Exhibit 10.1
CONFORMED, INCLUDING EXHIBITS
X-0, X-0, X-0, X XXX X CONFORMED AS EXECUTED
LOAN AGREEMENT
Dated as of July 29, 2002
by and among
SUNTERRA CORPORATION,
CERTAIN OF ITS SUBSIDIARIES,
THE FINANCIAL INSTITUTIONS FROM TIME TO TIME PARTY HERETO
and
XXXXXXX XXXXX MORTGAGE CAPITAL INC.
as Agent
TABLE OF CONTENTS
Page
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ARTICLE I
DEFINITIONS AND CERTAIN TERMS
Section 1.1. Definitions...................................................1
Section 1.2. Terms Generally..............................................30
Section 1.3. Accounting and Other Terms...................................30
Section 1.4. Time References..............................................31
Section 1.5. Amounts in Foreign Currency..................................31
ARTICLE II
THE LOANS
Section 2.1. Loan Commitments.............................................31
Section 2.2. Making the Loans.............................................32
Section 2.3. Notes; Repayment of Loans....................................35
Section 2.4. Limitation on Types of Loans; Illegality.....................35
Section 2.5. Repayment of Loans; Evidence of Debt.........................35
Section 2.6. Interest.....................................................36
Section 2.7. Prepayment of Loans..........................................36
Section 2.8. Fees.........................................................37
Section 2.9. Taxes........................................................38
ARTICLE III
PAYMENTS AND OTHER COMPENSATION
Section 3.1. Payments; Computations and Statements........................40
Section 3.2. Sharing of Payments, Etc.....................................41
Section 3.3. Apportionment of Payments....................................41
Section 3.4. Increased Costs and Reduced Return...........................42
Section 3.5. Joint and Several Liability of the Borrowers.................43
ARTICLE IV
CONDITIONS TO LOANS
Section 4.1. Conditions Precedent to Initial Loans........................44
Section 4.2. Conditions Precedent to All Loans............................48
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ARTICLE V
REPRESENTATIONS AND WARRANTIES
Section 5.1. Representations and Warranties...............................49
ARTICLE VI
COVENANTS OF THE BORROWERS
Section 6.1. Affirmative Covenants........................................58
Section 6.2. Negative Covenants...........................................71
Section 6.3. Financial Covenants..........................................75
ARTICLE VII
EVENTS OF DEFAULT
Section 7.1. Events of Default............................................76
ARTICLE VIII
AGENT
Section 8.1. Appointment..................................................79
Section 8.2. Nature of Duties.............................................79
Section 8.3. Rights, Exculpation, Etc.....................................80
Section 8.4. Reliance.....................................................80
Section 8.5. Indemnification..............................................80
Section 8.6. Agent Individually...........................................81
Section 8.7. Successor Agent..............................................81
Section 8.8. Collateral Matters...........................................81
ARTICLE IX
MISCELLANEOUS
Section 9.1. Notices, Etc.................................................83
Section 9.2. Amendments, Etc..............................................83
Section 9.3. No Waiver; Remedies, Etc.....................................84
Section 9.4. Expenses; Taxes; Attorneys' Fees.............................84
Section 9.5. Right of Set-off.............................................85
Section 9.6. Survival.....................................................85
Section 9.7. Severability.................................................86
Section 9.8. Assignments and Participations...............................86
Section 9.9. Counterparts.................................................88
Section 9.10. GOVERNING LAW.......s........................................88
Section 9.11. WAIVER OF JURY TRIAL, ETC....................................89
Section 9.12. No Party Deemed Drafter......................................89
Section 9.13. Parent as Agent for Borrowers................................89
Section 9.14. Indemnification..............................................89
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Section 9.15. Binding Effect...............................................90
Section 9.16. Acknowledgment Regarding Sunterra Securitizations............90
APPENDICES: A-1 Tranche A Loan Commitments
A-2 Tranche B Loan Commitments
A-3 Tranche C Loan Commitments
B Notice Addresses
SCHEDULES: I Borrower Subsidiaries
1.1(i) Certain Professional Fees
1.1(ii) Restructuring Memo
1.1(iii) Eligible Resorts
1.1(iv) Ground Leases
1.1(v) Key Personnel
1.1(vi) Loss Curves
1.1(vii) Mortgaged Real Property
1.1(viii) Other Assets
1.1(ix) Existing Indebtedness
1.1(x) Existing Liens
1.1(xi) Real Properties
1.1(xii) Right-to-Use Resorts
1.1(xiii) Underwriting Guidelines
4.1(h)(i) Surveys
4.1(p) Management
5.1(f) Subsidiaries
5.1(g) Litigation
5.1(h) Certain Events
5.1(j) ERISA
5.1(k) Taxes
5.1(o) Permits
5.1(r) Environmental Matters
5.1(s) Insurance
5.1(u) Bank Accounts
5.1(x) Place of Business; Chief Executive Office
5.1(z) States and Countries
5.1(ee) Condemnations
5.1(hh) Assessments
6.1(a)(i) Form of Consolidating Statements
6.1(a)(iii) Form of Flash Report
6.1(g) Cost Factor
6.2(c)(ii) Disposition of Resorts
6.2(e) Existing Investments
6.2(g) Capital Expenditures
6.3(a) U.S. Sales Revenues
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EXHIBITS: A Notice of Borrowing
B-1 Tranche A Loan Note
B-2 Tranche B Loan Note
B-3 Tranche C Loan Note
C Borrowing Base Certificate
D Opinions of Counsel
E Assignment and Acceptance
F Pledge Agreement
G Security Agreement
H Deposit Account Control Agreement
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LOAN AGREEMENT
This LOAN AGREEMENT, dated as of July 29, 2002, by and among Sunterra
Corporation, a Maryland corporation (the "Parent"), the subsidiaries of the
Parent listed on Schedule I hereto (together with the Parent, individually, a
"Borrower" and, collectively, the "Borrowers"), the financial institutions from
time to time party hereto (individually, a "Lender" and, collectively, the
"Lenders") and Xxxxxxx Xxxxx Mortgage Capital Inc., a Delaware corporation, as
administrative and collateral agent for the Lenders (in such capacity, the
"Agent").
RECITALS
WHEREAS, on May 31, 2000 and certain subsequent dates, the Parent and
certain of its subsidiaries (collectively, the "Debtors") commenced cases (the
"Chapter 11 Cases") under Chapter 11 of Title 11 of the United States Code (the
"Bankruptcy Code") in the United States Bankruptcy Court for the District of
Maryland, Baltimore Division (the "Bankruptcy Court");
WHEREAS, the Debtors have filed with the Bankruptcy Court a Third
Amended and Restated Joint Plan of Reorganization in the Chapter 11 Cases;
WHEREAS, pursuant to the Confirmation Order (as hereinafter defined),
the Debtors shall have been reorganized and shall have emerged from the Chapter
11 Cases;
WHEREAS, the Borrowers desire that the Lenders extend certain
financing facilities to the Borrowers, proceeds of which will be used for, among
other things, the payment of or in respect of certain prepetition claims in the
Chapter 11 Cases, the repayment of obligations under the Debtors' existing
debtor-in-possession financing facility, working capital, receivables financing
and other general corporate purposes; and
WHEREAS, to those ends, and for the purposes hereinafter set forth,
the Borrowers, the Lenders and the Agent wish to enter into this Agreement and
the other agreements and instruments provided for herein.
NOW, THEREFORE, the Borrowers, the Lenders and the Agent hereby agree
as follows:
ARTICLE I
DEFINITIONS AND CERTAIN TERMS
Section 1.1. Definitions. As used in this Agreement, the following
terms shall have the respective meanings indicated below:
"Administrative Borrower" has the meaning specified therefor in
Section 9.13.
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"Affiliate" means, as to any Person, any other Person that directly or
indirectly through one or more intermediaries, controls, is controlled by or is
under common control with, such Person. For purposes of this definition,
"control" of a Person means the power, directly or indirectly, either to (i)
vote 10% or more of the Capital Stock having ordinary voting power for the
election of directors of such Person or (ii) direct or cause the direction of
the management and policies of such Person whether by contract or otherwise.
Notwithstanding anything herein to the contrary, in no event shall the Agent or
any Lender be considered an "Affiliate" of any Loan Party.
"Agent" has the meaning specified therefor in the preamble hereto.
"Agent Advances" has the meaning specified therefor in Section 8.8(a).
"Agreement" means this Loan Agreement, including all amendments,
modifications and supplements and any appendices, exhibits or schedules to any
of the foregoing, and shall refer to the Agreement as the same may be in effect
at the time such reference becomes operative.
"Annualized Net Loss Rate" means an amount, expressed as a percentage,
equal to (x) the principal balance of those Mortgage Receivables that have
become delinquent by more than 180 days during any preceding 12 month period
less any recoveries received therefrom, divided by (y) the average principal
balance outstanding of Mortgage Receivables during such trailing 12 month
period.
"Applicable Margin" means (i) with respect to interest payable on
Tranche A Loans, 3.00%, (ii) with respect to interest payable on Tranche B
Loans, 5.00%; provided that if, during any month after the month in which first
annual anniversary of the Closing Date occurs, the outstanding principal amount
of Tranche B Loans exceeds $70,000,000, the Applicable Margin with respect to
interest payable for such month on outstanding Tranche B Loans shall be 7.00%
and (iii) with respect to interest payable on Tranche C Loans, 7.00%.
"A/R Inventory" means time share inventory relating to Mortgage
Receivables that are more than sixty (60) days past due.
"Assignment and Acceptance" means an assignment and acceptance entered
into by an assigning Lender and an assignee, and accepted by the Agent, in
accordance with Section 9.8 hereof and substantially in the form of Exhibit E
hereto.
"Audited Financial Statements" means the audited consolidated balance
sheet of the Parent and its consolidated Subsidiaries for the fiscal year ended
December 31, 2001 and the related consolidated statements of operation, cash
flows and stockholders' equity (deficit) for the fiscal year then ended.
"Authorized Officer" means the president, chief financial officer or a
vice president of the Administrative Borrower.
"Bank of America Agreement" means the Credit Agreement, dated as of
the date hereof, among Parent, certain of its subsidiaries as reborrowers or
guarantors, Bank of America,
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N. A., as administrative agent, and Bank of America and Societe Generale, as
Lenders, as approved in the Plan of Reorganization.
"Bankruptcy Code" has the meaning specified therefor in the recitals
hereto.
"Bankruptcy Court" has the meaning specified therefor in the recitals
hereto.
"Board" means the Board of Governors of the Federal Reserve System of
the United States.
"Board of Directors" has the meaning specified therefor in Section
6.1(s).
"Borrower" and "Borrowers" have the meanings specified therefor in the
preamble hereto.
"Borrowing Base" means the Tranche A Borrowing Base, Tranche B
Borrowing Base or Tranche C Borrowing Base, as applicable.
"Borrowing Base Certificate" means a certificate by an Authorized
Officer, substantially in the form of Exhibit C setting forth the calculation of
the Borrowing Base for each Tranche, including a calculation of each component
thereof, all in such detail as shall be reasonably satisfactory to the Agent.
All calculations of the Borrowing Base in connection with the preparation of any
Borrowing Base Certificate shall originally be made by the Borrower and
certified to the Agent.
"Borrowing Base Deficiency" means as of any date of determination,
with respect to the Loans of any Tranche, the excess of the then outstanding
principal amount of Loans of that Tranche over the then applicable Borrowing
Base for such Tranche.
"Business Day" means any day other than a Saturday, Sunday or other
day on which commercial banks in New York City are authorized or required to
close or on which the New York Stock Exchange, the Agent, the Custodian or
Interim Custodian is closed; provided, however, that, when used in connection
with the calculation of the LIBO Base Rate, the term "Business Day" shall also
exclude any day on which banks are not open for dealings in dollar deposits in
the London interbank market.
"Capital Expenditures" means, with respect to any Person for any
period, the sum of (i) the aggregate of all expenditures by such Person and its
Subsidiaries during such period that in accordance with GAAP are or should be
included in "property, plant and equipment" or similar fixed asset account on
its balance sheet, whether such expenditures are paid in cash or financed and
including all Capitalized Lease Obligations paid or payable during such period,
and (ii) to the extent not covered by clause (i) above, the aggregate of all
expenditures by such Person and its Subsidiaries to acquire by purchase or
otherwise the business or fixed assets of, or the Capital Stock of, any other
Person.
"Capital Guideline" means any law, rule, regulation, policy, guideline
or directive (whether or not having the force of law and whether or not the
failure to comply therewith would be unlawful) (i) regarding capital adequacy,
capital ratios, capital requirements, the calculation
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of a bank's capital or similar matters or (ii) affecting the amount of capital
required to be obtained or maintained by a Lender or any Person controlling such
Lender, or the manner in which such Lender or any Person controlling such Lender
allocates capital to any of its contingent liabilities, advances, acceptances,
commitments, assets or liabilities.
"Capitalized Lease" means, with respect to any Person, any lease of
real or personal property by such Person as lessee which is required under GAAP
to be capitalized on the balance sheet of such Person.
"Capitalized Lease Obligations" means, with respect to any Person,
obligations of such Person and its Subsidiaries under Capitalized Leases, and,
for purposes hereof, the amount of any such obligation shall be the capitalized
amount thereof determined in accordance with GAAP.
"Capital Stock" means (i) with respect to any Person that is a
corporation, any and all shares, interests, participations or other equivalents
(however designated and whether or not voting) of corporate stock and (ii) with
respect to any Person that is not a corporation, any and all partnership,
membership or other equity interests of such Person.
"Change of Control" means, at any time, (i) any Person or "group"
(within the meaning of Rules 13d-3 and 13d-5 under the Exchange Act) (a) shall
have acquired beneficial ownership of more than 50% or more on a fully diluted
basis of the voting and/or economic interest in the Capital Stock of the Parent
or (b) shall have obtained the power (whether or not exercised) to elect a
majority of the members of the board of directors (or similar governing body) of
the Parent; provided, however, that with respect to any holder, as of the
Closing Date, of 20% or more of the Capital Stock of the Parent, a "Change in
Control" shall be deemed to have occurred only upon the acquisition by such
holder of the power, directly or indirectly (including, without limitation,
through rights of conversion or the exercise of securities), to vote or direct
the voting of securities having more than 60% of the ordinary voting power for
the election of directors of the Parent; (ii) the Parent shall cease to
beneficially own and control 100% on a fully diluted basis of the economic and
voting interest in the Capital Stock of each of the Borrowers; (iii) the sale or
other disposition of all or substantially all of the assets of Sunterra Europe
or of all or substantially all of the Capital Stock thereof or (iv) the majority
of the seats (other than vacant seats) on the board of directors (or similar
governing body) of the Parent cease to be occupied by Persons who either (a)
were members of the board of directors of the Parent as of the close of business
on the Closing Date or (b) were nominated for election by the board of directors
of the Parent, a majority of whom were directors as of the close of business on
the Closing Date or whose election or nomination for election was previously
approved by a majority of such directors.
"Chapter 11 Cases" has the meaning specified therefor in the recitals
hereto.
"Closing Date" means the date on which the conditions set forth in
Section 4.1 are satisfied and the initial Loans are made.
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"Club" means Club Sunterra, Inc., a Florida corporation and
wholly-owned Subsidiary of the Parent, and any successor in interest thereto
following the Corporate Restructuring.
"Code" means the Internal Revenue Code of 1986, as amended from time
to time.
"Collateral" has the meaning specified therefor in the Collateral
Documents.
"Collateral Certificate" means the collateral certificate to be
executed and delivered by the Parent to the Agent in form and substance
satisfactory to the Agent, as it may be amended, supplemented or otherwise
modified from time to time in accordance with the terms and conditions of the
Loan Documents.
"Collateral Documents" means the Pledge Agreement, the Security
Agreement, the Mortgages, the Deposit Account Control Agreements and all other
instruments, documents and agreements delivered by any Loan Party in order to
grant to the Agent, for the benefit of Lenders, a Lien on any real, personal or
mixed property of that Loan Party as security for the Obligations.
"Commitment" means, with respect to each Lender, such Lender's Tranche
A Loan Commitment, Tranche B Loan Commitment or Tranche C Loan Commitment, as
the case may be, as any such Commitment may be terminated or reduced from time
to time in accordance with the terms of this Agreement.
"Confirmation Order" means that certain Order Confirming Debtors'
Third Amended and Restated Joint Plan of Reorganization under Chapter 11 of the
Bankruptcy Code entered by the Bankruptcy Court on June 21, 2002 in the Chapter
11 Cases, without modification, revision or amendment.
"Consolidated Adjusted EBITDA" means Consolidated EBITDA less any
Consolidated Interest Expense in connection with the Tranche A Loan, the 1998-A
Securitization and the Bank of America Agreement.
"Consolidated Adjusted Total Debt" means, as of the date of
determination thereof, Consolidated Total Debt less any amounts outstanding
under the Tranche A Loan, the 1998-A Securitization and the Bank of America
Agreement.
"Consolidated Adjusted Total Debt to Consolidated Adjusted EBITDA
Ratio" means, as of any date, the ratio of (a) Consolidated Adjusted Total Debt
as of such date to (b) Consolidated Adjusted EBITDA for the then most recently
ended four (4) consecutive fiscal quarter period of the Parent.
"Consolidated EBITDA" means, for the period in question, the sum of
(a) Consolidated Net Income for such period, plus (b) to the extent deducted in
determining such Consolidated Net Income, the sum of (i) Consolidated Interest
Expense during such period, plus (ii) provisions for taxes based on income or
profits made by the Parent and its Subsidiaries for such period, plus (iii) all
depreciation, amortization (including amortization of goodwill and other
intangibles but excluding amortization of prepaid cash expenses that were paid
in a prior
5
period) and other non-cash expenses (excluding any such non-cash expense to the
extent that it represents an accrual of or reserve for cash expenses in any
future period or amortization of a prepaid cash expense that was paid in a prior
period) of the Parent and its Subsidiaries for such period, plus (iv) all any
extraordinary losses during such period, plus (v) any losses from the sale or
disposition of any interest in any kind of property or asset, whether real,
personal or mixed, or tangible or intangible other than in the ordinary course
of business during such period, plus (vi) the pro forma effect of the deferred
revenue from sales of Time Share Interests in St. Maarten, plus (vii) the
professional fees set forth in Schedule 1.1(i) hereto, plus (viii) any
impairment of goodwill recognized by the Parent and its Subsidiaries during such
period, minus (c) to the extent added in determining Consolidated Net Income,
the sum of (i) any extraordinary gains during such period and (ii) any gains
from the sale or disposition of any interest in any kind of property or asset,
whether real, personal or mixed, or tangible or intangible other than in the
ordinary course of business during such period, all determined on a consolidated
basis and in accordance with GAAP.
"Consolidated EBITDA to Consolidated Interest Expense Ratio" means, as
of any date, the ratio of (a) Consolidated EBITDA as of such date to (b)
Consolidated Interest Expense for the then most recently ended four (4)
consecutive fiscal quarter period of the Parent.
"Consolidated Interest Expense" means, for the period in question,
without duplication, all gross interest expense of the Parent and its
Subsidiaries whether paid, accrued or scheduled to be paid (including, without
limitation, all commissions, discounts and/or related amortization and other
fees and charges owed by the Parent and its Subsidiaries with respect to letters
of credit, the net costs associated with any interest rate swap, interest cap or
other interest rate hedge obligations of the Parent and its Subsidiaries,
capitalized interest expense, the interest portion of Capitalized Lease
Obligations and the interest portion of any deferred payment obligation) for
such period, all determined on a consolidated basis and in accordance with GAAP.
"Consolidated Net Income" means the after-tax net income (or loss) of
the Parent and its Subsidiaries for the period in question, determined on a
consolidated basis and in accordance with GAAP.
"Consolidated Total Debt" means, as of the date of determination, (i)
all Indebtedness of the Parent and its Subsidiaries for borrowed money
(including the obligations hereunder), plus (ii) all Indebtedness incurred in
connection with the purchase or other acquisition of property or assets, whether
real, personal or mixed, or tangible or intangible, plus (iii) all Capitalized
Lease Obligations, plus (iv) the aggregate undrawn face amounts of all letters
of credit issued for the account and/or upon the application of the Parent
and/or its Subsidiaries together with all reimbursed drawings with respect
thereto plus (v) all guarantees of Indebtedness provided by the Parent and/or
its Subsidiaries, all determined on a consolidated basis and in accordance with
GAAP; provided, in no event shall "Consolidated Total Debt" include the Hawaiian
Partnerships' Debt.
"Contingent Obligation" means, with respect to any Person, any
obligation of such Person guaranteeing or intended to guarantee any
Indebtedness, leases, dividends or other obligations ("primary obligations") of
any other Person (the "primary obligor") in any manner,
6
whether directly or indirectly, including (i) the direct or indirect guaranty,
endorsement (other than for collection or deposit in the ordinary course of
business), co-making, discounting with recourse or sale with recourse by such
Person of the obligation of a primary obligor, (ii) the obligation to make
take-or-pay or similar payments, if required, regardless of nonperformance by
any other party or parties to an agreement, (iii) any obligation of such Person,
whether or not contingent, (A) to purchase any such primary obligation or any
property constituting direct or indirect security therefor, (B) to advance or
supply funds (1) for the purchase or payment of any such primary obligation or
(2) to maintain working capital or equity capital of the primary obligor or
otherwise to maintain the net worth or solvency of the primary obligor, (C) to
purchase property, assets, securities or services primarily for the purpose of
assuring the owner of any such primary obligation of the ability of the primary
obligor to make payment of such primary obligation or (D) otherwise to assure or
hold harmless the holder of such primary obligation against loss in respect
thereof; provided, however, that the term "Contingent Obligation" shall not
include any products warranties extended in the ordinary course of business. The
amount of any Contingent Obligation shall be deemed to be an amount equal to the
stated or determinable amount of the primary obligation with respect to which
such Contingent Obligation is made (or, if less, the maximum amount of such
primary obligation for which such Person may be liable pursuant to the terms of
the instrument evidencing such Contingent Obligation) or, if not stated or
determinable, the maximum reasonably anticipated liability with respect thereto
(assuming such Person is required to perform thereunder), as determined by such
Person in good faith.
"Contract File" means, with respect to any purchaser of Time Share
Interests for which a Borrower is the mortgagee or the beneficiary under a deed
of trust, the applicable mortgage or deed of trust and the following other
documents executed by such purchaser or delivered in connection with such
mortgage or deed of trust:
(i) the original promissory note bearing all intervening endorsements
showing a complete chain of endorsements from the originator of
such loan to the last endorsee (the "Last Endorsee"), endorsed by
the Last Endorsee, without recourse, in the following form: "Pay
to the order of ___________, without recourse" and signed in the
name of the Last Endorsee by an authorized officer;
(ii) except in connection with the Right-to-Use Resorts, the original
mortgage or deed of trust containing the original signatures of
all persons named as the maker, the mortgagor or trustor with
evidence of recording indicated; provided, however, that no such
original mortgage or deed of trust shall be required if included
among the applicable Contract File is a certified copy of the
recorded mortgage or deed of trust and an original or a copy of
the title insurance policy (or other evidence of title insurance,
including title commitment or binder);
(iii) except in connection with the Right-to-Use Resorts, an original
individual or bulk assignment of mortgage or deed of trust in
blank and signed in the name of the Last Endorsee by an
authorized officer;
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(iv) except in connection with the Right-to-Use Resorts, the originals
of all intervening assignments (or a copy certified to the Agent)
of the mortgage (if applicable) (with evidence of recording
thereon) showing a complete chain of assignments from the
originator of such mortgage loan to the Last Endorsee;
(v) an original or a copy of any assumption or modification of the
promissory note or mortgage or deed of trust (if applicable) with
evidence of recording thereon or an original or a copy of the
title insurance policy reflecting recording with respect to each
applicable mortgage or deed of trust;
(vi) except in connection with the Right-to-Use Resorts, an original
or a copy of an individual or bulk title insurance policy or
master blanket title insurance policy covering such mortgage loan
when applicable (or a commitment for title insurance or an
opinion of counsel with respect to title to and liens encumbering
the Time Share Interest);
(vii) the original of the guarantee executed in connection with the
mortgage note (if applicable);
(viii) the original power of attorney (or a certified copy), if
applicable;
(ix) the original or a copy of the sales contract that relates to each
mortgage note, including any addenda thereto;
(ix) in connection with the Right to Use Resorts, the original or copy
of the long-term lease or similar document; and
(x) the original truth-in-lending disclosure statement (or a copy)
that relates to each mortgage note.
provided, that for a period of ninety (90) days from the Closing Date, "Contract
Files" shall also mean, with respect to any purchaser of Time Share Interests
for which a Borrower is the mortgagee, the applicable mortgage and other
documents executed by such purchaser or delivered in connection with such
mortgage (other than credit files with respect to such purchaser) then held by
the Interim Custodian as provided in the applicable Custodial Agreement.
