EXHIBIT 10.150
LOAN AGREEMENT
between
RESORT FINANCE LLC,
a Massachusetts limited liability company
("Lender")
and
BLUEGREEN VACATIONS UNLIMITED, INC.,
a Florida corporation
("Borrower")
$50,000,000
Amount of Loan
January 10, 2005
ARTICLE 1. DEFINITIONS..............................................................................4
Section 1.1. Certain Defined Terms......................................................4
Section 1.2. Other Definitional Provisions.............................................18
ARTICLE 2. THE LOAN................................................................................18
Section 2.1. Agreement to Lend and Borrow and Project Loan Maturity....................18
Section 2.2. Disbursements of the Loan.................................................19
Section 2.3. Use of Disbursements......................................................19
Section 2.4. Fees......................................................................19
Section 2.5. No Reduction in Commitment Fee or Program Fee.............................19
Section 2.6. Interest..................................................................20
Section 2.7. Interest Rate Limitation..................................................20
Section 2.8. Repayment of Principal....................................................20
Section 2.9. Adjustment to Lender's Release Price......................................21
Section 2.10. Prepayment of the Loan....................................................21
Section 2.11. Payments..................................................................21
Section 2.12. Applications of Payments; Late Charges....................................22
Section 2.13. Approval Period...........................................................23
Section 2.14. Revolving Nature of Loan..................................................23
Section 2.15. Security..................................................................23
ARTICLE 3. APPROVAL OF PROJECTS; DISBURSEMENTS OF THE LOAN.........................................23
Section 3.1. Project Approvals; Project Commitments and Project Documents..............23
Section 3.2. Project Closings..........................................................24
Section 3.3. Disbursements of Loan Proceeds to Acquire Land and for Development Work...25
Section 3.4. Provisions Applicable to All Disbursements................................26
Section 3.5. Application of Disbursements..............................................27
Section 3.6. The Lender May Make Disbursement Notwithstanding Noncompliance............27
ARTICLE 4. REPRESENTATIONS AND WARRANTIES..........................................................28
Section 4.1. Consideration.............................................................28
Section 4.2. Organization..............................................................28
Section 4.3. Authorization.............................................................28
Section 4.4. Governmental Consents.....................................................28
Section 4.5. Validity..................................................................28
Section 4.6. Financial Position........................................................29
Section 4.7. Governmental Regulations..................................................29
Section 4.8. Employee Benefit Plans....................................................29
Section 4.9. Securities Activities.....................................................29
Section 4.10. No Material Adverse Change................................................29
Section 4.11. Payment of Taxes..........................................................29
Section 4.12. Litigation................................................................30
Section 4.13. Environmental Matters.....................................................30
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Section 4.14. No Burdensome Restrictions................................................30
Section 4.15. Full Disclosure...........................................................30
Section 4.16. Adequate Consideration....................................................31
Section 4.17. Compliance with Laws and Regulations......................................31
Section 4.18. Survival and Additional Representations and Warranties....................31
Section 4.19. USA Patriot Act of 2001...................................................31
ARTICLE 5. COVENANTS OF THE BORROWER...............................................................31
Section 5.1. Consideration.............................................................31
Section 5.2. Reporting Requirements....................................................31
Section 5.3. Borrower's Operations and Management......................................33
Section 5.4. Insurance.................................................................35
Section 5.5. Financial Covenants.......................................................36
Section 5.6. No Encumbrance; No Transfers..............................................36
Section 5.7. Further Assurances........................................................36
Section 5.8. Survival of Covenants.....................................................37
ARTICLE 6. THE PROJECTS............................................................................37
Section 6.1. Consideration.............................................................37
Section 6.2. Title to Project..........................................................37
Section 6.3. No Prior Liens or Claims..................................................37
Section 6.4. Access to the Project.....................................................38
Section 6.5. Compliance with Project Requirements and Laws and Regulations.............38
Section 6.6. Covenants, Zoning, Codes, Permits and Consents............................38
Section 6.7. Utilities.................................................................38
Section 6.8. Map, Permits, Licenses and Approvals......................................39
Section 6.9. Approval of Plans and Specifications and Approval of Budget...............39
Section 6.10. Adequacy of Loan Amount...................................................39
Section 6.11. Construction Start and Completion.........................................39
Section 6.12. Personal Property Incorporation...........................................40
Section 6.13. Contractors and Contracts.................................................40
Section 6.14. Evidence of Ownership of Materials........................................40
Section 6.15. Changes to Plans and Specifications and Budget............................40
Section 6.16. Lender Inspections, Appraisal and Information.............................42
Section 6.17. Correction of Defects.....................................................42
Section 6.18. Protection Against Lien Claims............................................43
Section 6.19. Conveyance, Lease or Encumbrance..........................................43
Section 6.20. Security Instruments......................................................44
Section 6.21. Further Assurances; Cooperation...........................................44
Section 6.22. Negative Covenants........................................................44
Section 6.23. Signs.....................................................................44
ARTICLE 7. SALES OF TIMESHARE INTERESTS AND RELEASES FROM DEED OF TRUST............................45
Section 7.1. Sales and Closings........................................................45
Section 7.2. Sales Operations and Seller's Obligations.................................45
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Section 7.3. Intentionally Omitted.....................................................45
Section 7.4. Releases from Lien of Deed of Trust.......................................45
ARTICLE 8. EVENTS OF DEFAULT AND REMEDIES..........................................................47
Section 8.1. Events of Default.........................................................47
Section 8.2. Remedies..................................................................50
Section 8.3. Application of Proceeds During an Event of Default........................53
Section 8.4. Uniform Commercial Code Remedies; Sale; Assembly of Collateral............53
Section 8.5. Application of UCC Sale Proceeds..........................................54
Section 8.6. Authorization to Apply Assets to Payment of Loan..........................54
ARTICLE 9. MISCELLANEOUS...........................................................................54
Section 9.1. Successors and Assigns; No Assignment by the Borrower.....................54
Section 9.2. Notices...................................................................54
Section 9.3. Borrower's Representative.................................................56
Section 9.4. Changes, Waivers, Discharge and Modifications in Writing..................57
Section 9.5. No Waiver; Remedies Cumulative............................................57
Section 9.6. Costs, Expenses and Taxes.................................................57
Section 9.7. Disclaimer by the Lender; No Joint Venture................................58
Section 9.8. Indemnification...........................................................58
Section 9.9. Consultants...............................................................59
Section 9.10. Titles and Headings.......................................................59
Section 9.11. Counterparts..............................................................59
Section 9.12. The Lender's Rights with Respect to Loan..................................60
Section 9.13. Confidentiality...........................................................60
Section 9.14. Time is of the Essence....................................................60
Section 9.15. No Third Parties Benefited................................................60
Section 9.16. Severability..............................................................60
Section 9.17. Governing Law.............................................................61
Section 9.18. Forum Selection...........................................................61
Section 9.19. USA Patriot Act Notification..............................................61
Section 9.20. Waiver of Jury Trial......................................................62
Section 9.21. Interpretation............................................................62
Section 9.22. Destruction of Note.......................................................62
Section 9.23. Cross Collateralization and Cross Default of Loan and Projects............62
Section 9.24. Attorneys' Fees...........................................................62
Section 9.25. Entire Agreement..........................................................63
Exhibit A CONDITIONS TO OBLIGATION OF THE LENDER TO MAKE THE LOAN..................................1
Exhibit B PROJECT REQUIREMENTS.....................................................................1
Exhibit C PROJECT UNDERWRITING DOCUMENTS...........................................................1
Exhibit D FORM OF PROJECT COMMITMENT...............................................................1
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LOAN AGREEMENT
THIS LOAN AGREEMENT (this "Loan Agreement") is made as of January 6, 2005
by and between BLUEGREEN VACATIONS UNLIMITED, INC., a Florida corporation (the
"Borrower") and RESORT FINANCE LLC, a Massachusetts limited liability company
(the "Lender").
RECITALS:
The Borrower has applied to the Lender for a revolving loan in the
principal amount of $50,000,000 (the "Loan") to finance various timeshare
acquisition, development and construction projects which the Borrower
anticipates undertaking. 1 The Lender is willing to make the Loan upon and
subject to the terms and conditions set forth in this Loan Agreement.
AGREEMENT:
NOW, THEREFORE, in consideration of the covenants and conditions herein
contained, the parties agree as follows:
ARTICLE 1. DEFINITIONS
Section 1.1. Certain Defined Terms
As used herein (including any Exhibits attached hereto), the following terms
have the meanings set forth below (unless expressly stated to the contrary):
"Affiliate" means a Person that, directly or indirectly, controls, is controlled
by, or is under common control with, a referenced Person.
"Addendum to Note" means the Addendum to Note that a Project Owner will be
required to sign if such Project Owner is not already a Borrower, as the same
may be amended or otherwise modified from time to time.
"Advance Rate" means 85%.
"Appraisal Report" means, with respect to a Project in which the Lender requires
in writing an appraisal report, a real estate appraisal report which (i) has
been prepared by an Appraiser, (ii) at the time it is submitted to the Lender is
not more than 3 months old, or was updated by letter not more than 3 months
prior to the date of submission to the Lender, (iii) states that it is prepared
in accordance with the applicable standards of the American Institute of Real
Estate Appraisers for such reports, (iv) provides an appraisal of the Project or
portion thereof required to be appraised
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thereunder, and (v) employs a customary methodology and provides limiting
conditions satisfactory to the Lender.
"Appraiser" means, with respect to a Project in which the Lender requires an
Appraisal Report, a Person who is qualified to appraise property similar in size
and scope to the Project which such Person is acceptable to the Lender in its
sole and absolute discretion.
"Approval Period" means the period during which new projects will be considered
for approval for funding from proceeds of the Loan, which period will commence
on the Effective Date of this Loan Agreement and will end on the Approval Period
Termination Date.
"Approval Period Termination Date" means the date which is 24 months after the
Effective Date of this Loan Agreement.
"Approved Costs" means the categories of costs in the Budget identified by the
Lender as approved costs for each Project, which shall include Land acquisition
costs (including reasonable closing costs actually paid to unaffiliated third
parties), acquisition commissions, capitalized interest, and hard development
costs (including engineering and architectural costs, permit and impact fees,
and bonding costs), but shall exclude soft costs such as marketing costs,
advertising costs, Borrower's overhead costs, and carrying costs.
"Articles of Organization" means the charter, articles, operating agreement,
joint venture agreement, partnership agreement, by-laws and any other written
documents evidencing the formation, organization, governance and continuing
existence of an entity.
"Assignment" means, with respect to a Project, that certain Assignment of
Construction Items previously executed or to be executed by the Borrower in
favor of the Lender, as the same may be amended or otherwise modified from time
to time.
"Assignment of Construction Items" means with respect to a Project a security
interest given in all documents, including architect's agreements, general
contractor's agreement, engineer's agreement, if any, together with, planning
specifications, drawings, tests, reports, permits, license approvals and all
Borrower's rights in and to agreements, all in connection with the Project.
"Available Amount" means the amount of the Loan which is available with respect
to any project which is proposed to be included as a Project, which amount will
equal the Loan Amount less the total of all Project Loan Committed Amounts.
"Bluegreen Corporation" means Bluegreen Corporation, a Massachusetts
corporation.
"Borrower" means, initially, Bluegreen Vacations Unlimited, Inc., a Florida
corporation, together with all Project Owners, jointly and severally.
"Budget" means, with respect to a Project, the itemized acquisition, development
and construction budget for such Project submitted to and approved by the
Lender, as such budget may be amended in accordance with the provisions of this
Loan Agreement.
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"Business Day" means a day other than Saturday, Sunday or a day on which
national banks are legally closed for business in the States of Florida, New
York and Vermont.
"Change" means, with respect to a Project, any material extra work not
contemplated by the Plans and Specifications, the installation of materially
additional or different materials from that set forth in the Plans and
Specifications, or any other material change in the Plans and Specifications.
"CLPI Assignment" means with respect to a Project a written assignment executed
and delivered to Lender or to be executed and delivered to Lender by Borrower
and creating in favor of Lender a perfected, direct, first and exclusive
assignment of the Contracts, Licenses, Permits and Other Intangibles with
respect to such Project in order to facilitate performance of the Borrower's
obligations under the Loan Documents, as it may be from time to time renewed,
amended, restated or replaced.
"Collateral" shall mean all collateral securing the Loan.
"Commitment Fee" means an amount of up to 1.00% of the Loan Amount (i.e.
$500,000), as provided for in Section 2.4 hereof.
"Construction Agreements" means, with respect to a Project, all agreements
(including, without limitation, construction contracts) entered into between the
Borrower and any contractor, architect, engineer, supplier or other Person with
respect to the development or construction of the Project, as such agreements
may be amended or otherwise modified from time to time in accordance with the
Loan Agreement.
"Construction Progress Schedule" means, with respect to a Project, the schedule
for the Development Work submitted to and approved by the Lender, as such
schedule may be adjusted in accordance with the provisions of this Loan
Agreement.
"Contracts, Licenses, Permits and Other Intangibles" means all contracts,
licenses, permits and other intangibles (excluding the reservation system) in
which Borrower now or hereafter has rights and are now or hereafter used in
connection with the marketing and sale of Timeshare Interests corresponding to a
Project and the management and/or operation of a Project .
"Debt" means, for any Person, without duplication, the sum of the following:
(1) indebtedness for borrowed money,
(2) obligations evidenced by bonds, debentures, notes or other
similar instruments,
(3) obligations to pay the deferred purchase price of property or
services,
(4) obligations as lessee under leases which have been or should be,
in accordance with GAAP, recorded as capital leases,
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(5) obligations of such Person to purchase securities (or other
property) which arise out of or in connection with the sale of the same or
substantially similar securities or property,
(6) obligations of such Person to reimburse any bank or other Person in
respect of amounts actually paid under a letter of credit or similar instrument,
(7) indebtedness or obligations of others secured by a lien on any
asset of such Person, whether or not such indebtedness or obligations are
assumed by such Person (to the extent of the value of the asset),
(8) obligations under direct or indirect guaranties in respect of,
and obligations (contingent or otherwise) to purchase or otherwise
acquire, or otherwise to assure a creditor against loss in respect of,
indebtedness or obligations of others of the kinds referred to in clauses
(1) through (7) above, and
(9) liabilities in respect of unfunded vested benefits under plans
covered by Title IV of ERISA.
"Deed of Trust" means, with respect to a Project, that certain Mortgage,
Security Agreement and Fixture Filing with Assignment of Rents, Proceeds and
Agreements (which Assignment can be a separate document) or deed of trust, as
applicable), previously executed or to be executed by the Borrower, or the
applicable Project Owner, as trustor, for the benefit of the Lender, as the same
may be amended or otherwise modified from time to time, including but not
limited to any modifications entered into between the Borrower or the Project
Owner, as applicable and the Lender.
"Default Rate" means 2% above the Interest Rate.
"Development Work" means, with respect to a Project, the renovation of existing
Improvements and/or the construction of Improvements all to be performed on or
with respect to the Land, all of which work and construction will be completed
by or on behalf of the Borrower in accordance with the Plans and Specifications.
"Draw Request Certification" means, with respect to a requested disbursement of
the Loan to fund Approved Costs for acquisition of Land, Improvements or
Development Work, a certification of the Borrower delivered to the Lender
substantially in the form of Exhibit E.
"Effective Date" means the date of this Loan Agreement.
"ERISA" means the Employee Retirement Income Security Act of 1974, as amended
from time to time, and the regulations and rulings issued thereunder.
"Environmental Indemnity" means that certain Hazardous Substances Remediation
and Indemnification Agreement dated as of the date hereof executed by the
Borrower and Guarantor, if any, in favor of the Lender, as the same may be
amended or otherwise modified from time to time.
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"Event of Default" means the occurrence, after any applicable grace period, of
any of the events listed in Section 8.1.
"Fees" means, as the context shall require, any of or collectively, the
Commitment Fee and/or the Program Fee.
"Floor Rate" means 6.90%.
"Force Majeure Event" means fire, flood, labor dispute, weather, governmental
action or other cause beyond the reasonable control of the Borrower that delays
the Development Work or other performance (other than the payment of money).
"GAAP" means generally accepted accounting principles set forth in the 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
prevalent in the United States of America.
"Guarantor" means Bluegreen Corporation and any other Person approved by the
Lender in its sole discretion who executes a Guaranty with respect to the Loan
or any portion thereof at any time after the Effective Date.
"Guaranty" means that primary, joint and several guaranty and subordination
agreement of even date herewith executed by the Guarantor in favor of the
Lender, as the same may be amended or otherwise modified from time to time.
"Hazardous Materials," in violation of any applicable laws, means the following:
(1) any oil, flammable substances, explosives, radioactive
materials, hazardous wastes or substances, toxic wastes or substances or
any other materials or pollutants, exposure to which is prohibited,
limited or regulated by any governmental authority pursuant to any
Hazardous Materials Law;
(2) asbestos in any form which is or could become friable, urea
formaldehyde foam insulation, transformers or other equipment which
contain dielectric fluid containing levels of polychlorinated biphenyls in
excess of fifty (50) parts per million, exposure to which is prohibited,
limited or regulated by any governmental authority pursuant to any
Hazardous Materials Law;
(3) any chemical, material or substance defined as or included in
the definition of "hazardous substances", "hazardous wastes", "hazardous
materials", "extremely hazardous waste", "restricted hazardous waste", or
"toxic substances" or words of similar import under any Hazardous Material
Laws; and
(4) any other chemical, material or substance, exposure to which is
prohibited, limited or regulated by any governmental authority pursuant to
any Hazardous Materials Law.
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"Hazardous Materials Claims" means any and all enforcement, clean-up, removal or
other governmental or regulatory actions or orders threatened, instituted or
completed pursuant to any Hazardous Materials Laws, together with all claims
made or threatened by any third party relating to damage, contribution, cost
recovery compensation, loss or injury resulting from any Hazardous Materials.
"Hazardous Materials Laws" means any federal, state or local laws, ordinances
and the regulations, policies or publications promulgated pursuant thereto
relating to (i) the environment, (ii) health and safety, (iii) any Hazardous
Materials (including, without limitation, the use, handling, transportation,
production, disposal, discharge or storage thereof), (iv) industrial hygiene or
(v) environmental conditions on, under or about property, including, without
limitation, soil and groundwater conditions; including, but not limited to: the
Clean Air Act, as amended, 42 U.S.C. Section 7401, et seq.; the Clean Water Act,
33 U.S.C. Section 1251, et seq.; the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, 42 U.S.C. Section 9601, et seq., as
amended by the Superfund Amendments and Reauthorization Act of 1986, 42 U.S.C.
Section 11001, et seq.; the Federal Water Pollution Control Act, as amended, 33
U.S.C. Section 1251, et seq.; the Hazardous Materials Transportation Act, as
amended, 49 U.S.C. Section 5101, et seq.; the Resource Conservation and Recovery
Act, 42 U.S.C. Section 6901, et seq.; the Safe Drinking Water Act, 42 U.S.C.
Sections 300f to 300j; the Solid Waste Disposal Act, 42 U.S.C. Section 3251, et
seq.; the Toxic Substances Control Act, 15 U.S.C. Section 2601, et seq.; the
Occupational Safety and Health Act, 29 U.S.C. ss. 651 et seq.; the Federal
Insecticide, Fungicide and Rodenticide Act, 7 U.S.C. xx.xx. 136 et seq.; the
Endangered Species Act, 16 U.S.C. xx.xx. 1531 et seq. and the National
Environmental Policy Act, 42 U.S.C. ss. 4321 et seq.
"Improvements" means all buildings, structures and improvements of every nature
whatsoever situated on or to be constructed on the Land in accordance with the
Plans and Specifications, inclusive of the Units to be used as part of the
Timeshare Program.
"Indemnified Party" means the Lender and any Affiliate of Lender and any
successors or assigns of Lender or any such Affiliate and each of their
officers, directors, employees, agents, attorneys, consultants and advisors.
"Inspector" means, with respect to a Project, the inspector(s) or engineer(s)
engaged by the Lender, at the expense of the Borrower, to provide to Lender
consultation services in connection with the Project.
"Interest Due Date" means the 15th calendar day of each month in which the
Lender has sent a statement of interest due pursuant to the terms of Section
2.6(b).
"Interest Rate" means the greater of (A) LIBOR plus 3.90% and (B) the Floor
Rate.
"Interest Reserve" means, with respect to a Project, the amount within the
Budget which has been designated by the Borrower and approved by the Lender as
available to pay the interest on the Loan.
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"Inventory Appraised Value" means with respect to a Project Loan, the value of
the related Project as stated in the related Appraisal Report, if Lender
requires in writing an Appraisal Report.
"Land" means, with respect to a Project, that certain real property which is
suitable for and is substantially entitled for the Improvements and the use
thereof as part of a Timeshare Program, as such real property is legally
described in the Deed of Trust.
