THIRD LOAN MODIFICATION AGREEMENT
This THIRD LOAN MODIFICATION AGREEMENT (the "Third Modification Agreement")
is made, entered into and effective as of the 28th day of September, 2001, by
and among CR RESORTS CANCUN, S. DE X.X. DE C.V., a Mexican limited
responsibility corporation with variable capital ("CR Cancun"), CR RESORTS LOS
CABOS, S. DE X.X. DE C.V., a Mexican limited responsibility corporation with
variable capital ("CR Cabos"), CR RESORTS PUERTO VALLARTA, S. DE X.X. DE C.V., a
Mexican limited responsibility corporation with variable capital ("CR Puerto
Vallarta"), CORPORACION MEXITUR, S. DE X.X. DE C.V., a Mexican limited
responsibility corporation with variable capital ("Mexitur"), CR RESORTS CANCUN
TIMESHARE TRUST, S. DE X.X. DE C.V., a Mexican limited responsibility
corporation with variable capital, CR RESORTS CABOS TIMESHARE TRUST, S. DE X.X.
DE C.V., a Mexican limited responsibility corporation with variable capital, CR
RESORTS PUERTO VALLARTA TIMESHARE TRUST S. DE X.X. DE C.V. a Mexican limited
responsibility corporation with variable capital, XXXXX XXXX RESORT, S. DE X.X.
DE C.V., a Mexican limited responsibility corporation with variable capital
("Xxxxx Xxxx") and PROMOTORA XXXXX XXXX, S. DE X.X. DE C.V., a Mexican limited
responsibility corporation with variable capital ("Promotora") (collectively,
jointly and severally, the "Borrower"); RAINTREE RESORTS INTERNATIONAL, INC., a
Nevada corporation ("Guarantor"), and TEXTRON FINANCIAL CORPORATION, a Delaware
corporation ("Lender").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, (a) Borrower (with the exception of Xxxxx Xxxx and Promotora), the
Guarantor, and Lender are parties to that certain Loan and Security Agreement
dated as of November 23, 1999 (the "Loan Agreement"), (b) Borrower (with the
exception of Xxxxx Xxxx and Promotora), the Guarantor, and Lender are parties to
that certain Loan Modification Agreement dated as of November 20, 2000 (the
"First Modification Agreement"), and (c) Borrower, the Guarantor and Lender are
parties to that certain Second Loan Modification Agreement dated as of December
29, 2000 (the "Second Modification Agreement"), pursuant to which Lender agreed
to make a loan to Borrower in the maximum principal amount at any time of
US$18,000,000, to be guaranteed by the Guarantor, all pursuant to the terms,
provisions, and conditions set forth in the Loan Agreement, the First
Modification Agreement, the Second Modification Agreement and the other Loan
Documents, as such term is defined in the Loan Agreement (the "Loan"); and
WHEREAS, the Loan consists of a note receivable component with two tranches
in the original principal amount of up to US$18,000,000; and WHEREAS, Borrower,
the Guarantor, and Lender desire to increase the maximum amount of the Loan by
US$4,357,000, to incorporate a third tranche to the Loan, and otherwise amend
the terms, provisions, and conditions of the Loan Agreement in the manner
permitted by Section 12.7 thereof.
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NOW, THEREFORE, for and in consideration of the premises and mutual
covenants herein contained and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
hereby agree as follows:
1. Definitions. Except as otherwise provided herein to the contrary or
unless the context otherwise requires, all capitalized terms used in this Third
Modification Agreement shall have the meanings ascribed to them in the Loan
Agreement, as modified pursuant to the terms of the First Modification Agreement
and the Second Modification Agreement.
2. Third Modification Closing Date. For purposes of this Third Modification
Agreement, "Third - Modification Closing Date" shall mean the effective date of
this Third Modification Agreement.
3. Borrowing Base. Section 1.1(h) of the Loan Agreement, Section 4 of the
First Modification Agreement and Section 4 of the Second Modification Agreement
are hereby deleted in their entirety and replaced by the following:
(h) Borrowing Base. (i) with respect to Eligible Notes Receivable pledged
to Lender in connection with each Advance under Tranche A of the Loan,
an amount equal to the sum of (a) fifty percent (50%) of the aggregate
outstanding principal balance of each UDI-denominated Eligible Note
Receivable for which at least three monthly payments have been made,
plus (b) eighty percent (80%) of the aggregate outstanding principal
balance of each Mexican Nuevo Peso-denominated Eligible Note
Receivable for which at least one monthly payment has been made, plus
(c) eighty-five percent (85%) of the aggregate remaining principal
balance of each U.S. Dollar denominated Eligible Note Receivable for
which at least one monthly payment has been made, (ii) with respect to
Eligible Notes Receivable pledged to Lender in connection with each
Advance under Tranche B of the Loan for which at least one monthly
payment has been made, an amount equal to the sum of (a) eighty
percent (80%) of the aggregate outstanding principal balance of each
Mexican Nuevo Peso-denominated Eligible Note Receivable, plus (b)
eighty percent (80%) of the aggregate remaining principal balance of
each U.S. Dollar denominated Eligible Note Receivable, and (iii) with
respect to Eligible Notes Receivable pledged to Lender in connection
with each Advance under Tranche C of the Loan, an amount equal to the
sum of (a) fifty percent (50%) of the aggregate outstanding principal
balance of each UDI-denominated Eligible Note Receivable for which at
least three monthly payments have been made, plus (b) eighty percent
(80%) of the aggregate outstanding principal balance of each Mexican
Nuevo Peso-denominated Eligible Note Receivable
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for which at least one monthly payment has been made, plus (c)
eighty-five percent (85%) of the aggregate remaining principal balance
of each U.S. Dollar denominated Eligible Note Receivable for which at
least one monthly payment has been made.