"Corporate Restructuring" means that series of distributions,
transfers, mergers, consolidations, conversions, dissolutions, terminations
and/or liquidations to be taken to reorganize the corporate structure of Parent
and certain of its subsidiaries, all as more fully described in the
Restructuring Memo attached hereto as Schedule 1.1(ii), including such other
similar and/or ancillary actions necessary or appropriate to effect the intent
of such Restructuring Memo.
"Custodial Agreement" means each of (i) the Custodial Agreement by and
among the Borrowers, the Custodian and the Agent, in form and substance
satisfactory to the Agent, as
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amended, restated or replaced from time to time and (ii) the Custodial Agreement
by and between the Interim Custodian and the Agent, in form and substance
satisfactory to the Agent, as amended, restated or replaced from time to time;
provided, the Custodial Agreement with the Interim Custodian shall be in effect
for no more that ninety (90) days after the Closing Date, and "Custodial
Agreements" means such agreements collectively.
"Custodian" means Xxxxx Fargo Bank Minnesota, N. A., or such other
custodian mutually agreeable to the Agent and the Parent.
"Debtors" has the meaning specified therefor in the recitals hereto.
"Default" means an event which, with the giving of notice or the lapse
of time or both, would constitute an Event of Default.
"Deposit Account" means a "deposit account" within the meaning of
Section 9-102(a)(29) of the UCC.
"Deposit Account Control Agreement" means a deposit account control
agreement among the applicable Loan Party, the Agent and the applicable
financial institution, in substantially the form of Exhibit H hereto, as it may
be amended, supplemented or otherwise modified from time to time.
"Determination Date" means, for any month, the twentieth (20th) day of
such month or, if such date is not a Business Day, the next succeeding Business
Day.
"DIP Facility" means the Financing Agreement, dated as of April 20,
2001, among the Debtors and Greenwich Capital Markets, Inc., as agent and
lender, as amended and supplemented prior to the date of this Agreement.
"Dollar," "Dollars" and the symbol "$" each means lawful money of the
United States of America.
"Eligible Mortgage Receivables" means those duly authorized Time Share
Mortgages secured by and that arise in connection with the purchase of Time
Share Interests for which a Borrower is the mortgagee:
(i) that have cleared escrow;
(ii) for which (a) the applicable Time Share Interest sale from
which it arises has not been canceled by the applicable mortgagor or any
Borrower, (b) any statutory or other applicable cancellation or rescission
period has expired, (c) the Time Share Interest purchased by the applicable
mortgagor has not been surrendered in accordance with the terms of the
relevant Purchase Document and (d) the related Time Share Interest sale
fully complies with the terms, provisions and conditions of this Agreement,
the other Loan Documents and all applicable laws;
(iii) as to which the applicable mortgagor is not an Affiliate of
any Borrower or related to or employed by any Borrower or any Affiliate of
any Borrower;
9
(iv) as to which the applicable mortgagor is as of the date of
determination delinquent (without giving effect to any applicable grace
period) in no more than two monthly payments;
(v) that is denominated and payable only in United States Dollars
in the United States (with no more than 15% of the total Eligible Mortgage
Receivables constituting obligations of mortgagors residing outside the
United States);
(vi) that does not contravene any laws, rules or regulations
applicable thereto (including laws, rules and regulations relating to the
sale of the Time Share Interests, usury, truth in lending, fair credit
billing, fair credit reporting, equal credit opportunity, fair debt
collection practices and privacy and with respect to which no party to the
mortgage related thereto is in violation of any such law, rule or
regulation if such violation would impair the collectibility of such
Mortgage Receivable);
(vii) with respect to which neither the purchaser nor the
applicable mortgagor has any bona fide claim against any Borrower or any
Affiliate of any Borrower or any defense, set off or counterclaim;
(viii) for which the aggregate amount owing from any applicable
mortgagor with respect to all such mortgages does not exceed $100,000 in
the aggregate, excluding any securitizations;
(ix) for which the Custodian or the Interim Custodian is in
possession of the Contract File and has issued to the Agent a trust receipt
therefor and no Material Exceptions, as such term is defined in the
Custodial Agreement, have been cited by the Custodian;
(x) as to which the relevant Purchase Document provides for fixed
monthly payments that fully amortize the mortgage over a term that does not
exceed 185 months;
(xi) as to which the applicable mortgage may be prepaid in full
without penalty; and
(xii) as to which the applicable invoices require the mortgagor
to remit all payments to the Deposit Accounts described in Section 6.1(t);
And, with respect to Mortgage Receivables originated on or after February 1,
2001, in addition to the foregoing criteria:
(a) that meet all of the Underwriting Guidelines;
(b) for which the applicable mortgagor was not delinquent 30 or
more days in making the first scheduled monthly payment, unless such
mortgagor has thereafter made on a timely basis six consecutive monthly
payments;
10
(c) as to which the mortgage, the mortgage note, the federal
truth-in-lending disclosure statement, the Purchase Document and the other
documents and instruments comprising the Contract File for such transaction
are genuine, valid and legally enforceable in accordance with their
respective terms and the applicable Borrower has not assigned or otherwise
transferred any right, title or interest in or to any such document or
instrument other than to the Agent and the Lenders; and
(d) as to which the relevant promissory note provides for fixed
monthly payments that fully amortize the indebtedness over a term that does
not exceed 120 months (except for promissory notes with respect to Sedona
Summit Resort, Scottsdale Villa Mirage and Ridge on Sedona Golf Resort).
"Eligible Resorts" means the Resorts identified on Schedule 1.1(iii)
hereto, as the same may be amended, modified or supplemented by the Parent, with
the prior written consent of the Agent; provided, Steamboat Springs shall also
be deemed an Eligible Resort upon execution and delivery by the Borrowers to the
Agent of the documents, instruments, agreements, certificates and opinions
referred to in Section 4.1(h) with respect to Steamboat Springs.
"Employee Plan" means an employee benefit plan (other than a
Multiemployer Plan) covered by Title IV of ERISA and maintained (or maintained
at any time during the six (6) calendar years preceding the date of any
borrowing hereunder) for employees of any Borrower or any of its ERISA
Affiliates.
"Environmental Actions" means any complaint, summons, citation,
notice, directive, order, claim, litigation, investigation, judicial or
administrative proceeding, judgment, letter or other communication from any
Governmental Authority involving violations of Environmental Laws or Releases of
Hazardous Materials (i) from any assets, properties or businesses of any Loan
Party or any of its Subsidiaries or any predecessor in interest; (ii) from
adjoining properties or businesses; or (iii) onto any facilities which received
Hazardous Materials generated by any Loan Party or any of its Subsidiaries or
any predecessor in interest.
"Environmental Laws" means the Comprehensive Environmental Response,
Compensation and Liability Act (42 U.S.C.(S) 9601, et seq.), the Hazardous
Materials Transportation Act (49 U.S.C.(S) 1801, et seq.), the Resource
Conservation and Recovery Act (42 U.S.C.(S) 6901, et seq.), the Federal Clean
Water Act (33 U.S.C.(S) 1251 et seq.), the Clean Air Act (42 U.S.C.(S) 7401 et
seq.), the Toxic Substances Control Act (15 U.S.C.(S) 2601 et seq.) and the
Occupational Safety and Health Act (29 U.S.C.(S) 651 et seq.), as such laws may
be amended or otherwise modified from time to time, and any other present or
future federal, state, local or foreign statute, ordinance, rule, regulation,
order, judgment, decree, permit, license or other binding determination of any
Governmental Authority imposing liability or establishing standards of conduct
for protection of the environment.
"Environmental Liabilities and Costs" means all liabilities, monetary
obligations, Remedial Actions, losses, damages, punitive damages, consequential
damages, treble damages, costs and expenses (including all reasonable fees,
disbursements and expenses of counsel, experts and consultants and costs of
investigations and feasibility studies), fines, penalties,
11
sanctions and interest incurred as a result of any claim or demand by any
Governmental Authority or any third party, and which relate to any environmental
condition or a Release of Hazardous Materials from or onto (i) any property
presently or formerly owned by any Loan Party or any of its Subsidiaries or (ii)
any facility which received Hazardous Materials generated by any Loan Party or
any of its Subsidiaries.
"Environmental Lien" means any Lien in favor of any Governmental
Authority for Environmental Liabilities and Costs.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, and any successor statute of similar import, and regulations
thereunder, in each case as in effect from time to time. References to sections
of ERISA shall be construed also to refer to any successor sections.
"ERISA Affiliate" means, with respect to any Person, any trade or
business (whether or not incorporated) which is a member of a group of which
such Person is a member and which would be deemed to be a "controlled group"
within the meaning of Sections 414(b), (c), (m) and (o) of the Code.
"Event of Default" means any of the events set forth in Section 7.1.
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
or any similar Federal statute, and the rules and regulations of the SEC
thereunder, all as the same shall be in effect at the time.
"Federal Funds Rate" means, for any period, a fluctuating interest
rate per annum equal for each day during such period of the weighted average of
the rates on overnight federal funds transactions with members of the Federal
Reserve System arranged by federal funds brokers, as published on the next
succeeding Business Day by the Federal Reserve Bank of New York, or, if such
rate is not so published for any day which is a Business Day, the average of the
quotations for such day on such transactions received by the Agent from three
Federal funds brokers of recognized standing selected by it.
"Final Maturity Date" means the date which is the earlier of (i) July
29, 2004 and (ii) such date on which the Loans shall become due and payable in
accordance with the terms of this Agreement and the other Loan Documents.
"GAAP" means generally accepted accounting principles in effect from
time to time in the United States, applied on a consistent basis, provided that
for the purpose of Sections 5, 6.2 and 6.3 and the definitions used therein,
"GAAP" shall mean generally accepted accounting principles in effect on the date
hereof and consistent with those used in the preparation of the Audited
Financial Statements (subject to the application of fresh start accounting and
otherwise to the extent possible after giving effect to the Chapter 11 Cases)
and provided further that if there occurs after the date of this Agreement any
change in GAAP that affects the calculation of any covenant contained in
Sections 5, 6.2 and 6.3, the Agent and the Borrowers shall negotiate in good
faith amendments to the provisions of this Agreement that relate to the
calculation of such covenant with the intent of having the respective positions
of the Lenders and the Borrowers after such change in GAAP conform as nearly as
possible to their
12
respective positions as of the date of this Agreement, provided that, until any
such amendment has been agreed upon, the covenants in Sections 5, 6.2 and 6.3
shall be calculated as if no such change in GAAP had occurred.
"Governing Body" means the board of directors or other body having the
power to direct or cause the direction of the management and policies of a
Person that is a corporation, partnership or limited liability company.
"Governmental Authority" means any nation or government, any state,
city, town, municipality, county, local or other political subdivision thereof
and any department, commission, board, bureau, instrumentality, agency or other
entity exercising executive, legislative, judicial, taxing, regulatory or
administrative powers or functions of or pertaining to government.
"Ground Lease" means each ground lease described on Schedule 1.1(iv)
hereto.
"Ground Lease Properties" means an Eligible Resort all or part of
which is held subject to a Ground Lease.
"Gross Sell-Out Value" means at any date of determination with respect
to any Time Share Interest, the retail price of such Time Share Interest as of
such date.
"Guarantor" means each Subsidiary of the Parent that becomes a
Guarantor pursuant to Section 6.1(b).
"Hard Inventory" means Time Share Inventory that (x) is not subject to
any Lien (other than Permitted Liens of the type described in clauses (i)
through (g) and clause (i) of the definition thereof) and (y) is available for
immediate sale.
"Hawaiian Partnerships" means Poipu Resort Partners, L.P. and West
Maui Resort Partners, L.P.
"Hawaiian Partnerships' Debt" has the meaning specified therefor in
clause (k) of the definition of Permitted Indebtedness.
"Hazardous Materials" means (a) any element, compound or chemical that
is defined, listed or otherwise classified as a contaminant, pollutant, toxic
pollutant, toxic or hazardous substances, extremely hazardous substance or
chemical, hazardous waste, special waste, or solid waste under Environmental
Laws; (b) petroleum and its refined products; (c) polychlorinated biphenyls; (d)
any substance exhibiting a hazardous waste characteristic, including but not
limited to corrosivity, ignitability, toxicity or reactivity as well as any
radioactive or explosive materials; and (e) any raw materials, building
components, including but not limited to asbestos-containing materials and
manufactured products containing hazardous substances.
"Hedging Agreement" means any interest rate, foreign currency,
commodity or equity swap, collar, cap, floor or forward rate agreement, or other
agreement or arrangement designed to protect against fluctuations in interest
rates or currency, commodity or equity values
13
(including any option with respect to any of the foregoing and any combination
of the foregoing agreements or arrangements), and any confirmation executed in
connection with any such agreement or arrangement.
"Indebtedness" means, without duplication, with respect to any Person,
(i) all indebtedness of such Person for borrowed money; (ii) all obligations of
such Person for the deferred purchase price of property or services (other than
trade payables or other account payables incurred in the ordinary course of such
Person's business and not past due beyond customary terms); (iii) all
obligations of such Person evidenced by bonds, debentures, notes or other
similar instruments or upon which interest payments are customarily made; (iv)
all obligations and liabilities of such Person created or arising under any
conditional sales or other title retention agreement with respect to Property
used and/or acquired by such Person, even though the rights and remedies of the
lessor, seller and/or lender thereunder are limited to repossession or sale of
such Property; (v) all Capitalized Lease Obligations of such Person; (vi) all
obligations and liabilities, contingent or otherwise, of such Person, in respect
of letters of credit, acceptances and similar facilities; (vii) all obligations
and liabilities, calculated on a basis satisfactory to the Agent and in
accordance with accepted practice, of such Person under Hedging Agreements;
(viii) all Contingent Obligations; (ix) liabilities incurred under Title IV of
ERISA with respect to any plan (other than a Multiemployer Plan) covered by
Title IV of ERISA and maintained for employees of such Person or any of its
ERISA Affiliates; (x) withdrawal liability incurred under ERISA by such Person
or any of its ERISA Affiliates to any Multiemployer Plan; (xi) all obligations
of such Person under any synthetic lease, tax retention operating lease,
off-balance sheet loan or similar off-balance sheet financing, if the
transaction giving rise to such obligation is considered indebtedness for
borrowed money for tax purposes but is classified as an operating lease in
accordance with GAAP; and (xii) all obligations referred to in clauses (i)
through (xi) of this definition of another Person secured by (or for which the
holder of such Indebtedness has an existing right, contingent or otherwise, to
be secured by) a Lien upon Property owned by such Person, even though such
Person has not assumed or become liable for the payment of such Indebtedness.
"Indemnified Matters" has the meaning specified therefor in Section
9.14.
"Indemnitees" has the meaning specified therefor in Section 9.14
"Interest Period" means each period commencing on each Remittance Date
and ending on the day prior to the next succeeding Remittance Date.
"Interest Rate Cap Agreement" means an Interest Rate Cap Agreement to
be entered into by the Borrowers with the Agent, a Lender or an Affiliate
thereof or any other financial institution having a rating of not less than Aa1
from Moody's and not less than A from Standard & Poor's, in form and substance
reasonably satisfactory to the Agent, as amended, restated or replaced from time
to time.
"Interim Custodian" means La Salle Bank National Association.
"Internal Revenue Code" means the Internal Revenue Code of 1986, as
amended (or any successor statute thereto) and the regulations thereunder.
14
"Inventory Collateral Value" means the value of the Borrowers' Time
Share Inventory equal to the sum of (i) 25.0% of the Gross Sell-Out Value of
Hard Inventory, (ii) 20.0% of the Gross Sell-Out Value of Soft Inventory,
excluding (x) Soft Inventory on the Closing Date that the Borrowers believe, as
set forth in an Officer's Certificate delivered to the Agent, cannot be
converted into Hard Inventory by January 31, 2003 or which has not been so
converted by such date and (y) Soft Inventory arising after the Closing Date
that the Borrowers believe, as set forth in an Officer's Certificate delivered
to the Agent, cannot be converted to Hard Inventory within 120 days after first
becoming Soft Inventory or which has not been so converted by such date and
(iii) 15.0% of the Gross Sell-Out Value of A/R Inventory, excluding (x) A/R
Inventory (not deeded in the State of Florida) on the Closing Date that the
Borrowers believe, as set forth in an Officer's Certificate delivered to the
Agent, cannot be converted into Hard Inventory within 210 days following the
Closing Date, or which has not been so converted by such date, and (y) A/R
Inventory (deeded in State of Florida) on the Closing Date that the Borrowers
believe, as set forth in an Officer's Certificate delivered to the Agent, cannot
be converted into Hard Inventory within 300 days following the Closing Date or
which has not been so converted by such date, determined in each case as of the
last day of the month prior to the month in which the determination hereunder is
being made; provided, notwithstanding anything herein to the contrary, upon not
less than 30 days', prior written notice, the Agent may, in its reasonable
business judgment, revise upwards or downwards, the foregoing Inventory
Collateral Values, based upon appraisals conducted or upon the Agent's good
faith judgment of market conditions; provided, further with respect to the
Borrowers' Time Share Inventory at Flamingo Beach Resort and Royal Palm Resort,
not withstanding anything herein to the contrary, such Time Share Inventory
shall no longer be included in Inventory Collateral Value at anytime after one
week after the Closing Date unless the Borrowers shall have executed and
delivered to the Agent the documents and instruments described in Section 4.1(h)
with respect to such Resorts.
"Key Personnel" means the employees, officers and consultants of the
Loan Parties set forth on Schedule 1.1(v).
"Lender" and "Lenders" have the meanings specified therefor in the
preamble hereto.
"LIBO Base Rate" means for any Loan, with respect to each Interest
Period, the rate per annum equal to the rate appearing at page 3750 of the
Telerate Screen as the one-month LIBOR (i) with respect to the Interest Period
beginning on the Closing Date, two (2) Business Days prior to the Closing Date,
and (ii) with respect to all other Interest Periods, two (2) Business Days prior
to the end of the immediately preceding Interest Period, and if such rate shall
not be so quoted, the rate per annum at which the Reference Banks are offered
Dollar deposits at or about 11:00 a.m., New York time, on such date by prime
banks in the interbank eurodollar market where the eurodollar and foreign
currency exchange operations in respect of their loans are then being conducted
for delivery on such day for a period of one month, and in an amount comparable
to the amount of the Loans then being requested and to be outstanding on such
day.
"LIBO Rate" means, at any time, a rate per annum (rounded upwards to
the nearest 1/100th of one percent) determined by the Agent to be equal to (i)
the LIBO Base Rate divided by (ii) 1 minus the LIBO Reserve Requirements.
15
"LIBO Reserve Requirements" shall mean for any calendar month and for
any Lender as to which LIBO Reserve Requirements are actually required to be
maintained, the aggregate (without duplication) of the rates (expressed as a
decimal fraction) of reserve requirements in effect on such day or during such
calendar month, as applicable (including, without limitation, basic,
supplemental, marginal and emergency reserves under any regulations of the Board
or other Governmental Authority having jurisdiction with respect thereto),
dealing with reserve requirements prescribed for eurocurrency funding (currently
referred to as "Eurocurrency Liabilities" in Regulation D of the Board)
maintained by a member bank of such Governmental Authority.
"Lien" means any mortgage, deed of trust, pledge, lien (statutory or
otherwise), security interest, lease, easement, title defect, restriction, levy,
execution, seizure, attachment, charge or other encumbrance or security or
preferential arrangement of any nature, including, without limitation, any
conditional sale or title retention arrangement, any Capitalized Lease and any
assignment, deposit arrangement or financing lease intended as, or having the
effect of, security.
"Litigation Trust" has the meaning set forth in the Plan of
Reorganization.
"Loan" means a Tranche A Loan, a Tranche B Loan or a Tranche C Loan.
"Loan Account" means an account maintained hereunder by the Agent, at
the Payment Office and with respect to the Borrowers, in which the Borrowers
will be charged with all Loans made to, and all other Obligations incurred by,
the Borrowers.
"Loan Balance Deficiency" means as of any date of determination, the
excess of the then outstanding principal amount of all Loans at such date over
the Maximum Aggregate Amount.
"Loan Documents" means this Agreement, the Notes, the Collateral
Documents, the Warrant Agreement, the Warrants and all other agreements,
instruments, and other documents executed and delivered pursuant hereto or
thereto or otherwise evidencing or securing any Loan or other Obligation.
"Loan Parties" means the Borrowers and the Guarantors, if any.
"Material Adverse Effect" means a material adverse effect on any of
the following: (i) the operations, business, assets, properties, condition
(financial or other) or prospects of the Parent and its Subsidiaries taken as a
whole or of the Loan Parties taken as a whole, (ii) the ability of the Parent,
or of the Loan Parties taken as a whole, to perform their obligations under the
Loan Documents to which they are parties, (iii) the legality, validity or
enforceability of this Agreement or any other Loan Document, (iv) the rights and
remedies of the Agent and the Lenders under any Loan Document or (v) the
validity, perfection or priority of a Lien in favor of the Agent for the benefit
of the Lenders on any material part of the Collateral.
"Maximum Aggregate Amount" means $300,000,000.
"Moody's" means Xxxxx'x Investors Service, Inc. and any successor
thereto.
16
"Mortgage" means any mortgage, deed of trust, deed to secure debt or
other similar instrument, in form and substance satisfactory to the Agent, made
by any Loan Party in favor of the Agent for the benefit of the Lenders, securing
the Obligations and delivered to the Agent.
"Mortgage Receivables" means Time Share Mortgage receivables
originated by the Borrowers.
"Mortgage Receivables Performance Event" means the occurrence of any
of the following events: (i) for any month, the amount of Mortgage Receivables
originated after February 1, 2001 and delinquent by more than 60 days exceeds 7%
of all such outstanding Mortgage Receivables, (ii) for any calendar quarter, the
Annualized Net Loss Rate for Mortgage Receivables originated after February 1,
2001 exceeds 5% or (iii) for any quarter, the cumulative loss rate (as measured
on a static pool basis for quarterly origination periods) for Mortgage
Receivables originated after February 1, 2001 exceeds the loss curves as set
forth on Schedule 1.1(vi) hereto.
"Mortgage Receivables Sale Transaction" means the purchase and sale of
Time Share Mortgages (and the corresponding notes), certain installment contract
obligations and membership interests in entities involved in the Prior Sunterra
Securitizations between various Borrowers and Subsidiaries, as sellers, and SMH,
or a separate limited liability company wholly owned by SMH in the case of the
Prior Sunterra Securitizations, as purchaser, pursuant to which said sellers are
selling, assigning, transferring and conveying to SMH or to the separately
created limited liability companies, in the case of the Prior Sunterra
Securitizations, in exchange for cash and a purchase money installment
promissory note, Time Share Mortgages and the corresponding notes, installment
contract obligations or membership interests, as the case may be, for purposes
of centralizing ownership, servicing and collection thereof.