"Laws and Regulations" shall mean (i) all laws, regulations, orders, codes,
ordinances, rules, statutes and policies of all local, regional, county, state
and federal governmental authorities having jurisdiction over a Project and (ii)
all restrictive covenants and other title encumbrances, permits and approvals,
leases and other rental agreements which in any case relate to the development,
occupancy, ownership, management, use, and/or operation of a Project.
"Lender" means Resort Finance LLC, a Massachusetts limited liability company,
and its successors or assigns.
"Lender's Escrow Instructions" shall mean, with respect to a Project, the escrow
instructions issued by the Lender, or the Lender's legal counsel on behalf of
the Lender, to the Title Company and accepted in writing by the Title Company,
specifying (i) the terms and conditions under which the Title Company may
disburse the initial disbursement of the Project Loan and (ii) the Lender's
requirements with respect to the title insurance policy to be issued with
respect to the Project.
"Lender's Release Fee" means $0.
"Lender's Release Price" means, with respect to a Timeshare Interest within a
Project which Borrower requests Lender to release from the lien of the Deed of
Trust encumbering such Timeshare Interest, an amount acceptable to Lender in its
sole discretion and provided for in the Project Commitment, which amount, as
adjusted from time to time in accordance with Section 2.9 hereof and the terms
of the Project Commitment, will be sufficient to repay the Project Loan Amount
upon the sale of 75% of the planned Timeshare Interests within such Project.
"LIBOR" means the average of interbank offered rates for 30-day dollar deposits
in the London market based on quotations of five major banks, as published from
time to time in The Wall Street Journal. In the event that The Wall Street
Journal ceases to be published or ceases to publish such a compilation of
interbank offered rates, the Borrower and the Lender will agree on a substitute
source and method of determining the interest rate generally known as the
one-month (or 30-day) LIBOR rate.
"Loan" means the loan described in this Loan Agreement in a principal amount not
to exceed the Loan Amount.
"Loan Agreement" means this Loan Agreement, as the same may be amended or
otherwise modified from time to time in accordance with the terms hereof.
"Loan Amount" means $50,000,000.
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"Loan Documents" means, as to the Loan, all documents, instruments, agreements,
assignments and certificates relating thereto, including, without limitation,
any and all loan or credit agreements, promissory notes, deeds of trust,
mortgages, financing statements, security agreements, assignments of rents,
assignments of leases, assignments of contracts, environmental indemnities,
guaranties, contractor's consent agreements, lender's title insurance policies,
opinions of counsel, evidences of authorization or incumbency, escrow
instructions, architect's consent agreements and all such documents relating to
Project(s) covered by the Loan to be executed (and acknowledged where
applicable) by the Borrower, the Guarantor, if any, and/or the Lender (where
applicable), all in connection with the Lender making the Loan to the Borrower
as the same may be amended or otherwise modified from time to time in accordance
with this Loan Agreement. The Loan Documents will include, but not be limited
to, the following:
(1) this Loan Agreement;
(2) the Note;
(3) the Guaranty;
(4) the Environmental Indemnity; and
(5) the Project Documents.
"Map" shall mean, with respect to a Project, a final subdivision, parcel, plat
or condominium map consistent with the Plans and Specifications and with the
Laws and Regulations.
"Material Adverse Change" means any material and adverse change in, or a change
which has a material adverse effect upon, any of:
(1) the business, properties, operations or condition (financial or
otherwise) of the Borrower or any Guarantor which, with the giving of
notice or the passage of time, or both, could reasonably be expected to
result in either (i) the Borrower or any Guarantor failing to comply with
any of the financial covenants contained in Section 5.5 or (ii) the
Borrower's or any Guarantor's inability to perform its or their respective
obligations pursuant to the terms of the Loan Documents; or
(2) the legal or financial ability of the Borrower or any Guarantor
to perform its or their respective obligations under the Loan Documents
and to avoid any Potential Default or Event of Default; or
(3) the legality, validity, binding effect or enforceability against
the Borrower or any Guarantor of any Loan Document.
"Maturity Date" means the first to occur of (i) the Project Loan Repayment Date
set forth in the last Project Commitment incorporated into this Loan Agreement,
(ii) the date which is 48 months from the Effective Date, or (iii) any earlier
date on which the Loan is accelerated or otherwise required to be repaid
pursuant to the terms of this Loan Agreement.
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"Maximum Project Loan Initial Balance" means the product of (i) the Advance Rate
and (ii) the lesser of (A) the Inventory Appraised Value of the related Project
provided an Appraisal Report is required, and (B) the Budget.
"Minimum Required Principal Payment" means, with respect to each Project Loan,
the minimum required principal payment for each quarter based on the outstanding
balance of such Project Loan divided by the number of quarters remaining until
the Maturity Date, as set forth in the Project Commitment related to such
Project Loan.
"Net Worth" means (i) total assets, as would be reflected on a balance sheet
prepared on a consolidated basis and in accordance with GAAP, consistently
applied, exclusive of Intellectual Property, experimental or organization
expenses, franchises, licenses, permits, and other intangible assets, treasury
stock, unamortized underwriters' debt discount and expenses, and goodwill minus
(ii) total liabilities, as would be reflected on a balance sheet prepared on a
consolidated basis and in accordance with GAAP consistently applied.
"Note" means that certain Revolving Promissory Note dated as of the date of this
Agreement executed by the Borrower and made payable to the order of Lender, as
holder, in the Loan Amount and maturing on the Maturity Date, as such Note may
be amended or otherwise modified from time to time.
"Permitted Exceptions" means, with respect to a Project, (i) real estate taxes
and assessments not yet due and payable and possible supplemental assessments
for improvements constructed on the Land, (ii) exceptions to title which are
approved in writing by the Lender (including such easements, dedications,
covenants and such which Lender consents to in writing after the Effective Date
of this Loan Agreement), and (iii) the exceptions set forth in the Title Policy.
"Person" means an individual, partnership, corporation (including a business
trust), limited liability company, joint stock company, trust, unincorporated
association, joint venture or other entity, or a government or any political
subdivision or agency thereof.
"Plans and Specifications" means, with respect to a Project, the final set of
architectural, structural, mechanical, electrical, grading, sewer, water, street
and utility plans and specifications for the Development Work, including all
supplements, amendments and modifications thereto signed and affixed with the
architect's registration stamp or seal, all in form and substance reasonably
satisfactory to the Lender and the Inspector.
"Potential Default" means the existence of any event, which with the giving of
notice, the passage of time, or both, would constitute an Event of Default
hereunder or an event of default (however described) under any other of the Loan
Documents.
"Prepayment Premium" means an amount to be paid pursuant to Section 2.10 upon a
prepayment of a Project Loan (Borrower is not required to pay a Prepayment
Premium under the terms of this Loan Agreement).
"Program Fee" means an amount equal to the product of (A) 1/12th of 0.125%, (B)
the Loan Amount and (C) 24.
12
"Project" means any acquisition, development and/or construction project located
in an area permitted by the Project Requirements or such other area as approved
by Lender in its sole and absolute discretion, as to which the Lender has issued
a Project Commitment and made proceeds of the Loan available for disbursement,
which such project shall include (i) the Land, (ii) the existing Improvements
(if any) and (iii) the Development Work to be completed on the Land, which
Project shall be used part of a Timeshare Program.
"Project Commitment" means, with respect to a Project, the project commitment
issued by the Lender to the Borrower for the Project, wherein the Lender agrees,
subject to the terms and conditions of such Project Commitment and the other
Loan Documents and subject to Borrower signing such Project Commitment, to make
proceeds of the Loan available for the Project. The terms of each Project
Commitment, once it is signed by both the Borrower and the Lender, will
supplement the terms of this Loan Agreement with respect to the stated Project,
the related Project Loan and the related Project Security Documents. The Project
Commitments will be substantially in the form of Exhibit D.
"Project Documents" means, with respect to a Project, all documents,
instruments, agreements, assignments and certificates relating thereto,
including, without limitation, any and all loan or credit agreements, promissory
notes, deeds of trust, mortgages, financing statements, security agreements,
assignments of rents, assignments of leases, assignments of contracts,
environmental indemnities, guaranties, contractor's consent agreements, lender's
title insurance policies, opinions of counsel, evidences of authorization or
incumbency, escrow instructions, and architect's consent agreements previously
executed or to be executed (and acknowledged where applicable) by the Borrower,
any Guarantor and/or the Lender (where applicable), all in connection with the
Lender making proceeds of the Loan available to the Borrower for the Project, as
the same may be amended or otherwise modified from time to time in accordance
with this Loan Agreement. The Project Documents will include, but not be limited
to, the following:
(1) the Project Commitment;
(2) the Project Security Instruments;
(3) the Plans and Specifications;
(4) the Lender's Escrow Instructions; and
(5) the Title Policy.
The Project Documents will include those forms of documents, instruments,
agreements, assignments and certificates which the Lender approves at the time
of its execution and delivery of this Loan Agreement, as evidenced by a written
certificate executed by the Borrower and the Lender. The forms of the Project
Documents may be supplemented or amended from time to time to add or amend form
Project Documents approved by the Lender.
"Project Loan" or "Project Loan Amount" means the loan or loan amount for the
acquisition and development of a Project with disbursements under such loan not
to exceed the Maximum Project Loan Initial Balance for such Project.
13
"Project Loan Advance Period" means, with respect to a Project Loan, the period
of time commencing on the date of the Project Documents and expiring on the date
set forth in the applicable Project Commitment as the termination date for the
Project Loan Advance Period.
"Project Loan Committed Amount" means the portion of a Project Loan Amount which
(a) has been advanced and not repaid plus (b) is available to be disbursed for
Approved Costs.
"Project Loan Repayment Date" means, with respect to a Project, the first to
occur of (i) the date which is set forth in the Project Commitment as the date
on which all proceeds of the Project Loan Amount must be repaid, (ii) the
Maturity Date or (iii) the date on which the Loan is required to be repaid
pursuant to Section 8.2.
"Project Owner" means the Person who owns a particular Project or Projects, and
which Person must also be a Borrower.
"Project Requirements" means, for any project proposed to be included as a
Project pursuant to the terms of this Loan Agreement, the requirements listed in
Exhibit B.
"Project Security Instruments" means, with respect to a Project, all pledge
agreements, guaranties, deeds of trust, mortgages, security agreements,
assignments and other agreements or instruments previously executed or to be
executed by the Borrower and/or the Guarantor, if any granting in favor of the
Lender a lien or encumbrance on or a security interest in any property or right
or interest of the Borrower or any Guarantor as security for the Loan, as the
same may be amended or otherwise modified from time to time in accordance with
this Loan Agreement, including but not limited to the following:
(1) the Deed of Trust;
(2) the UCC Financing Statement;
(3) the CLPI Assignment; and
(4) the Assignment.
"Project Specific Default" means a default under the Loan related to the
development, operation or management of a particular Project or to a particular
entity forming Borrower, which default is identified in one or more of Section
8.1(a)(10) and Section 8.1(a)(14) through Section 8.1(a)(18).
"Project Underwriting Documents" means, for any project proposed to be included
as a Project pursuant to the terms of this Loan Agreement, the documents listed
in Exhibit C and any other documents relating to the proposed project which the
Lender requests, all in form and substance reasonably satisfactory to the
Lender.
"Resolution" means a resolution of a corporation certified as true and correct
by an authorized officer of such corporation, a certificate signed by the
manager of a limited liability company and such members whose approval is
required, or a partnership certificate signed by all of the general partners of
such partnership and such other partners whose approval is required.
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"Retainage" means, with respect to a Project, the amount set forth in the
Project Commitment as the amount to be retained or held back from each approved
disbursement on a construction contract until the completion of such
construction contract and the satisfaction of all conditions precedent for the
final payment under such construction contract.
"Sales Agreement" means, with respect to a Project, a written agreement for the
sale of a Timeshare Interest between the Borrower and a Person who is not an
Affiliate of the Borrower.
"Staged Draw Schedule" means, with respect to a Project, the schedule of draws
for the various stages of the Development Work which such schedule, and the
components of the Development Work which fit within each stage, are specified in
the exhibit attached to the Project Commitment.
"Timeshare Interest" means the fractional fee simple timeshare interest in an
individual air-space condominium unit, cabin, villa, cottage or townhome within
a Resort, together with all furniture, fixtures and furnishings therein, and
together with any and all interests in common elements appurtenant thereto
acquired pursuant to a Sales Agreement with respect to a Project.
"Timeshare Program" means a program to be created by which Persons may own
Timeshare Interests, enjoy their respective Timeshare Interests on a recurring
basis, and share the expenses associated with the operation and management of
such program.
"Title Insurance Company" means a title insurance company acceptable to the
Lender.
"Title Policy" means, with respect to a Project, that certain policy of title
insurance accepted by the Lender for the Project, which policy of title
insurance shall:
(1) be an ALTA loan form (10-17-92 or the equivalent thereof) title
insurance policy;
(2) be issued in the amount specified by the Lender in the Lender's
Escrow Instructions;
(3) be issued by the Title Insurance Company;
(4) insure the Lender that the applicable Deed of Trust is an
enforceable first lien against marketable fee simple title to the Project,
subject only to Permitted Exceptions;
(5) provide mechanics' lien coverage;
(6) have all standard exceptions deleted therefrom other than taxes
for the current year and subsequent years; and
(7) have appended thereto the following endorsements to the extent
permitted by the laws of the state in which the Project is located.
(A) a Form 9 endorsement;
15
(B) a 3.0 zoning endorsement
(C) an environmental lien endorsement;
(D) variable rate mortgage endorsement.
(E) an endorsement deleting the creditors' rights exclusion
(F) a variable rate endorsement
(G) a public street access endorsement
(H) a pending disbursement endorsement
(I) a contiguity endorsment; and
(J) a survey endorsement; and
(K) such other endorsements as the Lender requires with
respect to the Project
"Transfer" means, with respect to any Project and/or the Borrower,
the occurrence of any of the following:
(1) any sale, conveyance, assignment, transfer, alienation,
mortgage, conveyance of security title, encumbrance or other disposition
of any kind of the Project, or any other transaction the result of which
is, directly or indirectly, to divest the Borrower of any portion of its
title to or interest in the Project, voluntarily or involuntarily, other
than transfers and sales of the Timeshare Interests in the ordinary course
of business, it being the express intention of the Borrower and the Lender
that the Borrower is prohibited from granting to any Person a lien or
encumbrance upon the Project (other than Permitted Encumbrances),
regardless of whether such lien is senior or subordinate to the Lender's
lien;
(2) any sale, conveyance, assignment, transfer, alienation,
mortgage, conveyance of security title, encumbrance or other disposition
of any kind of any other collateral for the Loan, or any other transaction
the result of which is, directly or indirectly, to divest the Borrower of
any portion of its title to or interest in such collateral, voluntarily or
involuntarily, it being the express intention of the Borrower and the
Lender that the Borrower is prohibited from granting to any Person a lien
or encumbrance upon such other collateral, regardless of whether such lien
is senior or subordinate to the Lender's lien other than Permitted
Exceptions;
(3) any merger, consolidation or dissolution involving the Borrower;
(4) the sale or transfer of a majority of the assets of the Borrower
not in the ordinary course of business;
16
(5) with respect to any Borrower which is a corporation:
(A) the transfer of any portion of the voting stock of the
Borrower;
(B) the transfer of any portion of the voting stock of any
corporation which is the direct or indirect owner of 10% or more of
the voting stock of the Borrower, provided that the foregoing
restriction shall not apply to Guarantor or to any Borrower that is
wholly owned by Guarantor;
(C) the transfer of any partnership interest in any
partnership which is the direct or indirect owner of 10% or more of
the voting stock of the Borrower; or
(D) the transfer of any membership interest in any limited
liability company which is the direct or indirect owner of 10% or
more of the voting stock of the Borrower;
(6) with respect to any Borrower which is a partnership:
(A) any merger, consolidation or dissolution involving the
general partner of the Borrower;
(B) the sale or transfer of a majority of the assets of any
general partner of the Borrower;
(C) the transfer of any general partnership interest in the
Borrower to another Person;
(D) with respect to any general partner of the Borrower which
is a corporation, the transfer of any portion of the voting stock of
such general partner to another Person;
(E) with respect to any general partner of the Borrower which
is a general partnership or limited partnership, the transfer of any
partnership interest of such general partner to another Person;
(F) with respect to any general partner of the Borrower which
is a limited liability company, the transfer of any membership
interest of such general partner to another Person;
(G) the conversion of any general partnership interest of the
Borrower to a limited partnership interest; or
(H) the addition of any general partner or limited partner to
the Borrower;
(7) with respect to any Borrower which is a limited liability
company:
(A) any merger, consolidation or dissolution involving the
managing member of the Borrower;
17
(B) the sale or transfer of a majority of the assets of any
managing member of the Borrower;
(C) the transfer of any managing member interest in the
Borrower to another Person;
(D) with respect to any managing member of the Borrower which
is a corporation, the transfer of any portion of the voting stock of
such managing member to another Person;
(E) with respect to any managing member of the Borrower which
is a general partnership or limited partnership, the transfer of any
partnership interest of such general partner to another Person;
(F) with respect to any managing member of the Borrower which
is a limited liability company, the transfer of any membership
interest of such general partner to another Person;
(G) the conversion of any managing member interest of the
Borrower to a non-managing member interest; or
(H) the addition of any managing member or member to the
Borrower.
"UCC Financing Statement" means, with respect to a Project, any UCC
financing statement, whether executed or not by the applicable Project Owner,
naming such Project Owner, as debtor, in favor of the Lender, as secured party,
in connection with the Lender making proceeds of the Loan available to the
Borrower for the Project, as such UCC financing statement may be amended or
otherwise modified from time to time with or without Project Owner's signature.
"Unit" means a dwelling unit in the Project.
Section 1.2. Other Definitional Provisions
(a) Accounting terms not defined herein will have the respective meanings
given to them under GAAP. To the extent that the definitions of accounting terms
herein are inconsistent with the meanings of such terms under GAAP, the
definitions contained herein will control.
(b) The words "hereof", "herein" and "hereunder" and words of similar
import when used in this Loan Agreement will refer to this Loan Agreement as a
whole and not to any particular provision of this Loan Agreement.
(c) In this Loan Agreement in the computation of periods of time from a
specified date to a later specified date, the word "from" means "from and
including" and the words "to" and "until" each means "to but excluding".
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ARTICLE 2. THE LOAN
Section 2.1. Agreement to Lend and Borrow and Project Loan Maturity
(a) The Lender agrees, on the terms and conditions hereinafter set forth,
to make the Loan to the Borrower through one or more Project Loans for the
purpose of providing financing for the acquisition, development and construction
of Projects; provided however, that the obligation of the Lender to make the
Loan is conditioned upon the Lender's receipt of the documents and the
satisfaction of the other items set forth in Exhibit A attached hereto. The
Borrower will repay the Loan pursuant to Section 2.6 and Section 2.9, may prepay
the Loan pursuant to Section 2.10 and may reborrow proceeds of the Loan pursuant
to this Section 2.1(a) and Section 2.14.
(b) The outstanding principal balance of each Project Loan, together with
accrued and unpaid interest thereon and all other amounts payable by the
Borrower under the terms of the Loan Documents relating to such Project Loan,
will be due and payable on the applicable Project Loan Repayment Date.
(c) The outstanding principal balance of the Loan (which includes all
outstanding Project Loans), together with accrued and unpaid interest thereon
and all other amounts payable by the Borrower under the terms of the Loan
Documents, will be due and payable on the Maturity Date.
Section 2.2. Disbursements of the Loan
The Lender shall make disbursements of the Loan in accordance with and
subject to the terms of Article III hereof.
Section 2.3. Use of Disbursements
The Borrower covenants to use disbursements of the Loan only for Approved
Costs.
Section 2.4. Fees
(a) Commitment Fee. The Commitment Fee shall be paid by the Borrower in
installments in the following manner:
(i) On the initial funding date for a Project Loan, 1.00% of the
initial balance of such Project Loan shall be due and the payment of such
amount shall be condition precedent to the funding of the Project Loan.
(ii) At the earlier of (A) the Approval Period Termination Date and
(B) the occurrence of an Event of Default, any unpaid amounts in respect
of the Commitment Fee shall be immediately due and payable.
(b) Program Fee. The Program Fee shall be paid by the Borrower in
installments in the following manner:
19
(i) On each Interest Due Date, the Borrower agrees to pay the Lender
an amount equal to 1/12th of 0.125% of the Loan Amount.
(ii) At the earlier of (A) the Approval Period Termination Date and
(B) the occurrence of an Event of Default, any unpaid amounts in respect
of the Program Fee shall be immediately due and payable.
Section 2.5. No Reduction in Commitment Fee or Program Fee
The Borrower acknowledges that the Commitment Fee and the Program Fee,
required to be paid to Lender pursuant to the provisions of Section 2.4, has
been earned upon Borrower' and Lender's execution of this Loan Agreement and
will not be refundable. Regardless of whether (a) Lender advances any amounts
under the terms of this Loan Agreement or (b) Borrower repays or is required to
repay the Loan on the date required by Section 8.2, the Borrower will not be
entitled to any refund of the Commitment Fee and the Program Fee previously
paid. Notwithstanding anything to the contrary contained herein, provided
Borrower presents to Lender a Project, which in Lender's sole and reasonable
discretion is a Project which meets its loan underwriting criteria, but Lender
refuses to fund the Project, Borrower shall not be obligated to pay a Commitment
Fee on said Project.