4. Eligible Notes Receivable. Section 1.1(z) of the Loan Agreement, Section
6 of the First Modification Agreement and Section 5 of the Second Modification
Agreement are hereby deleted in their entirety and replaced with the following:
(z) Eligible Notes Receivable. Those Pledged Notes Receivable which
satisfy each of the following criteria:
(a) With respect to Tranche A of the Loan:
(i) one or more of the entities constituting the Borrower is
the sole payee;
(ii) it arises from a bona fide sale by Borrower of one (1)
or more Intervals in one of the Resorts;
(iii)the Interval sale from which it arises has not been
canceled by the Purchaser, any statutory or other applicable
cancellation or rescission period has expired and the
Interval sale is otherwise in total compliance with the
terms and provisions of this Agreement and all of the other
Loan Documents;
(iv) it is secured by a properly executed Assignment of
Pledged Notes Receivable and a properly executed Interval
Lease Contract;
(v) principal and interest payments on it are payable to the
Borrower in legal tender of the United States, provided,
however, that (a) up to sixty percent (60%) by number of all
Eligible Notes Receivable may be payable in either Mexican
Nuevos Pesos or Mexican UDIs, and (b) a maximum of
US$3,000,000 of the outstanding principal balance under
Tranche A of the Loan shall be comprised of UDI-denominated
Notes Receivable; for clarification purposes, the Borrower
may pledge up to US$6,000,000 in UDI-denominated Notes
Receivable to secure such maximum of US$3,000,000 of
outstanding principal balance under Tranche A of the Loan;
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(vi) payments of principal and interest on it are due in
equal monthly installments (or in such other amounts to
cover principal and interest);
(vii)it shall have an original term of no more than sixty
(60) months; provided, however, that up to twenty-five
percent (25%) of the aggregate outstanding balance of all
Eligible Notes Receivable may, at any time, be comprised of
Notes Receivable having an original term of no more than
eighty-four (84) months;
(viii) a cash down payment and/or other cash payments have
been received from the Purchaser in an amount equal to at
least fifteen percent (15%) of the original purchase price
of the related Interval, and the Purchaser thereafter shall
have received no cash or other rebates of any kind which
would cause the down payment to be less than fifteen percent
(15%) of the total purchase price;
(ix) no monthly installment due with respect to the Pledged
Note Receivable is more than thirty (30) days contractually
past due as of the date of funding of the first Advance with
respect to such Pledged Note Receivable, or more than sixty
(60) days contractually past due thereafter;
(x) the weighted average interest rate of all Eligible Notes
Receivable payable in legal tender of the United States at
any time shall be not less than twelve percent (12.0%) per
annum;
(xi) the weighted average interest rate of all Eligible
Notes Receivable payable in both Mexican Nuevos Pesos and
Mexican UDIs at any time shall be not less than eighteen
percent (18.0%) per annum;
(xii)the Purchaser of the related Interval has immediate
access to a Unit of the type specified in such Purchaser's
Interval Lease Contract, which Interval and related Unit
have been completed, developed and furnished in accordance
with the specifications provided in the Purchaser's Interval
Lease Contract, the public offering statement (if any) and
the other Timeshare Documents; and the Purchaser has,
subject to the terms of the Declaration, Interval Lease
Contract and other Timeshare Documents, complete and
unrestricted access to the related Interval, Unit,
Facilities and the Resorts;
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(xiii) neither the Purchaser of the related Interval nor any
other maker of the Note Receivable is an Affiliate of,
personally related to or employed by Borrower;
(xiv)the Purchaser or other obligor has no claim against
Borrower or any Affiliate of Borrower, and no defense,
set-off or counterclaim exists with respect to the Note
Receivable;
(xv) the maximum outstanding principal balance of such Note
Receivable does not exceed US$25,000.00 (or the equivalent
in Mexican Nuevos Pesos or Mexican UDIs at the time of the
Advance with respect to such Note Receivable), and total
principal balance of all Notes Receivable executed by any
one (1) obligor will not exceed US$25,000.00 (or the
equivalent in Mexican Nuevos Pesos or Mexican UDIs at the
time of the Advance with respect to such Note Receivable),
without the prior written approval of Lender;
(xvi) the Note Receivable is executed by a Mexican resident;
(xvii) the original of the Note Receivable and all related
consumer documents have been endorsed in the manner
prescribed by Lender and delivered to Lender or its approved
agent (the "Agent") as provided in this Agreement, and the
terms thereof and all instruments related thereto shall
comply in all respects with all applicable federal and state
statutes, ordinances, rules and regulations;
(xviii) the Unit in which the Interval being financed by the
Note Receivable is located shall not be subject to any Lien
which has not previously been consented to in writing by
Lender other than the Permitted FINOVA Liens;
(xix)the form of promissory note, federal truth-in-lending
disclosure statement, if any, or other applicable
disclosure, purchase contract and all other documents and
instruments corresponding to the Interval purchase
transaction giving rise to such Note Receivable has been
approved in advance by Lender in writing;
(xx) the Purchaser (a) is entitled to fifty (50) consecutive
years of use (commencing in 1997) in a specific Unit type
during a specified season at one of the four locations of
the Resorts each year expiring in the year 2047, which right
5
shall be exercised for a seven (7) day period each year for
such fifty (50) year term, or (b) is entitled to twenty-five
(25) biennual years of use (commencing in 1997) in a
specific Unit type during a specified season at one of the
four locations of the Resorts expiring in the year 2047,
which shall be exercised for a seven (7) day period every
alternate year for such term;
(xxi)the Purchaser may not accelerate their usage in the
Resorts (provided, however, that certain Purchasers may
accelerate their usage by a maximum of one (1) week per
year, provided that such Purchasers pay all additional
maintenance fees and any and all other fees related to such
accelerated usage);
(xxii) the Note Receivable is originated in connection with
an Interval Lease Contract and Borrower has provided and/or
caused all interest or lienholders which have mortgages
encumbering the Resorts or other agreements or amendments to
their respective security documents which expressly state to
Lender's satisfaction that such interest or lienholder may
not disturb the use rights of any Purchaser pursuant to such
Purchaser's Interval Lease Contract for so long as Purchaser
is not in default pursuant to the terms of such Interval
Lease Contract;
(xxiii) Lender is in possession of the executed original
Notes Receivable endorsed by Borrower to Lender, along with
the executed original Interval Lease Contracts corresponding
to such Notes Receivable;
(xxiv) the Note Receivable is originated in connection with
a related Interval Lease Contract whereby Land Trustee under
a Mexican guaranty trust satisfactory to Lender holds legal
title to each of the Resorts on behalf of CR Cabos, CR
Cancun, or CR Puerto Vallarta, together with CR Remainder
(as to the remainder interest in each of the Resorts
commencing under the FINOVA Mortgages in the year 2047) and
whereby non-disturbance provisions for the continued use and
enjoyment by the Interval Purchasers of the Resorts and
Facilities are in a form and substance acceptable to Lender;
and
(xxv) any and all release payments required under the
inventory component of the FINOVA Loan pertaining to the
Interval related to such Note Receivable, specifically
6
including the "Interval Sales Payment" as such term is
defined in the FINOVA Loan Agreement, have been paid in full
by Borrower.