"Mortgaged Real Property" means each Real Property set forth on
Schedule 1.1(vii) hereto.
"Multiemployer Plan" means a "multiemployer plan" as defined in
Section 4001(a)(3) of ERISA for which any Borrower or any ERISA Affiliate has
contributed to, or has been obligated to contribute to, at any time during the
preceding six (6) years.
"New Sunterra Common Stock" has the meaning set forth in the Plan of
Reorganization.
"Non-Excluded Taxes" has the meaning specified therefor in Section
2.9(a).
"Notes" means the Tranche A Loan Notes, the Tranche B Loan Notes and
the Tranche C Loan Notes.
"Notice of Borrowing" has the meaning specified therefor in Section
2.2(a).
"Obligations" means (i) the obligations of each Borrower to pay, as
and when due and payable (by scheduled maturity, required prepayment,
acceleration or otherwise), all amounts from time to time owing by it in respect
of the Loans or the Loan Documents, whether for principal, interest, fees,
indemnification payments, expense reimbursements or otherwise, and
17
(ii) the obligations of each Borrower and each other Loan Party to perform or
observe all of its obligations from time to time existing under the Loan
Documents.
"Officer's Certificate" means, when used with reference to any
Borrower, a certificate signed by the president, chief financial officer or any
vice president of such Borrower.
"Operating Lease" means, with respect to any Person, any lease of real
or personal property by such Person as lessee which is required under GAAP to be
treated as an operating lease by such Person.
"Operating Lease Obligations" means, with respect to any Person,
obligations of such Person and its Subsidiaries under Operating Leases, and, for
purposes hereof, the amount of any such obligation shall be determined in
accordance with GAAP.
"Organizational Documents" means (i) with respect to any corporation,
its certificate or articles of incorporation, as amended, and its by-laws, as
amended, (ii) with respect to any limited partnership, its certificate of
limited partnership, as amended, and its partnership agreement, as amended,
(iii) with respect to any general partnership, its partnership agreement, as
amended, and (iv) with respect to any limited liability company, its articles of
organization, as amended, and its operating agreement, as amended.
"Other Assets" means the assets of the Borrowers specified on Schedule
1.1(viii) hereto, including real property and interests therein and the common
stock or other equity interests of any of the Borrowers in their respective
Subsidiaries (including Sunterra Europe and the Hawaiian Partnerships).
"Other Assets Collateral Value" means the value of the Other Assets,
determined by the Agent in its reasonable business judgment; provided,
notwithstanding anything herein to the contrary, upon not less than 30 days'
prior written notice, the Agent may, in its reasonable business judgment, revise
upwards or downwards, the foregoing Other Assets Collateral Value based upon
appraisals conducted or upon the Agent's good faith judgment of market
conditions.
"Parent" has the meaning specified therefor in the preamble hereto.
"Participant Register" has the meaning specified therefor in Section
9.8(b)(v).
"Payment Office" means the Agent's office located at 0 Xxxxx Xxxxxxxxx
Xxxxxx, Xxx Xxxx, XX 00000, or such other office or offices of the Agent as may
be designated in writing from time to time by the Agent to the Administrative
Borrower.
"PBGC" means the Pension Benefit Guaranty Corporation or any successor
thereto.
"Permitted Indebtedness" means:
(a) any Indebtedness owing to the Agent and the Lenders under this
Agreement and the other Loan Documents;
18
(b) any Indebtedness existing on the Closing Date and set forth in
Schedule 1.1(ix) hereto;
(c) any Indebtedness of Sunterra Europe to any Loan Party; provided,
the aggregate principal outstanding amount of any such Indebtedness shall not at
any time exceed the sum of (x) the outstanding principal amount thereof on the
Closing Date and (y) $10,000,000;
(d) Indebtedness of any Loan Party to another Loan Party; provided,
(i) all such Indebtedness shall be unsecured and subordinated in right of
payment to the payment in full of the Obligations, and (ii) any payment by any
such Loan Party under any guaranty of the Obligations shall result in a pro
tanto reduction of the amount of any Indebtedness owed by such Loan Party to the
other Loan Party;
(e) Indebtedness incurred by the Parent or any of its Subsidiaries
arising from agreements providing for indemnification, adjustment of purchase
price or similar obligations, or from guaranties or letters of credit, surety
bonds or performance bonds securing the performance of the Parent or any such
Subsidiary pursuant to such agreements, entered into in the ordinary course of
business or in connection with permitted dispositions of any business, assets or
Subsidiary of the Parent or any of its Subsidiaries;
(f) Indebtedness which may be deemed to exist pursuant to any
performance, surety, statutory, appeal or similar obligations incurred in the
ordinary course of business;
(g) Indebtedness in respect of netting services, overdraft protections
and otherwise in connection with deposit accounts;
(h) reimbursement, chargeback and similar obligations related to
processing credit card accounts and receivables to any financial institution
that processes credit card accounts or receivables in the ordinary course of the
Loan Parties' and their Subsidiaries' business in an aggregate amount not to
exceed $5,000,000 at any time outstanding;
(i) any Indebtedness secured by Liens permitted by clause (h) of the
definition of Permitted Liens;
(j) in addition to the Indebtedness set forth on Schedule 1.1(ix)
hereto, Indebtedness of Sunterra Pacific for which Sunterra Pacific is liable
solely as a result of it being (i) a general partner or joint venture in a
partnership or joint venture that has incurred such Indebtedness or (ii) a
developer or owner of a resort, in each case in an aggregate principal amount
acceptable to the Agent;
(k) Indebtedness of the Hawaiian Partnerships (the "Hawaiian
Partnerships' Debt"); provided, none of the Loan Parties nor any of their
Subsidiaries (other than (i) the Hawaiian Partnerships and (ii) Subsidiaries
that are corporations, limited partnership or limited liability companies with
assets (other than their interests as partners of a Hawaiian Partnership) with a
value less than, for any such Subsidiary, $100,000) has any liability, directly
or indirectly, in respect of such Indebtedness (other than liability that could
result solely from its status as a general partner or, in the case of Argosy/KGI
Poipu Investment Partnership, L.P., for the
19
Guaranty (Receivables) dated June 28, 1995 in favor of Xxxxxx Financial, Inc.)
and no assets of any Loan party or any Subsidiary of any Loan Party (other than
the Hawaiian Partnerships) secures any such Indebtedness, except as provided in
such Guaranty);
(l) Any Indebtedness to finance insurance premiums in an aggregate
amount not to exceed $8,000,000 at any time outstanding;
(m) Any intercompany Indebtedness incurred in connection with the
Mortgage Receivables Sale Transaction or the Corporate Restructuring;
(n) any other Indebtedness incurred in connection with construction
projects in an aggregate outstanding principal amount not to exceed $5,000,000;
and
(o) any other Indebtedness in the aggregate principal amount at any
time not in excess of $1,000,000.
"Permitted Investments" means (i) marketable direct obligations issued
or unconditionally guaranteed by the United States Government or issued by any
agency thereof and backed by the full faith and credit of the United States, in
each case maturing within six months from the date of acquisition thereof; (ii)
commercial paper, maturing not more than 270 days after the date of issue rated
P-1 by Moody's or A-1 by Standard & Poor's; (iii) certificates of deposit
maturing not more than 270 days after the date of issue, issued by commercial
banking institutions and money market or demand deposit accounts maintained at
commercial banking institutions, each of which is a member of the Federal
Reserve System and has a combined capital and surplus and undivided profits of
not less than $500,000,000; (iv) repurchase agreements having maturities of not
more than 90 days from the date of acquisition which are entered into with major
money center banks included in the commercial banking institutions described in
clause (iii) above and which are secured by readily marketable direct
obligations of the Government of the United States of America or any agency
thereof; (v) money market accounts maintained with mutual funds having assets in
excess of $2,500,000,000; and (vi) tax exempt securities rated A or better by
Moody's or A+ or better by Standard & Poor's.
"Permitted Liens" means:
(a) Liens securing the Obligations;
(b) Liens for taxes, assessments and governmental charges the payment
of which is not required under Section 6.1(c);
(c) Liens imposed by law, such as carriers', warehousemen's,
mechanics', materialmen's and other similar Liens arising in the ordinary course
of business and securing obligations (other than Indebtedness for borrowed
money) that are not overdue by more than 30 days, are bonded over or are being
contested in good faith and by appropriate proceedings promptly initiated and
diligently conducted, and a reserve or other appropriate provision, if any, as
shall be required by GAAP shall have been made therefor; provided, no such Lien
having priority over the Lien of the Agent in the Collateral shall be in
foreclosure unless being contested as set forth above;
20
(d) Liens existing on the Closing Date, as set forth on Schedule
1.1(x), but not the extension of coverage thereof to other property or the
extension of maturity, refinancing or other modification of the terms thereof or
the increase of the principal amount of the Indebtedness secured thereby (other
than the capitalized amount of any interest, fees or expenses);
(e) deposits and pledges securing (i) obligations incurred in respect
of workers' compensation, unemployment insurance or other forms of governmental
insurance or benefits, (ii) the performance of bids, tenders, leases, contracts
(other than for the payment of money) and statutory obligations or (iii)
obligations on surety or appeal bonds, but only to the extent such deposits or
pledges are incurred or otherwise arise in the ordinary course of business and
secure obligations not past due;
(f) easements, right-of-way, zoning restrictions, homeowners
association documents, covenants and restrictions, declarations of condominium,
declarations of timeshare project and similar encumbrances on the use of real
property and minor irregularities in the title thereto that do not (i) secure
obligations for the payment of money or (ii) materially impair the value of such
property or its use by any Loan Party or any of its Subsidiaries in the normal
conduct of such Person's business;
(g) Liens securing the payment of fees, dues and other obligations of
such Person to a homeowners, timeshare, condominium or property owners
association in which such Person owns time share units, provided that the
aggregate amount of past due fees, dues or other obligations for the payment of
money secured by such Liens does not exceed $1,000,000;
(h) Liens with respect to equipment leases, Capitalized Leases of
equipment, other equipment financing arrangements and other contractual
obligations (other than Indebtedness), in each case, entered into in the
ordinary course of business; provided, such arrangements are permitted pursuant
to Section 6.2(f);
(i) Liens on Hard Inventory or Soft Inventory securing the Mortgage
Receivables;
(j) Liens securing Indebtedness referred to in clauses (h), (j), (l)
and (n) of the definition of "Permitted Indebtedness";
(k) any interest or title of a lessor or sublessor under any lease of
real estate permitted hereunder;
(l) Liens solely on any xxxx xxxxxxx money deposits made by the Parent
or any of its Subsidiaries in connection with any letter of intent or purchase
agreement permitted hereunder;
(m) purported Liens evidenced by the filing of precautionary UCC
financing statements relating solely to operating leases of personal property
entered into in the ordinary course of business;
(n) Liens in favor of customs and revenue authorities arising as a
matter of law to secure payment of customs duties in connection with the
importation of goods;
21
(o) any zoning or similar law or right reserved to or vested in any
governmental office or agency to control or regulate the use of any real
property;
(p) licenses of patents, trademarks and other intellectual property
rights granted by the Parent or any of its Subsidiaries in the ordinary course
of business and not interfering in any respect with the ordinary conduct of the
business of the Parent or such Subsidiary;
(q) Liens described in a title report delivered pursuant to Section
4.1(h) or 6.1(b);
(r) Liens in and relating to certain Mortgage Receivables to be given
in favor of Bank of America, N.A., as collateral or substitute collateral
pursuant to the Bank of America Agreement; provided, prior to granting any such
Lien in the substitute collateral pursuant to the terms of the Bank of America
Agreement, the Borrowers shall provide the Agent with not less than 5 day's
prior written notice; and
(s) any other Liens the amount of which, in the aggregate for all such
Liens, is not more than $1,000,000 and which shall have been terminated or
discharged within thirty (30) days of attachment thereof; provided, in no event
shall such Liens (i) secure obligations for the payment of money or (ii)
materially impair the value of such property or its use by any Loan Party or any
of its Subsidiaries in the normal conduct of such Person's business.
"Person" means an individual, corporation, limited liability company,
partnership, association, joint-stock company, trust, unincorporated
organization, joint venture or Governmental Authority.
"Plan of Reorganization" means the Debtors' Third Amended and Restated
Joint Plan of Reorganization, dated as of May 9, 2002, as the has been
supplemented by the Plan Supplement and amended by the Confirmation Order and as
the same may be further amended or supplemented with the prior written consent
of the Agent, which consent shall not be unreasonably withheld or delayed.
"Plan Supplement" means a supplement to the Plan of Reorganization
that shall describe, among other things, this Agreement and the financing
provided for herein and that shall be acceptable to the Agent.
"Pledge Agreement" means the pledge agreement made by the Loan Parties
in favor of the Agent for the benefit of the Lenders and delivered to the Agent,
substantially in the form of Exhibit F, as it may be amended, supplemented or
otherwise modified from time to time.
"Post-Default Rate" has the meaning specified therefor in Section
2.6(b).
"Prior Sunterra Securitization" means each of the following
transactions involving the securitization of mortgage loans, mortgage notes or
other installment obligations (collectively, "Mortgage Notes"):
(i) the sale of Mortgage Notes to Sunterra Finance L.L.C., a
limited liability company organized and existing under the laws of the
State of Georgia ("Finance L.L.C."), by (a) Signature Resorts, Inc, a
Maryland corporation (now known as
22
Sunterra Corporation), (b) All Seasons Resorts, Inc., an Arizona
corporation, (c) All Seasons Resorts, Inc., a Texas corporation, (d) Port
Royal Resort, L.P., a South Carolina limited partnership, (e) Lake Tahoe
Resort Partners, LLC, a California limited liability company, and (f) Grand
Beach Resort, L.P., a Georgia limited partnership, and/or the issuance of
the Signature Resorts Vacation Ownership Receivables-Backed Notes 1998-A
pursuant to the Indenture, dated as of May 1, 1998, among Finance L.L.C.,
Signature Resorts, Inc. (now known as Sunterra Corporation) and LaSalle
National Bank (now known as LaSalle Bank, N.A.) (the "1998-A
Securitization");
(ii) the sale of Mortgage Notes by TerraSun Holding, Inc., a
Nevada corporation ("TerraSun Holding"), to TerraSun, L.L.C., a limited
liability company organized and existing under the laws of the State of
Nevada ("TerraSun L.L.C."), and/or the issuance of the Vacation Ownership
Receivables-Backed Notes 1999-A pursuant to the Indenture, dated as of
March 31, 1999, among TerraSun L.L.C., Sunterra Financial Services, Inc.
and LaSalle National Bank (now known as LaSalle Bank, N.A.); and
(iii) the sale of Mortgage Notes by Dutch Elm Holdings,
Inc., a Nevada corporation ("DE Holdings"), to Dutch Elm, LLC, a limited
liability company organized and existing under the laws of the State of
Nevada ("Dutch Elm, LLC"), and/or the issuance of the Vacation Ownership
Receivables-Backed Notes 1999-B pursuant to the Indenture dated as of
December 1, 1999 among Dutch Elm, LLC, Sunterra Financial Services, Inc.
and LaSalle Bank, National Association (now known as LaSalle Bank, N.A.).
"Property" means any right or interest in or to property of any kind
whatsoever, whether real, personal or mixed and whether tangible or intangible.
"Property Management Agreement" means the management agreement entered
into by and between a homeowners' association and a property management company,
pursuant to which the property manager is to provide management and other
services with respect to a Real Property.
"Pro Rata Share" means, with respect to any Lender and the Loans of
any Tranche, the percentage obtained by dividing (i) such Lender's Tranche A
Loan Commitment, Tranche B Loan Commitment or Tranche C Loan Commitment, as
applicable, by (ii) the Total Tranche A Loan Commitment, Total Tranche B Loan
Commitment or Total Tranche C Loan Commitment, as applicable, provided that, if
the Total Tranche A Loan Commitment, the Total Tranche B Loan Commitment or the
Total Tranche C Loan Commitment, as applicable, has been reduced to zero, the
numerator shall be the aggregate unpaid principal amount of all Tranche A Loans,
Tranche B Loans or Tranche C Loans (including Agent Advances), as applicable.
"Purchase Documents" means any purchase agreement and related sale and
escrow document executed and delivered by a purchaser of a Time Share Interest
to any Borrower with respect to a purchase of such Time Share Interest.
23
"Real Property" means each Resort and each real property set forth on
Schedule 1.1(xi).
"Reference Banks" means three major banks that are engaged in the
London interbank market, as selected by the Agent.
"Reference Rate" means the rate of interest publicly announced by
Citibank, N.A., its successors or any other commercial bank designated by the
Agent to the Borrowers from time to time in New York, New York from time to time
as its prime rate or base rate. The prime rate or base rate is determined from
time to time by such bank as a means of pricing some loans to its borrowers an
neither tied to any external rate of interest or index nor necessarily reflects
the lowest rate of interest actually charged by such bank to any particular
class or category of customers. Each change in the Reference Rate shall be
effective from and including the date such change is publicly announced as being
effective.
"Register" has the meaning specified therefor in Section 9.8(b)(ii).
"Registered Loan" means each Revolving Loan that is recorded on the
Register.
"Registered Note" means a promissory note in registered form
evidencing a Registered Loan.
"Release" means any spilling, leaking, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, leaching, seeping, migrating,
dumping or disposing of any Hazardous Material (including the abandonment or
discarding of barrels, containers and other closed receptacles containing any
Hazardous Material) into the indoor or outdoor environment, including ambient
air, soil, surface or ground water, provided that the term "Release" shall not
include the use of normal commercial or residential cleaning products by any
Loan Party or its Subsidiaries in the ordinary course of its business.
"Remedial Action" means all actions taken to (i) clean up, remove,
remediate, contain, treat, monitor, assess, evaluate or in any other way address
Hazardous Materials in the indoor or outdoor environment; (ii) prevent or
minimize a Release or threatened Release of Hazardous Materials so they do not
migrate or endanger or threaten to endanger public health or welfare or the
indoor or outdoor environment; (iii) perform pre-remedial studies and
investigations and post-remedial operation and maintenance activities; or (iv)
any other actions authorized by 42 U.S.C. Section 9601.
"Remittance Date" means, for any given month, the first (1st) Business
Day after the Determination Date for such month.
"Reportable Event" means an event described in Section 4043 of ERISA
(other than an event not subject to the provision for 30-day notice to the PBGC
under the regulations promulgated under such Section).
"Required Lenders" means Lenders whose Pro Rata Shares aggregate in
excess of 50% of the Total Commitment.
24
"Requirement of Law" means, as to any Person, the certificate of
incorporation and by-laws or other organizational or governing documents of such
Person, and any law, treaty, rule or regulation or determination of an
arbitrator or a court or other Governmental Authority, in each case applicable
to or binding upon such Person or any of its Property or the Property of its
bankruptcy estate or to which such Person or any of its Property is subject;
provided that the foregoing shall not include the organizational or governing
documents of the Lenders.
"Resort" means a time share residential real estate project in which a
Loan Party sells or has sold Time Share Interests, including the land on which
such project is located, all buildings and other improvements thereon and all
fixtures located at or used in connection with such project.
"Right-to-Use Resorts" means the Resorts listed on Schedule 1.1(xii).
"SEC" means the Securities and Exchange Commission or any other
similar or successor agency of the Federal government administering the
Securities Act.
"Securities Act" means the Securities Act of 1933, as amended, or any
similar Federal statute, and the rules and regulations of the SEC thereunder,
all as the same shall be in effect at the time.
"Security Agreement" means any security agreement made by the Loan
Parties in favor of the Agent for the benefit of the Lenders, substantially in
the form of Exhibit G, as it may be amended, supplemented or otherwise modified
from time to time.
"Securitization" means the financing of any timeshare mortgage loans
of any of the Borrowers through the issuance of notes or certificates issued by
a special purpose entity that is sponsored by the Parent or an Affiliate
thereof, the repayment of which is primarily based upon the payments received on
such mortgage loans.
"Securitization Agent" means, with respect to any publicly issued or
privately placed Securitization securities, the sole lead underwriter or the
sole lead placement agent, as applicable, of such Securitization.
"Securitization Breakage Fee" means, with respect to any
Securitization with respect to which the Agent and its Affiliates did not act as
executed Securitization Agent, an amount equal to the product of (x) 0.25% and
(y) the aggregate initial principal balance of all notes or certificates issued
in such Securitization and the gross sales proceeds of any such notes or
certificates having a notional amount.
"Securitization Commitment Period" means the period from the Closing
Date to the later of (x) the second anniversary of the Closing Date and (y) the
date on which all amounts due under this Agreement are repaid in full.
"Settlement Period" has the meaning specified therefor in Section
2.2(d)(i).
"Significant Subsidiary" means, at any time, a Subsidiary of the
Parent with assets, as of the end of the last month for which financial
statements have been delivered to the
25
Lender pursuant to Section 6.1(a)(ii), of at least $250,000 or with revenues for
the immediately preceding twelve-month period ending on the last day of the most
recent fiscal quarter of at least $250,000.
"SMH" means Sunterra Mortgage Holdings, LLC, a Delaware limited
liability company.
"Soft Inventory" means Time Share Inventory that (x) is not subject to
any Lien (other than Permitted Liens of the type described in clauses (a)
through (g) and clause (i) of the definition thereof) and (y) is not available
for immediate sale.
"Solvent" means, with respect to any Person on a particular date, that
on such date (i) the fair value of the Property of such Person is not less than
the total amount of the liabilities of such Person, (ii) the present fair
salable value of the assets of such Person is not less than the amount that will
be required to pay the probable liability of such Person on its existing debts
as they become absolute and matured, (iii) such Person is able to realize upon
its assets and pay its debts and other liabilities, contingent obligations and
other commitments as they mature in the normal course of business, (iv) such
Person does not intend to, and does not believe that it will, incur debts or
liabilities beyond such Person's ability to pay as such debts and liabilities
mature, and (v) such Person is not engaged in business or a transaction, and is
not about to engage in business or a transaction, for which such Person's
Property would constitute unreasonably small capital.
"Standard & Poor's" means Standard & Poor's Ratings Services, a
division of The XxXxxx-Xxxx Companies, Inc., and any successor thereto.
"Subsidiary" means, with respect to any Person at any date, any
corporation, limited or general partnership, limited liability company, trust,
association or other entity (i) of which more than 50% of (A) the outstanding
Capital Stock having (in the absence of contingencies) ordinary voting power to
elect a majority of the board of directors of such corporation, (B) the interest
in the capital or profits of such partnership or limited liability company or
(C) the beneficial interest in such trust or estate is, at the time of
determination, owned or controlled directly or indirectly through one or more
intermediaries, by such Person. Notwithstanding the foregoing, the term
Subsidiary shall not include (i) any homeowners, timeshare, condominium or
property owners association or (ii) any Subsidiary heretofore or hereafter
organized for the sole purpose of facilitating a securitization or financing of
mortgage notes receivable and which performs no business and has no other assets
other than those necessary to consummate such securitization or financing,
including, without limitation, any assignee of TerraSun Holding's interest in
TerraSun L.L.C., DE Holdings' interest in Dutch Elm, LLC or Sunterrra Mortgage,
Inc.'s interest in Finance L.L.C., as a result of the Mortgage Receivables Sale
Transaction.
"Sunterra Europe" means Sunterra Europe (Group Holdings) plc, a United
Kingdom company.
"Tangible Net Worth" means, as of any date of determination and in
each case determined in accordance with GAAP, the stockholders' equity of the
Parent (less intangible
26
assets) plus the pro forma effect of the deferred revenue from sales of Time
Share Interests in St. Maarten.