Section 2.6. Interest
(a) The Loan will bear interest from the date of disbursement hereunder on
the unpaid principal at an annual rate equal to the Interest Rate.
(b) On or before the 5th Business Day of each month, commencing with the
first month after the Lender has disbursed proceeds of the Loan, the Lender
shall send to the Borrower an invoice setting forth the amount of interest due
for the previous month. The Borrower will pay the interest due for the previous
month on or before the Interest Due Date, except if the Budget for any Project
includes an Interest Reserve, then the Borrower may direct the Lender to make a
disbursement from the Interest Reserve to pay the interest due on the Loan with
respect to such Project until such time as such Interest Reserve is fully
disbursed, upon and subject to the terms and conditions contained herein.
(c) Payments of principal, interest and any other amounts due and payable
under the Loan Documents shall earn interest after they are due at the rate of
the Default Rate. At the option of Lender, while an Event of Default exists,
interest shall accrue at the Default Rate.
Section 2.7. Interest Rate Limitation
The provisions of this Loan Agreement and the other Loan Documents are
hereby expressly limited so that in no contingency or event whatever will the
amount paid or agreed to be paid to the Lender for the use, forbearance or
detention of the sums evidenced by this Loan Agreement exceed the maximum amount
permissible under applicable law. If from any circumstance whatever the
performance or fulfillment of any provision of this Loan Agreement or of any
other Loan Document should involve or purport to require any payment in excess
of the limit prescribed by law, then the obligation to be performed or fulfilled
is hereby reduced to the limit of such validity. In addition, if, from any
circumstance whatever, the Lender should
20
ever receive as interest an amount which would exceed the highest lawful rate
under applicable law, then the amount which would be excessive interest will be
applied as an optional reduction of principal (or, at the Lender's option, be
paid over to the Borrower), and will not be counted as interest.
Section 2.8. Repayment of Principal
Principal of the Loan will be due and payable as follows:
(1) Concurrent with the closing of the sale of a Timeshare Interest
pursuant to a Sales Agreement, the Borrower will make a principal payment
in an amount equal to Lender's Release Price, which amount shall be
applied, until paid in full, to the payment of the outstanding amount of
the Project Loan Amount corresponding to the Project within which the
Timeshare Interest was sold.
(2) In the event that, for any reason, the aggregate payments to
Lender of the Lender's Release Price for any Project Loan are less than
the Minimum Required Principal Payment for such Project Loan during any
calendar quarter, then within 15 days after the end of such calendar
quarter, the Borrower shall make an additional quarterly payment on such
Project Loan to the Lender from Borrower's own funds of an amount equal to
the difference between the Minimum Required Principal Payment for such
calendar quarter and the aggregate payments to Lender of Lender's Release
Price for such calendar quarter with respect to such Project Loan.
(3) Upon a Project Specific Default and so long as there is no other
Event of Default or Potential Default, the Borrower may, at its option
(but only if exercised prior to the earlier of (i) the Lender's exercise
of its remedies under Section 8.2 and (ii) 30 days after the occurrence of
the Project Specific Default), repay the outstanding balance of the
Project Loan Amount corresponding to the Project Specific Default.
(4) If the Project Loan Amount has not been repaid on or before the
Project Loan Repayment Date for such Project, the Borrower must on such
date repay the entire outstanding principal amount of such Project Loan
together with all accrued and unpaid interest relating thereto.
(5) In the event that the sum of the Project Loan Committed Amounts
for all Projects at any time exceeds the Loan Amount, the Borrower must
immediately make a principal repayment in an amount sufficient to
eliminate any such excess, which payment shall be applied by Lender in its
discretion.
(6) On the Maturity Date, the Borrower is required to repay the
entire outstanding principal amount of the Loan together with all accrued
and unpaid interest and all other amounts owed to Lender under the Loan
Documents.
Section 2.9. Adjustment to Lender's Release Price.
Lender, in its sole and absolute discretion, reserves the right to adjust
the Lender's Release Price applicable to a Project at any time before the
applicable Project Loan Repayment
21
Date to ensure that such fee is sufficient to repay the Project Loan Amount upon
the sale of 75% of the planned Timeshare Interests within such Project.
Section 2.10. Prepayment of the Loan
The Borrower shall have the option to prepay each Project Loan in full or
in part without penalty upon 30 days prior written notice to the Lender.
Section 2.11. Payments
(a) All payments of principal, interest and Fees on the Loan must be made
to the Lender by federal funds wire transfer as instructed by the Lender in
immediately available funds not later than 2:00 p.m. Eastern Standard Time on
the dates such payments are to be made. Any payment received after 2:00 p.m.
Eastern Standard Time will be deemed received by the Lender on the next Business
Day.
(b) If any payment of principal, interest or fees to be made by the
Borrower becomes due on a day other than a Business Day, such payment will be
made on the next succeeding Business Day and such extension of time will be
included in computing any interest with respect to such payment.
(c) Throughout the term of the Loan, interest and fees will be calculated
on the basis of the actual number of days elapsed during the period for which
interest and fees are being charged predicated on a year consisting of 360 days.
Section 2.12. Applications of Payments; Late Charges
(a) Payments received by the Lender pursuant to the terms hereof will be
applied in the following manner:
(1) first, to the payment of all expenses, charges, costs and fees
incurred by or payable to the Lender and for which the Borrower is
obligated pursuant to the terms of the Loan Documents;
(2) second, to the payment of all interest accrued to the date of
such payment, except that the payments made pursuant to Section 2.8(1)
will be applied to the payment of principal in accordance with
subparagraph (3) below and not the payment of interest; and
(3) third to the payment of principal.
Notwithstanding anything to the contrary contained herein, after the occurrence
and during the continuation of an Event of Default, all amounts received by the
Lender from any party will be applied in such order as the Lender, in its sole
discretion, may elect.
(b) If any installment of interest and/or the payment of principal is not
received by the Lender within 5 Business Days after the due date thereof, then
in addition to the remedies conferred upon the Lender pursuant to Section 8.2
hereof and the other Loan Documents, the
22
Lender may elect to assess a late charge of 4% of the amount of the installment
due and unpaid, which such late charge will be added to the delinquent amount to
compensate the Lender for the expense of handling the delinquency. The Borrower
and the Lender agree that such late charge represents a good faith and fair and
reasonable estimate of the probable cost to the Lender of such delinquency. The
Borrower acknowledges that during the time that any such amount is in default,
the Lender will incur losses which are impracticable, costly and inconvenient to
ascertain and that such late charge represents a reasonable sum considering all
of the circumstances existing on the Effective Date of this Loan Agreement and
represents a reasonable estimate of the losses the Lender will incur by reason
of late payment. The Borrower further agrees that proof of actual losses would
be costly, inconvenient, impracticable and extremely difficult to fix.
Acceptance of such late charge will not constitute a waiver of the default with
respect to the overdue installment, and will not prevent the Lender from
exercising any of the other rights and remedies available hereunder.
Section 2.13. Approval Period
(a) During the Approval Period, Borrower may request the approval of a
Project for funding from the proceeds of the Loan by complying with the terms
and conditions of Section 3.1.
(b) Commencing on the Approval Period Termination Date, Borrower may not
request the approval of new Projects, although proceeds of the Loan will
continue to be disbursed with respect to the then existing Projects in
accordance with the provisions of Article III.
Section 2.14. Revolving Nature of Loan
The Loan is a revolving loan and any amounts which are repaid may, subject
to the terms of the Loan Documents limiting the amounts which may be drawn for
any Project and the terms restricting disbursements of proceeds of the Loan, be
redrawn.
Section 2.15. Security
Payment of the Loan by the Borrower and performance of the Borrower's
other obligations under the Loan Documents will be secured by the Guaranty and
the collateral described in the Project Security Instruments. The Borrower
warrants that the Project Security Instruments will create a valid and
first-lien position with respect to the Projects, subject only to Permitted
Exceptions.
ARTICLE 3. APPROVAL OF PROJECTS; DISBURSEMENTS OF THE LOAN
Section 3.1. Project Approvals; Project Commitments and Project Documents
(a) During the Approval Period, the Borrower may submit to the Lender
projects proposed to be included as Projects, all pursuant to and in accordance
with the terms of this Loan Agreement. Upon approval as a Project and compliance
with the requirements of Section 3.2 and the other terms and provisions of the
Loan Documents, disbursements of the Loan will be made with respect to the
Approved Costs for such Project in accordance with this Loan Agreement.
23
(b) In order to include a proposed project as a Project, the Borrower must
submit to the Lender a complete description of the proposed project, including
the Project Underwriting Documents, and evidence that the proposed project
complies with the Project Requirements.
(c) In the event that any Project is to be owned by a Person other than
Borrower, the Project Underwriting Documents must specify the Project Owner,
which must be a Person which is owned 100% by Borrower or Guarantor, or is
otherwise acceptable to Lender. The Project Documents relating to that Project
will contain a provision whereby the Project Owner, in addition to Borrower,
assumes all of the obligations of Borrower then, or at any time in the future,
contained in this Loan Agreement and the other Loan Documents and agrees to be
bound by and comply with all the terms hereof and thereof. In such an instance,
the Project Underwriting Documents must include (i) the name of the Project
Owner, (ii) the charter and organizational documents for the Project Owner,
including such documents as will specify who is to manage the Project Owner, and
(iii) such other information as the Lender, in its sole and absolute discretion,
will require regarding the Project Owner. (d) Upon its receipt of the Project
Underwriting Documents, the Lender will have [30] days to review and, in its
sole and absolute discretion, approve or disapprove in writing the proposed
project as a Project which may be financed from proceeds of the Loan. Upon any
such approval, the Lender will issue a Project Commitment with respect thereto
and such proposed project will become a Project for purposes of this Loan
Agreement upon Borrower returning to Lender a copy of the Project Commitment
containing the original signature of Borrower accepting the supplemental terms
and conditions set forth in the Project Commitment; provided however, that no
Project Commitment will be issued with respect to any proposed project unless
the Available Amount (plus any cash equity provided by the Borrower (as provided
for in the Project Commitment)) is at least equal to the amount required to
complete the acquisition of the Land and the performance of the Development Work
for such proposed project. The terms of each Project Commitment issued by the
Lender and signed by the Borrower shall supplement the terms of this Loan
Agreement and shall be applicable with respect to the stated Project, the
related Project Loan and the related Project Security Documents.
(e) It is a condition precedent to the approval of any proposed project
that the Lender shall have performed, at Borrower's expense, a site
inspection/market review with respect to such proposed project, and the Lender
must be satisfied with the results of such inspection and review.
Section 3.2. Project Closings
Upon issuance of a Project Commitment with respect to a Project, the
Borrower and the Lender shall proceed to execute and deliver the other required
Project Documents for such Project and close the transaction, thereafter
allowing proceeds of the Loan to be disbursed for such Project. The following
shall be the conditions precedent to the closing for each Project:
(1) The Borrower has delivered to the Lender the Project
Underwriting Documents, all the documents described in the Project
Commitment, executed originals of the other Project Documents and such
other agreements, instruments, certificates and opinions as the Lender
requires in connection with such Project.
24
(2) The Deed of Trust must be duly recorded and in a first-priority
lien position, which first-priority lien positions shall be evidenced and
insured by the Title Policy, subject to Permitted Exceptions.
(3) The Lender's security interests in all personal property and any
fixtures covered by the Deed of Trust must be duly perfected and in a
first-priority lien position.
(4) All taxes, fees and other charges in connection with the
preparation, execution, delivery and recording/filing of the Project
Documents have been paid by Borrower. All delinquent taxes, assessments or
other governmental charges or liens affecting the Project, if any, have
been paid, or if not paid, the Borrower has posted a bond or other
security acceptable to the Lender with respect to such unpaid taxes.
(5) An opinion of legal counsel located in the state where the
Project is located in substantially the form required by paragraph (2) of
Exhibit A relative to the Project Documents.
(6) As to any Project Owner for which such resolutions have not
previously been delivered to the Lender, a certified copy of the
resolutions adopted by the Project Owner authorizing the Project Owner to
incur or assume the debt related to the Loan and the Project and
authorizing certain officers of the Project Owner to execute and deliver
the Project Documents.
Section 3.3. Disbursements of Loan Proceeds to Acquire Land and for Development
Work
(a) Disbursements to finance the Borrower's acquisition of the Land for
each Project will be made upon the terms and conditions set forth in the Project
Commitment for the Project.
(b) All requests for disbursements of proceeds of the Loan to fund
Development Work must comply with the terms of this Section 3.3, subject to such
Retainage requirements and such conditions precedent, if any, as are set forth
in the Project Commitments and subject to any additional limitations set forth
in the Project Commitments. Disbursements related to the Development Work with
respect to all Projects will be available twice per month.
(c) Each disbursement request to fund Development Work must be evidenced
by a Draw Request Certification and must be accompanied by the following:
(1) a written summary prepared by the Borrower, in detail acceptable
to the Lender, of the xxxxxxxx of each subcontractor or vendor with
respect to the Development Work for which a disbursement is being
requested, together with copies of the xxxxxxxx of each such subcontractor
or vendor;
(2) at Lender's request, a written certification from the Inspector
to Lender, in a form satisfactory to Lender, that (i) the portion of the
Development Work for which payment is being sought has been completed,
(ii) all Development Work done for which payment is being sought has been
completed with sound new materials and fixtures, or refurbished materials
and fixtures that meet the requirements of the Plans and
25
Specifications, and in a good and workmanlike manner, (iii) the
Development Work is being performed within the Budget and in accordance
with the Plans and Specifications, and (iv) sufficient funds are available
to Borrower to complete the Development Work;
(3) at Borrower's expense, a "date down" endorsement to the Title
Policy insuring that there are no liens imposed by law for services, labor
or materials appearing in the public records, and insuring the full amount
of the disbursement, provided that any such endorsement may show
mechanics' liens resulting from the Development Work if and only if the
Title Company will issue an endorsement which insures Lender against any
loss by reason of such mechanics' liens and Borrower has complied in all
respects with the requirements of Section 6.18; and
(4) such other documents specified in the Project Commitment.
The foregoing submissions must reflect the cost of all Development Work for
which payment is to be made. The Draw Request Certification must specify the
portion of such costs which will be paid out of the requested disbursement of
Loan proceeds, and, if any portion of such costs are to be paid by the Borrower,
the portion of such costs to be paid by the Borrower.
(d) After the expiration of the applicable Project Loan Advance Period,
Lender shall have no further obligations to make any disbursements under the
Project Loan. In addition, the Lender shall have no obligation to make any
disbursement of proceeds under a Project Loan if the initial disbursement of
proceeds under such Project Loan is not made on or before the Approval Period
Termination Date.
(e) Provided that no Event of Default or Potential Default exists, and
subject to the terms and conditions set forth herein, including the provisions
of Section 3.4, the Lender will use its reasonable best efforts to disburse to
the Borrower the amount requested relating to the Development Work within [5]
Business Days after receipt of a Draw Request Certification meeting the
requirements of this Loan Agreement. In the event the Lender is unable to make
the disbursement within such time period, the Lender will disburse the proceeds
of the Loan as soon thereafter as possible. All disbursements will be delivered
to Borrower by federal funds wire transfer as instructed by Borrower.
Section 3.4. Provisions Applicable to All Disbursements
The obligation of Lender to make any disbursement requested by the
Borrower of proceeds of the Loan is subject to fulfillment of all of the
following conditions precedent:
(1) No Event of Default or Potential Default has occurred and is
continuing, or would result from such disbursements or from the
application of the proceeds therefrom.
(2) Following the requested disbursement of proceeds of the Loan,
(i) the outstanding principal amount of the Loan shall not exceed the Loan
Amount, and (ii) with respect to any Project, the principal amount
advanced shall not exceed the Project Loan Amount for that Project.
26
(3) Each Project shall comply with all requirements set forth in the
Project Commitment for such Project and the other Loan Documents.
(4) The proceeds of the Loan which remain available for disbursement
for the Development Work for the Projects shall be sufficient to complete
the Development Work related to such Projects; provided, however, that the
Lender will be obligated to make a disbursement notwithstanding such a
deficiency in the event that (i) the Budget for the acquisition of the
Land and the Development Work of the applicable Project and the amount of
the Loan available for such acquisition of the Land and such Development
Work have been increased by an amount at least equal to such deficiency in
accordance with the terms of Section 6.15(e), or (ii) the Borrower
provides to the Lender evidence that it has paid from its own funds, in
addition to any Borrower funds which the Budget for such Project requires,
an amount at least equal to the amount of such deficiency.
(5) All costs requested to be funded from the proceeds of such
disbursement shall relate to costs which are Approved Costs for such
Project.
(6) No liens (other than liens for real property taxes that are not
yet delinquent) have been filed against the Project, except as permitted
by Section 6.18 or Permitted Exceptions.
(7) All statements made in the applicable Draw Request Certification
shall be true and correct on and as of the date of the requested
disbursement, before and after giving effect thereto and to the
application of the proceeds therefrom.
(8) The representations and warranties of Borrower and Guarantor, if
any, contained in the Loan Documents are true and correct in all material
respects on and as of the date of the requested disbursement, before and
after giving effect thereto and to the application of the proceeds
therefrom, as though made on and as of such date.
(9) The interest rate applicable to the disbursement (before giving
effect to any savings clause) will not exceed the maximum rate permitted
by law.
(10) All disbursements must comply with the Retainage requirements
for such Project as set forth in the applicable Project Commitment.
(11) With respect to the initial disbursement of a Project Loan, the
portion of the Commitment Fee shall have been paid.
Section 3.5. Application of Disbursements
All Loan proceeds disbursed to the Borrower will be used only for payment
(or for reimbursement to Borrower for prior payment) of those items specified in
the Draw Request Certification for which the particular disbursement was made.
The Borrower will not use any such disbursement to pay or reimburse itself,
directly or indirectly, for any amounts paid by the Borrower or any other Person
but not included in the applicable Budget.
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Section 3.6. The Lender May Make Disbursement Notwithstanding Noncompliance
Notwithstanding the failure of any condition precedent to the Lender's
obligation to make any disbursement hereunder, the Lender may make such
disbursement if the Lender, in its sole discretion, determines the making of the
same to be advisable. The making of any disbursement, either before or after the
satisfaction of all conditions precedent with respect to the Lender's obligation
to make the same, will not be deemed to constitute an approval or acceptance by
the Lender of the Development Work theretofore completed or a waiver of such
condition with respect to a subsequent disbursement.
ARTICLE 4. REPRESENTATIONS AND WARRANTIES
Section 4.1. Consideration
As an inducement to the Lender to execute this Loan Agreement, make the
Loan and disburse the proceeds of the Loan, the Borrower represents and warrants
to the Lender the truth and accuracy of the matters set forth in this Article
IV.
Section 4.2. Organization
The Borrower is duly organized, validly existing and in good standing
under the laws of its state of organization, is duly qualified to do business
and is in good standing in every jurisdiction where its business or properties
require such qualification. The Borrower has all requisite power and authority
to own and operate its properties and to carry on its business as now conducted
or proposed to be conducted.
Section 4.3. Authorization
The execution, delivery and performance by the Borrower of the Loan
Documents have been duly authorized by all necessary action and do not and will
not (i) contravene the Articles of Organization of the Borrower, (ii) contravene
any law, rule or regulation or any order, writ, judgment, injunction or decree
or any contractual restriction binding on or affecting the Borrower, (iii)
require any approval or consent of any member, partner, shareholder or any other
Person, other than approvals or consents which have been previously obtained and
disclosed in writing to the Lender, (iv) result in a breach of or constitute a
default under any indenture or loan or credit agreement or any other agreement,
lease or instrument to which the Borrower is a party or by which the Borrower or
its properties may be bound or affected, or (v) result in, or require the
creation or imposition of, any lien of any nature (other than the liens
contemplated hereby) upon or with respect to any of the properties now owned or
hereafter acquired by the Borrower. The Borrower is not in default under any
such law, rule, regulation, order, writ, judgment, injunction, decree or
contractual restriction or any such indenture, agreement, lease or instrument.
Section 4.4. Governmental Consents
No authorization or approval or other action by, and no notice to or
filing with, any governmental authority or regulatory body is required for the
due execution, delivery and
28
performance by the Borrower and any Guarantor of the Loan Documents or any other
document executed pursuant thereto or in connection therewith.
Section 4.5. Validity
The Loan Documents have been duly executed and delivered by and constitute
the legal, valid and binding obligations of the Borrower and Guarantor, if any,
enforceable in accordance with their respective terms.