(b) With respect to Tranche B of the Loan:
(i) one or more of the entities constituting the Borrower is
the sole payee;
(ii) it arises from a bona fide sale by Borrower of one (1)
or more Intervals in one of the Resorts;
(iii) the Interval sale from which it arises has not been
canceled by the Purchaser, any statutory or other applicable
cancellation or rescission period has expired and the
Interval sale is otherwise in total compliance with the
terms and provisions of this Agreement and all of the other
Loan Documents;
(iv) it is secured by a properly executed Assignment of
Pledged Notes Receivable and a properly executed Interval
Lease Contract;
(v) principal and interest payments on it are payable to the
Borrower in legal tender of the United States, provided,
however, that up to sixty percent (60%) by number of all
Eligible Notes Receivable may be payable in Mexican Nuevos
Pesos;
(vi) payments of principal and interest on it are due in
equal monthly installments (or in such other amounts to
cover principal and interest);
(vii) it shall have an original term of no more than sixty
(60) months; provided, however, that up to twenty-five
percent (25%) of the aggregate outstanding balance of all
Eligible Notes Receivable may, at any time, be comprised of
Notes Receivable having an original term of no more than
eighty-four (84) months;
(viii) a cash down payment and/or other cash payments have
been received from the Purchaser in an amount equal to at
least fifteen percent (15%) of the original purchase price
of the related Interval, and the Purchaser thereafter shall
have received no cash or other rebates of any kind
7
which would cause the down payment to be less than fifteen
percent (15%) of the total purchase price;
(ix) no monthly installment due with respect to the Pledged
Note Receivable is more than thirty (30) days contractually
past due as of the date of funding of the first Advance with
respect to such Pledged Note Receivable, or more than sixty
(60) days contractually past due thereafter;
(x) the weighted average interest rate of all Eligible Notes
Receivable payable in legal tender of the United States at
any time shall be not less than twelve percent (12.0%) per
annum;
(xi) the weighted average interest rate of all Eligible
Notes Receivable payable in Mexican Nuevos Pesos at any time
shall be not less than eighteen percent (18.0%) per annum;
(xii) the Purchaser of the related Interval has immediate
access to a Unit of the type specified in such Purchaser's
Interval Lease Contract, which Interval and related Unit
have been completed, developed and furnished in accordance
with the specifications provided in the Purchaser's Interval
Lease Contract, the public offering statement (if any) and
the other Timeshare Documents; and the Purchaser has,
subject to the terms of the Declaration, Interval Lease
Contract and other Timeshare Documents, complete and
unrestricted access to the related Interval, Unit,
Facilities and the Resorts;
(xiii) neither the Purchaser of the related Interval nor any
other maker of the Note Receivable is an Affiliate of,
personally related to or employed by Borrower;
(xiv) the Purchaser or other obligor has no claim against
Borrower or any Affiliate of Borrower, and no defense,
set-off or counterclaim exists with respect to the Note
Receivable;
(xv) the maximum outstanding principal balance of such Note
Receivable does not exceed US$25,000.00 (or the equivalent
in Mexican Nuevos Pesos at the time of the Advance with
respect to such Note Receivable), and total principal
balance of all Notes Receivable executed by any one (1)
obligor will not exceed US$25,000.00 (or the equivalent in
Mexican Nuevos Pesos at the time of the
8
Advance with respect to such Note Receivable), without the
prior written approval of Lender;
(xvi) the Note Receivable is executed by a Mexican resident;
(xvii) the original of the Note Receivable and all related
consumer documents have been endorsed in the manner
prescribed by Lender and delivered to Lender or its Agent as
provided in this Agreement, and the terms thereof and all
instruments related thereto shall comply in all respects
with all applicable federal and state statutes, ordinances,
rules and regulations;
(xviii) the Unit in which the Interval being financed by the
Note Receivable is located shall not be subject to any Lien
which has not previously been consented to in writing by
Lender other than the Permitted FINOVA Liens;
(xix) the form of promissory note, federal truth-in-lending
disclosure statement, if any, or other applicable
disclosure, purchase contract and all other documents and
instruments corresponding to the Interval purchase
transaction giving rise to such Note Receivable has been
approved in advance by Lender in writing;
(xx) the Purchaser (a) is entitled to fifty (50) consecutive
years of use (commencing in 1997) in a specific Unit type
during a specified season at one of the four locations of
the Resorts each year expiring in the year 2047, which right
shall be exercised for a seven (7) day period each year for
such fifty (50) year term, or (b) is entitled to twenty-five
(25) biennual years of use (commencing in 1997) in a
specific Unit type during a specified season at one of the
four locations of the Resorts expiring in the year 2047,
which shall be exercised for a seven (7) day period every
alternate year for such term;
(xxi) the Purchaser may not accelerate their usage in the
Resorts (provided, however, that certain Purchasers may
accelerate their usage by a maximum of one (1) week per
year, provided that such Purchasers pay all additional
maintenance fees and any and all other fees related to such
accelerated usage);
9
(xxii) the Note Receivable is originated in connection with
an Interval Lease Contract and Borrower has provided and/or
caused all interest or lienholders which have mortgages
encumbering the Resorts or other agreements or amendments to
their respective security documents which expressly state to
Lender's satisfaction that such interest or lienholder may
not disturb the use rights of any Purchaser pursuant to such
Purchaser's Interval Lease Contract for so long as Purchaser
is not in default pursuant to the terms of such Interval
Lease Contract;
(xxiii) Lender is in possession of the executed original
Notes Receivable endorsed by Borrower to Lender, along with
the executed original Interval Lease Contracts corresponding
to such Notes Receivable;
(xxiv) the Note Receivable is originated in connection with
a related Interval Lease Contract whereby Land Trustee under
a Mexican guaranty trust satisfactory to Lender holds legal
title to each of the Resorts on behalf of CR Cabos, CR
Cancun, CR Puerto Vallarta or Xxxxx Xxxx, together with CR
Remainder (as to the remainder interest in each of the
Resorts commencing under the FINOVA Mortgages in the year
2047) and whereby non-disturbance provisions for the
continued use and enjoyment by the Interval Purchasers of
the Resorts and Facilities are in a form and substance
acceptable to Lender; and
(xxv) any and all release payments required under the
inventory component of the FINOVA Loan pertaining to the
Interval related to such Note Receivable, specifically
including the "Interval Sales Payment" as such term is
defined in the FINOVA Loan Agreement, have been paid in full
by Borrower.