"Termination Event" means (i) a Reportable Event with respect to any
Employee Plan other than the commencement of the Chapter 11 Cases, (ii) any
event with respect to an Employee Plan that causes any Borrower or any of its
ERISA Affiliates to incur liability under Section 409, 502(i), 502(l), 515,
4062, 4063, 4064, 4069, 4201, 4204 or 4212 of ERISA or Section 4971 or 4975 of
the Code, (iii) the filing of a notice of intent to terminate an Employee Plan
or the treatment of an Employee Plan amendment as a termination under Section
4041 of ERISA, (iv) the institution of proceedings by the PBGC to terminate an
Employee Plan or (v) any other event or condition which might constitute grounds
under Section 4042 of ERISA for the termination of, or the appointment of a
trustee to administer, any Employee Plan.
"Time Share Documents" has the meaning specified therefor in Section
5.1(z)(ii).
"Time Share Interest" means a timeshare interest or interval, however,
denominated or defined in the applicable condominium or timeshare declaration,
trust agreement, or other relevant document or instrument pursuant to which such
timeshare interest or interval is created, whether or not coupled with a fee
simple interest in real estate, together with all rights, benefits, privileges
and interests appurtenant thereto, including the right to use and occupy a
residential unit within the applicable Resort and the common areas and common
furnishings appurtenant to such unit for a specified period of time, on an
annual or a biennial basis, as more specifically described in the applicable
declaration or other relevant document or instrument.
"Time Share Inventory" means the unsold Time Share Interests at the
Eligible Resorts.
"Time Share Laws" has the meaning specified therefor in Section
5.1(z)(ii).
"Time Share Mortgage" means a mortgage, deed of trust or other
security interest on or with respect to a Timeshare Interest. Time Share
Mortgages are intended to include, without limitation, financing instruments for
Time Share Interests in St. Maarten and for financing instruments for points
based Time Share Interests.
"Title Company" has the meaning specified therefor in Section
6.2(c)(ii).
"Title Insurance Policy" means an ALTA loan policy, together with all
endorsements and documents referenced therein made from time to time thereto,
issued by or on behalf of a title insurance company with whom the Borrowers
currently conduct title insurance business or another title insurance company
acceptable to the Agent, satisfactory in form and substance to the Agent,
insuring the Lien created by a Mortgage in an amount and on terms satisfactory
to the Agent, delivered to the Agent pursuant to Section 4.1(h) or 6.1(b).
"Total Commitment" means the sum of the Total Tranche A Loan
Commitment, the Total Tranche B Loan Commitment and the Total Tranche C Loan
Commitment, but in any event not to exceed in the Maximum Aggregate Amount.
27
"Total Tranche A Loan Commitment" means the sum of the amounts of the
Lenders' Tranche A Loan Commitments, as such amounts may be terminated or
reduced from time to time in accordance with the terms of this Agreement,
provided that the Total Tranche A Loan Commitment shall not exceed $225,000,000
at any time.
"Total Tranche B Loan Commitment" means the sum of the amounts of the
Lenders' Tranche B Loan Commitments, as such amounts may be terminated or
reduced from time to time in accordance with the terms of this Agreement,
provided that the Total Tranche B Loan Commitment shall not exceed $100,000,000
at any time.
"Total Tranche C Loan Commitment" means the sum of the amounts of the
Lenders' Tranche C Loan Commitments, as such amounts may be terminated or
reduced from time to time in accordance with the terms of this Agreement,
provided that the Total Tranche C Loan Commitment shall not exceed $70,000,000
at any time.
"Tranche", when used with respect to Loans, shall refer to the Tranche
(A, B or C) of which such Loans are a part.
"Tranche A Advance Rate" means 80.0%.
"Tranche A Borrowing Base" means at any date of determination, the
product of (x) the Tranche A Advance Rate and (y) the aggregate principal amount
of the Eligible Mortgage Receivables as of such date.
"Tranche A Loan" means a loan made by a Lender to the Borrowers
pursuant to Section 2.1(a).
"Tranche A Loan Commitment" means, with respect to each Lender, the
commitment of such Lender to make Tranche A Loans to the Borrowers in the amount
set forth opposite such Lender's name in Appendix A-1 hereto, as such amount may
be terminated or reduced from time to time in accordance with the terms of this
Agreement.
"Tranche A Loan Note" means each promissory note, if any, of the
Borrowers made and delivered to a Lender, evidencing the Indebtedness resulting
from the making by such Lender to the Borrowers of Tranche A Loans substantially
in the form of Exhibit B-1, as it may be amended, supplemented or otherwise
modified from time to time.
"Tranche B Advance Rate" means 90.0%.
"Tranche B Borrowing Base" means at any date of determination, the
lesser of (i) the product of (x) the Tranche B Advance Rate and (y) the
Inventory Collateral Value as of such date and (ii) the product of (x) the
Tranche B Advance Rate and (y) the Inventory Collateral Value as of the Closing
Date.
"Tranche B Loan" means a loan made by a Lender to the Borrowers
pursuant to Section 2.01(b).
28
"Tranche B Loan Commitment" means, with respect to each Lender, the
commitment of such Lender to make Tranche B Loans to the Borrowers in the amount
set forth opposite such Lender's name on Appendix A-2 hereto, as such amount may
be terminated or reduced from time to time in accordance with the terms of this
Agreement.
"Tranche B Loan Note" means each promissory note, if any, of the
Borrowers made and delivered to a Lender, evidencing the Indebtedness resulting
from the making by such Lender to the Borrowers of Tranche B Loans substantially
in the form of Exhibit B-2, as it may be amended, supplemented or otherwise
modified from time to time.
"Tranche C Advance Rate" means 50.0%.
"Tranche C Borrowing Base" means the product of the Tranche C Advance
Rate and the Other Assets Collateral Value, provided that the Tranche C
Borrowing Base shall not exceed, during any period set forth below, the amount
specified for such period:
COLUMN A COLUMN B
--------------------------------------- ----------------- -----------------
During a Mortgage
Maximum Tranche C Receivable
Period Borrowing Base Performance Event
--------------------------------------- ----------------- -----------------
Closing Date to January 31, 2003 ...... $70,000,000 $50,000,000
February 1, 2003 to July 31, 2003 ..... 55,000,000 35,000,000
August 1, 2003 to January 31, 2004 .... 45,000,000 25,000,000
February 1, 2004 and thereafter ....... 35,000,000 15,000,000
further, provided, that if there shall have occurred a Mortgage Receivable
Performance Event as of any Determination Date, the Agent may reduce such
Tranche C Borrowing Base from the amounts reflected in Column A above to the
amounts reflected in Column B, as of such Determination Date, which reduction
shall be in effect until such time as the applicable Mortgage Receivable
Performance Event shall have been cured or otherwise waived, such cure or waiver
to be effective as of the next Determination Date thereafter.
"Tranche C Loan" means a loan made by a Lender to the Borrowers
pursuant to Section 2.1(c).
"Tranche C Loan Commitment" means, with respect to each Lender, the
commitment of such Lender to make Tranche C Loans to the Borrowers in the amount
set forth opposite such Lender's name on Appendix A-3 hereto, as such amount may
be terminated or reduced from time to time in accordance with the terms of the
Agreement.
29
"Tranche C Loan Note" means each promissory note, if any, of the
Borrowers made and delivered to a Lender, evidencing the Indebtedness resulting
from the making by such Lender to the Borrowers of Tranche C Loans substantially
in the form of Exhibit B-3, as it may be amended, supplemented or otherwise
modified from time to time.
"UCC" means the Uniform Commercial Code in effect in the State of New
York on the date hereof.
"Underwriting Guidelines" means the credit criteria applicable to
Mortgage Receivables attached hereto as Schedule 1.1(xiii), as the same shall be
amended, supplemented or replaced with the consent of the Agent, such consent
not to be unreasonably withheld and which consent shall not be required to the
extent that such amendment or supplement is not material.
"U.S. Sales Revenue" means the sales revenue of Time Share Interests
(i) in the United States of America and (ii) in St. Maarten. For the purposes of
calculating sales revenue of Time Share Interests in St. Maarten, such sales
revenue shall be reflected as the amounts specified in the sales contracts and
not the amounts recorded for GAAP purposes.
"WARN" has the meaning specified therefor in Section 5.1(j).
"Warrant Agreement" means the warrant agreement between the Parent and
the Agent dated as of the Closing Date, as it may be amended, supplemented or
otherwise modified from time to time.
"Warrants" means 5-year warrants for shares of New Sunterra Common
Stock to be issued in accordance with the terms and conditions of the Warrant
Agreement and in substantially the form set forth therein.
Section 1.2. Terms Generally. The definitions of terms herein shall
apply equally to the singular and plural forms of the terms defined. Whenever
the context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words "include", "includes" and "including" shall
be deemed to be followed by the phrase "without limitation". The word "will"
shall be construed to have the same meaning and effect as the word "shall".
Unless the context requires otherwise, (a) any definition of or reference to any
agreement, instrument or other document herein shall be construed as referring
to such agreement, instrument or other document as from time to time amended,
supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein), (b) any reference
herein to any Person shall be construed to include such Person's successors and,
subject to applicable provisions hereof, assigns, (c) the words "herein",
"hereof" and "hereunder", and words of similar import, shall be construed to
refer to this Agreement in its entirety and not to any particular provision
hereof and (d) all references herein to Articles, Sections, Appendices, Exhibits
and Schedules shall be construed to refer to Articles and Sections of, and
Appendices, Exhibits and Schedules to, this Agreement.
Section 1.3. Accounting and Other Terms. Unless otherwise expressly
provided herein, each accounting term used herein shall have the meaning given
it under GAAP. All terms used in this Agreement which are defined in Article 8
or Article 9 of the Uniform
30
Commercial Code in effect in the State of New York on the date hereof and which
are not otherwise defined herein shall have the same meanings herein as set
forth therein.
Section 1.4. Time References. Unless otherwise indicated herein, all
references to time of day refer to Eastern standard time or Eastern daylight
saving time, as in effect in New York City on such day. For purposes of the
computation of a period 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".
Section 1.5. Amounts in Foreign Currency. For the purposes of
calculations required by Sections 6.2 or 6.3, with respect to any amount
denominated in a currency other than that of the United States, such amount
shall be translated in accordance with GAAP.
ARTICLE II
THE LOANS
Section 2.1. Loan Commitments.
(a) Tranche A.
(i) Subject to the terms and conditions and relying upon the
representations and warranties herein set forth, each Lender severally
agrees to make Tranche A Loans to the Borrowers in an aggregate principal
amount not to exceed the lesser of (i) such Lender's Tranche A Loan
Commitment (or, if less, such Lenders' Pro Rata Share of the Total Tranche
A Loan Commitment) and (ii) such Lender's Pro Rata Share of the Tranche A
Borrowing Base. The Tranche A Loan Commitment of each Lender shall
automatically and permanently be reduced to zero on the Final Maturity
Date.
(ii) Notwithstanding the foregoing, the aggregate principal amount of
Tranche A Loans outstanding at any time shall not exceed the lesser of (i)
the Total Tranche A Loan Commitment as in effect at such time and (ii) the
Tranche A Borrowing Base. Within the foregoing limits, the Borrowers may
borrow, repay and reborrow Tranche A Loans on or after the Closing Date and
prior to the Final Maturity Date, subject to the terms, provisions and
limitations set forth herein.
(b) Tranche B.
(i) Subject to the terms and conditions and relying upon the
representations and warranties herein set forth, each Lender severally
agrees to make Tranche B Loans to the Borrowers in an aggregate principal
amount not to exceed the lesser of (i) such Lender's Tranche B Loan
Commitment (or, if less, such Lender's Pro Rata Share of the Total Tranche
B Loan Commitment) and (ii) such Lender's Pro Rata Share of the Tranche B
Borrowing Base. The Tranche B Loan Commitment of each Lender shall
automatically and permanently be reduced to zero on the Final Maturity
Date.
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(ii) Notwithstanding the foregoing, the aggregate principal amount of
Tranche B Loans outstanding at any time shall not exceed the lesser of (i)
the Total Tranche B Loan Commitment as in effect at such time and (ii) the
Tranche B Borrowing Base. Within the foregoing limits, the Borrowers may
borrow, repay and reborrow Tranche B Loans on or after the Closing Date and
prior to the Final Maturity Date, subject to the terms, provisions and
limitations set forth herein.
(c) Tranche C.
(i) Subject to the terms and conditions and relying upon the
representations and warranties herein set forth, each Lender severally
agrees to make Tranche C Loans to the Borrowers in an aggregate principal
amount not to exceed the lesser of (i) such Lender's Tranche C Loan
Commitment (or, if less, such Lender's Pro Rata Share of the Total Tranche
C Loan Commitment) and (ii) such Lender's Pro Rata Share of the Tranche C
Borrowing Base. The Tranche C Loan Commitment of each Lender shall
automatically and permanently be reduced to zero on the Final Maturity
Date.
(ii) Notwithstanding the foregoing, the aggregate principal amount of
Tranche C Loans outstanding at any time shall not exceed the lesser of (i)
the Total Tranche C Loan Commitment as in effect at such time and (ii) the
Tranche C Borrowing Base. Within the foregoing limits, the Borrowers may
borrow, repay and reborrow Tranche C Loans on or after the Closing Date and
prior to the Final Maturity Date, subject to the terms, provisions and
limitations set forth herein.
Section 2.2. Making the Loans. (a) The Administrative Borrower shall
give the Agent prior telephone notice (immediately confirmed in writing, in
substantially the form of Exhibit A hereto (a "Notice of Borrowing"), not later
than 12:00 noon (New York City time) on the date which is three (3) Business
Days prior to the date of a proposed Loan or Loans. Such Notice of Borrowing
shall be irrevocable and shall specify (i) the principal amount of each proposed
Loan and the principal amount thereof that shall be a Tranche A Loan, a Tranche
B Loan or a Tranche C Loan and (ii) the proposed borrowing date, which must be a
Business Day. The Agent and the Lenders may act without liability upon the basis
of written, telecopied or telephonic notice believed by the Agent in good faith
to be from the Administrative Borrower (or from any Authorized Officer thereof
designated in writing by the Administrative Borrower to the Agent). The Agent
and each Lender shall be entitled to rely conclusively on any Authorized
Officer's authority to request a Loan on behalf of the Borrowers until the Agent
receives written notice to the contrary. The Agent and the Lenders shall have no
duty to verify the authenticity of the signature appearing on any written Notice
of Borrowing. Except as otherwise provided in this Section 2.2, Loans shall be
made ratably by the Lenders in accordance with their respective Tranche A,
Tranche B and Tranche C Loan Commitments, as the case may be.
(b) Each Notice of Borrowing pursuant to this Section 2.2 shall be
irrevocable and the Borrowers shall be bound to make a borrowing in accordance
therewith. Each Loan shall be made in a minimum amount of $1,000,000 and shall
be in integral multiples of $500,000.
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(c) (i) Except as otherwise provided in this subsection 2.2(c), all
Loans under this Agreement shall be made by the Lenders simultaneously and
proportionately to their Pro Rata Shares of the Tranche A Loan Commitment,
Tranche B Loan Commitment or Tranche C Loan Commitment, as the case may be, it
being understood that no Lender shall be responsible for any default by any
other Lender in that other Lender's obligations to make a Loan requested
hereunder, nor shall any Commitment of any Lender be increased or decreased as a
result of the default by any other Lender in that other Lender's obligation to
make a Loan requested hereunder, and each Lender shall be obligated to make the
Loans required to be made by it by the terms of this Agreement regardless of the
failure by any other Lender.
(ii) Notwithstanding any other provision of this Agreement, the
Borrowers, the Agent and the Lenders agree that the Agent may (but shall not be
obligated to), and the Borrowers and the Lenders hereby irrevocably authorize
the Agent to, fund, on behalf of the Lenders, Loans pursuant to this Section
2.2, subject to the procedures for settlement set forth in subsection 2.2(d);
provided, however, that (a) the Agent shall in no event fund such Loans if the
Agent shall have received written notice from the Required Lenders on the
Business Day prior to the day of the proposed Loan that one or more of the
conditions precedent contained in Section 4.1 will not be satisfied on the day
of the proposed Loan, and (b) the Agent shall not otherwise be required to
determine that, or take notice whether, the conditions precedent in Section 4.1
have been satisfied. If the Administrative Borrower gives a Notice of Borrowing
requesting a Loan and the Agent elects not to fund such Loan on behalf of the
Lenders, then promptly after receipt of the Notice of Borrowing requesting such
Loan, the Agent shall notify each Lender of the specifics of the requested Loan
and that it will not fund the requested Loan on behalf of the Lenders. If the
Agent notifies the Lenders that it will not fund a requested Loan on behalf of
the Lenders, each Lender shall make its Pro Rata Share of the Loan available to
the Agent, in immediately available funds, at the Payment Office no later than
3:00 p.m. (New York City time) (provided that the Agent requests payment from
such Lender not later than 1:00 p.m.) on the date of the proposed Loan. The
Agent will make the proceeds of such Loans available to the Borrowers on the day
of the proposed Loan by causing an amount, in immediately available funds, equal
to the proceeds of all such Loans received by the Agent at the Payment Office or
the amount funded by the Agent on behalf of the Lenders to be deposited in an
account designated by the Administrative Borrower.
(iii) If the Agent has notified the Lenders that the Agent, on behalf
of the Lenders, will fund a particular Loan pursuant to subsection 2.2(c)(ii),
the Agent may assume that such Lender has made such amount available to the
Agent on such day and the Agent, in its sole discretion, may, but shall not be
obligated to, cause a corresponding amount to be made available to the Borrowers
on such day. If the Agent makes such corresponding amount available to the
Borrowers and such corresponding amount is not in fact made available to the
Agent by such Lender, the Agent shall be entitled to recover such corresponding
amount on demand from such Lender together with interest thereon, for each day
from the date such payment was due until the date such amount is paid to the
Agent, at the Federal Funds Rate for three Business Days and thereafter at the
Reference Rate. During the period in which such Lender has not paid such
corresponding amount to the Agent, notwithstanding anything to the contrary
contained in this Agreement or any other Loan Document, the amount so advanced
by the Agent to the Borrowers shall, for all purposes hereof, be a Loan (of the
Tranche requested by the Administrative Borrower) made by the Agent for its own
account. Upon any such failure by a Lender to pay the
33
Agent, the Agent shall promptly thereafter notify the Administrative Borrower of
such failure and the Borrowers shall immediately pay such corresponding amount
to the Agent for its own account.
(iv) Nothing in this subsection 2.2(c) shall be deemed to relieve any
Lender from its obligations to fulfill any Commitment of such Lender hereunder
or to prejudice any rights that the Agent or the Borrowers may have against any
Lender as a result of any default by such Lender hereunder.
(d) (i) With respect to all periods for which the Agent has funded
Loans pursuant to subsection 2.2(c), on Friday of each week, or if the
applicable Friday is not a Business Day, then on the following Business Day, or
such shorter period as the Agent may from time to time select (any such week or
shorter period being herein called a "Settlement Period"), the Agent shall
notify each Lender of the unpaid principal amount of the Loans outstanding as of
the last day of each Settlement Period. In the event that such amount is greater
than the unpaid principal amount of the Loans outstanding on the last day of the
Settlement Period immediately preceding such Settlement Period (or, if there has
been no preceding Settlement Period, the amount of the Loans made on the date of
such Lender's initial funding), each Lender shall promptly (and in any event not
later than 2:00 p.m. if the Agent requests payment from such Lender not later
than 12:00 noon on such day) make available to the Agent its Pro Rata Share of
the difference in immediately available funds. In the event that such amount is
less than such unpaid principal amount, the Agent shall promptly pay over to
each Lender its Pro Rata Share of the difference in immediately available funds.
In addition, if the Agent shall so request at any time when a Default or an
Event of Default shall have occurred and be continuing, each Lender shall
promptly remit to the Agent or, as the case may be, the Agent shall promptly
remit to each Lender, sufficient funds to adjust the interests of the Lenders in
the then outstanding Loans to such an extent that, after giving effect to such
adjustment, each Lender's interest in the then outstanding Loans will be equal
to its Pro Rata Share thereof. The obligations of the Agent and each Lender
under this subsection 2.2(d) shall be absolute and unconditional. Each Lender
shall only be entitled to receive interest on its Pro Rata Share of the Loans
which have been funded by such Lender.
(ii) In the event that any Lender fails to make any payment required
to be made by it pursuant to subsection 2.2(d)(i), the Agent shall be entitled
to recover such corresponding amount on demand from such Lender together with
interest thereon, for each day from the date such payment was due until the date
such amount is paid to the Agent, at the Federal Funds Rate for three Business
Days and thereafter at the Reference Rate. During the period in which such
Lender has not paid such corresponding amount to the Agent, notwithstanding
anything to the contrary contained in this Agreement or any other Loan Document,
the amount so advanced by the Agent to the Borrowers shall, for all purposes
hereof, be a Loan (of the Tranche requested by the Administrative Borrower) made
by the Agent for its own account. Upon any such failure by a Lender to pay the
Agent, the Agent shall promptly thereafter notify the Administrative Borrower of
such failure and the Borrowers shall immediately pay such corresponding amount
to the Agent for its own account. Nothing in this subsection 2.2(d)(ii) shall be
deemed to relieve any Lender from its obligation to fulfill any Commitment of
such Lender hereunder or to prejudice any rights that the Agent or the Borrowers
may have against any Lender as a result of any default by such Lender hereunder.
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Section 2.3. Notes; Repayment of Loans. (a) If requested in writing by
any Lender, all Tranche A Loans, Tranche B Loans and Tranche C Loans made by
such Lender to the Borrowers shall be evidenced by a single Tranche A Loan Note,
Tranche B Loan Note or Tranche C Loan Note, as the case may be, duly executed on
behalf of the Borrowers, dated the Closing Date and delivered to and made
jointly and severally payable to the order of such Lender in a principal amount
equal to the amount of such Lender's Tranche A Loan Commitment, Tranche B Loan
Commitment or Tranche C Loan Commitment, as the case may be.
(b) Subject to Section 2.7, the outstanding principal of all Loans,
together with accrued and unpaid interest thereon, shall be due and payable on
the Final Maturity Date.
(c) All payments made by the Borrowers hereunder or under the Notes or
any of the other Loan Documents shall be made without set-off, counterclaim,
deduction or other defense.
Section 2.4. Limitation on Types of Loans; Illegality. Anything herein
to the contrary notwithstanding, if, on or prior to the determination of any
LIBO Base Rate, (a) the Agent determines, in good faith, which determination
shall be conclusive absent manifest error, that quotations of interest rates for
the relevant deposits referred to in the definition of "LIBO Base Rate" in
Section 1.1 are not being provided in the relevant amounts or for the relevant
maturities for purposes of determining rates of interest for Loans as provided
herein or (b) it becomes unlawful for any Lender to honor its obligation to make
or maintain Loans hereunder using a LIBO Rate, then the Agent shall give the
Administrative Borrower prompt notice thereof and, so long as such condition
remains in effect, the Lenders shall, following discussions with the
Administrative Borrower, select in good faith an index that approximates as
closely as reasonably practicable the LIBO Base Rate.
Section 2.5. Repayment of Loans; Evidence of Debt. (a) Each Borrower
hereby unconditionally promises to pay to the Agent for the account of the
Lenders the then unpaid principal amount of each Loan made by such Lender on the
Final Maturity Date (or such earlier date on which the Loans become due and
payable pursuant to the terms of this Agreement). Each Borrower hereby further
agrees to pay interest on the unpaid principal amount of the Loans made from
time to time outstanding from the date hereof until payment in full thereof at
the rates per annum set forth in Section 2.6 and on the dates set forth in
Section 2.7.
(b) Each Lender shall maintain in accordance with its usual practice
an account or accounts evidencing indebtedness of the Borrowers to such Lender
resulting from each Loan of such Lender from time to time, including the amounts
of principal and interest payable and paid to such Lender from time to time
under this Agreement.