Section 4.6. Financial Position
As of the dates prepared, the financial statements and all financial data
heretofore delivered to the Lender in connection with the Loan and/or relating
to the Borrower and Guarantor, if any, are true, correct and complete in all
material respects and were prepared in accordance with GAAP consistently
applied. Such financial statements fairly present the financial position of the
Persons who are the subject thereof as of the dates thereof.
Section 4.7. Governmental Regulations
Neither the Borrower nor any Guarantor is subject to regulation under the
Investment Company Act of 1940, the Federal Power Act, the Public Utility
Holding Company Act of 1935, the Interstate Commerce Act, as the same may be
amended from time to time, or any federal or state statute or regulation
limiting its ability to incur Debt.
Section 4.8. Employee Benefit Plans
Neither the Borrower nor any Guarantor maintains any pension, retirement,
profit sharing or similar employee benefit plan that is subject to ERISA other
than a plan pursuant to which such entity's contribution requirement is made
contemporaneously with the employees' contributions.
Section 4.9. Securities Activities
Neither the Borrower nor any Guarantor is engaged principally, or as one
of its important activities, in the business of extending credit for the purpose
of purchasing or carrying any margin stock (as defined in Regulation U of the
Board of Governors of the Federal Reserve System in effect from time to time)
and not more than 25% of the value of the assets of either such entity consists
of such margin stock.
Section 4.10. No Material Adverse Change
No Material Adverse Change has occurred.
Section 4.11. Payment of Taxes
All tax returns and reports required to be filed by the Borrower and any
Guarantor have been timely filed, or proper extensions for filing have been
obtained. All taxes, assessments, fees and other governmental charges upon the
Borrower, any Guarantor and their properties,
29
assets, income and franchises which are due and payable have been paid when due
and payable, or proper extensions for payment have been obtained, except to the
extent that such taxes, assessments, fees and other governmental charges or the
failure to pay the same would not be material to the respective business,
properties, assets, operations, condition (financial or otherwise) or business
prospects of the Borrower or any Guarantor. Neither the Borrower nor any
Guarantor has any knowledge of any proposed tax assessment against the Borrower
or any Guarantor that could be material to its business, properties, assets,
operations, condition (financial or otherwise) or business prospects.
Section 4.12. Litigation
There is no pending or, to the knowledge of the Borrower, threatened
action, suit, proceeding or arbitration against or affecting the Borrower or any
Guarantor before any court, governmental agency or arbitrator, which may result
in a Material Adverse Change.
Section 4.13. Environmental Matters
(a) Projects. The Borrower's representations, warranties and covenants
with respect to all environmental matters relating to the Projects are set forth
in the Environmental Indemnity.
(b) Non-Projects. As to each "Non-Project" (defined as any project to be
developed, under development, or developed by the Borrower or the Guarantor
other than a Project), the operations of the Borrower and Guarantor, if any,
comply in all respects with all Hazardous Materials Laws except such
noncompliance which would not (if enforced in accordance with applicable law)
reasonably be expected to result, individually or in the aggregate, in a
Material Adverse Change. As of the Effective Date of this Loan Agreement, (i)
neither the Borrower, any Guarantor nor their present properties or operations
is subject to any outstanding written order from, or settlement or consent
agreement with, any governmental authority or other Person, nor is any of the
foregoing subject to any judicial or docketed administrative proceeding
respecting any Hazardous Materials Law, Hazardous Materials Claim or Hazardous
Material, which would (if enforced in accordance with applicable law) reasonably
be expected to result, individually or in the aggregate, in a Material Adverse
Change and (ii) there are no other conditions or circumstances known to the
Borrower which may give rise to any Hazardous Materials Claim arising from the
operations of the Borrower or any Guarantor, which would (if enforced in
accordance with applicable law) reasonably be expected to result, individually
or in the aggregate, in a Material Adverse Change.
Section 4.14. No Burdensome Restrictions
Neither the Borrower nor any Guarantor is a party to or bound by any
contract or agreement, or subject to any charter or corporate restriction or any
requirement of law, which would reasonably be expected to result in a Material
Adverse Change.
Section 4.15. Full Disclosure
None of the statements contained in any exhibit, report, statement or
certificate furnished by or on behalf of the Borrower or any Guarantor in
connection with the Loan Documents contains any untrue statement of a material
fact, or omits any material fact required to be stated
30
therein or necessary to make the statements made therein, in light of the
circumstances under which they are made, not misleading; provided, however, that
it is recognized by the Lender that projections and forecasts provided and to be
provided by the Borrower and any Guarantor, while reflecting the Borrower's and
any Guarantor's good faith projections and forecasts, based upon methods and
data the Borrower and Guarantor believes to be reasonable and accurate, are not
to be viewed as facts and that actual results during the period or periods
covered by any such projections and forecasts may differ from the projected or
forecasted results.
Section 4.16. Adequate Consideration
The Borrower represents and warrants to the Lender that prior to entering
into this Loan Agreement, it has reviewed the benefits to be provided to it as a
result of the Lender making the Loan and has concluded that such benefits are
reasonably equivalent in value to the collateral to be pledged to secure the
Loan and the obligations assumed and to be assumed by the Borrower pursuant to
the Loan Documents.
Section 4.17. Compliance with Laws and Regulations
Borrower and the Project are in compliance in all material respects with
all Laws and Regulations, and there are no, nor are there any alleged or
asserted, violations of law, regulations, ordinances, codes, declarations,
covenants, conditions, or restrictions of record, or other agreements relating
to Borrower, any Guarantor, the Project, the Land, Improvements or the
Development Work, or any part thereof.
Section 4.18. Survival and Additional Representations and Warranties
The representations and warranties and contained in this Article IV are in
addition to, and not in derogation of, the representations and warranties
contained elsewhere in the Loan Documents and shall be deemed to be made and
reaffirmed as of the making of each disbursement of proceeds of the Loan, unless
as otherwise disclosed in a writing to Lender and accepted by Lender in writing.
Section 4.19. USA Patriot Act of 2001
Borrower shall not (i) be or become subject at any time to any law,
regulation, or list of any government agency (including, without limitation, the
U.S. Office of Foreign Asset Control list) that prohibits or limits the Lender
from making any advance or extension of credit to Borrower or from otherwise
conducting business with Borrower, or (ii) fail to provide documentary and other
evidence of Borrower's identity as may be requested by Lender at any time to
enable Lender to verify Borrower's identity or to comply with any applicable law
or regulation, including, without limitation, Section 326 of the USA Patriot Act
of 2001, 31 U.S.C. Section 5318.
31
ARTICLE 5. COVENANTS OF THE BORROWER
Section 5.1. Consideration
As an inducement to the Lender to execute this Loan Agreement, make the
Loan and make each disbursement of the Loan, the Borrower hereby covenants that,
so long as any amount payable hereunder or under any other Loan Document remains
unpaid or the Lender has any commitment to disburse the Loan hereunder, Borrower
shall comply with the covenants set forth in this Article V.
Section 5.2. Reporting Requirements
Borrower shall furnish or cause to be furnished to the Lender the
following notices and reports:
(1) Quarterly Financial Reports. As soon as possible after each
fiscal quarter of Bluegreen Corporation (other than the last quarter of
any fiscal year) and in any event within 5 days after submission to the
Securities and Exchange Commission, the following: (i) a copy of Bluegreen
Corporation's 10Q filing certified by the Chief Financial Officer of
Bluegreen Corporation to fairly present the financial condition of said
entity on a fully consolidated basis as at the end of such fiscal quarter
and the results of the operations of Bluegreen Corporation on a fully
consolidated basis for the period ending on such date; (ii) copies of any
and all other financial reports and corrections thereto and to the 10Q
filings required of Bluegreen Corporation under federal laws and
regulations.
(2) Annual Financial Statements. As soon as possible after each
fiscal year of Bluegreen Corporation and in any event within 5 days after
submission to the Securities and Exchange Commission, the following: (i) a
copy of Bluegreen Corporation's 10K filing certified by the Chief
Financial Officer of Bluegreen Corporation to fairly present the financial
condition of said entity on a fully consolidated basis at the end of such
fiscal year and the results of the operations of such entity on a fully
consolidated basis at the end of such fiscal year and the results of the
operations of such entity on a fully consolidated basis for the period
ending on such date; and (ii) copies of any and all other financial
reports and corrections thereto and to the 10K filings required of
Bluegreen Corporation under federal laws and regulations.
(3) Monthly Sales Reports and Sales Information. If requested by
Lender, Borrower will cause to be furnished to Lender, on or before the
20th day after the end of each month, a sales report showing the number of
sales and closings of Timeshare Interests and the aggregate dollar amount
thereof, including down payments, during such month. Borrower will deliver
to Lender within 10 Business Days after receipt of a written request from
Lender to do so, (i) sales literature, consumer documents forms,
registrations/consents to sell, and final subdivision public
reports/public offering statements/prospectuses relative to the Timeshare
Interests and (ii) current price lists for sale of the Timeshare
Interests.
32
(4) Notice of Labor Controversy or other Force Majeure Event. As
soon as possible and in any event within 5 Business Days after the
Borrower has knowledge of its occurrence, written notice of any labor
controversy or other force majeure event resulting in a material strike,
work stoppage, shutdown or other material disruption against or involving
the Borrower, any Guarantor, or any Project.
(5) Notice of Material Adverse Change. As soon as possible after its
occurrence, written notice and a description of any matter which has
resulted, or may result, in a Material Adverse Change.
(6) Notice of Defaults or Potential Defaults. As soon as possible
and in any event within 5 Business Days after the Borrower has knowledge
of the occurrence of any Potential Default (however described) or Event of
Default hereunder or an event of default (however described) under any
other of the Loan Documents, written notice and a description of such
Potential Default, Event of Default or event of default and the action
which the Borrower proposes to take with respect thereto.
(7) Notices of Default Regarding Other Development Projects. As soon
as possible and in any event within 5 Business Days after the Borrower has
knowledge of the occurrence of (i) any event of default under any loan or
other financing facility, including seller financing, made for a
development or construction project comparable to a Project and involving
the Borrower, any Guarantor or any of their Affiliates which event of
default might result in a Material Adverse Change, or (ii) any material
event of default under any other loan or credit agreement relating to
other debt incurred by the Borrower, any Guarantor or any of their
Affiliates which event of default might result in a Material Adverse
Change. The written notice required herein shall contain a description of
such event of default, the cure period and the action which the Borrower
proposes to take with respect thereto.
(8) Notice of Litigation. As soon as possible and in any event
within 5 Business Days after institution thereof, written notice and a
description of any material adverse litigation, action or proceeding
commenced against the Borrower, any Guarantor or any of their Affiliates
or relating to any Project, and any adverse determination in any such
litigation, action or proceeding, which could result in a Material Adverse
Change in the financial condition of Borrower, any Guarantor or any
Project.
(9) Notices Regarding Hazardous Materials. As soon as possible after
the Borrower obtains knowledge of any material occurrence, written notice
and a description of the release of any Hazardous Material, or any
liability with respect thereto, on, under or in connection with a Project
and the action which the Borrower proposes to take with respect thereto.
(10) Notices Regarding Projects. As soon as possible and in any
event within 5 Business Days after receipt by the Borrower, copies of all
(i) notices of violation relating to and adversely affecting any Project
that the Borrower receives from any governmental agency or authority, (ii)
notices of default that the Borrower receives under the Construction
Agreements or any other agreement relating to and adversely affecting any
33
Project, and (iii) notices of default that the Borrower receives under any
agreement relating to the borrowing of money by the Borrower for any
Project from any Person.
(11) Other Information. Such other information respecting the
business, properties, assets, operations and condition, financial or
otherwise, of the Borrower, any Guarantor, their Affiliates and the
Projects, including, without limitation, copies of Project construction
and sales reports, and any other rights or interests subject to the Loan
Documents, as the Lender may from time to time reasonably request.
Section 5.3. Borrower's Operations and Management
Borrower shall:
(1) Compliance with Laws, Etc. Comply in all material respects, with
all applicable laws, rules, regulations and orders of any governmental
authority, including but not limited to the Laws and Regulations, the
noncompliance with which may result in a Material Adverse Change.
(2) Payment of Taxes and Claims. Pay (i) all taxes, assessments and
other governmental charges imposed upon it or any of its properties or
assets or in respect of any of its franchises, business, income or profits
before any penalty accrues thereon, and (ii) subject to, with respect to
the Projects, Section 6.18, 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, except for those claims disputed by any of
the entities comprising the Borrower in accordance with Section 6.18(b),
but only so long as there is no threat of foreclosure of such lien.
(3) Maintenance of Properties; Books and Records. Maintain or cause
to be maintained:
(A) in good repair, working order and condition all properties
and assets material to the continued conduct of the business of the
Borrower, and from time to time make or cause to be made all
necessary repairs, renewals and replacements thereof; and
(B) proper books, records and accounts in which full, true and
correct entries in accordance with GAAP consistently applied are
made of all financial transactions and matters involving its assets
and business.
(4) Change in Nature of Business. Make no material change in the
nature of its business as carried on at the Effective Date hereof.
(5) Maintenance of Existence. Maintain and preserve its existence
and all rights, privileges, qualifications, permits, licenses, franchises
and other rights material to its business.
34
(6) Change in State of Registration or location of Executive
Offices. Make no change to its state of organization or the location of
its executive offices without giving the Lender at least 30 days' prior
written notice.
(7) Management. Maintain professional and qualified management and
staff to manage, operate and maintain its assets and business, including
but not limited to the Projects.
(8) Inspection. At Borrower's expense, permit Lender and its
representatives at all reasonable times to inspect each Project and to
inspect, audit and copy Borrower's books and records, including, without
limitation, the reasonable costs of travel, lodging and meals for
representatives of Lender with respect to such inspections and audits.
Section 5.4. Insurance
(a) The Borrower will maintain or cause its contractors to maintain the
insurance required by the terms of this Loan Agreement and will deposit with the
Lender original, duplicate original or certified copies of insurance
certificates issued by insurance companies with current Best's Key Ratings of
not less than A/IX (as to those policies maintained by the Borrower) and A- or
better (as to those policies maintained by its contractors) and written in form
and content acceptable to the Lender, providing the following minimum insurance
coverages:
(1) "Comprehensive General Liability" insurance in the minimum
"general aggregate" amount of $1,000,000 for the Borrower and $1,000,000
for its contractors, in the minimum "occurrence" limit of $1,000,000 for
the Borrower and $1,000,000 for its contractors, and in the minimum
"umbrella" amount of $11,000,000 for the Borrower, all against claims for
"personal injury" liability, including bodily injury, death or damage to
the project liability, including completed operations and contractual
liability and also "Builders Risk" coverage naming the Lender as an
additional insured.
(2) Insurance with respect to its properties, assets and business
against loss or damage of the kinds customarily insured against by Persons
of established reputation engaged in the same or similar business and
similarly situated, of such types and in such amounts as are customarily
carried under similar circumstances by such other Persons, all in
accordance with reasonably prudent industry standards.
(3) Workers' compensation insurance as prescribed by the laws of
each state in which the Borrower is required to maintain such insurance,
and employers' liability with limits as prescribed by law.
(4) For each Project, broad form course of construction insurance
covering all risks in the minimum amount of the proposed construction cost
for such Project on a replacement cost basis, against loss or damage by
hazards customarily included within "extended coverage" policies, and any
other risks or hazards which in the Lender's reasonable judgment should be
insured against, with a Lender's Loss Payable Endorsement naming the
Lender as an additional insured, together with a full replacement cost
endorsement (without provisions for co-insurance).
35
(5) For each Project, flood insurance in the maximum amount of the
budgeted construction costs or the maximum coverage available, whichever
is less, designating the Lender as payee, or evidence satisfactory to the
Lender that the Project is not located within an area designated as within
the 100 year flood plain under the National Flood Insurance Program.
(b) Each policy of insurance required under this Section 5.4 must contain
the "standard non-contributory mortgagee clause" and the "standard lenders' loss
payable clause," or their equivalents, in favor of the Lender and/or its
assignees, and will provide a certificate of insurance on Accord Form 27 to the
Lender. The Borrower must also furnish the Lender with receipts for the payment
of premiums on such policies or other evidence of such payment reasonably
satisfactory to the Lender.
(c) In the event the Borrower does not deposit with the Lender a new
policy of insurance with evidence of payment of premiums thereon immediately
upon renewal, then the Lender may, but will not be obligated to, procure such
insurance, and the Borrower will pay the premiums thereon to the Lender promptly
upon demand.
(d) The Lender will not, by the fact of approving, disapproving,
accepting, preventing, obtaining or failing to obtain any such insurance, incur
any liability for the form or legal sufficiency of insurance contracts, solvency
of insurers or payment of losses, and the Borrower hereby expressly assumes full
responsibility therefor and all liability related thereto, if any.
Section 5.5. Financial Covenants
Borrower shall comply with, or ensure compliance with, the following:
(1) Net Worth. Bluegreen Corporation will maintain a Net Worth equal
to or in excess of $200,000,000.00; and
(2) Ratio of Total Debt to Net Worth. At all times, the ratio of
total Debt of Bluegreen Corporation determined in accordance with GAAP
consistently applied on a consolidated basis, and not including but not
limited to contingent liabilities, to its Net Worth shall not exceed
2.5:1.
Section 5.6. No Encumbrance; No Transfers
None of the entities comprising the Borrower (including the Project
Owners) and Guarantor may encumber, pledge, mortgage, assign, hypothecate or
otherwise Transfer all or any portion of a Project or the Land that is
encumbered by the Project Security Instruments and any interest in any
collateral with respect to the Projects pledged under the Project Security
Instruments to or for the benefit of a lender other than the Lender, except for
leases and purchase money loans for equipment purchased in the ordinary course
of business. The entities comprising Borrower will not make any Transfer unless
the Borrower has obtained the written consent of the Lender, which consent may
be granted or withheld in the Lender's sole and absolute discretion.
36
Section 5.7. Further Assurances
The Borrower shall execute and deliver, or cause the execution and
delivery, at any time and from time to time any and all instruments, agreements
and documents, and will take such other action, or cause such other action to be
taken, as the Lender reasonably requires to maintain, perfect or insure the
Lender's security provided for under the Loan Documents, including, without
limitation, the execution of amendments to the Loan Documents.
Section 5.8. Survival of Covenants
The covenants contained in this Article V are in addition to, and not in
derogation of, the covenants contained elsewhere in the Loan Documents and shall
be deemed to be made and reaffirmed prior to the making of each disbursement of
proceeds of the Loan.
ARTICLE 6. THE PROJECTS
Section 6.1. Consideration
As an inducement to the Lender to finance each Project and to make each
disbursement of the Loan for the Projects, the Borrower represents and warrants
the truth and accuracy of the matters regarding each Project set forth in this
Article VI and hereby covenants regarding each Project as set forth in this
Article VI. Each of the representations, warranties and covenants in this
Article VI is made by the Borrower with respect to each Project individually,
and as to all Projects collectively. The Borrower's execution and delivery to
the Lender of the Project Commitment and other Project Documents for a Project
shall be deemed a reaffirmation by the Borrower of the representations,
warranties and covenants in this Article VI as to that Project.
Section 6.2. Title to Project
Except as may be otherwise provided in the conditions, covenants and
restrictions governing the Timeshare Program, the Project Owner is, or will be
upon acquisition of the Land, the Improvements, and the Development Work as
contemplated by the Project Commitment, the sole legal and beneficial owner of
the Land, the Improvements, and the Development Work, free and clear of all
claims, liens and encumbrances other than Permitted Exceptions. Except as may be
otherwise provided in the conditions, covenants and restrictions governing the
Timeshare Program, all of the personal property which forms a part of the
Improvements and the Development Work is or will be vested solely in the Project
Owner, free and clear of all claims, liens and encumbrances, and the security
interest of the Lender in such personal property is a first lien thereon
Section 6.3. No Prior Liens or Claims
(a) As to Projects as to which no prior work has commenced, except as
otherwise may have been approved in writing by the Lender and as to which the
Lender shall have received such endorsements (including mechanics lien coverage)
to the Title Policy as the Lender may require to assure the priority of the Deed
of Trust as a valid first lien on the Project, prior to recordation of the Deed
of Trust, neither the Project Owner, nor anyone acting on the Project Owner's
behalf has (i) commenced construction of the Development Work, or any grading or
site
37
clearance related thereto, (ii) purchased, contracted for or otherwise brought
upon the Land any materials, specially fabricated or otherwise, to be
incorporated into the Development Work, or (iii) entered into any contract or
arrangement, the performance of which by any other party thereto could give rise
to a lien or claim on the Project or any portion thereof.
(b) As to Projects as to which the Project Owner has disclosed that prior
work has commenced and Lender has consented to such prior work, and
notwithstanding that, prior to recordation of the Deed of Trust, the Project
Owner has (i) commenced certain construction activity on the Land, (ii)
purchased, contracted for or otherwise brought upon the Land materials,
specially fabricated or otherwise, to be incorporated into the Development Work,
and/or (iii) entered into certain contracts or arrangements, the performance of
which by any other party thereto could give rise to a lien or claim on the
Project or any portion thereof, the Borrower represents none of such activities
have given rise, nor shall any such activities give rise in the future, to any
liens against the Project which could impair the priority of the Deed of Trust
as a valid first lien on the Project.