(c) With respect to Tranche C of the Loan:
(i) one or more of the entities constituting the Borrower is
the sole payee;
(ii) it arises from a bona fide sale by Borrower of one (1)
or more Intervals in one of the Resorts;
(iii) it arises from the resale of an Interval re-acquired
by Borrower as a result of that certain Diamond CR Vallarta
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Sublease Agreement for Kona Reef Inventory dated as of May
24, 2001, as amended, by and between CR Puerto Vallarta,
Guarantor, Diamond Resorts and Diamond at Kona Reef LLC (the
"Sublease Agreement") and pursuant to that certain Tri-Party
Agreement to be executed by and between Lender, Borrower,
Guarantor and Diamond at Kona Reef, LLC (the "Tri-Party
Agreement").
(iv) the Interval sale from which it arises has not been
canceled by the Purchaser, any statutory or other applicable
cancellation or rescission period has expired and the
Interval sale is otherwise in total compliance with the
terms and provisions of this Agreement and all of the other
Loan Documents;
(v) it is secured by a properly executed Assignment of
Pledged Notes Receivable and a properly executed Interval
Lease Contract;
(vi) principal and interest payments on it are payable to
the Borrower in legal tender of the United States, provided,
however, that up to sixty percent (60%) by number of all
Eligible Notes Receivable may be payable in either Mexican
Nuevos Pesos or Mexican UDIs;
(vii) payments of principal and interest on it are due in
equal monthly installments (or in such other amounts to
cover principal and interest);
(viii) it shall have an original term of no more than sixty
(60) months; provided, however, that up to twenty-five
percent (25%) of the aggregate outstanding balance of all
Eligible Notes Receivable may, at any time, be comprised of
Notes Receivable having an original term of no more than
eighty-four (84) months;
(ix) a cash down payment and/or other cash payments have
been received from the Purchaser in an amount equal to at
least fifteen percent (15%) of the original purchase price
of the related Interval, and the Purchaser thereafter shall
have received no cash or other rebates of any kind which
would cause the down payment to be less than fifteen percent
(15%) of the total purchase price;
(x) no monthly installment due with respect to the Pledged
Note Receivable is more than thirty (30) days
11
contractually past due as of the date of funding of the
first Advance with respect to such Pledged Note Receivable,
or more than sixty (60) days contractually past due
thereafter;
(xi) the weighted average interest rate of all Eligible
Notes Receivable payable in legal tender of the United
States at any time shall be not less than twelve percent
(12.0%) per annum;
(xii) the weighted average interest rate of all Eligible
Notes Receivable payable in both Mexican Nuevos Pesos and
Mexican UDIs at any time shall be not less than eighteen
percent (18.0%) per annum;
(xiii) the Purchaser of the related Interval has immediate
access to a Unit of the type specified in such Purchaser's
Interval Lease Contract, which Interval and related Unit
have been completed, developed and furnished in accordance
with the specifications provided in the Purchaser's Interval
Lease Contract, the public offering statement (if any) and
the other Timeshare Documents; and the Purchaser has,
subject to the terms of the Declaration, Interval Lease
Contract and other Timeshare Documents, complete and
unrestricted access to the related Interval, Unit,
Facilities and the Resorts;
(xiv) neither the Purchaser of the related Interval nor any
other maker of the Note Receivable is an Affiliate of,
personally related to or employed by Borrower;
(xv) the Purchaser or other obligor has no claim against
Borrower or any Affiliate of Borrower, and no defense,
set-off or counterclaim exists with respect to the Note
Receivable;
(xvi) the maximum outstanding principal balance of such Note
Receivable does not exceed US$25,000.00 (or the equivalent
in Mexican Nuevos Pesos or Mexican UDIs at the time of the
Advance with respect to such Note Receivable), and the total
principal balance of all Notes Receivable executed by any
one (1) obligor will not exceed US$25,000.00 (or the
equivalent in Mexican Nuevos Pesos or Mexican UDIs at the
time of the Advance with respect to such Note Receivable),
without the prior written approval of Lender;
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(xvii) the Note Receivable is executed by a Mexican
resident; provided, however, that Notes Receivable executed
by United States residents shall be considered as Eligible
Notes Receivable so long as (a) Borrower has obtained the
written consent of FINOVA which is acceptable to Lender, and
(b) Borrower has executed all necessary agreements in
relation to such United States consumers including, but not
limited to, portfolio interest trust agreements;
(xviii) the original of the Note Receivable and all related
consumer documents have been endorsed in the manner
prescribed by Lender and delivered to Lender or its Agent as
provided in this Agreement, and the terms thereof and all
instruments related thereto shall comply in all respects
with all applicable federal and state statutes, ordinances,
rules and regulations;
(xix) the Unit in which the Interval being financed by the
Note Receivable is located shall not be subject to any Lien
which has not previously been consented to in writing by
Lender other than the Permitted FINOVA Liens;
(xx) the form of promissory note, federal truth-in-lending
disclosure statement, if any, or other applicable