(c) The Agent, on behalf of the Borrowers, shall maintain the Register
pursuant to Section 10.8, and a subaccount therein for each Lender, in which
shall be recorded (i) the amount and Tranche of each Loan made hereunder and any
Note evidencing such Loan, (ii) the amount of any principal or interest due and
payable or to become due and payable from the Borrowers to each Lender hereunder
and (iii) the amount of any sum received by the Agent hereunder from the
Borrowers and each Lender's share thereof.
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(d) The entries made in the Register and the accounts of each Lender
maintained pursuant to this Section 2.5 shall, to the extent permitted by
applicable law, be prima facie evidence of the existence and amounts of the
obligations of the Borrowers therein recorded; provided, however, that the
failure of any Lender or the Agent to maintain the Register or any such account,
or any error therein, shall not affect the obligation of the relevant Borrower
to repay (with applicable interest) the Loans made to the Borrowers by such
Lender in accordance with the terms of this Agreement.
Section 2.6. Interest.
(a) Loans. Each Loan shall bear interest on the principal amount
thereof from time to time outstanding, from the date of such Loan until such
principal amount becomes due, at a rate per annum equal to the LIBO Rate plus
the Applicable Margin for Loans of such Tranche.
(b) Default Interest. To the extent permitted by law, upon the
occurrence and during the continuance of an Event of Default, the principal of,
and all accrued and unpaid interest on, all Loans and all fees, indemnities or
any other Obligations of the Borrowers under this Agreement and the other Loan
Documents shall bear interest, from the date such Event of Default occurred
until such Event of Default is cured or waived in writing in accordance
herewith, at a rate per annum equal to (i) with respect to Loans of any Tranche
and interest thereon, the LIBO Rate plus the Applicable Margin for Loans of such
Tranche plus 3.00% and (ii) with respect to other Obligations, the LIBO Rate
plus the Applicable Margin for Tranche A Loans plus 3.00% (any such rate, the
"Post-Default Rate").
(c) Interest Payment. Interest on each Loan shall be payable with
respect to each Interest Period, in arrears, on each Remittance Date, commencing
on the first Remittance Date following the Remittance Date on which such Loan is
made and at maturity (whether upon demand, by acceleration or otherwise).
Interest at the Post-Default Rate shall be payable on demand. The Borrowers
hereby authorize the Agent to, and the Agent may, from time to time, charge the
Loan Account pursuant to Section 3.1 with the amount of any interest payment due
hereunder.
(d) General. All interest shall be computed on the basis of a year of
360 days for the actual number of days elapsed.
Section 2.7. Prepayment of Loans.
(a) Optional Prepayment. The Borrowers may, without penalty or
premium, prepay the principal of any Loan, in whole or in part and together with
accrued and unpaid interest thereon, on three (3) Business Days' prior written
notice.
(b) Mandatory Prepayment. On the date of delivery of a Borrowing Base
Certificate pursuant to Section 6.1(a)(v), but in any event, within 5 days of
becoming aware of any Borrowing Base Deficiency or Loan Balance Deficiency, the
Borrowers shall prepay the Loans in an amount equal to such Borrowing Base
Deficiency or such Loan Balance Deficiency, as applicable, together with
interest accrued on the amount or amounts prepaid; provided, except during the
continuance of a Default or an Event of Default, to the extent that all or any
portion of a Borrowing Base Deficiency occurs as the result of a casualty loss,
damage, destruction or
36
taking by condemnation of any Collateral, (A) such prepayment shall not be
required while Borrower is proceeding diligently to replace, repair or restore
such Collateral (or while Borrower is settling its insurance claim with respect
thereto), (B) proceeds from insurance covering loss, damage or destruction, or
from any taking, of any Collateral not in excess of $1,000,000 for any one
occurrence shall not be required to be so prepaid to the extent such insurance
proceeds are used to replace, repair or restore the Collateral in respect of
which such proceeds were paid, and (C) proceeds from insurance covering loss,
damage or destruction, or from any taking, of any Collateral in excess of
$1,000,000 for any one occurrence shall not be required to be so prepaid to the
extent that such insurance proceeds are deposited into a bank account maintained
at a bank satisfactory to Agent and subject to a blocked account agreement in
form and substance satisfactory to Agent, granting a perfected first priority
security interest in such account to the Agent for the benefit of itself and the
Lenders (a "Blocked Account") and used to replace or restore the properties or
assets in respect of which such proceeds were paid, and if, in each case, the
Borrower delivers a certificate to the Agent within five (5) Business Days of
receipt of such proceeds stating that such proceeds shall be used to replace,
repair or restore any such Collateral as soon as reasonably practicable, but in
no event to exceed 18 months, after the date of receipt of such proceeds (which
certificate shall set forth estimates of the proceeds to be so expended) and
Agent shall disburse such proceeds from the Blocked Account from time to time,
upon Borrower's request, to pay the costs of such replacement, repair or
restoration. If all or any portion of such proceeds not so applied to as
prepayments are not so used within the restoration period specified in such
relevant certificate delivered to Agent, such remaining portion shall be prepaid
on the last day of such specified restoration period. The principal amount of
each prepayment shall be applied (i) first to Loans of any Tranche in respect of
which there is a Borrowing Base Deficiency and (ii) then to any Loan Balance
Deficiency, with amounts prepaid solely under this clause (ii) to be applied to
Loans of any Tranche or Tranches as determined by the Administrative Borrower.
Section 2.8. Fees.
(a) Facility Fees.
(i) On the Closing Date, the Borrowers shall (x) pay to the Agent, for
the account of the Lenders, a non-refundable facility fee equal to 2.50% of
the Maximum Aggregate Amount (less any amounts previously paid by any of
the Borrowers to the Agent, such amount equaling 1.00% of the Maximum
Aggregate Amount) and (y) issue and deliver to the Agent the Warrants.
(ii) On the first annual anniversary of the Closing Date, the
Borrowers shall pay to the Agent, for the account of the Lenders in
accordance with their Pro Rata Shares, an additional non-refundable
facility fee equal to 1.50% of the Maximum Aggregate Amount.
(b) Unused Line Fee. From and after the Closing Date and until the
Final Maturity Date, the Borrowers shall pay to the Agent, for the account of
the Lenders in accordance with their Pro Rata Shares, an unused line fee which
shall accrue at the rate per annum of 0.25% on the excess, if any, of the
Maximum Aggregate Amount over the average
37
daily principal amount of Loans outstanding from time to time and shall be
payable monthly in arrears on each Remittance Date.
(c) The fees payable pursuant to Section 2.8(b) shall be computed on
the basis of a year of 360 days for the actual number of days elapsed.
Section 2.9. Taxes. (a) All payments made by the Borrowers hereunder
or under the Notes or any of the other Loan Documents shall be made free and
clear of and without deduction for any present or future income, franchise,
sales, use, excise, stamp or other taxes, levies, imposts, deductions, charges,
fees, withholdings, restrictions or conditions of any nature now or hereafter
imposed, levied, collected, withheld or assessed by any jurisdiction (whether
pursuant to United States federal, state, local or foreign law) or by any
political subdivision or taxing authority thereof or therein, and all interest,
penalties or similar liabilities, excluding (i) net income taxes, gross receipts
and franchise taxes (imposed in lieu of net income taxes) of, and branch profit
taxes of, the Agent or any Lender imposed by the jurisdiction in which the Agent
or such Lender is organized or any political subdivision thereof or taxing
authority thereof or any jurisdiction in which such Person's principal office or
relevant lending office is located or any political subdivision thereof or
taxing authority thereof and (ii) deductions, charges or withholdings
("Amounts") with respect to payments hereunder to the Agent or any Lender in
accordance with laws in effect on the later of the date of this Agreement and
the date such Agent or Lender becomes the Agent or a Lender, as the case may be,
but not excluding, with respect to such Agent or Lender, any increase in such
Amounts solely as a result of any change in such laws occurring after such later
date (such nonexcluded taxes being hereinafter collectively referred to as
"Non-Excluded Taxes"). If the Borrowers shall be required by law to deduct or to
withhold any Non-Excluded Taxes from or in respect of any amount payable
hereunder,
(i) the amount so payable shall be increased to the extent necessary
so that after making all required deductions and withholdings (including
Non-Excluded Taxes on amounts payable to the Lenders pursuant to this
sentence) the Lenders receive an amount equal to the sum they would have
received had no such deductions or withholdings been made,
(ii) the Borrowers shall make such deductions or withholdings, and
(iii) the Borrowers shall pay the full amount deducted or withheld to
the relevant taxing authority in accordance with applicable law. Whenever
any Non-Excluded Taxes are payable by the Borrowers, as promptly as
possible thereafter, the Administrative Borrower shall send the Lenders and
the Agent an official receipt (or, if an official receipt is not available,
such other documentation as shall be reasonably satisfactory to the Lenders
or the Agent, as the case may be) showing payment. In addition, the
Borrowers agree to pay any present or future taxes, charges or similar
levies which arise from any payment made hereunder or from the execution,
delivery, performance, recordation or filing of, or otherwise with respect
to, this Agreement, the Notes or any of the other Loan Documents other than
the foregoing excluded taxes (hereinafter referred to as "Other Taxes").
38
Notwithstanding anything herein to the contrary, each Lender agrees that, as
promptly as practicable after the officer of such Lender responsible for
administering its Loans becomes aware of the occurrence of an event or the
existence of a condition that would entitle such Lender to receive payments
under this Section 2.9(a), it will, to the extent not inconsistent with the
internal policies of such Lender and any applicable legal or regulatory
restrictions, use reasonable efforts to (a) make, issue, fund or maintain its
Loans, through another office of such Lender, or (b) take such other measures as
such Lender may deem reasonable, if as a result thereof the circumstances which
would cause the additional amounts which would otherwise be required to be paid
to such Lender pursuant to this Section 2.9(a) to be materially reduced and if,
as determined by such Lender in its sole discretion, the making, funding or
maintaining of such Commitments and Loans through such other office or in
accordance with such other measures, as the case may be, would not otherwise
adversely affect such Commitments or Loans or the interests of such Lender;
provided, such Lender will not be obligated to utilize such other office
pursuant to this Section unless the Parent agrees to pay the reasonable
incremental expenses incurred by such Lender as a result of utilizing such other
office as described in above.
(b) If the Borrowers fail to pay any Non-Excluded Taxes or Other
Taxes, the Borrowers will indemnify the Lenders for the amount of Non-Excluded
Taxes or Other Taxes (including any Non-Excluded Taxes or Other Taxes imposed by
any jurisdiction on amounts payable under this Section 2.9) paid by any Lender
and any liability (including penalties, interest and expenses for nonpayment,
late payment or otherwise) arising therefrom or with respect thereto, whether or
not such Non-Excluded Taxes or Other Taxes were correctly or legally asserted.
This indemnification shall be paid within 30 days from the date on which such
Lender makes written demand, which demand shall identify the nature and amount
of the Non-Excluded Taxes or Other Taxes for which indemnification is being
sought and the basis of the claim.
(c) Each Lender that is organized in a jurisdiction other than the
United States, a state thereof or the District of Columbia hereby agrees that:
(i) it shall, no later than the Closing Date (or, in the case of a
Lender which becomes a party hereto pursuant to Section 10.8 after the
Closing Date, the date upon which such Lender becomes a party hereto),
deliver to the Administrative Borrower and the Agent two accurate, complete
and signed originals of U.S. Internal Revenue Service Form W-8ECI or Form
W-8BEN or other applicable or successor form indicating that such Lender is
on the date of delivery thereof entitled to receive payments of principal,
interest and fees for the account of its lending office under this
Agreement free from withholding of United States federal income tax;
(ii) it shall deliver to the Administrative Borrower and the Agent two
further properly completed and duly executed copies of such Form W-8 ECI or
Form W-8 BEN or any successor or applicable form on or before the date that
any such Form W-8 ECI or Form W-8 BEN expires or becomes obsolete or
invalid and after the occurrence of any event (including a change in a
lending office or an addition of a lending office by a Lender) requiring a
change in the most recent form previously delivered by it to the
Administrative Borrower and the Agent or upon the reasonable request of the
Administrative Borrower or the Agent;
39
(iii) it shall, promptly upon the Administrative Borrower's reasonable
request to that effect, deliver to the Administrative Borrower such other
forms or similar documentation as may be required from time to time by any
applicable law, treaty, rule or regulation in order to establish such
Lender's tax status for withholding purposes; and
(iv) it shall obtain such extensions of time for filing and completing
such forms or certifications as may be reasonably requested by the
Administrative Borrower.
(d) If a Lender shall become aware that it is entitled to claim a
refund from a taxing authority in respect of Non-Excluded Taxes or Other Taxes
as to which it has been indemnified by the Borrowers, or with respect to which
the Borrowers have paid increased amounts pursuant to this Section 2.9, it shall
promptly notify the Administrative Borrower of the availability of such refund
claim and shall make the appropriate claim to such taxing authority for such
refund. If a Lender receives a refund (including pursuant to a claim for refund
made pursuant to the preceding sentence) in respect of any Non-Excluded or Other
Tax as to which it has been indemnified by the Borrowers, or with respect to
which the Borrowers have paid increased amounts pursuant to this Section 2.9, it
shall within 30 days from the date of such receipt pay over such refund (but
only to the extent of indemnity payments made or additional amounts paid by the
Borrowers pursuant to this Section 2.9) to the Borrowers, net of all
out-of-pocket expenses of such Lender; provided that the Borrowers, upon the
request of such Lender, agree to repay the amount paid over to the Borrowers
(plus any penalties, interest or other charges imposed by the relevant
Governmental Authority) to such Lender in the event that such Lender is required
to repay such refund to such Governmental Authority.
(e) If the Borrowers fail to perform their obligations under this
Section 2.9, the Borrowers shall indemnify the Lenders for any taxes, interest
or penalties that may become payable as a result of any such failure.
ARTICLE III
PAYMENTS AND OTHER COMPENSATION
Section 3.1. Payments; Computations and Statements. (a) The Borrowers
will make each payment under the Notes not later than 12:00 noon (New York City
time) on the day when due, in lawful money of the United States of America and
in immediately available funds, to the Agent at the Payment Office. All payments
received by the Agent after 3:00 P.M. (New York City time) on any Business Day
will be credited to the Loan Account on the next succeeding Business Day. All
payments shall be made by the Borrowers without defense, set-off or counterclaim
to the Agent and the Lenders. Except as provided in Section 2.2, after receipt,
the Agent will promptly thereafter cause to be distributed like funds relating
to the payment of principal ratably to the Lenders in accordance with their Pro
Rata Shares and like funds relating to the payment of any other amount payable
to any Lender to such Lender, in each case to be applied in accordance with the
terms of this Agreement. Whenever any payment to be made under any of the Loan
Documents shall be stated to be due on a day other than a Business Day, such
payment shall be made on the next succeeding Business Day and such extension of
time shall in such case be included in the computation of interest or fees, as
the case may be.
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(b) The Agent shall provide the Administrative Borrower, promptly
after the end of each month, a summary statement (in the form from time to time
used by the Agent) of the opening and closing daily balances in the Loan Account
of the Borrowers during such month, the amounts and dates on all Loans made to
the Borrowers during such month, the amounts and dates of all payments on
account of the Loans to the Borrowers during such month and the Loans to which
such payments were applied, the amount of interest accrued on the Loans to the
Borrowers during such month and the amount and nature of any charges to such
Loan Account made during such month on account of fees, commissions, expenses
and other Obligations. All entries on any such statement shall, unless objected
to by the Administrative Borrower within 30 days after the same is sent, be
presumed to be correct and shall be final and conclusive absent manifest error.
Section 3.2. Sharing of Payments, Etc. Except as provided in Section
2.2, if any Lender shall obtain any payment (whether voluntary, involuntary,
through the exercise of any right of set-off or otherwise) on account of any
Obligation in excess of its ratable share of payments on account of similar
obligations obtained by all the Lenders, such Lender shall forthwith purchase
from the other Lenders such participations in such similar obligations held by
them as shall be necessary to cause such purchasing Lender to share the excess
payment ratably with each of them; provided, however, that if all or any portion
of such excess payment is thereafter recovered from such purchasing Lender, such
purchase from each Lender shall be rescinded and such Lender shall repay to the
purchasing Lender the purchase price to the extent of such recovery together
with an amount equal to such Lender's ratable share (according to the proportion
of (i) the amount of such Lender's required repayment to (ii) the total amount
so recovered from the purchasing Lender of any interest or other amount paid by
the purchasing Lender in respect of the total amount so recovered). The
Borrowers agree that any Lender so purchasing a participation from another
Lender pursuant to this Section 3.2 may, to the fullest extent permitted by law,
exercise all its rights (including the Lender's right of set-off) with respect
to such participation as fully as if such Lender were the direct creditor of the
Borrowers in the amount of such participation.
Section 3.3. Apportionment of Payments. (a) Subject to Section 2.2 and
to any written agreement among the Agent and the Lenders, all payments of
principal and interest in respect of outstanding Loans, all payments of fees and
all other payments in respect of any of the other Obligations shall be allocated
by the Agent among such of the Lenders as are entitled thereto, in proportion to
their respective Pro Rata Shares or otherwise as provided herein or, in respect
of payments not made on account of Loans as designated by the Person making
payment when the payment is made.
(b) After the occurrence and during the continuance of an Event of
Default, the Agent may, and upon the direction of the Required Lenders shall,
apply all payments in respect of any Obligations and all proceeds of the
Collateral, subject to the provisions of this Agreement (i) first, to pay the
Obligations in respect of any fees, expense reimbursements, indemnities and
other amounts then due to the Agent until paid in full; (ii) second, to pay the
Obligations in respect of any fees and indemnities then due to the Lenders until
paid in full; (iii) third, ratably to pay interest due in respect of the Loans
and Agent Advances until paid in full; (iv) fourth, ratably to pay principal of
the Loans and Agent Advances until paid in full; and (v) fifth, to the ratable
payment of all other Obligations then due and payable.
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Section 3.4. Increased Costs and Reduced Return. (a) If any Lender
shall have determined that the adoption or implementation of, or any change in,
in each case after the date hereof, any law, rule, treaty, regulation, policy,
guideline or directive of, or any change after the date hereof in the
interpretation or administration thereof by, any court, central bank or other
administrative or Governmental Authority, or compliance by any Lender or any
Person controlling any Lender with any directive or guideline from any central
bank or other Governmental Authority, issued or given after the date hereof, in
each case applicable to any Lender or any Person controlling any such Lender
(whether or not having the force of law), shall (i) change (other than a change
which occurs before such Lender becomes a Lender) the basis of taxation of
payments to any Lender or any Person controlling any Lender of any amounts
payable hereunder (except for taxes on the overall net income or gross receipts
of any Lender or any Person controlling any such Lender and franchise taxes)
(imposed in lieu of net income taxes) and branch profits taxes, (ii) impose,
modify or deem applicable any reserve, special deposit or similar requirement
against any Loan or against assets of or held by, or deposits with or for the
account of, or credit extended by any Lender, or any Person controlling any such
Lender (but excluding reserves otherwise taken into account in the determination
of the LIBO Rate) or (iii) impose on any Lender or any Person controlling any
such Lender or any other condition regarding this Agreement or any Loan, and the
result of any event referred to in clause (i), (ii) or (iii) above shall be to
increase the cost to any Lender of making any Loan or agreeing to make any Loan
or to reduce any amount received or receivable by any Lender hereunder, then,
upon demand by such Lender, the Borrowers shall pay to such Lender such
additional amounts as will compensate such Lender for such increased costs or
reductions in amount.
(b) If any Lender shall have determined that the adoption or
implementation of, or any change in, in each case after the date hereof, any
Capital Guideline by the Governmental Authority charged with the interpretation
or administration thereof, or compliance by any Lender or any Person controlling
any Lender with any request or directive of any such Governmental Authority,
issued or given after the date hereof, with respect to any Capital Guideline
(whether or not having the force of law), either (i) affects or would affect the
amount of capital required or expected to be maintained by any Lender or any
Person controlling any Lender, and any Lender determines that the amount of such
capital is increased as a direct or indirect consequence of any Loans made or
maintained, or any Lender's or any such controlling Person's other obligations
hereunder, or (ii) has or would have the effect of reducing the rate of return
on any Lender's or any such controlling Person's capital to a level below that
which such Lender or such controlling Person could have achieved but for such
circumstances as a consequence of any Loans made or maintained, or any agreement
to make Loans, or such Lender's or such controlling Person's other obligations
hereunder (in each case, taking into consideration such Lender's or such
controlling Person's policies with respect to capital adequacy), then, upon
demand by any Lender, the Borrowers shall pay to such Lender from time to time
such additional amounts as will compensate such Lender for such cost of
maintaining such increased capital or such reduction in the rate of return on
such Lender's or such controlling Person's capital.
(c) All amounts payable under this Section 3.4 shall bear interest
from the date that is ten days after the date of demand by a Lender until
payment in full to such Lender at the Reference Rate. A certificate of any
Lender claiming compensation under this Section 3.4 specifying the event herein
above described and the nature of such event shall be submitted by
42
such Lender to the Administrative Borrower, setting forth the additional amount
due and an explanation of the calculation thereof and such Lender's reasons for
invoking the provisions of this Section 3.4, and shall be final and conclusive
absent manifest error. Each Lender shall give the Administrative Borrower
notice, promptly after the Agent has knowledge thereof, of the occurrence of any
event in respect of which such Lender expects to demand payment of any
additional amount under this Section 3.4.
(d) If any of the events requiring payments of additional amounts by
the Borrowers under this Section 3.4 occurs and the applicable Lender shall have
made a demand for such payment hereunder, the applicable Lender shall take such
steps as may be reasonable (consistent with its internal policy and legal and
regulatory restrictions) to (i) change the jurisdiction of its funding office if
such change would avoid the Borrowers being required to pay any additional
amount or (ii) otherwise mitigate the effects of any law or regulation or any
change therein or interpretation thereof as set forth in this Section 3.4.
Section 3.5. Joint and Several Liability of the Borrowers. (a)
Notwithstanding anything in this Agreement or any other Loan Document to the
contrary, each of the Borrowers hereby accepts joint and several liability
hereunder and under the other Loan Documents in consideration of the financial
accommodations to be provided by the Agent and the Lenders under this Agreement
and the other Loan Documents, for the mutual benefit, directly and indirectly,
of each of the Borrowers and in consideration of the undertakings of the other
Borrowers to accept joint and several liability for the Obligations. Each of the
Borrowers, jointly and severally, hereby irrevocably and unconditionally
accepts, not merely as a surety but also as a co-debtor, joint and several
liability with the other Borrowers with respect to the payment and performance
of all of the Obligations (including, without limitation, any Obligations
arising under this Section 3.5), it being the intention of the parties hereto
that all the Obligations shall be the joint and several obligations of each of
the Borrowers without preference or distinction among them. If and to the extent
that any of the Borrowers shall fail to make any payment with respect to any of
the Obligations as and when due or to perform any of the Obligations in
accordance with the terms thereof, then in each event the other Borrowers will
make such payment with respect to, or perform, such Obligations.
(b) The provisions of this Section 3.5 are made for the benefit of the
Agent, the Lenders and their successors and assigns and may be enforced by them
from time to time against any or all of the Borrowers as often as occasion
therefor may arise and without requirement on the part of the Agent, the Lenders
or such successors or assigns first to marshal any of its or their claims or to
exercise any of its or their rights against any of the other Borrowers or to
exhaust any remedies available to it or them against any of the other Borrowers
or to resort to any other source or means of obtaining payment of any of the
Obligations hereunder or to elect any other remedy. The provisions of this
Section 3.5 shall remain in effect until all of the Obligations shall have been
paid in full or otherwise fully satisfied.