Section 6.4. Access to the Project
All roads, streets, traffic turn lanes, and access ways necessary for the
full utilization of the Project for its intended purpose have either been bonded
around or completed or the necessary rights of way have either been acquired by
the appropriate governmental authority or have been dedicated to public use and
accepted by the appropriate governmental authority, and all necessary steps have
been taken by the Project Owner and the appropriate governmental authority to
assure the complete construction and installation thereof by the time needed for
construction and/or occupancy and operation of the Project.
Section 6.5. Compliance with Project Requirements and Laws and Regulations
The Project and the Improvements, the proposed and actual use thereof, and
the Development Work when completed will comply in all material respects with
the Project Requirements and with the Laws and Regulations, and there is no
action or proceeding pending or, to the knowledge of the Borrower (after due
inquiry), threatened before any court, quasi-judicial body or administrative
agency at the time of any disbursement by the Lender relating to the validity of
the Loan or would have a material adverse effect on the proposed or actual use
of the Project.
Section 6.6. Covenants, Zoning, Codes, Permits and Consents
The Borrower is familiar and has complied with all of the Laws and
Regulations to be complied with in connection with the construction of the
Development Work. All permits, licenses, consents, approvals or authorizations
by, or registrations, declarations, withholding of objections or filings with
any governmental body necessary in connection with the valid execution, delivery
and performance of the Loan Documents, and any and all other documents executed
in connection with any of the foregoing, necessary for the development of the
Land and necessary for the construction of the Development Work, or in a timely
manner will be obtained, and are or will be valid, adequate and in full force
and effect for the purposes hereunder. Construction of the Development Work and
the intended use of the Project as part of a
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Timeshare Program will in all respects conform to and comply with all Laws and
Regulations, including without limitation all applicable zoning, subdivision,
environmental protection, use and building codes, laws, regulations and
ordinances.
Section 6.7. Utilities
All utility services and facilities necessary for the construction, sale
and occupancy of the Project and the operation thereof for its intended purpose
are either available at the boundaries of the Land, or, if not, all necessary
steps have been taken by the Project Owner and the local authority or public
utility company which provides such services to assure the complete installation
and availability thereof when needed for construction, sale, occupancy and
operation of the Project.
Section 6.8. Map, Permits, Licenses and Approvals
The Project Owner has obtained, or will in a timely manner obtain, the
Map. Project Owner shall properly comply with and keep in effect the Map and all
permits, licenses and approvals which are required to be obtained from
governmental bodies in order to construct, occupy, operate, market and sell the
Project. Project Owner shall promptly deliver copies of the Map and all such
permits, licenses and approvals to Lender.
Section 6.9. Approval of Plans and Specifications and Approval of Budget
(a) The Plans and Specifications are a true, complete and accurate
reflection of the Development Work that the Project Owner will construct. The
Plans and Specifications are satisfactory to the Project Owner and have been
reviewed and approved by the Project Owner and the general contractor for the
Project (if different from the Project Owner), and have also been approved as
required by all governmental bodies or agencies having jurisdiction (including,
without limitation, any local design review boards) and, if required, by the
beneficiary of any restrictive covenant affecting the Project. There are no
structural defects in the Development Work as shown in the Plans and
Specifications, and no violation of any of the Laws and Regulations exists with
respect to the Plans and Specifications.
(b) After diligent investigation of all relevant conditions and due
consultation with such parties as the Project Owner deems appropriate, the
Project Owner represents that the Budget identifies on a line item basis all
costs to be incurred in connection with the Development Work and all costs for
which proceeds of the Loan are to be disbursed. The Budget reflects the Project
Owner's best, true, accurate and complete estimate of the costs shown therein
and of the costs estimated to be necessary to construct the Development Work in
accordance with the Plans and Specifications.
Section 6.10. Adequacy of Loan Amount
The Loan Amount, when combined with Borrower's invested cash equity, is
sufficient to pay all costs of the acquisition of the Land and the Improvements
and all costs of the Development Work in accordance with the Plans and
Specifications and all remaining costs related thereto, except as has been
specifically disclosed to and approved in writing by the Lender.
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Section 6.11. Construction Start and Completion
Subject to a Force Majeure Event (but not having any effect on Section
8.1(a)(14) and Section 8.1(a)(16)) the Project Owner shall commence construction
of the Development Work no later than the date set forth in the Project
Commitment and shall thereafter diligently proceed with construction and
completion of the Development Work in a good and workmanlike manner in normal
course of business as a prudent developer. The Project Owner shall cause the
Development Work at all times to materially conform to the Laws and Regulations
and shall accomplish completion of the Development Work in the manner of a
prudent developer. The Project Owner shall cooperate at all times with Lender in
bringing about the timely completion of each element of the Development Work,
and Project Owner shall use best efforts to resolve all disputes arising during
the work of construction in a manner which shall allow work to proceed
expeditiously.
Section 6.12. Personal Property Incorporation
All personal property for which the Lender disburses Loan proceeds for the
Project is to be stored on the Land and in the Lender's judgment must be
reasonably secure from damage and theft and fully insured at all times.
Section 6.13. Contractors and Contracts
Upon demand by the Lender, the Project Owner shall furnish to the Lender,
from time to time, correct lists of all contractors and subcontractors employed
in connection with the Development Work. Each such list shall show the name,
address and telephone number of each such contractor or subcontractor, a general
statement of the nature of the work to be done, the labor and materials to be
supplied, the names of materialmen, if known, and the approximate dollar value
of such labor, work and materials with respect to each. Upon an Event of
Default, the Lender shall have the right, and at any time the Inspector shall
have the right (in both cases without either the obligation or the duty), to
contact directly each contractor, subcontractor and materialman to verify the
facts disclosed by said list or for any other purpose.
Section 6.14. Evidence of Ownership of Materials
If requested by the Lender, the Project Owner shall promptly deliver to
Lender any bills of sale, statements, receipts, contracts or agreements under
which the Project Owner claims title to any materials, fixtures or articles
incorporated into the Development Work.
Section 6.15. Changes to Plans and Specifications and Budget
(a) The following Changes, whether made by change order or otherwise, to
any of (i) the Budget or the schedule of the costs of the Development Work, (ii)
the Plans and Specifications and/or (iii) working drawings relating to the
Development Work, shall require the prior written approval of the Lender, and
any request for such approval shall be accompanied by a written report from the
Inspector stating that the Inspector has reviewed and approved such Changes:
(1) any Change which, together with all prior increases, will result
in an increase to the total Budget for the Development Work of 5% or more,
it being understood that the
40
foregoing shall not apply to increases to particular line items of the
Budget unless such increase to the line item will result in an increase to
the total Budget for the Development Work of 5% or more;
(2) any Change which, together with all prior decreases, will result
in a decrease to the total Budget for the Development Work of 5% or more,
it being understood that the foregoing shall not apply to decreases to
particular line items of the Budget unless such decrease to the line item
will result in a decrease to the total Budget for the Development Work of
5% or more; provided, however, that the Project Owner shall not offset
against each other increases and decreases in the total Budget for the
Development Work, it being the intent that an increase or a decrease in
the total Budget for the Development Work which meets either the threshold
set forth in subparagraph (a)(1) or the threshold set forth in this
subparagraph (a)(2) shall require the prior approval of the Lender; and
(b) As a condition to its approval of any Change described in subparagraph
(a), Lender may require verification that such Change:
(1) is a Change as to which the Project Owner has complied with the
terms of subparagraph (c) of this Section 6.15;
(2) will not adversely affect the value of the Lender's security;
(3) is not a material change in structure, design, exterior
appearance, square footage, or function;
(4) would not cause an increase in any line item or category of the
Budget in excess of the contingencies (if any) specifically contained in
the Budget for that line item or category; and
(5) would be consistent with the Laws and Regulations.
(c) The Lender is under no duty to review or inform the Borrower of the
quality or suitability of the Plans and Specifications, any contract or
subcontract or any changes thereto. Without limitation of the foregoing, the
Project Owner shall obtain the Lender's prior written approval of any alteration
in the Plans and Specifications which might adversely affect the value of the
Lender's security or which, regardless of cost, is a material change in
structure, design, function or exterior appearance.
(d) The Project Owner agrees to provide the Lender with copies of all
change orders, together with all additional documents that the Lender may
require in order to evaluate a request for approval of a Change of a type
described in subparagraph (a) above. These documents may include the following:
(i) a written description of the Change and related working drawings and (ii) a
written estimate of the cost of the Change and the time necessary to complete
it. The Lender may take a reasonable time to evaluate any requests for approval
of a Change, and may require that all other approvals required from other
parties be obtained before it reviews any requested Change. The Lender may
approve or disapprove Changes in the exercise of its reasonable judgment. The
Project Owner acknowledges that any requested Changes may result in delays and
agrees that any delays caused by the Lender or otherwise shall not affect the
41
Project Owner's obligation to complete each element of the Development Work in
accordance with the Construction Progress Schedule.
(e) In the event that either:
(1) the proceeds of the Loan which are available for disbursement
will not be sufficient to complete the Development Work as scheduled; or
(2) the costs of the Project have increased over the amount set
forth in the Budget by an amount in excess of the amount set forth in
subparagraph (a)(1),
then the Project Owner shall submit to the Lender a revised budget for the
Project, together with (i) a request that the Lender approve an increase in the
Project Loan Amount, which request the Lender may approve or disapprove in its
absolute and sole discretion, or (ii) evidence that the Project Owner has
sufficient funds to pay the increased costs, in which event the Lender shall not
be obligated to disburse additional amounts of the Loan pursuant to Section 3.3
until such time as the Borrower provides to the Lender evidence that it has paid
from its own funds, in addition to any Project Owner funds which the Budget
requires, an amount at least equal to the increase. Any such revised Budget for
the Project submitted to the Lender shall be accompanied by a written report
from the Inspector stating that the Inspector has reviewed and approved the
revised Budget.
(f) In addition to obtaining the prior written approval of the Lender in
connection with any Change described in this Section 6.15, the Project Owner
shall also obtain, to the extent that such approvals may be required, (i) the
approvals of the appropriate governmental authorities to any Change and (ii)
from the appropriate persons or entities approvals of any alterations in the
Map, the Plans and Specifications or any work, materials or contracts that are
required by any of the Laws and Regulations or under the terms of the Project
Commitment or the other Loan Documents.
Section 6.16. Lender Inspections, Appraisal and Information
During normal business hours, the Project Owner shall arrange for the
Lender, the Inspector or any other authorized representative of Lender, at the
expense of the Borrower, to visit, inspect or appraise the Project, the
materials to be used thereon or therein, contracts, records, plans,
specifications and shop drawings relating thereto, whether kept at the
Borrower's offices or at the Project construction site or elsewhere, and the
books, records, accounts and other financial and accounting records of the
Borrower wherever kept, and to make copies and take extracts thereof and
therefrom as often as may be reasonably requested by the Lender. The Borrower
will cooperate with the Lender to enable the Lender, the Inspector or such other
authorized representatives of the Lender to conduct such visits, inspections and
appraisals. The costs of the Inspector and the other authorized representatives
of the Lender, and of such inspections and appraisals shall be borne by the
Borrower and shall be paid within 30 days of the Borrower's receipt of any
invoice with respect thereto. Borrower agrees to keep at its offices or at the
Project, and to make available to the Lender, the Inspector of any other
representative of Lender during normal business hours, the Plans and
Specifications on an as-built basis or, if unavailable, the final set of plans
and specifications from which the Development Work
42
were constructed ("As-Builts"), certified by a licensed architect or licensed
contractor as true, correct and complete As-Builts.
Section 6.17. Correction of Defects
If Lender in its reasonable judgment determines that any Development Work
or materials fail to conform to the Map, any Laws and Regulations, the Plans and
Specifications, or that they otherwise depart from any of the requirements of
this Loan Agreement, the Lender may require the work to be stopped and withhold
disbursements until the matter is corrected. If this occurs, the Project Owner
shall promptly correct the work to the Lender's satisfaction, and pending
completion of such corrective work shall not allow any other work which is
dependent upon or directly related to the work requiring correction to proceed.
No such action by the Lender shall affect the Project Owner's obligation to
complete each element of the Development Work within the times required by this
Loan Agreement. The disbursement of any Loan proceeds shall not constitute a
waiver of the Lender's right to require compliance with this covenant.
Section 6.18. Protection Against Lien Claims
(a) The Project Owner shall pay and discharge, or cause to be paid and
discharged, promptly and fully all claims for labor done and materials and
services furnished in connection with the Development Work, and take or cause to
be taken all reasonable steps to forestall the assertion of claims of lien
against the Project or any part thereof. Upon the request of the Lender, the
Project Owner shall obtain a lien waiver with respect to each payment by or to
the Project Owner and each of the various subcontractors and materialmen (and
the major subcontractors and submaterialmen under them). Lender, at any time, at
its option, may require that any disbursement made hereunder be made by joint
check made payable to the Project Owner and the subcontractor or
sub-subcontractor for whose account such payment is to be made, as joint payees.
(b) Nothing herein contained shall require the Project Owner to pay any
claims for labor, materials, or services which the Project Owner in good faith
disputes and which the Project Owner, at its own expense, currently and
diligently contests, provided that, in the event the aggregate amount of claims
filed with respect to the Project exceeds $25,000, within 30 days after the
Project Owner's actual receipt of notice of filing of that claim of lien which
exceeds the specified amount, the Project Owner shall take one of the following
actions with respect to all subsequent claims:
(1) record or cause to be recorded in the office of the recorder of
the County in which the Project is located a surety bond or other security
sufficient to release said claim of lien, or
(2) make or cause to be made a deposit of cash in the amount of 150%
of the claim of lien with the Lender; or
(3) deliver or cause to be delivered to Lender a specific
endorsement to the Title Policy which insures the Lender against any loss
by reason of such claim of lien, or
43
(4) deliver or cause to be delivered to the Lender such other
assurance as may be acceptable to the Lender.
Section 6.19. Conveyance, Lease or Encumbrance
The Project Owner shall not sell, agree to sell, convey, transfer, dispose
of or further encumber the Project or any portion thereof or interest therein
(other than the sale of Timeshare Interests on and subject to the terms of this
Loan Agreement), or enter into a lease covering all or any portion thereof or
interest therein, either voluntarily, involuntarily or otherwise, or enter into
an agreement to do so, without the prior written consent of the Lender being
first had and obtained. All easements, declarations, covenants, conditions,
restrictions and dedications affecting the Project shall be submitted to the
Lender for its approval, accompanied by a drawing or survey showing the precise
location thereof, and such approval shall be obtained prior to the execution or
granting of any thereof by the Project Owner. The Project Owner shall not
execute any lease of any portion of the Project without the prior written
consent of the Lender. The Project Owner shall promptly notify the Lender of any
event of default or cancellation under any lease now or hereafter in effect.
Upon Lender's approval of same the Lender will join or consent to such documents
to the extent requested by Borrower provided Lender shall not incur any
liability with respect to such joinder or consent.
Section 6.20. Security Instruments
From time to time, upon the request of the Lender, the Project Owner shall
execute and deliver to the Lender a security instrument or instruments naming
the Lender as secured party covering all contracts of any kind entered into in
connection with the Development Work and all other property of any kind
whatsoever owned by the Project Owner and used, or to be used, in the use and
enjoyment of the Project and concerning which the Lender may have any doubt as
to its being subject to the lien of the Project Security Instruments.
Notwithstanding any language in this Section 6.20 to the contrary, Borrower
shall not be required to pledge any interest to the names Bluegreen, Bluegreen
Vacation Club or any variation thereof.
Section 6.21. Further Assurances; Cooperation
The Project Owner will at any time and from time to time upon request of
the Lender take or cause to be taken any action, execute, acknowledge, deliver
or record any further documents, opinions, mortgages, security agreements,
financing statements or other instruments or obtain such additional insurance as
the Lender in its reasonable discretion deems necessary or appropriate to carry
out the purposes of this Loan Agreement and to preserve, protect and perfect the
security interest intended to be created and preserved in the Project, the
Improvements, and the Development Work.
Section 6.22. Negative Covenants
So long as any amount payable under any Loan Document still remains unpaid
or Lender shall have any commitment to disburse the Loan hereunder, the Project
Owner shall not, unless the Lender shall otherwise consent in writing or as a
Permitted Exception (i) create, assume or suffer to exist any lien, security
interest or other charge or encumbrance, or any other type of preferential
arrangement, upon the collateral for the Loan assigned to the Lender pursuant to
44
Project Security Instruments, or (ii) sell, lease, transfer or otherwise dispose
of (A) all or substantially all of its assets (in a single transaction or a
series of related transactions), or (B) any of the collateral for the Loan
assigned to the Lender by the Project Owner, except in the ordinary course of
business.
Section 6.23. Signs
Upon the request of the Lender, the Project Owner shall erect and place on
or in the vicinity of the Project a sign or signs indicating that the Lender has
provided construction financing for the Project. Said sign(s) shall comply with
Laws and Regulations and remain the property of the Lender and shall be required
to be removed only after the Development Work has been completed.
ARTICLE 7. SALES OF TIMESHARE INTERESTS AND RELEASES FROM DEED OF TRUST
Section 7.1. Sales and Closings
The Borrower may enter into Sales Agreements for the sale of Timeshare
Interests in the ordinary course of business with bona fide third party buyers
without the Lender's prior written consent if:
(1) a Sales Agreement is executed with the buyer which conforms to
the requirements of this Loan Agreement; and
(2) the Borrower, acting in good faith following exercise of
reasonable due diligence, has qualified the buyer under policies
consistent with the Borrower's business practices applicable to its
projects, generally.
The Borrower shall, upon the Lender's request, provide to Lender copies of the
Sales Agreements. The Lender in the exercise of its reasonable discretion may
consider any sale to be unsatisfactory if the sale fails to meet any of the
requirements of this Loan Agreement. If this happens, or if any Event of Default
has occurred and is continuing, the Lender may make written demand on Borrower
to submit future Sales Agreements for the Lender's approval prior to execution,
together in each instance with accompanying financial statements for the buyer
and other information that the Borrower may have pertaining to the prospective
buyer. The Borrower shall comply immediately with any such demand by the Lender.
Section 7.2. Sales Operations and Seller's Obligations
The Borrower shall at all times maintain adequate marketing capability for
the sale of the Timeshare Interests, and shall perform all obligations required
to be performed by it under each Sales Agreement.
45
Section 7.3. Intentionally Omitted
Section 7.4. Releases from Lien of Deed of Trust
The Borrower may from time to time request that Lender release one or more
Timeshare Interests from the lien of the Deed of Trust and the other Project
Security Instruments encumbering such Timeshare Interests. The Lender agrees
that it will use its best efforts to execute a partial release that releases the
Lender's lien on such Timeshare Interests pursuant to the Deed of Trust and the
other Project Security Instruments within [5] Business Days after receipt of the
release, provided that the following conditions precedent shall have been
satisfied:
(1) the Lender shall have received a written notice requesting the
partial release no fewer than 5 Business Days prior to the date on which
the partial release is to be effective, which notice shall specify (i) the
Project, (ii) the specific Timeshare Interests to be released, (iii) the
Person(s) to whom such Timeshare Interests are being sold, which Person(s)
shall not be an Affiliate of the Borrower or of any Guarantor, and (iv)
the Lender's Release Price(s) therefor;
(2) the Lender shall have received evidence satisfactory to the
Lender that, if the release is being sought precedent to a sale, (i) the
closing of the sale and/or release of such Timeshare Interests shall be
conducted through an escrow with a title company or an escrow agent
specified by the Borrower and satisfactory to the Lender, and (ii) such
title company shall have been instructed, which instructions shall have
been acknowledged and agreed to by such title company and which cannot be
changed or supplemented without the Lender's written concurrence, not to
record the Lender's partial release until such title company receives in
respect of such release an amount equal to Lender's Release Price for such
Timeshare Interests and is irrevocably committed to disburse such amount
to the Lender;
(3) the Lender shall have received executed originals of
instruments, agreements and other documents, in form and substance
satisfactory to the Lender, which the Lender determines are necessary or
appropriate, to evidence and/or effectuate the partial release and to
modify the Loan Documents as a result thereof;
(4) the Lender shall have received evidence satisfactory to Lender
that the Borrower has satisfied all conditions precedent in the Loan
Documents relating to the release of the Timeshare Interests; and
(5) no Event of Default shall exist, unless the Event of Default is
a Project Specific Default and the Borrower seeks Lender's release of the
entire Project as to which the Project Specific Default applies.
In connection with each release of a Timeshare Interest, provided all conditions
to such release have been met, the Lender agrees to provide to the title
insurance company an estoppel letter, in form and substance satisfactory to the
Lender, specifying the Lender's Release Price for the applicable Project.