disclosure, purchase contract and all other documents and
instruments corresponding to the Interval purchase
transaction giving rise to such Note Receivable has been
approved in advance by Lender in writing;
(xxi) the Purchaser (a) is entitled to fifty (50)
consecutive years of use (commencing in 1997) in a specific
Unit type during a specified season at one of the four
locations of the Resorts each year expiring in the year
2047, which right shall be exercised for a seven (7) day
period each year for such fifty (50) year term, or (b) is
entitled to twenty-five (25) biennual years of use
(commencing in 1997) in a specific Unit type during a
specified season at one of the four locations of the Resorts
expiring in the year 2047, which shall be exercised for a
seven (7) day period every alternate year for such term;
(xxii) the Purchaser may not accelerate their usage in the
Resorts (provided, however, that certain Purchasers may
accelerate their usage by a maximum of one (1) week per
year, provided that such Purchasers pay all additional
13
maintenance fees and any and all other fees related to such
accelerated usage);
(xxiii) the Note Receivable is originated in connection with
an Interval Lease Contract and Borrower has provided and/or
caused all interest or lienholders which have mortgages
encumbering the Resorts or other agreements or amendments to
their respective security documents which expressly state to
Lender's satisfaction that such interest or lienholder may
not disturb the use rights of any Purchaser pursuant to such
Purchaser's Interval Lease Contract for so long as Purchaser
is not in default pursuant to the terms of such Interval
Lease Contract;
(xxiv) Lender is in possession of the executed original
Notes Receivable endorsed by Borrower to Lender, along with
the executed original Interval Lease Contracts corresponding
to such Notes Receivable;
(xxv) the Note Receivable is originated in connection with a
related Interval Lease Contract whereby Land Trustee under a
Mexican guaranty trust satisfactory to Lender holds legal
title to each of the Resorts on behalf of CR Cabos, CR
Cancun, or CR Puerto Vallarta, together with CR Remainder
(as to the remainder interest in each of the Resorts
commencing under the FINOVA Mortgages in the year 2047) and
whereby non-disturbance provisions for the continued use and
enjoyment by the Interval Purchasers of the Resorts and
Facilities are in a form and substance acceptable to Lender;
and
(xxvi) any and all release payments required under the
inventory component of the FINOVA Loan pertaining to the
Interval related to such Note Receivable, specifically
including the "Interval Sales Payment" as such term is
defined in the FINOVA Loan Agreement, have been paid in full
by Borrower.
5. Guaranty. Guarantor shall, concurrently with the execution and delivery
of this Third Modification Agreement, execute and deliver to Lender a Third
Amended and Restated Payment Guaranty and Subordination Agreement (hereinafter
the "Third Amended Guaranty Agreement"). Said Third Amended Guaranty Agreement
shall replace and supersede in their entirety the original Payment Guaranty and
Subordination Agreement dated as of November 23, 1999, executed by Guarantor in
favor of Lender,
14
the Amended and Restated Payment Guaranty and Subordination Agreement dated as
of November 20, 2000, executed by Guarantor in favor of Lender and the Second
Amended and Restated Payment Guaranty and Subordination Agreement dated as of
December 29, 2000, executed by Guarantor in favor of Lender. Upon execution and
delivery by Guarantor to Lender of the Third Amended Guaranty Agreement, Lender
shall return to the Guarantor, the original Payment Guaranty and Subordination
Agreement, the Amended and Restated Payment Guaranty and Subordination Agreement
and the Second Amended and Restated Payment Guaranty and Subordination Agreement
marked "Canceled and Satisfied." In accordance with the foregoing, Section
1.1(qq) of the Loan Agreement, Section 7 of the First Modification Agreement,
and Section 6 of the Second Modification Agreement are hereby deleted in their
entirety and replaced by the following:
(qq) Guaranty. The Third Amended and Restated Payment Guaranty
and Subordination Agreement dated as of September 28, 2001,
executed by Guarantor, and delivered to Lender concurrently
with the Third Modification Agreement. The Guaranty shall be
the absolute and unconditional guaranty of payment and
performance of the Loan and all amounts secured by or under
the Loan Documents, as more fully set forth in this Third
Modification Agreement, in the Loan Agreement, in the First
Modification Agreement and in the Second Modification
Agreement.
6. Interest Rate. Section 1.1(xx) of the Loan Agreement and Section 7 of
the Second Modification Agreement are hereby deleted in their entirety and
replaced with the following:
(xx) Interest Rate. (i) with respect to Tranche A of the Loan, a
variable rate, adjusted as of the first day of each calendar
month, equal to the sum of the Prime Rate as of the first
day of each calendar month, plus two percent (2.00%) per
annum, (ii) with respect to Tranche B of the Loan, a
variable rate, adjusted as of the first day of each calendar
month, equal to the sum of the Prime Rate as of the first
day of each calendar month, plus two and three-quarters
percent (2.75%) per annum, and (iii) (i) with respect to
Tranche C of the Loan, a variable rate, adjusted as of the
first day of each calendar month, equal to the sum of the
Prime Rate as of the first day of each calendar month, plus
two percent (2.00%) per annum.