(c) Each of the Borrowers hereby agrees that it will not enforce any
of its rights of contribution or subrogation against the other Borrowers with
respect to any liability incurred by it hereunder or under any of the other Loan
Documents, any payments made by it to the Agent or the Lenders with respect to
any of the Obligations or any Collateral until such time as all of the
Obligations have been paid in full in cash. Any claim which any Borrower may
have
43
against any other Borrower with respect to any payments to the Agent or the
Lenders hereunder or under any of the other Loan Documents are hereby expressly
made subordinate and junior in right of payment, without limitation as to any
increases in the Obligations arising hereunder or thereunder, to the prior
payment in full in cash of the Obligations.
ARTICLE IV
CONDITIONS TO LOANS
Section 4.1. Conditions Precedent to Initial Loans. The obligations of
the Lenders to make the Loans to be made on the Closing Date are subject to the
satisfaction, on or prior to the Closing Date, of the following conditions:
(a) Loan Party Documents. The Borrowers shall, and shall cause each
other Loan Party to, deliver to the Lenders (or to the Agent with sufficient
originally executed copies, where appropriate, for each Lender) the following
with respect to the Borrowers or such other Loan Party, as the case may be,
each, unless otherwise noted, dated as of Closing Date:
(i) copies of the Organizational Documents of such Person, certified
by the Secretary of State of its jurisdiction of organization or, if such
document is of a type that may not be so certified, certified by the
secretary or similar officer or manager of the applicable Loan Party,
together with a good standing certificate from the Secretary of State of
its jurisdiction of organization and each other jurisdiction in the United
States in which such Person is qualified to do business and, to the extent
generally available, a certificate or other evidence of good standing as to
payment of any applicable franchise or similar taxes from the appropriate
taxing authority of each jurisdiction of organization, each dated a recent
date prior to the Closing Date;
(ii) resolutions of the Governing Body of such Person approving and
authorizing the execution, delivery and performance by such Person of the
Loan Documents to which it is a party, certified as of the Closing Date by
the secretary or similar officer or manager of such Person as being in full
force and effect without modification or amendment;
(iii) signature and incumbency certificates of the officers or
managers of such Person executing the Loan Documents to which it is a
party;
(iv) executed originals of the Loan Documents to which such Person is
a party; and
(v) such other documents relating to any of the foregoing as the Agent
may reasonably request.
(b) Fees. The Borrowers shall have paid to the Agent, for distribution
to the Agent and the Lenders, the fees payable on the Closing Date provided for
in Section 2.8.
(c) Representations and Warranties; Performance of Agreements. The
Administrative Borrower shall have delivered to the Agent an Officer's
Certificate to the effect
44
that (i) the representations and warranties in Section 5.1 and in each of the
other Loan Documents are true and correct in all respects on and as of the
Closing Date as though made on and as of that date (or, to the extent such
representations and warranties specifically relate to an earlier date, that such
representations and warranties were true and correct in all respects on and as
of such earlier date), (ii) that the Borrowers have performed in all respects
all agreements and satisfied all conditions which this Agreement provides shall
be performed or satisfied by them on or before the Closing Date, (iii) since
December 31, 2001 no event or development has occurred that has had or is
reasonably likely to have a Material Adverse Effect, other than any such event
or development described in Schedule 5.1(h) hereto and (iv) no Default or Event
of Default shall have occurred and is continuing both before and after giving
effect to the transactions contemplated to occur on or about the Closing Date.
(d) Financial Statements. Lenders shall have received from the Parent
(i) the Audited Financial Statements, (ii) the unaudited financial statements of
the Parent and its consolidated Subsidiaries as of March 31, 2002 and for the
fiscal quarter then ended and (iii) a pro forma balance sheet of the Parent and
its Subsidiaries dated as of May 31, 2002, giving effect to the Plan of
Reorganization and the financing contemplated hereby and reflecting fresh start
accounting bases, in form and substance reasonably satisfactory to the Agent and
the Lenders.
(e) Opinions of Counsel to Borrowers. The Lenders shall have received
executed copies of one or more favorable written opinions of counsel for the
Borrowers, in form and substance reasonably satisfactory to the Agent and its
counsel, dated as of the Closing Date and covering substantially the matters
designated in Exhibit D hereto and as to such other matters as the Agent may
reasonably request (this Agreement constituting a written request by the
Borrowers to such counsel to deliver such opinions to the Lenders).
(f) Evidence of Insurance. The Agent shall have received a certificate
from the Parent's insurance broker or other evidence satisfactory to the Agent
that all insurance required to be maintained pursuant to Section 6.1(i) is in
full force and effect and that the Agent on behalf of the Lenders has been named
as additional insured and/or loss payee thereunder to the extent required under
such Section.
(g) Necessary Governmental Authorizations and Consents. The Borrowers
shall have obtained all Governmental Authorizations and all consents of other
Persons that are necessary in connection with the transactions provided for in
the Loan Documents. Each such Governmental Authorization and consent shall be in
full force and effect, except in any case where the failure to obtain or
maintain a Governmental Authorization or consent, either individually or in the
aggregate, could not reasonably be expected to have a Material Adverse Effect.
(h) Real Estate Assets.
(i) In order to create in favor of the Agent, for the benefit of
the Lenders, a valid and, subject to any filing and/or recording referred
to herein, perfected first priority security interest in certain real
estate assets, the Agent shall have received from each applicable Loan
Party (1) one or more Mortgages with respect to each Mortgaged Real
Property, creating on such real property of such Loan Party a perfected,
45
highest available priority Lien on such real property (subject only to
Permitted Liens), (2) a Title Insurance Policy covering such Mortgaged Real
Property containing such endorsement and affirmative coverages as the Agent
may reasonably request, including a longform endorsement, if available, (3)
the surveys set forth on Schedule 4.1(h)(i), and (4) such other agreements,
instruments, approvals, legal opinions or other documents reasonably
requested by the Agent in order to create, perfect, establish the highest
available priority of or otherwise protect any Lien purported to be covered
by any such Mortgage (subject only to Permitted Liens).
(ii) In addition, Agent shall have received with respect to each
Mortgaged Real Property (except as otherwise expressly set forth herein),
(1) for the Mortgaged Real Property set forth on Schedule 4.(h)(ii), either
(A) letters or other evidence from the appropriate municipal authorities
(or other Persons) concerning applicable zoning and building laws, (B) an
ALTA 3.1 zoning endorsement for the applicable Title Insurance Policy, (C)
a zoning opinion letter, or (D) a zoning report, in each case in substance
reasonably satisfactory to Agent, (2) a Phase I environmental report (and,
if recommended by the Phase I environmental report, a Phase II
environmental report), in each case reasonably satisfactory in form and
substance to Agent, (3) Physical Conditions Reports, which reports shall be
reasonably satisfactory in form and substance to Agent, (4) a copy of each
Property Management Agreement, (5) a certificate of occupancy for each
Building located on such Mortgaged Real Property, (6) evidence reasonably
satisfactory to Agent that all statutorily required registration documents
and offering statements and all amendments thereto have been filed with the
applicable Governmental Authority where the Resorts are located and the
Time Share Interests are being sold or marketed and that all marketing and
sales materials comply in all material respects with all Requirements of
Law of the state in which the Resort is located and the states in which the
Time Share Interests at the Resort are being sold or marketed, and (7)
opinions of counsel (which counsel shall be reasonably satisfactory to the
Agent) with respect to the creation and perfection of the security
interests in favor of the Agent in the Real Property, the enforceability of
the Mortgages and such other matters governed by the laws of each
jurisdiction in which any Real Property is located as the Agent may
reasonably request, in each case in form and substance reasonably
satisfactory to the Agent.
(i) Personal Property Collateral. In order to create in favor of the
Agent, for the benefit of the Lenders, a valid, perfected first priority
security interest in the personal property Collateral, the Agent shall have
received:
(i) evidence satisfactory to the Agent of the compliance by each Loan
Party of their obligations under the Collateral Documents (including,
without limitation, their obligations to execute and deliver UCC financing
statements, originals of securities, instruments and chattel paper and any
agreements governing deposit and/or securities accounts as provided
therein);
(ii) (A) a completed Collateral Certificate dated the Closing Date and
executed by an Authorized Officer, (B) the results of a search (including a
recent update thereof), by a Person satisfactory to the Agent, of all
effective UCC financing statements (or
46
equivalent filings) made with respect to any personal or mixed property of
any Loan Party, together with copies of all such filings disclosed by such
search, and (C) UCC termination statements (or similar documents) duly
executed by all applicable Persons for filing in all applicable
jurisdictions as may be necessary to terminate any effective UCC financing
statements (or equivalent filings) disclosed in such search (other than any
such financing statements in respect of Permitted Liens);
(iii) opinions of counsel (which counsel shall be reasonably
satisfactory to the Agent) with respect to the creation and perfection of
the security interests in favor of the Agent in such Collateral and such
other matters governed by the laws of each jurisdiction in which any Loan
Party or any personal property Collateral is located as the Agent may
reasonably request, in each case in form and substance reasonably
satisfactory to the Agent; and
(iv) evidence that each Loan Party shall have taken or caused to be
taken any other action, executed and delivered or caused to be executed and
delivered any other agreement, document and instrument and made or caused
to be made any other filing and recording (other than as set forth herein)
reasonably required by the Agent.
(j) Matters Relating to Existing Indebtedness. The Debtors shall have
(a) no Indebtedness outstanding under the DIP Facility, (b) discharged
Indebtedness under all of their prepetition credit facilities as provided in the
Plan of Reorganization, (c) terminated any commitments to lend or credit
facilities except for any Permitted Indebtedness and (d) delivered to the Agent
all documents or instruments necessary to release all Liens securing
Indebtedness or other obligations of the Borrowers and their subsidiaries under
existing credit facilities to the extent required by the Agent.
(k) Plan of Reorganization. The Plan of Reorganization shall have been
delivered to the Agent and the Lenders, shall expressly provide for and describe
the Loans and Commitments and the Agent and the Lenders and shall be in form and
substance acceptable to the Agent and the Lenders. The Plan of Reorganization
shall have become effective in accordance with its terms without waiver of any
condition to such effectiveness that, in the Agent's reasonable judgment, is
material.
(l) Confirmation Order. The Confirmation Order shall have been
delivered to the Agent, shall address the making of the Loans and the
Commitments under this Agreement and the terms hereof and the granting of all
Liens required under this Agreement and the other Loan Documents and shall
otherwise be in form and substance satisfactory to the Agent and the Lenders.
The Confirmation Order shall be in full force and effect and shall not have been
stayed pending any appeal, no appeal or petition for review or for rehearing
shall have been taken or shall be pending, the Confirmation Order is not subject
to appeal and not less than 11 days shall have elapsed since entry of the
Confirmation Order and the Agent shall have received evidence satisfactory to it
demonstrating such facts.
(m) Valuation/Appraisal. The Agent shall have received
valuation/appraisals with respect to certain of the Collateral from such third
party appraisal firm or firms as selected by the
47
Borrowers and acceptable to the Agent, and such valuation/appraisal and the
results thereof shall be acceptable to the Agent.
(n) Exchange Programs. The Agent shall be satisfied with respect to
matters relating to the Borrowers' membership or participation in programs of
Resort Condominium International and/or Interval International.
(o) Custodial Agreements. Each of the Custodial Agreements shall be in
full force and effect.
(p) Management. The persons listed on Schedule 4.1(p) hereto shall
have executed and delivered management agreements with respect to services to be
provided to the Parent that are satisfactory to the Agent and provide, inter
alia, that such person shall maintain an active role in the management Parent
for the time periods set forth therein.
(q) Completion of Proceedings. All corporate and other proceedings
taken or to be taken in connection with the transactions contemplated hereby and
all documents incidental thereto shall be satisfactory in form and substance to
the Agent, and the Agent shall have received all such counterpart originals or
certified copies of such documents as the Agent may reasonably request.
Section 4.2. Conditions Precedent to All Loans. The obligation of the
Agent or any Lender to make any Loan is subject to the satisfaction, on or prior
to the date of such Loan, of the following conditions:
(a) Fees. The Borrowers shall have paid all fees, costs, expenses and
taxes then payable by the Borrowers to the Agent and the Lenders pursuant to
this Agreement and the other Loan Documents.
(b) Representations and Warranties; No Event of Default. The following
statements shall be true and correct, and the submission by the Administrative
Borrower to the Agent of a Notice of Borrowing with respect to each Loan, and
the Borrowers' acceptance of the proceeds of such Loan, shall each be deemed to
be a representation and warranty by the Borrowers on the date of such Loan that:
(i) the representations and warranties in Section 5.1 and in each of the other
Loan Documents are true and correct in all material respects on and as of such
date (or, to the extent such representations specifically relate to an earlier
date, that such representations and warranties were true and correct in all
material respects on and as of such earlier date), (ii) at the time of and after
giving effect to the making of such Loan and the application of proceeds
thereof, no Default or Event of Default has occurred and is continuing or would
result from the making of such Loan, (iii) since December 31, 2001 no event or
development has occurred that has had or is reasonably likely to have a Material
Adverse Effect, other than any such event or development described in Schedule
5.1(h) hereto and (iv) the conditions set forth in this Section 4.2 have been
satisfied as of the date of such request.
(c) Notice of Borrowing. The Agent shall have received a Notice of
Borrowing pursuant to Section 2.2(a) hereof.
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(d) Proceedings; Receipt of Documents. All corporate and other
proceedings taken or to be taken in connection with the making of such Loan and
the other transactions contemplated by this Agreement, and all documents
incidental hereto and thereto, shall be satisfactory to the Agent, and the Agent
shall have received all such counterpart originals or certified or copies of
such documents, in form and substance satisfactory to the Agent, as the Agent
may reasonably request.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
Section 5.1. Representations and Warranties. Each Borrower hereby
represents and warrants to the Agent and the Lenders as follows:
(a) Organization, Good Standing, Etc. Each Loan Party (i) is a
corporation, limited liability company or limited partnership duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
organization, (ii) has all requisite corporate, limited liability company or
partnership power and authority to conduct its business as now conducted and as
presently contemplated and in the case of the Borrowers to make borrowings
hereunder and to execute and deliver each Loan Document to which it is a party,
and to consummate the transactions contemplated hereby and thereby and (iii) is
duly qualified to do business and is in good standing in each jurisdiction in
which the character of the properties owned or leased by it or in which the
transaction of its business makes such qualification necessary, except where the
failure so to be qualified or in good standing is not reasonably likely to have
a Material Adverse Effect.
(b) Authorization, Etc. The execution, delivery and performance by
each Loan Party of each Loan Document to which it is or will be a party (i) have
been duly authorized by all necessary corporate, limited liability company or
partnership, as the case may be, action, (ii) do not and will not contravene its
Organizational Documents or any applicable law or any contractual restriction
binding on or otherwise affecting it or any of its properties, (iii) do not and
will not result in or require the creation of any Lien (other than pursuant to
any Loan Document) upon or with respect to any of its properties and (iv) do not
and will not result in any suspension, revocation, impairment, forfeiture or
nonrenewal of any material permit, license, authorization or approval applicable
to its operations or any of its properties.
(c) Governmental Approvals. Except for the entry of the Confirmation
Order, such filings as may be required under the Exchange Act and filings and
notices required to create or perfect any Lien to be created under any of the
Loan Documents, no authorization or approval or other action by, and no notice
to or filing with, any Governmental Authority is required in connection with the
due execution, delivery and performance by any Loan Party of any Loan Document
to which it is or will be a party.
(d) Execution and Binding Effect. Each of the Loan Documents required
to be executed and delivered on or prior to the Closing Date has been duly and
validly executed and delivered by each of the Loan Parties which is a party
thereto and constitutes a legal, valid and binding obligations of each Loan
Party, enforceable in accordance with the terms hereof or thereof. Each Loan
Document that was not required to be executed and delivered by any Loan
49
Party prior to the Closing Date, when executed and delivered, will be validly
executed and delivered by each Loan Party party thereto and will constitute a
legal, valid and binding obligation of each Loan Party, enforceable in
accordance with the terms thereof.
(e) Warrant Shares. The shares of New Sunterra Common Stock issuable
upon exercise of the Warrants have been duly authorized by all necessary
corporate action on the part of the Parent, have been duly reserved for issuance
upon such exercise and, when issued against payment therefor and otherwise in
accordance with the provisions of the Warrants, will be validly issued, fully
paid and nonassessable and shall not have been issued in violation of any
preemptive, first refusal or similar rights. The number of shares of New
Sunterra Common Stock issuable upon exercise of the Warrants constitutes 5% of
the number of shares of such stock that will be outstanding after giving effect
to the transactions provided for in the Plan of Reorganization, assuming the
exercise in full of all stock options and warrants provided for in such Plan or
outstanding on the Closing Date.
(f) Subsidiaries. Schedule 5.1(f) is a complete and correct
description of the name, jurisdiction of organization and ownership of the
outstanding Capital Stock of Subsidiaries of the Parent in existence on the date
hereof. All of the issued and outstanding shares of Capital Stock of each
Subsidiary have been validly issued and are fully paid and nonassessable, and
the holders thereof are not entitled to any preemptive, first refusal or other
similar rights. Except as indicated on such Schedule, all such Capital Stock is
owned by the Parent or one or more of its wholly-owned Subsidiaries, free and
clear of all Liens.
(g) Litigation. Except as set forth in Schedule 5.1(g), there is no
pending or, to the knowledge of any Borrower, threatened action, suit or
proceeding affecting any Loan Party before or by any court or other Governmental
Authority or any arbitrator that (i) is reasonably likely to have a Material
Adverse Effect or (ii) as of the Closing Date, relates to this Agreement or any
other Loan Document or any transaction contemplated hereby or thereby.
(h) Financial Condition. The Audited Financial Statements, and the
unaudited consolidated financial statements of the Parent and its consolidated
Subsidiaries as at March 31, 2002 and for the fiscal quarter then ended, copies
of which have been delivered to the Agent and the Lenders, fairly present the
consolidated financial condition of the Parent and its Subsidiaries as at the
dates thereof and the consolidated results of their operations for the fiscal
periods ended on such dates, all in accordance with GAAP, subject, in the case
of such unaudited financial statements, to the absence of footnotes and to
normal year-end audit adjustments, and since December 31, 2001 no event or
development has occurred that has had or is reasonably likely to have a Material
Adverse Effect, other than any such event or development described in Schedule
5.1(h) hereto.
(i) Compliance with Law, Etc. None of the Loan Parties is in violation
of its Organizational Documents or any law, rule, regulation, judgment or order
of any Governmental Authority applicable to it or any of its property or assets
which is reasonably likely to have a Material Adverse Effect, and no Default or
Event of Default has occurred and is continuing.
(j) ERISA. Except as set forth on Schedule 5.1(j), (i) each Employee
Plan is in substantial compliance with ERISA and the Code, (ii) no Termination
Event has occurred nor is
50
reasonably expected to occur with respect to any Employee Plan, (iii) the most
recent annual report (Form 5500 Series) with respect to each Employee Plan,
including any required Schedule B (Actuarial Information) thereto, copies of
which have been filed with the United States Department of Labor and will
promptly be delivered upon request to the Agent, is complete and correct and
fairly presents the funding status of such Employee Plan, and since the date of
such report there has been no material adverse change in such funding status,
(iv) no Employee Plan had an accumulated or waived funding deficiency or
permitted decreases which would create a deficiency in its funding standard
account or has applied for an extension of any amortization period within the
meaning of Section 412 of the Code at any time during the previous 60 months,
and (v) no Lien imposed under the Code or ERISA exists or is likely to arise on
account of any Employee Plan within the meaning of Section 412 of the Code at
any time during the previous 60 months. Neither any Loan Party nor any ERISA
Affiliate thereof is or was during the preceding six years obligated to
contribute to any Multiemployer Plan, and neither any Loan Party nor any ERISA
Affiliate thereof has assumed any obligation of any predecessor with respect to
any Multiemployer Plan. Except as required by Section 4980B of the Code, none of
the Loan Parties or any of their ERISA Affiliates maintains an employee welfare
benefit plan (as defined in Section 3(1) of ERISA) which provides health or
welfare benefits (through the purchase of insurance or otherwise) for any
retired or former employee of any Loan Party or any of its ERISA Affiliates or
coverage after a participant's termination of employment. None of the Loan
Parties or any of their ERISA Affiliates has incurred any material liability or
obligation under the Worker Adjustment and Retraining Notification Act ("WARN")
or similar state law, which remains unpaid or unsatisfied.
(k) Taxes, Etc. All federal, state and material local tax returns and
other reports required by applicable law to be filed by any Loan Party have been
filed, or extensions have been obtained, and all material taxes, assessments and
other governmental charges imposed upon any Loan Party or any property of any
Loan Party and which have become due and payable on or prior to the date hereof
have been paid, except as set forth on Schedule 5.1(k) hereto and except to the
extent contested in good faith by proper proceedings which stay the imposition
of any penalty, fine or Lien resulting from the non-payment thereof and with
respect to which adequate reserves have been set aside for the payment thereof.
(l) Compliance with Margin Regulations. None of the Loan Parties is or
will be engaged in the business of extending credit for the purpose of
purchasing or carrying margin stock (within the meaning of Regulation T, U or X
of the Board), and no proceeds of any Loan will be used to purchase or carry any
margin stock or to extend credit to others for the purpose of purchasing or
carrying any margin stock.
(m) Nature of Business. None of the Loan Parties is engaged in any
business other than the acquisition, marketing, sale, development, management,
rental and operation of timeshare resorts and other timeshare activities, the
provision of financing for the purchase of Time Share Interests and other
leisure activities (exclusive of gaming) and activities directly related to or
otherwise supporting any of the foregoing.
(n) Adverse Agreements, Etc. None of the Loan Parties is subject to
any charter, limited liability company agreement, partnership agreement or other
corporate, partnership or limited liability company restriction or any judgment,
order, regulation, ruling or other
51
requirement of a court or other Governmental Authority (other than regulations
or other similar requirements relating to acquisition, marketing, sale,
development, management, rental and operation of time share resorts and other
time share activities, the provision of financing for the purchase of Time Share
Interests and other leisure activities (exclusive of gaming) and activities
directly related to the foregoing), which is reasonably likely to have a
Material Adverse Effect.
(o) Permits, Etc. Except as set forth in Schedule 5.1(o) hereto, each
Loan Party has, and is in compliance with, all permits, licenses,
authorizations, approvals, entitlements and accreditations required for such
Person lawfully to own, lease, manage or operate, or to acquire, each business
currently owned, leased, managed or operated, or to be acquired, by such Person
except for the failure to obtain and maintain compliance with permits, licenses,
authorizations, approvals, entitlements and accreditations which is not
reasonably likely to have a Material Adverse Effect. No condition exists or
event has occurred which, in itself or with the giving of notice or lapse of
time or both, would result in the suspension, revocation, impairment, forfeiture
or non-renewal of any such permit, license, authorization, approval, entitlement
or accreditation, and there is no claim that any thereof is not in full force
and effect, except for the occurrence of such conditions or events which are not
reasonably likely to have a Material Adverse Effect.
(p) Title to Properties.
(i) Each Loan Party has good and indefeasible title to, or valid
leasehold interests in, all property and assets material to its business,
free and clear of all Liens except Permitted Liens. All such properties are
in good working order and condition, ordinary wear and tear excepted, and
in compliance with all laws, rules, regulations, judgments or orders of any
Governmental Authority, except for such noncompliance which is not
reasonably likely to have a Material Adverse Effect.
(ii) Schedule 1.1(x)(i) sets forth a complete and accurate list as of
the Closing Date of Real Property owned or leased by each Loan Party and
its Subsidiaries.