46
(b) In addition to the releases provided for in subparagraph (a), the
Lender agrees that, without requiring payment of any additional release price,
it shall release from the lien of the Deed of Trust and the other Project
Security Instruments those portions of the Project necessary for utility
easements and dedicated public roads, and Lender shall agree to subordinate its
lien of the Deed of Trust and the other Project Security Instruments and/or to
execute a non-disturbance agreement relative to the Project's common elements
(including any parts of the Project to be transferred to a timeshare association
or the like) if required by any governmental agency; provided that the following
conditions precedent shall have been satisfied:
(1) the Borrower complies with the requirements of subparagraphs
(1), (3), (4) and (5) of subparagraph (a) above (except that the
requirement of subparagraph (a)(1) requiring the written notice to specify
the Lender's Release Price(s) shall not be applicable);
(2) the Lender is furnished with a survey, or another document
reasonably satisfactory to the Lender, depicting and describing the real
property affected; and
(3) such request is consistent in all material respects with the
site plan or other depiction of the Project provided to the Lender as part
of the Project Underwriting Documents.
(c) In addition to the releases provided for in subparagraphs (a)
and (b), Lender agrees that it shall release the Deed of Trust and the
Project Security Instruments (or assign without recourse or warranty,
other than for acts and omissions of Lender, such Project Documents as
requested by Borrower and at no cost to Lender) for a particular Project
upon the payment in full of the corresponding Project Loan Amount,
provided that no Event of Default or Potential Default shall exist.
ARTICLE 8. EVENTS OF DEFAULT AND REMEDIES
Section 8.1. Events of Default
(a) The occurrence and continuance of any of the following events
constitutes an "Event of Default" hereunder:
(1) The Borrower fails to pay any installment of principal on the
Loan when due, including the payment of any installment of principal on
any Project Loan, whether at stated maturity, as a result of a mandatory
prepayment requirement not cured within one (1) Business Day, upon
acceleration or otherwise, or pay when due any interest, fees or other
amounts payable hereunder or under the other Loan Documents.
(2) Any representation or warranty made by the Borrower or any
Guarantor herein or in any other Loan Document is at any time incorrect in
any material respect.
(3) The Borrower or any Guarantor fail to perform or observe any
term, covenant or agreement contained in this Loan Agreement or any other
Loan Document relative to any Project under this Loan, including a
cross-default under any Project Loan, and such failure remains unremedied
for 30 days after notice thereof from the Lender to the
47
Borrower or any Guarantor; provided that in the event the Borrower or any
Guarantor commences and is diligently pursuing to completion action to
cure the failure, such 30 day period may be extended for such period of
time as is necessary to cure the failure, but in no event longer then 120
days from the date of the Lender's notice; provided further however, that
in the event (i) the Lender reasonably determines that the failure to
immediately declare an Event of Default could materially and adversely
harm the rights of the Lender hereunder or under any other Loan Document,
or the rights of the Lender with respect to the collateral pledged to
secure the Loan, or (ii) the Lender reasonably determines that the failure
to perform or observe the terms of this Loan Agreement or any other Loan
Document cannot be remedied with the passage of 120 days, then the Lender
may declare an immediate Event of Default in its notice given pursuant to
this Section 8.1(a)(3).
(4) The Borrower or any Guarantor asserts the invalidity or
unenforceability of any Loan Document or any Loan Document is adjudicated
to be invalid or unenforceable in any material respect.
(5) Any event of default (however described) under any other Loan
Document occurs and is not cured within the applicable grace period.
(6) Any Project Security Instrument, for any reason, ceases to
create a valid and perfected first priority lien on or in the Land or
other collateral relating thereto as described in the Loan Documents, or
the Borrower so states in writing other than the Permitted Exceptions.
(7) The dissolution or winding up of the Borrower or any Guarantor.
(8) Any Transfer occurs which has not been consented to in writing
by Lender.
(9) The Borrower or any Guarantor fails to comply with any of the
financial covenants set forth in Section 5.5.
(10) A Material Adverse Change occurs and is not cured within the
cure period set forth in Section 8.1(a)(3) hereof.
(11) Any judgment or order for the payment of money in excess of
$2,500,000, singularly or in the aggregate, is rendered against the
Borrower or any Guarantor, and either (i) enforcement proceedings have
been commenced by any creditor upon such judgment, or (ii) there is a
period of 15 Business Days during which a stay of enforcement of such
judgment or order, by reason of a pending appeal or otherwise, is not in
effect.
(12) The Borrower or any Guarantor fails to pay any Debt (other than
the Debt incurred by the Borrower and any Guarantor with respect to the
Loan, the Events of Default with respect to which are set forth elsewhere
in this Section 8.1), or any interest or premium thereon, when due
(whether by scheduled maturity, required prepayment, acceleration, demand
or otherwise) and such failure continues after the applicable grace
period, if any, specified in the agreement or instrument relating to such
Debt; any other
48
default under any agreement or instrument relating to any such Debt, or
any other event, occurs and continues after the applicable grace period,
if any, specified in such agreement or instrument, if the effect of such
failure to pay, default or event results in the acceleration, or permits
the acceleration of, the maturity of such Debt; or any such Debt is
declared to be due and payable, or is required to be prepaid (other than
by a regularly scheduled required prepayment) prior to the stated maturity
thereof; provided however that none of the foregoing events or inactions
will constitute an Event of Default unless such event or inaction could
result in a Material Adverse Change.
(13) The Borrower or any Guarantor generally does not pay its Debts
as such Debts become due, or admits in writing its inability to pay its
Debts generally, or makes a general assignment for the benefit of
creditors; or any proceeding is instituted by or against the Borrower or
any Guarantor seeking to adjudicate such party as bankrupt or insolvent,
or seeking liquidation, winding up, reorganization, arrangement,
adjustment, protection, relief or composition of such party's Debts under
any law relating to bankruptcy, insolvency or reorganization or relief of
debtors, or seeking the entry of an order for relief or the appointment of
a receiver, trustee or other similar official for such party or for any
substantial part of such party's property and, in the case of any such
proceeding instituted against it (but not instituted by it), either such
proceeding remains undismissed or unstayed for a period of 60 days
(whether or not consecutive), or any of the actions sought in such
proceeding (including, without, limitation, the entry of an order for
relief against, or the appointment of a receiver, trustee, custodian or
other similar official for, it or for any substantial part of its
property) occur; or the Borrower or any Guarantor takes any action to
authorize any of the actions set forth above.
(14) With respect to any Project, the Borrower fails to commence
construction of the Development Work or fails to satisfy all of the
conditions of this Loan Agreement with respect to disbursement of Loan
proceeds for costs of such construction on or before the expiration of 6
months after date of the Project Commitment issued for such Project.
(15) With respect to any Project, there shall occur substantial
deviations in the Development Work from the Plans and Specifications
without the prior approval of the Lender, or the existence of materially
adverse defective workmanship or materials incorporated into the
Development Work, such deviations and defects to be conclusively
determined by the Lender after consultation with the Inspector.
(16) With respect to any Project, cessation of the Development Work
prior to completion for a continuous period of (i) 90 days or more if such
cessation is caused by a Force Majeure Event, or (ii) 30 days or more if
such cessation is not caused by a Force Majeure Event.
(17) With respect to any Project, a court of competent jurisdiction
enters an order enjoining construction of the Development Work, or such a
court or an authorized governmental agency orders that sales of the
Timeshare Interests be suspended or halted, or any required approval,
license or permit is withdrawn or suspended, and the order, withdrawal or
suspension remains in effect for a period of 15 Business Days.
49
(18) With respect to any Project, any surety obligated for any
Development Work is called upon to perform its obligations and/or any
person demands funds pursuant to any "set-aside" letter or "cash in lieu
of bond agreement" issued by the Lender with respect to the Project.
(19) The assignment by the Borrower or any Guarantor of the rents or
the income of any Project, or any part thereof or of any other revenues or
sales proceeds relating to the Project (other than to the Lender).
(20) With respect to any Project, there occurs any attachment, levy,
execution or other judicial seizure of any portion of the Project, any
other collateral provided by the Borrower under any of the Loan Documents,
or any substantial portion of the other assets of the Borrower, which is
not released, expunged, discharged or dismissed prior to the earlier of
(i) 20 days after such attachment, levy execution or seizure, or (ii) the
sale of the assets affected thereby.
(21) The occurrence of an event of default (however designated or
defined) with respect to any loan made by Lender or any Affiliate of
Lender to any one or more of Borrower, Guarantor, or any of their
respective Affiliates.
(b) The Borrower acknowledges and agrees that all material non-monetary
defaults are conclusively deemed to be and are defaults which impair the
security of the Deed of Trust, and that the Lender shall be entitled to exercise
any appropriate remedy, including without limitation, foreclosure of the Deed of
Trust upon the occurrence of any such material non-monetary default.
Section 8.2. Remedies (a) Upon the occurrence of any Event of Default, until
such Event of Default is cured and the cure is accepted by Lender, the following
provisions apply:
(1) If such event is an Event of Default specified in Section
8.1(a)(13), the Lender's commitment to fund the Loan or make any
disbursements under a Project Loan will terminate and the indebtedness
evidenced by the Note and any other amounts payable under this Loan
Agreement and the other Loan Documents will immediately and automatically
become due and payable.
(2) Upon the occurrence of any other Event of Default, the Lender
may, at its option, do any one or more of the following:
(A) Immediately terminate any further disbursement of Loan
funds hereunder, and from time to time apply all or any portion of
the undisbursed Loan funds to payment of accrued interest under the
Note and/or upon any other obligations of the Borrower hereunder or
under the Project Documents. Lender may also withhold any one or
more disbursements after an event or condition occurs that with
notice or the passage of time could become an Event of Default,
unless the Borrower cures or corrects the event or condition to the
reasonable satisfaction of the Lender prior to the occurrence of an
Event of Default.
50
(B) Declare the Note to be immediately due and payable and
record a notice of default under any Deed of Trust.
(C) Make any disbursements after the happening of any one or
more Events of Default, without thereby waiving its right to demand
payment of the Note and all other sums owing to Lender with respect
to the Project Documents or any other rights or remedies described
herein, and without liability to make any other or further
disbursements, notwithstanding Lender's previous exercise of any
such rights and remedies.
(D) Enter upon the Project and with or without legal process
take possession of the Project, without breaching the peace, remove
the Borrower and all employees, contractors and agents of the
Borrower therefrom, and complete or attempt to complete construction
of the Development Work in accordance with the Plans and
Specifications with such changes, additions or corrections therein
as the Lender may from time to time and in its judgment deem
appropriate, and market, sell or lease the Project, at the risk and
expense of the Borrower. The Lender shall have the right at any time
to discontinue any work commenced by it in respect to the
Development Work or to change any course of action undertaken by it
and not be bound by any limitations or requirements of time whether
set forth herein or otherwise. The Lender shall have the right and
power (but shall not be obligated) to assume any construction
contract made by or on behalf of the Borrower in any way relating to
the Development Work and to take over and use all or any part of the
labor, materials, supplies and equipment contracted for, by or on
behalf of the Borrower whether or not previously incorporated into
the Development Work, in the discretion of the Lender. The Lender
may also modify or terminate any contractual arrangements, subject
to its right at any time to discontinue any work without liability.
If the Lender chooses to complete the Development Work, the Lender
shall not assume any liability to the Borrower or any other person
for completing them, or for the manner or quality of their
construction, and Borrower expressly waives any such liability. In
connection with any work of construction undertaken by the Lender
pursuant to the provisions of this subsection (3), the Lender may do
any of the following:
i. engage builders, contractors, subcontractors,
architects, engineers, suppliers, inspectors, consultants and
others for the purpose of furnishing labor, materials,
equipment and other services in connection with the work of
construction, for the protection or clearance of title to the
Project, or for the protection of the Lender's interests with
respect thereto;
ii. pay, settle or compromise all bills or claims which
may become liens against the Project or which have been or may
be incurred in any manner in connection with completing
construction of the Development Work or for the protection or
clearance of title to the Project, or for the protection of
the Lender's interests with respect thereto;
51
iii. prosecute and defend all actions and proceedings in
connection with the Project;
iv. execute, acknowledge and deliver all other
instruments and documents in the name of the Borrower that are
necessary or desirable, to exercise the Borrower's rights
under contracts concerning the Project; and
v. take such other action, including the employment of
security personnel to protect the Development Work, or refrain
from taking action under this Loan Agreement as the Lender may
in its discretion determine from time to time.
The Borrower shall be liable to the Lender for sums paid or incurred
for completing construction of the Development Work whether the same
shall be paid or incurred pursuant to the provisions of this Section
or otherwise, and all payments made or liabilities incurred by the
Lender hereunder of any kind whatsoever shall be paid by the
Borrower to the Lender upon demand with interest at the rate set
forth in the Note, and all of the foregoing shall be deemed and
shall constitute disbursements under this Loan Agreement and be
secured by the Project Documents. For the purpose of carrying out
the provisions and exercising the rights, powers and privileges
granted by this subsection (3), the Borrower hereby unconditionally
and irrevocably constitutes and appoints the Lender its true and
lawful attorney-in-fact to enter into such contracts, perform such
acts and incur such liabilities as are referred to in said Section
in the name and on behalf of the Borrower. This power of attorney is
coupled with an interest.
(E) Where substantial deviations from the Plans and
Specifications appear which have not been approved as set forth
herein, or where defective or unworkmanlike labor or materials are
being used in the construction of the Development Work, or upon
receipt of knowledge of encroachments to which there has been no
consent, or if the Lender determines that the Development Work is
not being constructed in accordance with any governmental
requirements or any covenants, conditions, restrictions, agreements
or other matters, whether or not of record, affecting the condition
of title to the Project, the Lender shall have the right to
immediately order stoppage of the construction and demand that such
conditions be corrected. After issuance of such an order in writing,
no further work shall be done on that portion of the Development
Work where there is a substantial deviation from the Plans and
Specifications which has not been approved as set forth herein,
where there is defective or unworkmanlike labor or materials, or
which does not comply with governmental requirements or matters
affecting title to the Project, without the prior written consent of
the Lender, which consent shall not be unreasonably withheld, unless
and until said condition has been fully corrected.
(F) Foreclose on any security for the Loan without waiving its
rights to proceed against any other security or other entities or
individuals directly or indirectly responsible for repayment of the
Loan, or waive any and all security for
52
the Loan as the Lender may in its discretion so determine, and
pursue any such other remedy or remedies as the Lender may so
determine to be in its best interest.
(G) If the Lender spends its funds in exercising or enforcing
any of its rights or remedies under the Project Documents, the
amount of funds spent shall be payable to the Lender upon demand,
together with interest at the rate applicable to the principal
balance of the Note, from the date such funds were spent until
repaid. Such amounts shall be deemed secured by the Deed of Trust
and other applicable Project Documents, except as otherwise
specifically provided in such documents.
(H) Request and have appointed a receiver with respect to the
Borrower and/or the collateral securing the Loan, and to that end,
Borrower hereby consents to the appointment of a receiver by Lender
in any action initiated by Lender pursuant to this Loan Agreement,
and Borrower waives any notice and posting of a bond in connection
therewith.
(I) Any and all other remedies available at law or in equity.
(b) Whether or not the Lender elects to employ any or all of the remedies
available to it in connection with an Event of Default, the Lender shall not be
liable for (i) the Borrower's or the Project Owner's construction of or failure
to construct, complete or protect the Development Work, (ii) the payment of any
expense incurred by the Lender for the construction or completion of the
Development Work undertaken by the Borrower or the Project Owner, or (iii) the
performance or non-performance of any other obligation of the Borrower.
(c) All remedies of the Lender provided for herein and in any other Loan
Documents are cumulative and shall be in addition to all other rights and
remedies provided by law or in equity. The exercise of any right or remedy by
the Lender hereunder shall not in any way constitute a cure or waiver of default
hereunder or under any other Loan Document or invalidate any act done pursuant
to any notice of default, or prejudice the Lender in the exercise of any of its
rights hereunder or under any other Loan Document. If the Lender exercises any
of the rights or remedies provided in this Article VIII, that exercise shall not
make the Lender, or cause the Lender to be deemed to be, a partner or joint
venturer of the Borrower. No disbursement of Loan funds by the Lender shall cure
any default of the Borrower, unless the Lender agrees otherwise in writing in
each instance.
(d) Upon the occurrence of any Event of Default, all of the Borrower' s
obligations under the Loan Documents may become immediately due and payable
without notice of default, presentment or demand for payment, protest or notice
of nonpayment or dishonor, or other notices or demands of any kind or character,
at the Lender's option, exercisable in its sole discretion. If such acceleration
occurs, the Lender may apply the undisbursed Loan funds to the obligations of
the Borrower under the Loan Documents, in any order and proportions that the
Lender in its sole discretion may choose.
53
Section 8.3. Application of Proceeds During an Event of Default
Notwithstanding anything in the Loan Documents to the contrary, while an
Event of Default exists, any cash received and retained by Lender in connection
with the collateral securing the Loan may be applied to payment of the
Borrower's obligations under the Loan Documents as Lender in its discretion may
determine.
Section 8.4. Uniform Commercial Code Remedies; Sale; Assembly of Collateral
(a) UCC Remedies; Sale of Collateral. Lender shall have all of the rights
and remedies of a secured party under the Uniform Commercial Code of the State
of Florida and all other rights and remedies accorded to a Secured Party at
equity or law. Any notice of sale or other disposition of the Collateral given
not less than 10 Business Days prior to such proposed action in connection with
the exercise of Lender's rights and remedies shall constitute reasonable and
fair notice of such action. Lender may postpone or adjourn any such sale from
time to time by announcement at the time and place of sale stated on the notice
of sale or by announcement of any adjourned sale, without being required to give
a further notice of sale. Any such sale may be for cash or, unless prohibited by
applicable law, upon such credit or installment as Lender may determine.
Borrower shall be credited with the net proceeds of such sale only when such
proceeds are actually received by Lender in good current funds. Despite the
consummation of any such sale, Borrower shall remain liable for any deficiency
on the Borrower's obligations under the Loan Documents which remains outstanding
following such sale. All net proceeds recovered pursuant to a sale shall be
applied in accordance with the provisions of Section 8.5.
(b) Lender's Right to Execute Conveyances. During an Event of Default
which is continuing, Lender may, in the name of Borrower or in its own name,
make and execute all conveyances, assignments and transfers of the Collateral
sold in connection with the exercise of Lender's rights and remedies; and Lender
is hereby appointed Borrower's attorney-in-fact for this purpose.
(c) Obligation to Assemble Collateral. Upon request of Lender when an
Event of Default exists, Borrower shall assemble the Collateral and make it
available to Lender at a time and place designated by Lender, if it is not
already in Lender's possession.
Section 8.5. Application of UCC Sale Proceeds
Should Lender exercise the rights and remedies specified in Section 8.4,
unless otherwise required by applicable law, any proceeds received thereby shall
be first applied to pay the costs and expenses, including reasonable attorneys'
fees, incurred by Lender as a result of the Event of Default. The remainder of
any proceeds, net of Lender's costs and expenses shall be applied to the
satisfaction of the obligations under the Loan Documents as Lender in its
discretion may determine until fully satisfied with any excess paid over to
Borrower
Section 8.6. Authorization to Apply Assets to Payment of Loan
The Borrower hereby authorizes the Lender, following the occurrence of an
Event of Default, without notice or demand, to apply any property, balances,
credits, accounts or moneys of the Borrower or any Affiliate of the Borrower
then in the possession of the Lender, or
54
standing to the credit of the Borrower or any Affiliate of the Borrower, to the
payment of the Loan.
ARTICLE 9. MISCELLANEOUS
Section 9.1. Successors and Assigns; No Assignment by the Borrower
The provisions of this Loan Agreement will be binding upon and inure to
the benefit of the parties hereto and their respective successors and assigns,
provided that the Borrower may not assign or transfer any of its rights or
obligations under this Loan Agreement or any of the other Loan Documents without
the prior written consent of the Lender.
Section 9.2. Notices
(a) All notices, requests and demands to be made hereunder to the
parties hereto must be in writing (at the addresses set forth below) and
may be given by any of the following means:
(1) personal delivery;
(2) reputable overnight courier service;
(3) electronic communication, whether by telex, telegram or
telecopying (if confirmed in writing sent by registered or certified,
first class mail, return receipt requested); or
(4) registered or certified, first class mail, return receipt
requested.
Any notice, demand or request sent pursuant to the terms of this Loan Agreement
will be deemed received (i) if sent pursuant subsection (1), upon such personal
delivery, (ii) if sent pursuant to subsection (2), on the next Business Day
following delivery to the courier service, (iii) if sent pursuant to subsection
(3), upon dispatch if such dispatch occurs between the hours of 9:00 a.m. and
5:00 p.m. (recipient's time zone) on a Business Day, and if such dispatch occurs
other than during such hours, on the next Business Day following dispatch and
(iv) if sent pursuant to subsection (4), 3 days following deposit in the mail.