7. Loan. Section 1.1(ddd) of the Loan Agreement, Section 8 of the First
Modification Agreement and Section 8 of the Second Modification Agreement are
hereby deleted in their entirety and replaced by the following:
(ddd)Loan. The Loan in the maximum aggregate amount of
US$22,357,000 shall consist of the following three separate
tranches, (i) the maximum US$13,000,000.00 credit facility,
as further described in the Loan Agreement, as modified by
the First Modification Agreement, the Second Modification
Agreement and
15
the Third Modification Agreement ("Tranche A"), (ii) the
maximum US$5,000,000.00 credit facility provided pursuant to
the terms of the Second Modification Agreement, as modified
by the Third Modification Agreement ("Tranche B"), and (iii)
the maximum US$4,357,000.00 credit facility provided
pursuant to the terms of the Third Modification Agreement
("Tranche C").
8. Note Receivable Promissory Note. Section 1.1(ooo) of the Loan Agreement,
Section 9 of the First Modification Agreement and Section 9 of the Second
Modification Agreement are hereby deleted in their entirety and replaced by the
following:
(ooo)Note Receivable Promissory Note. The Third Amended and
Restated Note Receivable Promissory Note evidencing the Loan
executed and delivered by Borrower and Guarantor to Lender
concurrently with the Third Modification Agreement.
9. Textron Mortgages. Section 1.1(uuuu) of the Loan Agreement and
Section 13 of the Second Modification Agreement are hereby deleted in their
entirety and replaced with the following:
(uuuu) Textron Mortgages. Collectively, four separate properly
recorded and perfected mortgages delivered by Borrower in
favor of Lender securing the Loan and encumbering the Resort
Property and all Improvements (including the Units, all
Interval Lease Contracts and, to the greatest extent
permitted under United States and Mexican law, all Unsold
Intervals) constructed or to be constructed thereon, subject
only to the Permitted Liens and Encumbrances. The Textron
Mortgages shall be of a second priority and exclusive (with
the exception of the FINOVA Mortgages) as to the Resort
Property (including all possible future phases, all
amenities, improvements and fixtures now or hereafter
located on the Resort Property, and all easements and other
rights appurtenant to the Resort Property now existing or to
be constructed or renovated) and the Improvements. In
accordance with Mexican law, Textron's Mortgages shall be
perfected by recording amendments to the existing guaranty
Trust Agreements which establish the FINOVA Mortgages in
order to add Lender as the second beneficiary in guaranty as
to each of the Resorts, with FINOVA remaining as the first
beneficiary in guaranty as to each of the Resorts. The
documents establishing the guaranty Trust Agreements shall
be amended under terms acceptable to Lender, the trustee of
the guaranty Trust Agreements (the "Land Trustee") shall be
a bank acceptable to Lender, and the Trust Agreements shall
be recorded with the Public Registries of Property in the
location of each of the Resorts. The four separate Trust
Agreements establishing the
16
Textron Mortgages shall be in the total aggregate amount of
US$22,357,000, with Trust Agreements encumbering the Club
Xxxxxx Resort at Cancun, Club Xxxxxx Resort at Puerto
Vallarta, Club Xxxxxx Resort at Los Cabos and Club Xxxxxx
Resort at Acapulco in the amounts of US$5,000,000,
US$5,000,000, US$3,000,000 and US$5,000,000, respectively.
The Trust Agreements shall each include an acknowledgement
by Borrower and FINOVA to Lender's rights in and to the
Resort Property and to Lender's rights to the Notes
Receivable and related Interval Lease Contracts and
Intervals to be financed by Lender pursuant to the terms of
this Agreement.
10. Loan. Section 2.1 of the Loan Agreement, Section 11 of the First
Modification Agreement and Section 14 of the Second Modification Agreement
are hereby deleted in their entirety and replaced with the following:
2.1 Loan. Except as may be expressly set forth herein to the
contrary, all amounts of money set forth herein and in the
Loan Documents shall be in U.S. Dollars. Upon the terms and
subject to the conditions set forth in the Loan Agreement,
as modified by the First Modification Agreement, by the
Second Modification Agreement and by the Third Modification
Agreement, Lender shall advance to Borrower, and Borrower
may borrow, repay and reborrow, principal under the Loan to
be funded in a series of Advances during the initial full
twelve (12) month period following December 29, 2000 (the
"Revolving Credit Period") not to exceed an outstanding
balance of the lesser of US$22,357,000 or the Borrowing
Base. In accordance with the provisions of Section 4.2(c)(v)
and Section 4.2(c)(vi) of the Loan Agreement, Advances would
be made in increments of at least US$50,000 but not more
often than twice a month. As more fully set forth in Section
6.11 of the Loan Agreement, the proceeds of the Loan will be
disbursed by Lender solely to pay for Loan Costs (as such
term is defined in the Commitment), to Borrower for
amortization (principal or interest) of mortgage and
non-mortgage debt owed by Borrower or by any Affiliates of
Borrower and for sales, marketing, working capital, project
development and administrative expenses incurred in the
operations for the Resorts, and for future expansion of
timeshare development in accordance with plans and
projections acceptable to Lender (provided, however, that
the use of the proceeds of the Loan for such expansion shall
not adversely affect the operations of any of the Resorts).
The maximum Loan amount (exclusive of accrued but unpaid
interest) which may be outstanding at any time under the
Loan Agreement, as modified by the
17
First Modification Agreement, by the Second Modification
Agreement and by the Third Modification Agreement, shall not
exceed US$22,357,000, with a maximum of US$13,000,000 under
Tranche A, a maximum of US$5,000,000 under Tranche B, and a
maximum of $4,357,000 under Tranche C, and Lender shall have
no obligation whatsoever to make any Advance which would
cause the aggregate outstanding principal balances of the
Loan to exceed US$22,357,000. In the event that the proceeds
of the Loan and any other amounts required to be paid by
Borrower hereunder are insufficient to fully pay all costs
as contemplated hereunder such proceeds will be applied, or
if the use of the Loan proceeds varies materially (as
determined reasonably and in good faith by Lender) from the
uses described herein, then Lender shall have no obligation
to fund (or continue funding) the Loan or any portion
thereof; provided, however, that, Borrower shall be
permitted to provide from its own funds an amount sufficient
to cover that portion of the Loan proceeds used for uses
materially varying from the uses described herein.