(iii) With respect to each Ground Lease, Borrowers hereby warrant and
represent as follows: (i) the Borrower set forth on Schedule 1.1(xi) hereto
is the owner of a valid and subsisting interest as lessee under the
applicable Ground Lease; (ii) the Ground Lease is in full force and effect,
unmodified by any writing or otherwise except as set forth on Schedule
1.1(xi) hereto; (iii) all rent, additional rent and other charges reserved
therein have been paid to the extent they are payable to the date hereof;
(iv) Borrower enjoys the quiet and peaceful possession of the property
demised thereby; (v) Borrowers are not in default under any of the terms
thereof and there are no defaults under any of the terms thereof beyond the
giving of any required notice and the expiration of any applicable cure
period; (vi) to Borrower's knowledge, Borrowers have not received notice
from lessor under the Ground Lease of a default thereunder, which default
has not been timely cured; (vii) to the best of Borrowers' knowledge,
lessor under the Ground Lease is not in default under any of the terms or
provisions thereof on the part of the lessor to be observed or performed;
(viii) the Ground Lease or a memorandum thereof has been duly recorded; and
(ix) the terms of the Ground Lease extend not less than ten (10) years
beyond the Final Maturity Date.
52
(q) Full Disclosure. Each Borrower has disclosed to the Agent all
agreements, instruments and corporate or other restrictions to which it is
subject, and all other matters known to it, that, individually or in the
aggregate, is reasonably likely to have a Material Adverse Effect. None of the
reports, financial statements, certificates or other information furnished by or
on behalf of any Borrower to the Agent in connection with the negotiation of
this Agreement or delivered hereunder (as modified or supplemented by other
information so furnished) contains any material misstatement of fact or omits to
state any material fact necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading; provided that,
with respect to projected financial information, each represents only that such
information was prepared in good faith based upon assumptions believed to be
reasonable at the time.
(r) Environmental Matters. Except as set forth on Schedule 5.1(r), (i)
the operations of each Loan Party are in compliance with Environmental Laws;
(ii) there has been no Release at any of the properties owned or operated by any
Loan Party or a predecessor in interest, or at any disposal or treatment
facility which received Hazardous Materials generated by any Loan Party or any
predecessor in interest; (iii) no Environmental Action has been asserted against
any Loan Party or any predecessor in interest nor does any Loan Party have
knowledge or notice of any threatened or pending Environmental Action against
any Loan Party or any predecessor in interest; and (iv) no Environmental Actions
have been asserted against any facilities that may have received Hazardous
Materials generated by any Loan Party or any predecessor in interest, except in
the case of each of items (i), (ii), (iii) and (iv) above, for matters that
could not reasonably be expected to have a Material Adverse Effect.
(s) Insurance. Each Loan Party keeps or causes to be kept its property
adequately insured and maintains or causes other Persons to maintain (i)
insurance to such extent and against such risks, including fire, as is customary
with companies in the same or similar businesses, (ii) workers' compensation
insurance in the amounts required by applicable law, (iii) public liability
insurance in amounts customary with companies in the same or similar business
against claims for personal injury or death on properties owned, occupied or
controlled by it and (iv) such other insurance as may be required by law or as
may be reasonably required by the Agent (including insurance against larceny,
embezzlement or other criminal misappropriation). Schedule 5.1(s) sets forth a
list of all insurance maintained by each Loan Party on the Closing Date.
(t) Solvency. After giving effect to the transactions contemplated by
this Agreement and before and after giving effect to each Loan, each Loan Party
is Solvent.
(u) Location of Bank Accounts. Schedule 5.1(u) sets forth a complete
and accurate list as of the Closing Date of all deposit, checking and other bank
accounts, all securities and other accounts maintained with any broker dealer
and all other similar accounts maintained by each Loan Party, together with a
description thereof (i.e., the bank or broker dealer at which such deposit or
other account is maintained and the account number and the purpose thereof).
(v) Intellectual Property. Each Loan Party owns or licenses or
otherwise has the right to use all licenses, permits, trademarks, trademark
applications, patents, patent applications, service marks, tradenames,
copyrights, copyright applications, franchises, authorizations and
53
other intellectual property rights that are necessary for the operation of its
businesses, without infringement upon or conflict with the rights of any other
Person with respect thereto, except for such infringements and conflicts which,
individually or in the aggregate, are not reasonably likely to have a Material
Adverse Effect.
(w) Holding Company and Investment Company Acts. None of the Loan
Parties is (i) a "holding company" or a "subsidiary company" of a "holding
company" or an "affiliate" of a "holding company", as such terms are defined in
the Public Utility Holding Company Act of 1935, as amended, or (ii) an
"investment company" or an "affiliated person" or "promoter" of, or "principal
underwriter" of or for, an "investment company", as such terms are defined in
the Investment Company Act of 1940, as amended.
(x) Place of Business; Chief Executive Office. Schedule 5.1(x) sets
forth a complete and accurate list as of the date hereof of (i) each place of
business of each Loan Party and (ii) the chief executive office of each Loan
Party.
(y) Lien Priority. The Liens of the Agent in the Collateral shall be
valid and perfected first priority Liens subject only to Permitted Liens (to the
extent that such Permitted Liens are accorded priority as a matter of law or
pursuant to agreement).
(z) Time Share Interests.
(i) The sale, offering for sale and financing of Time Share
Interests (1) do not constitute the sale, or the offering of sale, of
securities subject to registration requirements of the Securities Act or
any state or foreign securities law, (2) except to the extent that any such
violation(s), either individually or in the aggregate, are not reasonably
likely to have a Material Adverse Effect, do not violate any time share or
other law of any state or foreign country in which sales or solicitation of
Time Share Interests occur and (3) except to the extent that any such
violation(s), either individually or in the aggregate, are not reasonably
likely to have a Material Adverse Effect, do not violate any consumer
credit or usury laws of any state or foreign country in which sales or
solicitations of Time Share Interests occur. Except to the extent that any
such failure(s), either individually or in the aggregate, are not
reasonably likely to have a Material Adverse Effect, the Loan Parties have
not failed to make or cause to be made any registrations or declarations
with any Governmental Authority necessary to the ownership of the Resorts
or to the conduct of their business, including laws and regulations
applicable to the business and activities, the operation of the Resorts and
the sale, or offering for sale, of Time Share Interests. Except to the
extent that any such noncompliance, either individually or in the
aggregate, is not reasonably likely to have a Material Adverse Effect, the
Loan Parties have, to the extent required by their activities and
businesses, complied with all laws and regulations applicable to their
business and activities.
(ii) Schedule 5.1(z) sets forth, with respect to each Resort, the
states and countries in which Time Share Interests with respect to such
Resort are being sold or marketed. Borrower has filed in each jurisdiction
in which such filing is a legal prerequisite to the marketing of the Time
Share Interests therein all applicable documents
54
with the appropriate Governmental Authorities required to authorize the
sale of Time Share Interests in such jurisdiction and has subjected each
Resort to certain limitations, restrictions, conditions and covenants as
described in the time share declarations and as hereinafter set forth in
accordance with the provisions of any applicable laws, statutes or
regulations (such laws, statutes or regulations and all amendments,
modifications or replacements thereof and successors thereto, and all
regulations and guidelines promulgated thereunder or with respect thereto,
now or hereafter enacted, being hereinafter collectively referred to as the
"Time Share Laws"), except for failures to make such filings that are not
reasonably likely to have a Material Adverse Effect . All material
documents used in connection with the creation of the Time Share Interests,
the sale of the Time Share Interests and the operation of the Resort as a
time share resort, including, without limitation, the Declaration (as
hereinafter defined), by-laws and rules and regulations of the homeowner's
association, the management agreement, the form of contract of sale and
deeds, and all other documents used by the Loan Parties in connection with
the sale of Time Share Interests, and the operation of the Resort as a time
share resort and the regulation, management and administration thereof
(collectively, the "Time Share Documents") comply with all Time Share Laws,
except for any non-compliance that is not reasonably likely to have a
Material Adverse Effect. As used herein, the term "Declaration" means the
declaration in furtherance of a plan for subjecting the Resort to a time
share form of ownership, which Declaration contains covenants,
restrictions, easements, charges and liens and including, without
limitation, provisions regarding the identification of Time Share Interests
and the common areas and the regulation and governance of the Real Property
comprising the Resort as a time share regime.
(aa) Time Share Interest Exchange Network. To the extent Borrowers and
their Subsidiaries have entered into written agreements with Resort Condominiums
International or Interval International, such Borrowers and their Subsidiaries
are members and participants pursuant to validly executed and enforceable
written agreements in Resort Condominium International and/or Interval
International, as applicable. Such Borrowers and their Subsidiaries have paid
all fees and other amounts due and owing under such agreements and are not
otherwise in default in any respect thereunder, except to the extent that is not
reasonably likely to have a Material Adverse Effect.
(bb) Common Areas. To the extent that Borrowers are obligated to
construct common areas and amenities, the common areas and amenities appurtenant
to sold Time Share Interests, and the streets and other off-site improvements
contained within the projects, have been completed or a bond insuring the
completion thereof has been obtained, except to the extent that such failure to
complete or post a bond is not reasonably likely to have a Material Adverse
Effect, and such interests in such common areas are free and clear of all Liens
except Permitted Liens.
(cc) Schedules. All of the information which is required to be
scheduled to this Agreement is set forth on the Schedules attached hereto, is
correct and accurate in all material respects and does not omit to state any
information material thereto.
55
(dd) Homeowners' Association, Maintenance Fees and Developer
Subsidies. As of May 31, 2002, all homeowners' association, maintenance fees
and/or developer subsidies, as applicable, required to be paid by any Loan Party
and which are past due have been paid, except to the extent that such past due
fees do not exceed $1,000,000 in the aggregate.
(ee) Condemnation. Except as set forth in Schedule 5.1(ee), as of the
Closing Date no condemnation or other proceeding in the nature of eminent domain
has been commenced or, to any Loan Party's best knowledge, is threatened or
contemplated with respect to all or any portion of any Mortgaged Real Property
or for the relocation of roadways providing access to any Mortgaged Real
Property.
(ff) Utilities and Public Access. Each Mortgaged Real Property has
rights of access to public ways and is served by water, sewer, sanitary sewer
and storm drain facilities adequate to service such Mortgaged Real Property for
its respective intended uses. All public utilities necessary to the full use and
enjoyment of each Mortgaged Real Property are located either in the public
right-of-way abutting such Mortgaged Real Property (which are connected so as to
serve such Mortgaged Real Property without passing over other property) or in
recorded easements serving such Mortgaged Real Property. All roads necessary for
the use of each Mortgaged Real Property for its current purposes have been
completed and dedicated to public use and accepted by all Governmental
Authorities.
(gg) Separate Lots. Each Mortgaged Real Property is comprised of one
(1) or more parcels which constitute a separate tax lot or lots and does not
constitute a portion of any other tax lot not a part of such Mortgaged Real
Property; provided, however, that the foregoing shall not prohibit a Loan Party
from owning Time Share Interests that are jointly assessed with Time Share
Interests owned by other Persons.
(hh) Assessments. Except as set forth in Schedule 5.1(hh), as of the
Closing Date, there are no pending or proposed special or other assessments for
public improvements or otherwise affecting any Mortgaged Real Property.
(ii) Use of Property. Each Resort is used exclusively as a time share
resort, hotel and/or other appurtenant and related uses.
(jj) Certificate of Occupancy; Licenses. All material certifications,
permits, licenses and approvals, including without limitation, certificates of
completion and occupancy permits required for the legal use, occupancy and
operation of each Resort as a time share resort or hotel (collectively, the
"Licenses"), have been obtained and are in full force and effect. Borrower shall
keep and maintain all Licenses necessary for the operation of each Resort as a
time share resort. The use being made of each Resort is in conformity with the
certificate of occupancy issued for such Resort.
(kk) Flood Zone. None of the improvements on any Mortgaged Real
Property are located in an area as identified by the Federal Emergency
Management Agency as an area having special flood hazards or, if so located,
flood insurance is in full force and effect with respect to each Mortgaged Real
Property.
56
(ll) Physical Condition. Each Mortgaged Real Property, including,
without limitation, all buildings, improvements, parking facilities, sidewalks,
storm drainage systems, roofs, plumbing systems, HVAC systems, fire protection
systems, electrical systems, equipment, elevators, exterior sidings and doors,
landscaping, irrigation systems and all structural components, are in good
condition, order and repair in all material respects; there exists on the
Closing Date no structural or other material defects or damages in any Mortgaged
Real Property, whether latent (to the knowledge of the Borrowers) or otherwise;
and Borrower has not received on the Closing Date notice from any insurance
company or bonding company of any defects or inadequacies in any Mortgaged Real
Property, or any part thereof, which would materially adversely affect the
insurability of the same or cause the imposition of extraordinary premiums or
charges thereon or of any termination or threatened termination of any policy of
insurance or bond.
(mm) Boundaries. All of the improvements which were included in
determining the appraised value of each Mortgaged Real Property lie wholly
within the boundaries and building restriction lines of such Mortgaged Real
Property, and no improvements on adjoining properties encroach upon such
Mortgaged Real Property, and no easements or other encumbrances upon the
applicable Mortgaged Real Property encroach upon any of the improvements, so as
to affect the value or marketability of the applicable Mortgaged Real Property
except those which are insured against by the Title Insurance Policy.
(nn) Survey. The Surveys delivered to Agent in connection with this
Agreement do not fail to reflect any material matter affecting such Mortgaged
Real Property or the title thereto.
(oo) Filing and Recording Taxes. All transfer taxes, deed stamps,
intangible taxes or other amounts in the nature of transfer taxes required to be
paid by any Person under applicable Requirements of Law currently in effect in
connection with the transfer of the Real Properties to the applicable Loan Party
have been paid. All mortgage, mortgage recording, stamp, intangible or other
similar tax required to be paid by any Person under applicable Requirements of
Law currently in effect in connection with the execution, delivery, recordation,
filing, registration, perfection or enforcement of any of the Loan Documents,
including, without limitation, the Mortgages, will be paid on the date hereof
and, under current Requirements of Law, each of the Mortgages is enforceable in
accordance with its terms by Agent (or any subsequent holder thereof), subject
to principles of equity and bankruptcy, insolvency and other laws generally
applicable to creditors' rights and the enforcement of debtors' obligations.
(pp) Management Agreement. To the best of Borrowers' knowledge, the
Property Management Agreements are in full force and effect and to the knowledge
of each Loan Party there is no material default thereunder by any Loan Party
party thereto or, to the knowledge of any Loan Party, by any party thereto other
than a Loan Party, other than any such default that is not reasonably likely to
have a Material Adverse Effect, and no event has occurred that, with the passage
of time and/or the giving of notice would constitute such a default thereunder.
(qq) Illegal Activity. No portion of any Real Property has been or
will be purchased with proceeds of any illegal activity.
57
(rr) Embargoed Person. At all times throughout the term of the Loans,
including after giving effect to any transfers of Property permitted pursuant to
the Loan Documents, (a) none of the funds or other assets of any Loan Party
constitute property of, or are beneficially owned, directly or indirectly, by
any Person subject to trade restrictions under U.S. law, including, but not
limited to, the International Emergency Economic Powers Act, 50 U.S.C. (S)(S)
1701 et seq., The Trading with the Enemy Act, 50 U.S.C. App. 1 et seq., and any
Executive Orders or regulations promulgated thereunder with the result that the
investment in any Loan Party (whether directly or indirectly), is prohibited by
law or the Loans made by the Agent are in violation of law ("Embargoed Person");
(b) no Embargoed Person has any interest of any nature whatsoever in any Loan
Party with the result that the investment in any Loan Party (whether directly or
indirectly), is prohibited by law or the Loans are in violation of law; and (c)
none of the funds of any Loan Party have been derived from any unlawful activity
with the result that the investment in any Loan Party (whether directly or
indirectly), is prohibited by law or the Loan is in violation of law.
ARTICLE VI
COVENANTS OF THE BORROWERS
Section 6.1. Affirmative Covenants. So long as any principal of or
interest on any Loan or any other Obligation (whether or not due) shall remain
unpaid (other than Obligations that by the express terms of this Agreement
survive the termination hereof) or any Lender shall have any Commitment, the
Borrowers will, unless the Required Lenders shall otherwise consent in writing:
(a) Reporting Requirements. Furnish to the Agent and each Lender:
(i) as soon as available, and in any event within 120 days after the
end of each fiscal year, consolidated and consolidating (in the form of
Schedule 6.1(a)(i) hereto) balance sheets, consolidated and consolidating
(in the form of Schedule 6.1(a)(i) hereto) statements of income and
consolidated statements of cash flows and stockholders' equity of the
Parent and its Subsidiaries as at the end of such fiscal year, setting
forth in comparative form the corresponding figures for the immediately
preceding fiscal year, all in reasonable detail and prepared in accordance
with GAAP, and accompanied by a report and an opinion, prepared in
accordance with generally accepted auditing standards, of Deloitte & Touche
LLP or other independent certified public accountants of recognized
national standing selected by the Parent and satisfactory to the Agent
(which opinion shall be without qualification or exception as to scope of
audit or for going concern, except for limitations arising with respect to
financial statements for prior periods that were not audited by Deloitte &
Touche LLP), together with a written statement of such accountants (1) to
the effect that, in making the examination necessary for their
certification of such financial statements, they have not obtained any
knowledge of the existence of an Event of Default or a Default and (2) if
such accountants shall have obtained any knowledge of the existence of an
Event of Default or such Default, describing the nature thereof;
(ii) as soon as available, and in any event within 30 days of the end
of each fiscal month of the Parent and its Subsidiaries (or with respect to
any month that is also
58
the last month in a fiscal quarter, within 45 days of the end of such
month), internally prepared consolidated and consolidating (in the form of
Schedule 6.1(a)(i) hereto) balance sheets, consolidated and consolidating
(in the form of Schedule 6.1(a)(i) hereto) statements of operations and
consolidated statements of cash flows for such fiscal month of the Parent
and its Subsidiaries for such fiscal month and for the period from the
beginning of such fiscal year to the end of such fiscal month, and, for
such reports prepared more than one year after the Closing Date, setting
forth in comparative form the corresponding figures for the preceding
fiscal year, all in reasonable detail and certified by an Authorized
Officer as fairly presenting, in all material respects, the financial
position of the Parent and its Subsidiaries as of the end of such fiscal
month and the results of operations and cash flows of the Parent and its
Subsidiaries for such fiscal month, in accordance with GAAP applied in a
manner consistent with that of the most recent audited financial statements
furnished to the Lenders, subject to normal year-end adjustments;
(iii) as soon as available, a weekly flash report in the form of
Schedule 6.1(a)(iii) hereto and within twenty (20) days after the end of
each month, a management report that shall include an analysis of Time
Share Inventory, Time Share Inventory sales and Mortgage Receivable
activity, all as of the month then ended;
(iv) simultaneously with the delivery of the financial statements
required by clauses (i) and (ii) of this Section 6.1(a), a certificate of
an Authorized Officer (A) stating that such Authorized Officer has reviewed
the provisions of this Agreement and the other Loan Documents and has made
or caused to be made under his or her supervision a review of the condition
and operations of the Parent and its Subsidiaries during the period covered
by such financial statements with a view to determining whether the Parent
and its Subsidiaries were in compliance with all of the provisions of such
Loan Documents at the times such compliance is required by the Loan
Documents and that such review has not disclosed, and such Authorized
Officer has no knowledge of, the existence during such period of an Event
of Default or Default or, if an Event of Default or Default existed,
describing the nature and period of existence thereof and the action which
the Parent and its Subsidiaries propose to take or have taken with respect
thereto and (B) attaching a schedule showing the calculations necessary for
purposes of the covenants contained in Section 6.3;
(v) as soon as available, but in any event within twenty (20) days
after the end of each fiscal month, a Borrowing Base Certificate as of the
last day of such month, together with an electronic tape detailing the
Mortgage Receivables covered by such Borrowing Base Certificate;
(vi) promptly after submission to any Governmental Authority, all
documents and written information furnished to such Governmental Authority
in connection with any investigation of any Loan Party other than those
relating to routine inquiries by such Governmental Authority;
(vii) as soon as possible, and in any event within three (3) Business
Days after the occurrence of an Event of Default or Default or the
occurrence of any event or
59
development that is reasonably likely to have a Material Adverse Effect,
the written statement of an Authorized Officer setting forth the details of
such Event of Default, Default, other event or Material Adverse Effect and
the action which the Parent and its Subsidiaries propose to take with
respect thereto;
(viii) (A) as soon as possible and in any event (1) within ten (10)
days after any Loan Party or any ERISA Affiliate thereof knows or has
reason to know that any Termination Event with respect to any Employee Plan
has occurred, or (2) within 10 days after any Loan Party or any ERISA
Affiliate thereof knows or has reason to know that an accumulated funding
deficiency has been incurred or an application has been made to the
Secretary of the Treasury for a waiver or modification of the minimum
funding standard (including installment payments) or an extension of any
amortization period under Section 412 of the Code with respect to an
Employee Plan, a statement of an Authorized Officer setting forth the
details of such occurrence and the action, if any, which such Loan Party or
such ERISA Affiliate proposes to take with respect thereto, (B) promptly
and in any event within three days after receipt thereof by any Loan Party
or any ERISA Affiliate thereof from the PBGC, copies of each notice
received by any Loan Party or any ERISA Affiliate thereof of the PBGC's
intention to terminate any Plan or to have a trustee appointed to
administer any Plan, (C) promptly and in any event within 10 days after the
filing thereof if requested by the Agent, copies of each Schedule B
(Actuarial Information) to the annual report (Form 5500 Series) with
respect to each Employee Plan and Multiemployer Plan, (D) promptly and in
any event within 10 days after any Loan Party or any ERISA Affiliate
thereof knows or has reason to know that a required installment within the
meaning of Section 412 of the Code has not been made when due with respect
to an Employee Plan, a statement of an Authorized Officer setting forth the
details thereof and the action, if any, which such Loan Party or such ERISA
Affiliate proposes to take with respect thereto and (E) promptly and in any
event within 10 days after any Loan Party or any ERISA Affiliate thereof
sends notice of a plant closing or mass layoff (as defined in WARN) to
employees, copies of each notice sent by such Loan Party or such ERISA
Affiliate thereof, other than in connection with the closing of the
Borrowers' offices in Orlando, Florida;
(ix) promptly after the commencement thereof but in any event not
later than five (5) days after service of process with respect thereto on,
or the obtaining of knowledge thereof by, any Loan Party, notice of each
action, suit or proceeding before any court or other Governmental Authority
or other regulatory body or any arbitrator which is reasonably likely to
have a Material Adverse Effect;
(x) promptly after the sending or filing thereof, copies of all
statements, reports and other information (other than matters solely of an
administrative nature) that any Loan Party sends to holders generally
(other than Loan Parties) of its Indebtedness or its securities or files
with the SEC or any national (domestic or foreign) securities exchange;
(xi) promptly upon receipt thereof, copies of all financial reports
(including management letters) submitted to any Loan Party by its auditors
in connection with any annual or interim audit of the books thereof;
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(xii) promptly upon request, such other information pertaining to the
Collateral as the Agent may reasonably request, including the following:
(1) month-end remittance reports in both paper and electronic form relating
to the Mortgage Receivables; (2) month-end inventory reports listing Hard
Inventory and Soft Inventory count by Resort, by unit type and by season;
and (3) month-end audit tracking reports detailing all monthly changes to
Hard and Soft Inventory and the reason for such change;
(xiii) promptly upon request, such other information concerning the
condition or operations, financial or otherwise, of any Loan Party as the
Agent may from time to time reasonably request.
