Xxxxx
Title: Vice President
SUNTERRA FINANCIAL SERVICES, INC.
By: /s/ Xxxxxxxx X. Xxxxx
------------------------------------------
Name: Xxxxxxxx X. Xxxxx
Title: Vice President
SUNTERRA ST. CROIX, INC.
By: /s/ Xxxxxxxx X. Xxxxx
------------------------------------------
Name: Xxxxxxxx X. Xxxxx
Title: Vice President
WILLIAMSBURG VACATIONS, INC.
By: /s/ Xxxxxxxx X. Xxxxx
----------------------------------------
Name: Xxxxxxxx X. Xxxxx
Title: Vice President