The addresses for notices are as follows:
To the Lender: Resort Finance LLC
000 Xxxxxxx Xxxxxx, Xxxxx 00
Xxxxxxxxxx, XX 00000
Attention: Xxxxxx Xxxxxxx, Vice President
Telephone No.: (000) 000-0000 x000
Telecopier No.: (000) 000-0000
With a copy to: Resort Finance LLC
000 Xxxxxxx Xxxxxx, Xxxxx 00
Xxxxxxxxxx, XX 00000
Attention: Xxx Xxxxxxx, Counsel
55
Telephone No.: (000) 000-0000 x000
Telecopier No.: (000) 000-0000
With a copy to Xxxxx & XxXxxxxx LLP
One Prudential Plaza
000 Xxxx Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xx. Xxxxxx X. Xxxxxxx
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
To the Borrower: Bluegreen Vacations Unlimited, Inc.
c/o Bluegreen Corporation
0000 Xxxxxxxxxx Xxx Xxxxx, Xxxxx 000
Xxxx Xxxxx, Xxxxxxx 00000
Attention: Xxxx X. Xxxxxx, Senior Vice President
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
With courtesy copies to: Bluegreen Corporation
0000 Xxxxxxxxxx Xxx Xxxxx, Xxxxx 000
Xxxx Xxxxx, XX 00000
Attention: Xxxxx Xxxxxx, General Counsel
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
With a copy to: Xxxxx XxXxxxxx
000 Xxxx Xxxxxxx Xxxxxxxxx
Xxxx Xxxxxxxxxx, Xxxxxxx 00000
Attention: Xx. Xxxxx X. Xxxxxxxxxx
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
(b) The failure to provide courtesy copies will not affect or impair the
Lender's rights and remedies against the Borrower. Such addresses may be changed
by notice to the other parties given in the same manner as provided above.
(c) Notwithstanding the foregoing, all requests for disbursements of the
Loan pursuant to Article II above will be deemed received only upon actual
receipt, and such requests for disbursement must be given only to the Lender's
primary addressee.
Section 9.3. Borrower's Representative
The Borrower hereby designates the following natural persons as its
representatives and the representative of Guarantor, if any, for purposes of (i)
making all decisions with respect to the Loan, the Projects and the Loan
Documents, (ii) delivering all notices, certificates, Draw Request
Certifications, requests and other documents required by the terms of the Loan
Documents or requested by the Borrower or any Guarantor in connection with the
Loan and (iii)
56
taking all other actions requested by the Borrower or any Guarantor in
connection with the Loan, the Projects and the Loan Documents:
Xxxx X. Xxxxxx, Senior Vice President Xxxxx X. Xxxx, Vice President
Bluegreen Corporation Bluegreen Corporation
0000 Xxxxxxxxxx Xxx Xxxxx 0000 Xxxxxxxxxx Xxx Xxxxx
Xxxxx 000 Xxxxx 000
Boca Raton, Florida 33431 Xxxx Xxxxx, XX 00000
Telephone No.: (000) 000-0000 Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000 Telecopier No.: (000) 000-0000
In taking action pursuant to the terms of this Loan Agreement and the other Loan
Documents, the Lender shall be entitled to rely, without further investigation,
upon any notice, certificate, Draw Request Certification, request or other
document delivered in writing and executed or signed by such representative of
the Borrower and any Guarantor. In addition, the Lender may, at its option,
refuse to take action in the event a notice, certificate, Draw Request
Certification, request or other document is delivered to Lender which has not
been executed or delivered by such representative of the Borrower and the
Lender. Borrower shall have the right at any time upon written notice to Lender
to change its listed representatives.
Section 9.4. Changes, Waivers, Discharge and Modifications in Writing
No provision of this Loan Agreement or any of the other Loan Documents may
be changed, waived, discharged or modified except by an instrument in writing
signed by the party against whom enforcement of the change, waiver, discharge or
modification is sought.
Section 9.5. No Waiver; Remedies Cumulative
No disbursement of proceeds of the Loan will constitute a waiver of any
conditions to the Lender's obligation to make further disbursements nor, in the
event the Borrower is unable to satisfy any such conditions, will any such
waiver have the effect of precluding the Lender from thereafter declaring such
inability to constitute an Event of Default (however described) under this Loan
Agreement or any other Loan Document. No failure or delay on the part of the
Lender in the exercise of any power, right or privilege hereunder or under this
Loan Agreement or any other Loan Document will impair such power, right or
privilege or be construed to be a waiver of any Event of Default (however
described) or acquiescence therein, nor will any single or partial exercise of
any such power, right or privilege preclude any other or further exercise
thereof, or of any other right, power or privilege. Except as specifically
provided herein, all rights and remedies existing under this Loan Agreement and
the other Loan Documents are cumulative to and not exclusive of any rights or
remedies otherwise available.
Section 9.6. Costs, Expenses and Taxes
(a) The Borrower agrees to pay the costs, and all expenses incurred by the
Lender in connection with the preparation, execution, delivery, administration,
modification and
57
amendment of this Loan Agreement, the other Loan Documents and any other
documents to be delivered hereunder. The costs and expenses to be paid by the
Borrower shall include, without limitation the following:
(1) the reasonable fees and out-of-pocket expenses of counsel for
the Lender, including in-house counsel to the Lender, with respect thereto
and with respect to advising the Lender as to its rights and
responsibilities under this Loan Agreement and the other Loan Documents;
(2) any and all stamp and other taxes payable or determined to be
payable in connection with the execution and delivery of this Loan
Agreement, the other Loan Documents and the other documents to be
delivered hereunder;
(3) the fees, costs and expenses of any Appraisers retained by the
Lender;
(4) the fees, costs and expenses of any Inspectors retained by the
Lender;
(5) the costs associated with the issuance of the Title Policy and
the date-down endorsements required by the terms of Section 3.3(c);
(6) any and all reasonable travel expenses of Lender's employees in
relation to the Loan; and
(7) any and all other costs and expenses incurred by Lender.
(b) The Borrower further agrees to pay all costs and expenses of the
Lender, including, without limitation, reasonable counsel fees and expenses,
court costs and all litigation expenses, (including, but not limited to,
reasonable expert witness fees, document copying expenses, exhibit preparation,
courier expenses, postage expenses and communication expenses) in connection
with the enforcement of this Loan Agreement, the other Loan Documents and any
other documents delivered hereunder, including, without limitation, costs and
expenses incurred in connection with any bankruptcy, insolvency, liquidation,
reorganization, moratorium or other similar proceeding, or any refinancing or
restructuring in the nature of a "workout" of the Loan Documents and any other
documents delivered by the Borrower and any Guarantor related thereto.
(c) Payment from the Borrower of amounts due pursuant to this Section 9.6
will be due 10 Business Days after it has received from the Lender written
notice of the nature of the item for which payment is required and the amount
due.
Section 9.7. Disclaimer by the Lender; No Joint Venture
The Borrower acknowledges, understands and agrees as follows:
(1) The relationship between the Borrower and the Lender is, and
will at all times remain, solely that of borrower and lender, and the
Lender neither undertakes nor assumes any responsibility for or duty to
the Borrower, any Guarantor or any Affiliate to select, review, inspect,
supervise, pass judgment upon or inform the Borrower of the
58
quality, adequacy or suitability of any matter or thing submitted to the
Lender for its approval.
(2) The Lender owes no duty of care to protect the Borrower, any
Guarantor or any Affiliate or any other Person against negligent, faulty,
inadequate or defective building or construction.
(3) The Borrower is not and will not be an agent of the Lender for
any purpose. The Lender is not a joint venture partner with the Borrower
in any manner whatsoever. Approvals granted by the Lender for any matters
covered under this Loan Agreement are to be narrowly construed to cover
only the parties and facts identified in any such approval.
Section 9.8. Indemnification
In addition to the separate and independent Environmental Indemnity, the
Borrower agrees to protect, indemnify, defend and hold harmless each Indemnified
Party from and against any and all claims, damages, losses, liabilities,
obligations, penalties, actions, judgments, suits, costs, disbursements and
expenses (including, without limitation, reasonable fees and expenses of counsel
and consultants and allocated costs of internal counsel (but not in duplication
of outside third party legal fees)) that may be incurred by or asserted against
any Indemnified Party, in each case arising out of or in connection with or
related to any of the following:
(1) the Loan, this Loan Agreement or any other Loan Document;
(2) any Project, except for matters occurring or arising after the
issuance of a deed following a foreclosure sale or the execution or
delivery of a deed in lieu of foreclosure;
(3) the use of funds disbursed under the Loan Documents; or
(4) the failure of the Borrower, any Guarantor or any other party to
the Loan Documents (other than the Lender) to comply fully with any and
all laws applicable to it;
whether or not an Indemnified Party is a party thereto and whether or not the
transactions contemplated hereby are consummated, except to the extent such
claims, damages, losses, liabilities, obligations, penalties, actions,
judgments, suits, costs, obligations, penalties, disbursements and expenses are
found in a final non-appealable judgment by a court of competent jurisdiction to
have resulted from the gross negligence or willful misconduct of the Indemnified
Party. Without prejudice to the survival of any other agreement of the Borrower
hereunder, the agreements and obligations of the Borrower contained in this
Section 9.8 will survive the termination of this Loan Agreement and the other
Loan Documents and the payment in full of the Loan.
Section 9.9. Consultants
The Borrower will pay any and all valid claims of any consultants,
advisors, brokers or agents whom it has retained or with whom it has initiated
contact with respect to the Loan who
59
claims a right to any fees in connection t 6 6 with the Loan, and will
indemnify, defend and hold the Lender harmless from such claims, whether or not
they are valid.
Section 9.10. Titles and Headings
The titles and headings of sections of this Loan Agreement are intended
for convenience only and are not in any way to affect the meaning or
construction of any provision of this Loan Agreement.
Section 9.11. Counterparts
This Loan Agreement may be executed in any number of counterparts, each of
which will be deemed an original and all of which will constitute one and the
same agreement with the same effect as if all parties had signed the same
signature page.
Section 9.12. The Lender's Rights with Respect to Loan
Notwithstanding any provision to the contrary contained in this Loan
Agreement or any other Loan Document, the Lender may at any time sell, assign,
grant or transfer to any Person all or a portion of its interest in or rights
with respect to the Loan and in all or part of the obligations of the Borrower
and any other obligated party under the Loan Documents. Lender agrees to use its
best efforts to retain the servicing of the Loan.
Section 9.13. Confidentiality
The Borrower and the Lender shall mutually agree on the contents of any
press release, public announcement or other public disclosure regarding this
Loan Agreement and the transactions contemplated hereunder to be made following
the mutual execution and delivery of this Loan Agreement; provided that the
Lender may disclose the terms hereof and give copies of the Loan Documents to
assignees and participants and to prospective assignees and participants. If
either party fails to respond to the other party in writing with either an
approval or a disapproval within 5 Business Days of a party's receipt of the
other party's request for consent or approval as expressly contemplated pursuant
to this Section 9.13, then such consent or approval will be deemed to have been
given, provided that such 5 Business Day period will not commence to run unless
and until the other party has received all information, materials, documents and
other matters required to be submitted to it hereunder with respect to such
consent or approval and all other information, materials, documents and other
matters reasonably essential to its decision process. Notwithstanding anything
contained in this Section 9.13 to the contrary, either party may make such
disclosures as required by law or a court having jurisdiction over such party.
Section 9.14. Time is of the Essence
Time is of the essence of this Loan Agreement.
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Section 9.15. No Third Parties Benefited
This Loan Agreement is made and entered into for the sole protection and
legal benefit of the Borrower, the Guarantor, if any, and the Lender and their
permitted successors and assigns, and no other Person will be a direct or
indirect legal beneficiary of, or have any direct or indirect cause of action or
claim in connection with this Loan Agreement or any of the other Loan Documents.
The Lender will not have any obligation to any Person not a party to this Loan
Agreement or the other Loan Documents.
Section 9.16. Severability
The illegality or unenforceability of any provision of this Loan Agreement
or any instrument or agreement required hereunder will not in any way affect or
impair the legality or enforceability of the remaining provisions of this Loan
Agreement or any instrument or agreement required hereunder.
Section 9.17. Governing Law
THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS
AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE
WITH, THE LAW OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICT OF LAWS
PRINCIPLES.
Section 9.18. Forum Selection
EACH OF THE PARTIES HEREBY IRREVOCABLY AND UNCONDITIONALLY:
SUBMITS FOR ITSELF AND ITS PROPERTY IN ANY LEGAL ACTION OR PROCEEDING RELATING
TO THIS AGREEMENT TO WHICH IT IS A PARTY, OR FOR RECOGNITION AND ENFORCEMENT OF
ANY JUDGMENT IN RESPECT THEREOF, TO THE NON-EXCLUSIVE GENERAL JURISDICTION OF
THE COURTS OF THE STATE OF NEW YORK SITTING IN MANHATTAN AND THE UNITED STATES
OF AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK, AND APPELLATE COURTS FROM ANY
THEREOF;
CONSENTS THAT ANY SUCH ACTION OR PROCEEDING MAY BE BROUGHT IN SUCH COURTS AND
WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH
ACTION OR PROCEEDING IN ANY SUCH COURT OR THAT SUCH ACTION OR PROCEEDING WAS
BROUGHT IN AN INCONVENIENT COURT AND AGREES NOT TO PLEAD OR CLAIM THE SAME; AND
AGREES THAT NOTHING HEREIN SHALL AFFECT THE RIGHT TO EFFECT SERVICE OF PROCESS
IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT THE RIGHT TO XXX IN ANY
OTHER JURISDICTION.
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Section 9.19. USA Patriot Act Notification.
The following notification is provided to Borrower pursuant to Section 326
of the USA Patriot Act of 2001, 31 U.S.C. Section 5318:
IMPORTANT INFORMATION ABOUT PROCEDURES FOR OPENING A NEW ACCOUNT. To help the
government fight the funding of terrorism and money laundering activities,
Federal law requires all financial institutions to obtain, verify, and record
information that identifies each person or entity that opens an account,
including any deposit account, treasury management account, loan, other
extension of credit, or other financial services product. What this means for
Borrower: When Borrower opens an account, if Borrower is an individual, Lender
will ask for Borrower's name, taxpayer identification number, residential
address, date of birth, and other information that will allow Lender to identify
Borrower, and, if Borrower is not an individual, Lender will ask for Borrower's
name, taxpayer identification number, business address, and other information
that will allow Lender to identify Borrower. Lender may also ask, if Borrower is
an individual, to see Borrower's driver's license or other identifying
documents, and, if Borrower is not an individual, to see Borrower's legal
organizational documents and other identifying documents.
Section 9.20. Waiver of Jury Trial
EACH OF THE PARTIES HEREBY IRREVOCABLE AND UNCONDITIONALLY WAIVES, TO THE EXTENT
PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO TRIAL BY JURY IN ANY LEGAL
ACTION OR PROCEEDING RELATING DIRECTLY OR INDIRECTLY TO THIS AGREEMENT OR ANY
OTHER DOCUMENT OR INSTRUMENT RELATED HERETO AND FOR ANY COUNTERCLAIM THEREIN.
Section 9.21. Interpretation
This Loan Agreement and the other Loan Documents will not be construed
against the Lender merely because of the Lender's involvement in the preparation
of such documents and agreements.
Section 9.22. Destruction of Note
In the event the Note is mutilated or destroyed by any cause whatsoever,
or otherwise lost or stolen and regardless of whether due to the act or neglect
of the Lender, the Borrower will execute and deliver to the Lender in
substitution therefor a duplicate promissory note containing the same terms and
conditions as the Note, within 10 days after the Lender notifies the Borrower of
any such mutilation, destruction, loss or theft of the Note. Upon the Borrower's
delivery of such duplicate promissory note, the Borrower will be relieved of all
obligations under the original Note and will thereafter be bound solely by the
provisions of such duplicate promissory note. Notwithstanding anything contained
herein to the contrary, provided Borrower shall have delivered such duplicate
promissory note as required hereunder, Lender agrees to indemnify and hold
harmless Borrower from any loss, claim or damage arising from the mutilation,
destruction, loss or theft of the Note.
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Section 9.23. Cross Collateralization and Cross Default of Loan and Projects
The collateral securing the Loan shall also include security interests
required to be given in connection with all Projects under the Loan. Should
Borrower default under the Project Loan for any Project, it shall constitute an
Event of Default under the entire Loan.
Section 9.24. Attorneys' Fees
Notwithstanding any provision of this Agreement, the Note, the Guaranty,
the Environmental Indemnity, the Projects Documents relating to this Loan or any
Project covered by this Loan to the contrary, Lender shall not be entitled to
recover its attorneys' fees and other costs relating to any dispute,
enforcement, litigation or other judicial or quasi-judicial proceeding, if it is
determined by a court of law or other tribunal having personal and subject
matter jurisdiction over the parties and/or the Project(s) that Lender did not
have cause to bring an action against Borrower or Guarantor.
Section 9.25. Entire Agreement
This Loan Agreement, together with the other Loan Documents, embodies the
entire agreement and understanding among the Borrower, the Guarantor, if any,
and the Lender and supersedes all prior or contemporaneous agreements and
understandings of such persons, verbal or written, relating to the subject
matter hereof and thereof except for any prior arrangements made with respect to
the payment by the Borrower of (or any indemnification for) any fees, costs or
expenses payable to or incurred (or to be incurred) by or on behalf of the
Lender.
[Remainder of page intentionally left blank - signature pages follow]
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IN WITNESS WHEREOF, the Lender and the Borrower have caused this Loan
Agreement to be duly executed and delivered as of the date first above written.
BORROWER:
BLUEGREEN VACATIONS UNLIMITED, INC.,
a Florida corporation
By:_____________________________________
Printed Name:___________________________
Title:__________________________________
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LENDER:
RESORT FINANCE LLC,
a Massachusetts limited liability company
By:______________________________________
Printed Name: Xxxxxx Xxxxxxx
Title: Vice President
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EXHIBIT A
CONDITIONS TO OBLIGATION OF THE LENDER TO MAKE THE LOAN
The obligation of the Lender to make the Loan is conditioned upon the
Lender having received, in form and substance satisfactory to the Lender, each
of the following:
(1) Executed originals of this Loan Agreement, the Note, the
Environmental Indemnity and the Guaranty.
(2) A favorable opinion from counsel for the Borrower with respect
to the following:
(A) Borrower is duly organized, validly existing and in good
standing as a business corporation under the laws of the State of
Florida, is duly qualified to do business and in good standing in
every jurisdiction where its business or properties require such
qualification and has all requisite power and authority to own and
operate its properties and to carry on its business as now
conducted.
(B) The Borrower has the power and authority to execute and
deliver, and perform its obligations under, the Loan Documents (as
used in this paragraph (2), shall mean to the extent such documents
have been or are concurrently executed by Borrower at the time of
the delivery of the opinion).
(C) The execution, delivery and performance by the Borrower of
the Loan Documents have been duly authorized by all necessary action
and do not and will not (i) contravene the Articles of Organization
of the Borrower; (ii) contravene any law, rule or regulation or, to
such counsel's knowledge (after due investigation), any order, writ,
judgment, injunction or decree or any contractual restriction
binding on or affecting the Borrower; (iii) require any approval or
consent of any member or any other Person other than approvals or
consents which have been previously obtained and disclosed in
writing to the Lender; (iv) to such counsel's knowledge (after due
investigation), result in a breach of or constitute a default under
any indenture or loan or credit agreement or any other agreement,
lease or instrument to which the Borrower is a party or by which the
Borrower or any of its properties may be bound or affected; or (v)
to such counsel's knowledge (after due investigation), result in, or
require the creation or imposition of, any lien of any nature (other
than the contemplated liens) upon or with respect to any of the
properties now owned or hereafter acquired by the Borrower; and, to
such counsel's knowledge, the Borrower is not in default under any
such law, rule, regulation, order, writ, judgment, injunction,
decree or contractual restriction or any such indenture, agreement,
lease or instrument.
(D) The Loan Documents have been duly authorized, executed and
delivered and constitute the legal, valid and binding obligations of
the Borrower enforceable in accordance with their respective terms.
1
(E) The federal and state courts presiding in the state of New
York will recognize the validity of the choice of law provision set
forth in the Loan Documents.
(F) In the event that a court of competent jurisdiction
determines that the laws of the state(s) of New York apply, then the
Loan Documents constitute the legal, valid and binding obligations
of the Borrower enforceable in accordance with their respective
terms.
(G) To the extent applicable, the Deed of Trust will, upon
being recorded or filed in the county in which the Project is
located, establish perfect, preserve and protect the lien of the
Deed of Trust as a valid, direct and perfected lien of record on the
collateral described in the "granting clauses" of the Deed of Trust.
(H) No authorization or approval or other action by, and no
notice to or filing with, any governmental authority or regulatory
body is required for the due execution, delivery and performance by
the Borrower of the Loan Agreement or the Note or any other document
executed pursuant thereto or in connection therewith.
(I) To such counsel's knowledge (after due investigation),
there is no pending or threatened action, suit, proceeding or
arbitration against or affecting the Borrower or any of its
Affiliates before any court, governmental agency or arbitrator
which, if adversely determined, would result in a Material Adverse
Change.