11. Form Request for Advance. Exhibit F to the Loan Agreement and Exhibit F
to the Second Modification Agreement are hereby deleted in their entirety and
replaced and superceded by Exhibit F attached hereto and incorporated herein by
this reference.
12. Cross-Collateralization and Default. Section 3.7 of the Loan Agreement,
Section 13 of the First Modification Agreement and Section16 of the Second
Modification Agreement are hereby deleted in their entirety and replaced with
the following:
3.7 Cross-Collateralization and Default. The Collateral
including, but not limited to, the Acapulco Mortgage (as defined
below), shall secure all of the Obligations. All Liens, pledges,
assignments, mortgages, security interests and collateral granted by
any Borrower entity, Guarantor or any Affiliate of any Borrower entity
or Guarantor to or for the benefit of Lender pursuant hereto or any
other related documents or instruments shall also secure the
Obligations. In addition, all other loans of any type made by Lender
to any Borrower entity, Guarantor, or any Affiliate of any Borrower
entity or Guarantor shall be cross-collateralized and cross-defaulted.
Notwithstanding the foregoing, Borrower's failure to satisfy any and
all payments required of Borrower pursuant to the terms of the
Sublease Agreement and the Tri-Party Agreement shall constitute an
Event of Default under the Loan.
13. Expenses. Contemporaneously with the first Advance of the Loan that
occurs on or after the Third Modification Closing Date (but in no event later
than sixty (60) days following the Third Modification Closing Date), Borrower
shall pay all costs and expenses related to the negotiation, documentation, and
closing of the subject Loan
18
modification transaction, including but not limited to the costs of title
updates, recording and search fees, Lender's attorneys' fees, and all travel and
other out-of-pocket expenses reasonably incurred by Lender in connection
therewith.
14. Cooperation; Other Documents and Actions. Borrower and the Guarantor
agree to cooperate in good faith with Lender by executing, acknowledging, and/or
delivering to Lender such other amendments to the Loan Documents and such title
and legal opinions, and other documents and information, and by taking all such
other actions, as Lender may request, in its sole discretion, in order properly
to document and otherwise effectuate the subject Loan modification transaction.
15. Special Advance. Lender's initial Advance under Tranche C of the Loan
pursuant to the terms of this Third Modification Agreement is subject to the
following conditions:
a. The executed amendment to the FINOVA Mortgage presently encumbering
the Club Xxxxxx Resort at Acapulco whereby Lender has been added as second
beneficiary in guaranty (the "Acapulco Mortgage") shall be recorded in the
appropriate real property records by no late than October 15, 2001.
b. Final lender's title insurance policy acceptable to Lender for the
Club Xxxxxx Resort at Acapulco by no later than October 15, 2001.
c. Execute amendment to pledge on Pledged Notes Receivable to
incorporate Tranche C of the Loan by no later than October 15, 2001.
d. Establish separate Mexican lockbox agreement for Tranche C of the
Loan by no later than by no later than October 15, 2001 .
16. Additional Collateral and Promissory Notes.
a. Additional Collateral. By executing this Third Modification
Agreement, Borrower and Guarantor acknowledge and agree that in the event
Lender obtains information which establishes that Lender's security
interests as second beneficiary in guaranty under the FINOVA Mortgages have
decreased in value or are otherwise disputable, Lender reserves the right
to obtain a security interest from Borrower and Guarantor in additional
collateral, including an assignment of Borrower's beneficial interest under
the FINOVA Mortgages, provided, however, that Lender shall act reasonably
in the designation of such additional collateral and the grant of a
security interest in such additional collateral will not cause an undue
financial burden for Borrower or Guarantor.
b. Promissory Notes. By executing this Third Modification Agreement,
Borrower and Guarantor acknowledge and agree that Lender has reserved the
right to require Borrower and Guarantor to execute additional promissory
notes (either in the form of the Second Amended and Restated Note
Receivable Promissory Note or in the
19
form of a promissory note with dual jurisdiction enforceable in the United
States and Mexico) in order to evidence Borrower's and Guarantor's obligations
to Lender under each of the FINOVA Mortgages through which Lender has obtained a
second beneficial interest in guaranty.
17. Authority.
a. As of the Third Modification Closing Date, each Borrower entity (a)
is a Mexican limited responsibility corporation with variable capital duly
registered, validly existing and in good standing under the laws of Mexico
and duly licensed or qualified under the laws of each jurisdiction in which
the character or location of the properties owned by it or the business
transacted by it requires licensing and qualification, and (b) has all
requisite power, corporate or otherwise, to conduct its business and to
execute and deliver, and to perform its obligations under, the Loan
Documents.
b. The execution, delivery, and performance by each Borrower entity of
this Third Modification Agreement and all documents and instruments
executed by Borrower contemporaneously herewith have been duly authorized
by all necessary corporate action by Borrower and do not and will not (i)
violate any provision of the Memorandum and Articles of Incorporation of
any Borrower entity, or any contract, agreement, statute, ordinance, rule,
regulation, order, writ, judgment, injunction, decree, determination, or
award presently in effect to which any Borrower is a party or is subject;
(ii) result in, or require the creation or imposition of, any Lien upon or
with respect to any asset of any Borrower other than Liens in favor of
Lender; or (iii) result in a breach of, or constitute a default by any
Borrower under, any indenture, loan, or credit agreement or any other
contract, agreement, document, instrument, or certificate to which Borrower
is a party or by which it or any of its assets are bound or affected.
c. As of the Third Modification Closing Date, Guarantor (a) is a
Nevada corporation duly formed, registered, validly existing and in good
standing under the laws of Nevada and the United States and duly licensed
or qualified under the laws of each jurisdiction in which the character or
location of the properties owned by it or the business transacted by it
requires licensing and qualifications, and (b) has all requisite power,
corporate or otherwise, to conduct its business and to execute and deliver,
and to perform its obligations under, the Loan Documents.
d. The execution, delivery, and performance by Guarantor of this Third
Modification Agreement and all documents and instruments executed by
Guarantor contemporaneously herewith have been duly
20
authorized by all necessary corporate actions by Guarantor and do not and
will not (i) violate any provision of the Articles or By-Laws of Guarantor,
or any contract, agreement, statute, ordinance, rule, regulation, order,
writ, judgment, injunction, decree, determination, or award presently in
effect to which Guarantor is a party or is subject; (ii) result in, or
require the creation or imposition of, any Lien upon or with respect to any
asset of Guarantor other than Liens in favor of Lender; or (iii) result in
a breach of, or constitute a default by Guarantor under, any indenture,
loan, or credit agreement or any other contract, agreement, document,
instrument, or certificate to which Guarantor are a party or by which they
or any of their assets are bound or affected.
e. No approval, authorization, order, license, permit, franchise, or
consent of, or registration (with the exception of the registration of the
Textron Mortgages), declaration, qualification, or filing with, any
governmental authority or other Person is required in connection with the
execution, delivery, and performance by Borrower or Guarantor of the Loan
Agreement, as modified hereby, or any of the other Loan Documents.
f. This Third Modification Agreement and the other Loan Documents
constitute legal, valid and binding obligations of Borrower and Guarantor,
enforceable against Borrower and Guarantor in accordance with their
respective terms.
18. Miscellaneous.
a. No Other Changes. Except as expressly set forth herein, each and
every term, provision, and condition contained in the Loan Agreement, in
the First Modification Agreement and in the Second Modification Agreement
including all exhibits and schedules thereto and all of Lender's rights and
remedies thereunder, shall remain unchanged and in full force and effect
following the Third Modification Closing Date. In the event of any conflict
between the provisions hereof and those contained in the Loan Agreement,
the First Modification Agreement, the Second Modification Agreement or any
of the other Loan Documents, the provisions hereof shall govern and control
the parties' respective rights and obligations with respect to the Loan.
b. Ratification. Borrower and the Guarantor hereby ratify and reaffirm
as of the date hereof all covenants, conditions, provisions,
representations, and warranties made or contained in the Loan Agreement,
the First Modification Agreement, the Second Modification Agreement or any
of the other Loan Documents, agree, except as expressly provided herein or
in the Third Amended Guaranty Agreement to the contrary, to be legally
bound thereby and to comply fully therewith, and acknowledge Lender's right
to enforce such Loan Agreement, the First Modification Agreement,
21
the Second Modification Agreement and other Loan Documents in accordance
with the term, provisions, and conditions thereof.
c. Counterparts. This Third Modification Agreement may be executed in
identical counterparts, each of which shall be deemed an original for any
and all purposes and all of which, collectively, shall constitute one and
the same instrument.
d. No Defaults. Borrower and the Guarantor hereby acknowledge and
represent that Lender has complied fully with all of its obligations under
the Loan Agreement, the First Modification Agreement, the Second
Modification Agreement and the other Loan Documents through the date hereof
and is not currently in default thereunder.
[REMAINDER OF PAGE INTENTIONALLYLEFT BLANK
SIGNATURES BEGIN ON FOLLOWING PAGE]
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IN WITNESS WHEREOF, the parties hereto have caused this Third Modification
Agreement to be duly executed and delivered as of the date first above written.
BORROWER:
WITNESS: CR RESORTS CANCUN, S. DE X.X. DE C.V.,
a Mexican limited responsibility corporation
with variable capital
____________________________ By:__________________________________
Witness Name:
Its:
[SEAL]
WITNESS: CR RESORTS LOS CABOS, S. DE X.X. DE
C.V., a Mexican limited responsibility
corporation with variable capital
____________________________ By:__________________________________
Witness Name:
Its:
[SEAL]
WITNESS: CR RESORTS PUERTO VALLARTA, S. DE
X.X. DE C.V., a Mexican limited responsibility
corporation with variable capital
____________________________ By:__________________________________
Witness Name:
Its:
[SEAL]
23
WITNESS: CORPORACION MEXITUR, S. DE X.X. DE
C.V., a Mexican limited responsibility
corporation with variable capital
____________________________ By:__________________________________
Witness Name:
Its:
[SEAL]
WITNESS: CR RESORTS CANCUN TIMESHARE
TRUST, S. DE X.X. DE C.V., a Mexican limited
responsibility corporation with variable
capital
____________________________ By:__________________________________
Witness Name:
Its:
[SEAL]
WITNESS: CR RESORTS CABOS TIMESHARE TRUST,
S. DE X.X. DE C.V., a Mexican limited
responsibility corporation with variable
capital
____________________________ By:__________________________________
Witness Name:
Its:
[SEAL]
WITNESS: CR RESORTS PUERTO VALLARTA
TIMESHARE TRUST S. DE X.X. DE C.V., a
Mexican limited responsibility corporation
with variable capital
____________________________ By:__________________________________
Witness Name:
Its:
[SEAL]
24
WITNESS: XXXXX XXXX RESORT, S. DE X.X. DE C.V., a
Mexican limited responsibility corporation with
variable capital
____________________________ By:__________________________________
Witness Name:
Its:
[SEAL]
WITNESS: PROMOTORA XXXXX XXXX, S. DE X.X. DE
C.V., a Mexican limited responsibility
corporation with variable capital
____________________________ By:__________________________________
Witness Name:
Its:
[SEAL]
LENDER:
TEXTRON FINANCIAL CORPORATION, a
Delaware corporation
____________________________ By: ________________________________
Witness Name:
Its:
[SEAL]
GUARANTOR:
RAINTREE RESORTS INTERNATIONAL,
INC., a Nevada corporation
____________________________ By: _______________________________
Witness Name:
Its:
[SEAL]
25
EXHIBIT F
FORM OF REQUEST FOR ADVANCE (RECEIVABLES)
26