(J) The amounts to be received by the Lender under the terms
of the Loan Documents shall not constitute usurious or otherwise
unlawful interest.
(3) A favorable opinion from counsel for the Guarantor, if
applicable, with respect to the following:
(A) The Guarantor is duly organized, validly existing and in
good standing as a business corporation under the laws of the State
of Massachusetts, is duly qualified to do business and in good
standing in every jurisdiction where its business or properties
require such qualification and has all requisite power and authority
to own and operate its properties and to carry on its business as
now conducted.
(B) The Guarantor has the power and authority to execute and
deliver, and perform its obligations under, the Guaranty.
(C) The execution, delivery and performance by the Guarantor
of the Guaranty has been duly authorized by all necessary action and
does not and will not (i) contravene the Articles of Organization of
the Guarantor; (ii) contravene any law, rule or regulation or, to
such counsel's knowledge (after due investigation), any order, writ,
judgment, injunction or decree or any contractual
2
restriction binding on or affecting the Guarantor; (iii) require any
approval or consent of any member or any other Person other than
approvals or consents which have been previously obtained and
disclosed in writing to the Lender; (iv) to such counsel's knowledge
(after due investigation), result in a breach of or constitute a
default under any indenture or loan or credit agreement or any other
agreement, lease or instrument to which the Guarantor is a party or
by which the Guarantor or any of its properties may be bound or
affected; or (v) to such counsel's knowledge (after due
investigation), result in, or require the creation or imposition of,
any lien of any nature (other than the contemplated liens) upon or
with respect to any of the properties now owned or hereafter
acquired by the Guarantor; and, to such counsel's knowledge, the
Guarantor is not in default under any such law, rule, regulation,
order, writ, judgment, injunction, decree or contractual restriction
or any such indenture, agreement, lease or instrument.
(D) The Guaranty has been duly executed and delivered and
constitutes the legal, valid and binding obligations of the
Guarantor enforceable in accordance with its terms.
(E) The federal and state courts presiding in the state of New
York will recognize the validity of the choice of law provision set
forth in the Guaranty.
(F) In the event that a court of competent jurisdiction
determines that the laws of the state of New York apply, then the
Guaranty constitutes the legal, valid and binding obligations of the
Guarantor enforceable in accordance with its terms.
(G) No authorization or approval or other action by, and no
notice to or filing with, any governmental authority or regulatory
body is required for the due execution, delivery and performance by
the Guarantor of the Guaranty or any other document executed
pursuant thereto or in connection therewith.
(H) To such counsel's knowledge (after due investigation),
there is no pending or threatened action, suit, proceeding or
arbitration against or affecting the Guarantor or any of its
Affiliates before any court, governmental agency or arbitrator
which, if adversely determined, would result in a Material Adverse
Change.
(I) Such other opinions as the Lender reasonably requests.
(4) Certified copies of the Articles of Incorporation (and all
amendments thereto), and an original Certificate of Good Standing for the
Borrower.
(5) Certified copies of the Articles of Incorporation (and all
amendments thereto), and an original Certificate of Good Standing for the
Guarantor.
(6) Copies of the Resolutions adopted by the Borrower authorizing
the Borrower to obligate itself with respect to the Loan and authorizing
certain officers to execute and deliver this Loan Agreement and the other
Loan Documents.
3
(7) Copies of the Resolutions adopted by the Guarantor authorizing
the Guarantor to obligate itself with respect to the Loan and authorizing
certain officers to execute and deliver the Guaranty.
(8) Payment of all costs and expenses incurred by the Lender,
including, without limitation, the fees and costs of its legal counsel, in
connection with the preparation, execution and delivery of this Loan
Agreement, the Guaranty and the forms of the Project Documents.
(9) Evidence satisfactory to the Lender that the Borrower and
Guarantor, if any, have approved the forms of the Project Documents
approved by the Lender.
4
EXHIBIT B
PROJECT REQUIREMENTS
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GENERAL A proposed Project may utilize proceeds of the Loan
for any of the following: (i) acquisition of the
Land, the Improvements and the Development Work (ii)
acquisition of the Land and Development Work, or
(iii) Development Work.
A proposed project may be one of several projects
anticipated to be developed by Borrower in a single
contiguous development.
The Project Underwriting Documents for a proposed
Project must be satisfactory to Lender in its sole
and absolute discretion.
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ENTITLEMENTS All proposed Projects must be suitable for and
substantially entitled for the commencement of the
Development Work, including the relative on and
off-site improvements. Unless otherwise agreed to by
the Lender, the Land must be fully entitled, and the
Borrower must be able to commence development of the
Project, as contemplated by the Project Underwriting
Documents, upon payment of fees to the governing
municipality.
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GEOGRAPHIC REGION Projects must be located in the United States of
America.
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COMMENCEMENT OF WORK The construction of the Development Work for a
Project must commence within 6 months of the date of
the applicable Project Commitment.
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PROJECT AMOUNT The minimum Project amount shall be $[__________].
Proceeds of the Loan will be disbursed to fund
acquisition of the Land, the Improvements and the
Development Work in an amount equal to 85% of the
lesser of (i) Inventory Appraised Value if an
Appraisal Report is required or (ii) actual
acquisition and development cost, as applicable,
less 10% Retainage to be advanced upon satisfactory
completion of the construction, provided that
Borrower must demonstrate to Lender's sole and
absolute satisfaction that Borrower has invested
cash equity of at least 15% of all of the
above-described costs. Notwithstanding the
requirement of said 10% Retainage, for purposes of
calculating the maximum available but not
disbursable Preceeds of the Loan for said Project,
said Retainage shall not be taken into calculation.
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1
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PROJECT LOAN All outstanding borrowings of the Loan with respect
REPAYMENT DATE to a Project will be due and owing on or before the
earlier of (i) the date specified in the applicable
Project Commitment, or (ii) 48 months from the date
of the Loan Agreement.
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2
EXHIBIT C
PROJECT UNDERWRITING DOCUMENTS
(which must be satisfactory to Lender)
GENERAL PROJECT INFORMATION:
1. Summary description of proposed project.
2. Purchase contract for property.
4. Cash flow analysis, which will include the proposed Budget
(including breakdown between Land and Improvements acquisition costs
and costs of Development Work) and Construction Progress Schedule
for the proposed project.
5. Sales and marketing plan and budget for the project.
6. Appraisal Report (if required by the Lender).
7. The Map, when prepared.
Preliminary title report, including copies of all documents relating to
exceptions.
All management and service contracts for the Project, to the extent executed.
All leases of space or any interest therein to third parties within the Land, to
the extent executed.
Evidence of Insurance.
Evidence of adequate parking.
Flood information.
Phase I environmental report.
Soils report.
Letters regarding utility information.
CONSTRUCTION INFORMATION AND DOCUMENTS:
1. Site plan, if applicable.
2. Evidence of site plan approval and proper zoning.
3. Survey (showing all easements necessary to the operation and use of
the Land, and such other details as Lender may require).
4. Evidence of the Borrower's ability to satisfy the conditions of the
site plan approval, if applicable.
All permits, licenses and certificates for the Development Work and all general
approvals and permits for the use and operation of the Project.
The name of and information regarding the architect, interior designer and the
general contractor, and copies of the Construction Agreements, to the extent
executed.
Plans and Specifications.
Budget.
Construction Progress Schedule and Staged Draw Schedule.
Evidence that the Land is not located within a flood plane area, or if
otherwise, flood insurance is available and has been obtained for the
Improvements.
The report of the Inspector's inspection of the Project, the Budget, the Plans
and Specifications, the Construction Agreements, Construction Progress Schedule,
and the Development Work.
1
PROJECT LEGAL DOCUMENTS
1. Proposed or recorded CC&R's, when prepared.
2. If a condominium, or otherwise applicable, a copy of the homeowner's
association articles of incorporation, by-laws and budget, when
prepared.
2
EXHIBIT D
FORM OF PROJECT COMMITMENT
THIS PROJECT COMMITMENT (this "Project Commitment") is entered into as of
_______________ __, 200_ by and between BLUEGREEN VACATIONS UNLIMITED, INC., a
Florida corporation ("Borrower") and RESORT FINANCE LLC, a Massachusetts limited
liability company ("Lender") and shall become part of and supplement the terms
of the Loan Agreement between Borrower and Lender dated January 6, 2005 (the
"Loan Agreement"). Under the terms of the Loan Agreement, Lender has agreed to
make a revolving loan in the maximum principal amount of $50,000,000 (the
"Loan") to Borrower to finance various timeshare acquisition, development and
construction projects to be approved pursuant to a Project Commitment. Lender is
pleased to confirm that upon the execution of this Project Commitment, Lender
shall be deemed to approve the project described herein as a "Project" and that
proceeds of the Loan may be disbursed with respect to such Project all in
accordance with the terms and conditions of the Loan Agreement, inclusive of
this Project Commitment.
Section 1. It is the intent of the parties that this Project Commitment
become a part of and supplement the terms of the Loan Agreement with respect to
the Project described herein. Capitalized terms used and not otherwise defined
herein shall have the meanings set forth in the Loan Agreement.
Section 2. The following Project terms are hereby approved and agreed to
by the parties:
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GENERAL
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PROJECT [Project Name], located at [__________,] in
[___________] County, [__________,] consisting
of [________________] as more particularly
described on Exhibit A attached hereto and
incorporated herein by reference.
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TERMS OF THE LOAN APPLICABLE TO THIS PROJECT
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PROJECT LOAN AMOUNT Means an amount not to exceed the principal
amount of [$_________________________]
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PROJECT LOAN ADVANCE PERIOD Means the period of time commencing on the date
of this Project Commitment and expiring on
___________, 200__.
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PROJECT LOAN REPAYMENT DATE Means the first to occur of (i) January 6, 2008
or (ii) the date on which the Loan must be
repaid pursuant to Section 8.2.
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MINIMUM REQUIRED PRINCIPAL Borrower is required to make the following
PAYMENTS minimum principal payments towards the repayment
of the Project Loan during the following loan
years (with each loan year ending on the
anniversary of the Effective Date)
Loan Year Minimum Principal Reduction
--------- ---------------------------
Year 1 $_____________
Year 2 $_____________
Year 3 $_____________
Year 4 $_____________
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LENDER'S RELEASE PRICE $_______________ for each Timeshare Interest,
based upon the construction of _________
Timeshare Interests in the Project.
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OTHER REQUIRED TERMS All Project Loan Disbursements will be made
through a Construction Loan Escrow Agreement
containing usual and customary terms and
conditions.
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PROJECT INFORMATION
--------------------------------------------------------------------------------
USE OF PROCEEDS Acquisition of Land [and Improvements] for the
[construction/renovation] of ____________ Time
Share Interests located in [_______] County,
[_______].
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DEVELOPMENT WORK With respect to a Project, the work of
development to be performed on or with respect
to the Land [and existing Improvements [describe
work to be done], all of which work will be
completed by or on behalf of the Borrower in
accordance with the Plans and Specifications in
all material respects.
--------------------------------------------------------------------------------
BUDGET FOR ACQUISITION, The Budget for the acquisition, development and
DEVELOPMENT AND CONSTRUCTION construction for the Project is attached hereto
as Schedule 1.
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2
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CONSTRUCTION PROGRESS SCHEDULE Schedule 2 attached hereto sets forth the
AND STAGED DRAW SCHEDULE Construction Progress Schedule for the Project
and Schedule 3 attached hereto sets forth the
Staged Draw Schedule for the Project.
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RETAINAGE 10% percent of the amount of each approved
disbursement under a construction contract.
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INSPECTOR [__________], or such other inspector(s) or
engineer(s) engaged by the Lender, at the
expense of the Borrower, to provide to the
Lender consultation services in connection with
the Project.
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COMMENCEMENT OF DEVELOPMENT Commencement of the Development Work shall occur
WORK no later than ____ days from the date of this
Project Commitment and will continue in
accordance with the Construction Progress
Schedule provided to the Lender.
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PROJECT DOCUMENTS
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PROJECT DOCUMENTS Project Commitment
Deed of Trust
CLPI Assignment
UCC Financing Statements
Assignment
Plans and Specifications
Addendum to Note (if applicable)
Title Policy
Construction Loan Escrow Agreement
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REQUIRED POST CLOSING Prior to making any Project Loan disbursement,
DOCUMENTS AND ITEMS the Borrower shall deliver to the Lender the
following additional post-closing documents
and/or items:
(1)
(2)
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Section 3. [As the approved Project is owned by [_______________] (the
"Project Owner"), which entity is a wholly owned subsidiary of Borrower, Project
Owner hereby expressly, and without any reservations or exceptions, agrees
hereby to become a party to the Loan Agreement, assumes, jointly and severally
with Borrower, all of the obligations of Borrower presently, or at any time in
the future, contained in the Loan Agreement and agrees to be bound by and comply
with all the terms thereof. Project Owner agrees to execute and deliver to
Lender the Addendum to the Note whereby Project Owner, jointly and severally
with Borrower, assumes all of the obligations of Borrower presently, or at any
time in the future,
3
contained in the Note. Project Owner and Borrower acknowledge that they are each
jointly and severally liable, as primary co-obligors and not as sureties or
guarantors, for all of the amounts disbursed under the Note for this Project and
all other projects funded pursuant to the Loan Agreement, and for all other
obligations of "Borrower" pursuant to such Loan Agreement. To the extent Project
Owner or Borrower is deemed a surety or guarantor, each hereby waive any and all
surety and guarantor defenses to the extent waivable under applicable laws.
Whenever used herein or in the other Loan Documents, the term "Borrower" shall
include Project Owner.]
Section 4. Except as otherwise disclosed on Exhibit B to this Project
Commitment, Borrower reaffirms [and Project Owner makes] as of the date of this
Project Commitment all of the covenants, representations and warranties as to
itself [themselves] and as to the Project. Borrower hereby ratifies all of the
provisions of the Loan Documents and confirms that all of such provisions remain
in full force and effect. Borrower acknowledges and agrees that there are no
defenses, counterclaims, setoffs, recoupments or other adverse claims or causes
of action of any kind existing with respect to the Loan and the Loan Documents,
including without limitation, claims regarding the validity, perfection,
priority and enforceability of the lien interests held by Lender pursuant to the
Loan Documents.
Section 5. Borrower declares and certifies, under penalty of perjury,
that: (i) the U.S. Taxpayer I.D. Number of [_____________] is [_____________];
(ii) the business addresses of Borrower and Project Owner are [_____________]
and [_____________] respectively; (iii) Borrower is not a "foreign person"
within the meaning of Sections 1445 and 7701 of the Internal Revenue Code of
1986, as amended; and (iv) Borrower understands that the information and
certification contained in this paragraph may be disclosed to the Internal
Revenue Service and that any false statement contained herein could be punished
by fine, imprisonment or both. The Borrower agrees to provide the Lender with a
new certification containing the provisions of this paragraph immediately upon
any change in such information.
Section 6. SECTIONS 9.17, 9.18 AND 9.20 OF THE LOAN AGREEMENT ARE
INCORPORATED HEREIN BY THIS REFERENCE. BORROWER SPECIFICALLY ACKNOWLEDGES,
REAFFIRMS AND RESTATES THE AGREEMENTS AND WAIVERS CONTAINED IN THOSE SECTIONS AS
IF SET FORTH IN FULL IN THIS PROJECT COMMITMENT.
Initials:
Lender: __________
Borrower: __________ __________ ____________________
Section 7. The Project Documents shall be prepared by counsel to the
Lender and shall be satisfactory to the Lender. Borrower shall be obligated to
pay all costs and expenses incurred to satisfy all conditions precedent, whether
or not any funds of the Loan are advanced with respect to the Project. Lender
shall not be responsible or liable for consequential damages which may be
alleged as a result of the issuance of this Project Commitment.
Section 8. Borrower agrees to indemnify and hold harmless Lender from
liabilities (including costs of settlement) arising out of or resulting from the
transactions contemplated by
4
this Project Commitment, other than liabilities resulting from the gross
negligence or willful misconduct of Lender, and to reimburse Lender for
reasonable legal or other expenses incurred in connection with the defense or
preparation of the defense of any such liability.
Section 9. The provisions of the immediately preceding two paragraphs
shall survive any termination of this Project Commitment.
Section 10. Borrower represents, warrants and certifies that as of the
date of this Project Commitment (i) there has been no Material Adverse Change
since the date of the most recent financial statements delivered to Lender, (ii)
there has been no Material Adverse Change in the financial condition or
projected operations of the Project since the date of the most recent
information delivered to the Lender with respect to the Project, (iii) there has
been no material action, suit or proceeding (including, without limitation, any
inquiry or investigation) pending or threatened with respect to Borrower or the
Project that could have a Material Adverse Change on Borrower or the Project and
(iv) no Event of Default or Potential Default exists under the Loan Agreement.
Section 11. This Project Commitment shall not be effective unless this
Project Commitment and the other Project Documents are executed by Borrower and
Lender on or before [_____________].
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LENDER:
RESORT FINANCE LLC,
a Massachusetts limited liability company
By:_______________________________________
Printed Name:
Title:
BORROWER:
BLUEGREEN VACATIONS UNLIMITED, INC.,
a Florida corporation
By:_______________________________________
Print Name:_______________________________
Its: _____________________________________
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[BY SIGNING BELOW, PROJECT OWNER
ACKNOWLEDGES THAT IT HAS RECEIVED A COPY
OF THE LOAN AGREEMENT AND THAT PROJECT
OWNER AGREES TO BECOME A BORROWER UNDER
AND BOUND BY SUCH LOAN AGREEMENT, JOINTLY
AND SEVERALLY LIABLE, ALL CONSISTENT WITH
THE PROVISIONS OF THIS PROJECT COMMITMENT
PROJECT OWNER:
[_____________],
a [_____________]
By:_______________________________________
Printed Name:_____________________________
Title:___________________________________]
7
EXHIBIT A TO PROJECT COMMITMENT
Real Property Description
8
EXHIBIT B TO PROJECT COMMITMENT
Disclosed Non-Compliance with Covenants, Representations and Warranties
None, unless otherwise completed.
9
SCHEDULE 1 TO PROJECT COMMITMENT
DEVELOPMENT WORK BUDGET
10
SCHEDULE 2 TO PROJECT COMMITMENT
CONSTRUCTION PROGRESS SCHEDULE
11
SCHEDULE 3 TO PROJECT COMMITMENT
STAGED DRAW SCHEDULE
12
EXHIBIT E
FORM OF DRAW REQUEST CERTIFICATION
DRAW REQUEST CERTIFICATION
================================================================================
DRAW REQUEST NUMBER
DATE:
LENDER: RESORT FINANCE LLC,
a Massachusetts limited liability company
BORROWER: BLUEGREEN VACATIONS UNLIMITED, INC.,
a Florida corporation
PROJECT:
================================================================================
Reference is made to that certain Loan Agreement dated as of January 6,
2005, between Lender and Borrower relating to the above referenced Project (as
amended or otherwise modified from time to time, the "Loan Agreement").
Capitalized terms used herein without definition shall have the meanings set
forth in the Loan Agreement, unless the context shall require otherwise.
Borrower requests Lender to disburse to Borrower the proceeds of the Loan
in the amounts and for the purposes stated in the attached Schedule 1.
In connection with such requested disbursement, Borrower hereby
represents, warrants and certifies to Lender as follows:
(10) No Event of Default or Potential Default presently exists under
the Loan Agreement or any other Loan Document.
(11) All of the representations and warranties of Borrower and
Guarantor, if any, under the Loan Agreement and the other Loan Documents
are hereby remade and restated.
(12) With respect to the Loan:
(A) Borrower has satisfied all conditions precedent to the
funding of the Project as set forth in the Loan Documents;
(B) the Loan Documents are in full force and effect;
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(C) the Loan is secured by a first-priority lien on the
Project and the other collateral described in the Loan Documents,
other than Permitted Exceptions;
(D) the sum of all amounts expended in respect of the
acquisition of the Land, the Improvements and the Development Work
does not exceed the Budget, or if such amounts do exceed the Budget,
attached hereto is a listing of the amounts over budget and an
explanation of such budget overrun(s); and
(E) all contractors, subcontractors, vendors, materialmen and
other Persons entitled to payment with respect to the Development
Work have been paid or will be paid, subject to retainage, with the
proceeds of the requested disbursement.
(13) All insurance required to be maintained by Borrower remains in
full force in effect, of the types, in the amounts and issued by insurers
as previously approved by Lender.
(14) All Development Work covered by this Draw Request has been
completed in accordance with the applicable contracts and should now be
paid, and all costs incurred in connection with the Development Work
either have been paid or will be paid out of the proceeds of this
disbursement.
BORROWER:
BLUEGREEN VACATIONS UNLIMITED, INC.,
a Florida corporation
By:______________________________________
Name:____________________________________
Title:___________________________________
2
[PROJECT NAME]
SCHEDULE 1 TO DRAW REQUEST NUMBER
3