(b) Additional Loan Parties and Collateral Security. (i) Cause any
Person that becomes a Significant Subsidiary of a Loan Party after the Closing
Date (other than Subsidiaries of the Parent not organized under the laws of the
United States or any state thereof), (A) to execute and deliver to the Agent a
guaranty in form and substance satisfactory to the Agent or, at the option of
such Loan Party, cause such Person to become a "Borrower" hereunder by executing
and delivering to the Agent a counterpart to this Agreement in form and
substance satisfactory to the Agent, and (B) to take all such actions and
execute and deliver, or cause to be executed and delivered, all such documents,
instruments, agreements (or supplements thereto) and certificates as are similar
to those described in Sections 4.1(h) and 4.1(i) hereof and such other
agreements (or supplements thereto), instruments, approvals, legal opinions or
other documents reasonably requested by the Agent in order to create, perfect,
establish the highest available priority of or otherwise protect any Lien
purported to be covered by the Collateral Documents (subject only to any
Permitted Liens) and otherwise to effect the intent that such Subsidiary shall
become bound by all of the terms, covenants and agreements contained in the Loan
Documents and that all property and assets of such Subsidiary shall become
Collateral and (ii) cause any Loan Party that acquires any real property asset
after the Closing Date to take all such actions and execute and deliver, or
cause to be executed and delivered, all such documents, instruments, agreements
(or supplements thereto) and certificates as are similar to those described in
Section 4.1(h) hereof and such other agreements (or supplements thereto),
instruments, approvals, legal opinions or other documents reasonably requested
by the Agent in order to create, perfect, establish the highest available
priority of or otherwise protect any Lien purported to be covered by the
Collateral Documents (subject only to any Permitted Liens) and otherwise to
effect the intent that such real estate asset shall become Collateral.
(c) Compliance with Laws, Etc. Except for such noncompliance which is
not reasonably likely to have a Material Adverse Effect, comply, and cause each
of their Subsidiaries and all of the Real Properties to comply with all
applicable laws, rules, regulations, judgments and orders (including all
Environmental Laws), such compliance to include (i) paying before the same
become delinquent all taxes, assessments and governmental charges or levies
imposed upon it or upon its income or profits or upon any of its properties, and
(ii) paying all lawful claims before the same become a Lien or charge upon any
of its properties, except in any such case to the extent (A) such claims relate
to taxes not yet due and payable or (B) such claims are contested in good faith
by proper proceedings which stay the imposition of any penalty, fine or Lien
resulting from the non-payment thereof and with respect to which adequate
reserves have been set aside for the payment thereof.
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(d) Preservation of Existence, Etc. Except to the extent permitted by
Section 6.2(c), maintain and preserve, and cause each of their Subsidiaries to
maintain and preserve, their existence, rights and privileges, and become or
remain duly qualified and in good standing in each jurisdiction in which the
character of the properties owned or leased by them or in which the transaction
of their business makes such qualification necessary, except where failure so to
be qualified or in good standing would not be reasonably likely to have a
Material Adverse Effect.
(e) Keeping of Records and Books of Account. Keep adequate records and
books of account, with complete entries made in accordance with GAAP.
(f) Inspection Rights. Permit, and cause each of their Subsidiaries to
permit, the Agent or representatives thereof at any time and from time to time
during normal business hours and, unless a Default or Event of Default has
occurred and is continuing, upon reasonable notice, at the expense of the
Borrowers, to examine and make copies of and abstracts from their records and
books of account, to visit and inspect their properties, to verify materials,
leases, notes receivable, deposit accounts and other assets of the Loan Parties
and their Subsidiaries, to conduct, on a reasonable basis and, unless a Default
or Event of Default has occurred and is continuing, in consultation with the
Administrative Borrower, audits, physical counts, valuations, appraisals (other
than those provided for in Section 6.1(g)), environmental assessments or
examinations and to discuss their affairs, finances and accounts with any of the
directors, officers, managerial employees, independent accountants or other
representatives thereof.
(g) Appraisal Rights. Permit, and cause each of their Subsidiaries to
permit, the Agent or representatives thereof at any time and from time to time
on a reasonable basis, at the expense of the Borrowers (provided, so long as an
Event of Default shall not have occurred and be continuing, such expense shall
not be in the aggregate more than $50,000 in any calendar year), to engage an
independent third party appraisal firm to perform a collateral valuation of Time
Share Inventory at any Resort of the Borrowers for the purpose of updating the
"Cost Factor" (as set forth in Schedule 6.1(g) hereto) for use in the
calculation of Inventory Collateral Value.
(h) Maintenance of Properties, Etc. Except as otherwise provided in
Section 6.2(c), repair, replace, maintain and preserve, and cause each of their
Subsidiaries to repair, replace, maintain and preserve, all of their properties
(whether owned or held under lease) which are necessary or useful in the proper
conduct of their business in good working order and condition, ordinary wear and
tear excepted, and comply, and cause each of their Subsidiaries to comply, at
all times with the provisions of all leases to which each of them is a party as
lessee or under which each of them occupies property so as to prevent any
material loss or forfeiture thereof or thereunder.
(i) Maintenance of Insurance. Maintain, and cause each of their
Subsidiaries to maintain, or cause other Persons to maintain for the Borrower
and their Subsidiaries, insurance with responsible and reputable insurance
companies or associations (including, comprehensive general liability, hazard,
rent and business interruption insurance) with respect to their properties
(including all real properties leased or owned by them) and business, in such
amounts and covering such risks as is required by any Governmental Authority
having jurisdiction with
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respect thereto or as is carried generally in accordance with sound business
practice by companies in similar businesses similarly situated and in any event
in amount, adequacy and scope reasonably satisfactory to the Agent. To the
extent such policies name a Loan Party or its Subsidiaries as a named insured,
all policies covering the Collateral are to be made payable to the Agent for the
benefit of the Lenders, as its interests may appear, in case of loss, under a
standard non-contributory "lender" or "secured party" clause and are to contain
such other provisions as the Agent may reasonably require to protect the
Lenders' interest in the Collateral and to any payments to be made under such
policies. All certificates of insurance are to be delivered to the Agent, and
the policies are to be premium prepaid, with the loss payable and additional
insured endorsement in favor of the Agent and such other Persons as the Agent
may designate from time to time as their respective interests may appear, and
shall provide for not less than 30 days' prior written notice to the Agent of
the exercise of any right of cancellation. If the Loan Parties or any of their
Subsidiaries fail to maintain such insurance, the Agent may arrange for such
insurance, but at the Borrowers' expense and without any responsibility on the
Agent's part for obtaining the insurance, the solvency of the insurance
companies, the adequacy of the coverage or the collection of claims. Upon the
occurrence and during the continuance of an Event of Default, the Agent shall
have the sole right, in the name of the Lenders, the Loan Parties and their
Subsidiaries, to file claims under any insurance policies, to receive, receipt
and give acquittance for any payments that may be payable thereunder and to
execute any and all endorsements, receipts, releases, assignments, reassignments
or other documents that may be necessary to effect the collection, compromise or
settlement of any claims under any such insurance policies, subject to the
rights of third parties that have been granted a Permitted Lien that is prior to
the Lien in favor of the Agent.
(j) Obtaining of Permits, Etc. Obtain, maintain and preserve, and
cause each of their Subsidiaries to obtain, maintain and preserve, all permits,
licenses, authorizations, approvals, entitlements and accreditations which are
necessary or useful in the proper conduct of its business, except where the
failure to obtain, maintain or preserve such permits, licenses, authorizations,
approvals, entitlements and accreditations is not reasonably likely to have a
Material Adverse Effect.
(k) Custodial Agreements. Comply with their obligations under each of
the Custodial Agreements (including their obligations thereunder to maintain and
deliver the Contract Files to the Custodian) other than any such obligations the
failure to comply with which would not adversely affect in any material respect
the interests of the Lenders hereunder
(l) Environmental. Except as provided in Schedule 5.1(r), (i) keep any
property either owned or operated by them or any of their Subsidiaries free of
any Environmental Liens; (ii) comply, and cause their Subsidiaries to comply, in
all material respects with Environmental Laws and provide to the Agent
documentation of such compliance which the Agent reasonably requests; (iii) as
soon as practicable notify the Agent of any Release of a Hazardous Material in
excess of any quantity that could be reasonably be likely to have a Material
Adverse Effect from or onto Property owned or operated by the Loan Parties or
any of their Subsidiaries and take any Remedial Actions required by
Environmental Laws to xxxxx said Release; (iv) promptly provide the Agent with
written notice within 10 days of the receipt of any of the following: (A) notice
that an Environmental Lien has been filed against any Property of any Loan Party
or any of its Subsidiaries; (B) commencement of any Environmental Action or
notice that an Environmental
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Action will be filed against any Loan Party or any of its Subsidiaries; and (C)
notice of a violation, citation or other administrative order which could have a
Material Adverse Effect and (v) defend, indemnify and hold harmless the Agent
and the Lenders and their transferees, and their respective employees, agents,
officers and directors, from and against any claims, demands, penalties, fines,
liabilities, settlements, damages, costs or expenses (including, without
limitation, reasonable attorney and consultant fees, investigation and
laboratory fees, court costs and litigation expenses) arising out of (A) the
presence, disposal, release or threatened release of any Hazardous Materials on
any Property at any time owned or occupied by any Loan Party or any of its
Subsidiaries (or its respective predecessors in interest or title), (B) any
personal injury (including wrongful death) or property damage (real or personal)
arising out of or related to such Hazardous Materials, (C) any investigation,
lawsuit brought or threatened, settlement reached or government order relating
to such Hazardous Materials and/or (D) any violation of any Environmental Law.
(m) Further Assurances. Take such action and execute, acknowledge and
deliver, and cause each of their Subsidiaries to take such action and execute,
acknowledge and deliver, at their sole cost and expense, such agreements,
instruments or other documents as the Agent may reasonably require from time to
time in order (i) to carry out more effectively the purposes of this Agreement
and the other Loan Documents, (ii) to subject to valid and perfected highest
available priority Liens (subject to Permitted Liens), to the extent required by
this Agreement and the other Loan Documents, any of the Collateral or any other
Property of the Guarantors and their Subsidiaries, (iii) to establish and
maintain the validity and effectiveness of any of the Loan Documents and the
validity, perfection and priority of the Liens intended to be created thereby
(subject to Permitted Liens), and (iv) to better assure, convey, grant, assign,
transfer and confirm unto the Agent the rights now or hereafter intended to be
granted to the Agent and the Lenders under this Agreement or any other Loan
Document.
(n) Change in Collateral; Collateral Records. (i) Give the Agent not
less than 30 days' prior written notice of any change in the location of any
Collateral, other than to locations existing on the Closing Date and with
respect to which the Agent has filed financing statements and otherwise fully
perfected its Liens thereon (subject to Permitted Liens), and (ii) advise the
Agent promptly, in sufficient detail, of any material adverse change relating to
the type, quantity or quality of the Collateral or the Lien granted thereon.
(o) Mortgage Receivables Information. Maintain, and cause each of
their Subsidiaries to maintain, or other Persons shall maintain for Parent and
its Subsidiaries, files that are accurate and complete in all material respects
relating to the Mortgage Receivables.
(p) Use of Proceeds. The proceeds of the Loans shall be used for the
purposes set forth in the fourth recital to this Agreement, provided that the
Borrowers (i) shall not use proceeds of the Tranche A Loans or Tranche B Loans
for the purpose of acquisitions of assets (other than in the ordinary course of
business) or equity interests of any other Person or for Capital Expenditures
and (ii) and shall not use proceeds of Tranche C Loans for the purposes
specified in the foregoing clause (i) except in compliance with the limitations
set forth in Section 6.2(g). No part of the proceeds of the Loans will be used
to purchase or carry any margin stock or to extend credit to others for the
purpose of purchasing or carrying any margin
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stock or in a manner that, or for any purpose that violates, or is inconsistent
with, the provisions of Regulation T, U or X of the Board of Governors of the
Federal Reserve System.
(q) Securitization Provision. In the event that the Parent elects to
execute or permits any Subsidiary to execute a Securitization during the
Securitization Commitment Period, the Parent shall give the Agent written notice
of such election (the "Election Notice") and Agent or its Affiliates shall have
the right to act as Securitization Agent in connection with such Securitization.
All fees payable to the Agent to execute such Securitization shall be
commercially reasonable fees equal to fees charged by underwriters or placement
agents, as applicable, at the time of such Securitization to securitize similar
mortgage loans in substantially similar transactions. The Parent shall have the
right to use a third party Securitization Agent during the Securitization
Commitment Period if the Parent reasonably determines that the net proceeds to
be received by the Parent or its Affiliates from a Securitization executed with
the Agent or its Affiliates would be materially less than the net proceeds to be
received by the Parent or its Affiliates from a Securitization executed by a
third party Securitization Agent provided that the Parent pays to the Agent the
Securitization Breakage Fee. Notwithstanding the foregoing, the Parent shall not
be obligated to pay to the Agent any Securitization Breakage Fee if either (i)
the Agent shall not have responded in writing to the Election Notice within ten
Business Days after receipt thereof or (ii) the Agent elects in writing not to
exercise its right to act as a Securitization Agent under this Section 6.1 (q).
(r) Interest Rate Cap Agreement. At any time the Tranche A Loans,
Tranche B Loans or Tranche C Loans remain outstanding, the Borrowers shall keep
in effect an Interest Rate Cap Agreement, the terms of which shall be reviewed
from time to time by the Borrowers and the Agent and which shall include (i) a
notional amount based on the outstanding and anticipated principal balances of
the Tranche B Loan and Tranche C Loan, (ii) a term of two years, (iii) a strike
price at 1% to 2% out of the money on spot one month LIBOR and (iv) a monthly
payment requirement.
(s) Board of Directors. The Agent shall have the right to appoint two
representatives (the "Representatives") to attend the meetings of board of
directors of the Parent (the "Board of Directors"). The Parent agrees to provide
to the Representatives prior written notice of each meeting of the Board of
Director and copies of all materials provided to the members of the Board of
Directors at the same time such notice and such materials are provided to the
members of the Boards of Directors except that (i) for matters related to claims
or litigation, counsel for the Borrowers may determine whether disclosing such
document, or permitting attendance at or participation in a meeting of the Board
of Directors or relevant portion thereof, could adversely affect the
applicability thereto of attorney-client privilege or other like privilege
available at law and if counsel for the Borrowers makes such determination,
Parent shall not be required to provided such material to the Representatives or
to permit the Representatives to attend or participate in the applicable meeting
or relevant portion thereof and (ii) the Parent shall not be obligated to
provide to the Representatives material for the Board of directors that relate
to the Loan or any Lender or to matters relating to or involving any Lender or
to permit the Representatives to attend or participate in the meeting or the
relevant portion thereof relating to such matters.
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(t) Management of Cash and Mortgage Notes. The Borrowers shall (x)
establish and maintain a cash management system in which cash proceeds from the
sale of Time Share Inventory and from Mortgage Receivables subject to a
Permitted Lien are not commingled with cash proceeds from the sale of Time Share
Inventory and from Mortgage Receivables subject to the first priority Lien in
favor of the Agent and (y) cause all custodians having possession of the
Borrowers' Mortgage Receivables and related documents and instruments subject to
a Permitted Lien to be segregated and not commingled with Mortgage Receivables
and related documents and instruments subject to the first priority Lien in
favor of the Agent and cause such custodians to comply with clause (x) above.
The Borrowers shall, and shall cause their Subsidiaries to, deposit and maintain
all proceeds from the sale of Time Share Inventory and all proceeds from
Mortgage Receivables in one or more Deposit Accounts of a Loan Party; provided,
at all times each such Deposit Account shall be subject to a legal, valid and
binding Deposit Account Control Agreement among the applicable Loan Party, the
Agent and the financial institution at which such Deposit Account is maintained.
Notwithstanding anything to the contrary in this Agreement or in any other Loan
Document, the Borrowers shall use their best efforts to have all such Deposit
Account Control Agreements in effect as of the Closing Date; provided, the
failure to have all such Deposit Account Control Agreements in effect in
accordance with this Section 6.1(t) on or before the 45th day after the Closing
Date shall be an Event of Default hereunder.
(u) Management Availability. Cause its senior management and advisors,
and use reasonable efforts to cause each of their Subsidiaries to cause such
Subsidiary's senior management and advisors, to be available to the Agent or
representatives thereof on a monthly basis at times and locations to be agreed
upon and to provide the Agent or representatives thereof with an update with
respect to current operations and information regarding the previous month's
actual operating and financial results.
(v) Change in Key Personnel. Give the Agent prompt notice of any
changes or pending changes with respect to any Key Personnel, including any
material changes to the duties and responsibilities of any Key Personnel and use
commercially reasonable efforts to replace any Key Personnel with an individual
reasonably satisfactory to the Agent within 60 days of any vacancy; provided
that, in any event, the Parent shall replace the chief executive officer and the
chief financial officer with an individual reasonably satisfactory to the Agent
within 120 days of any vacancy.
(w) Conversion to Hard Inventory. Use its reasonable efforts to
convert Soft Inventory and A/R Inventory into Hard Inventory.
(x) Collateral Information. Use its best efforts to provide the Agent
with copies of any appraisals or valuations of material Collateral and any
qualified letter of intent, offer or commitment to purchase material Collateral,
in each case to the extent prepared for or received by any of the Borrowers.
(y) Management of Resorts. With respect to each Resort with which they
have a management contract on the Closing Date, use commercially reasonable
efforts to maintain, and cause each of their Subsidiaries to use commercially
reasonable efforts to maintain, such management contracts, except to the extent
that the failure to maintain such management contracts is not reasonably likely
to have a Material Adverse Effect.
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(z) Homeowners' Association and Maintenance Fees. Pay, and cause each
of their Subsidiaries to pay, all homeowners' association and maintenance fees
required to be paid by them before such fees become delinquent, except to the
extent that such past due fees do not exceed $1,000,000 at any time, or become a
Lien (other than a Permitted Lien) or charge upon any of its properties, except
to the extent contested in good faith by proper proceedings which stay the
imposition of any penalty, fine or Lien resulting from the non-payment thereof
and with respect to which adequate reserves have been set aside for the payment
thereof.
(aa) Time Share Obligations. Comply, and cause each of their
Subsidiaries to comply, with all of their respective obligations under the Time
Share Documents, except to the extent that any non-compliance would not
reasonably be expected to have a Material Adverse Effect.
(bb) Regulatory Matters. Comply, and cause each of their Subsidiaries
to comply, with all applicable regulations of any Governmental Authority with
respect to the sale of Time Share Interests in each jurisdiction in which they
are currently selling Time Share Interests, except to the extent such
noncompliance is not reasonably likely to have a Material Adverse Effect.
(cc) Sales and Marketing. At all times maintain, and cause each of
their Subsidiaries to maintain, an active sales and marketing program for the
sale of the Time Share Interests for locations where it has material Time Share
Interests. All Time Share Interests shall be sold in a manner which is in
compliance with all applicable Requirements of Law including, without
limitation, the Time Share Laws, except to the extent that any non-compliance
would not reasonably be expected to have a Material Adverse Effect.
(dd) Club Obligations. Cause the Club to comply with all applicable
laws, statutes, rules and governmental regulations applicable to it and with
each material instrument, agreement or document to which it is a party or by
which it is bound, except to the extent that any non-compliance would not
reasonably be expected to have a Material Adverse Effect, and to administer and
maintain all obligations under the Club according to the terms and conditions of
each instrument, agreement or document to which the Club or any Loan Party is a
party or by which it is bound, except to the extent that any non-compliance or
failure to administer would not reasonably be expected to have a Material
Adverse Effect.
(ee) Systems. At all times maintain, and cause each of their
Subsidiaries to maintain, accounting and inventory interval systems at least at
their current levels.
(ff) Inventory Management. Maintain and cause each of their
Subsidiaries to maintain, a backup storage and disaster recovery program for
their inventory management systems reasonably acceptable to the Agent.
(gg) Lien Releases. Use its commercially reasonable efforts to have
terminated or discharged all Liens (other than Permitted Liens (but not
including Permitted Liens described in clause (q) of the definition thereof))
identified pursuant to the title searches and UCC searches obtained pursuant to
Section 4.1(h), 4.1(i) or 6.1(b), and provide to the Agent evidence acceptable
to the Agent, in its sole and absolute discretion, of such termination or
discharge.
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(hh) Power of Attorney. Grant to the Agent a power of attorney, in
form and substance mutually agreed between the Agent and the Administrative
Borrower, executed by the Loan Parties and relating to the resolution of
exceptions pursuant to either of the Custodial Agreements.
(ii) Integration of Points. Use its reasonable efforts to establish a
global points program for the owners of the Time Share Interests at the Resorts.
(jj) Insurance Proceeds and Condemnation Awards. Each Loan Party shall
reasonably cooperate with Agent in obtaining for Agent the benefits of any
insurance proceeds or condemnation awards lawfully or equitably payable in
connection with any Real Property, and Agent shall be reimbursed for any
expenses incurred in connection therewith (including reasonable attorneys' fees
and disbursements, and the payment by each Loan Party of the expense of an
appraisal on behalf of Agent in case of casualty or condemnation affecting any
Real Property or any part thereof) out of such insurance proceeds or
condemnation awards.
(kk) Further Assurances. Each Loan Party shall, at each Loan Party's
sole cost and expense: (i) furnish to Agent all instruments, documents, boundary
surveys, footing or foundation surveys, certificates, plans and specifications,
appraisals, title and other insurance reports and agreements, and each and every
other document, certificate, agreement and instrument required to be furnished
by each Loan Party pursuant to the terms of the Loan Documents or which are
reasonably requested by Agent in connection therewith; (ii) execute and deliver
to Agent such documents, instruments, certificates, assignments and other
writings, and do such other acts necessary or desirable, to evidence, preserve
and/or protect the Collateral at any time securing or intended to secure the
obligations of each Loan Party under the Loan Documents, as Agent may reasonably
require; and (iii) do and execute all and such further lawful and reasonable
acts, conveyances and assurances for the better and more effective carrying out
of the intents and purposes of this Agreement and the other Loan Documents, as
Agent shall reasonably require from time to time.
(ll) Supplemental Mortgage Affidavits. Each Loan Party represents that
it has paid all state, county and municipal recording and all other taxes
imposed upon the execution and recordation of the Mortgages. If at any time
Agent determines, based on applicable law, that Agent is not being afforded the
maximum amount of security available from any one or more of the Mortgaged Real
Properties as a direct or indirect result of applicable taxes not having been
paid with respect to any such Mortgaged Real Property, each Loan Party agrees
that each Loan Party will execute, acknowledge and deliver to Agent, immediately
upon Agent's request, supplemental affidavits increasing the amount of the
Indebtedness attributable to any such Mortgaged Real Property for which all
applicable taxes have been paid to an amount determined by Agent to be equal to
the greater of the fair market value of the applicable Real Property (i) as of
the date hereof and (ii) as of the date such supplemental affidavits are to be
delivered to Agent, and each Loan Party shall, on demand, pay any additional
taxes.
(mm) Title to the Real Properties. Each Loan Party will warrant and
defend (a) the title to each Mortgaged Real Property and every part thereof,
less Time Share Inventory sold in accordance with the provisions of this
Agreement, subject only to Liens permitted hereunder (including Permitted Liens)
and (b) the validity and priority of the Liens of the
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Mortgages and the Assignments of Leases, subject only to Permitted Liens, in
each case against the claims of all Persons whomsoever. Each Loan Party shall
reimburse Agent for any losses, costs, damages or expenses (including reasonable
attorneys' fees and court costs) incurred by Agent if an interest in any
Mortgaged Real Property, other than as permitted hereunder, is claimed by
another Person.
(nn) Costs of Enforcement. In the event (a) that any Mortgage
encumbering any Mortgaged Real Property is foreclosed in whole or in part or
that any such Mortgage is put into the hands of an attorney for collection,
suit, action or foreclosure, (b) of the foreclosure of any mortgage prior to or
subsequent to any Mortgage encumbering any Mortgaged Real Property in which
proceeding Agent is made a party, or (c) of the bankruptcy, insolvency,
rehabilitation or other similar proceeding in respect of any Loan Party or an
assignment by any Loan Party for the benefit of its creditors, such Loan Party,
its successors or assigns, shall be chargeable with and agrees to pay all
reasonable costs of collection and defense, including reasonable attorneys' fees
and costs, incurred by Agent or such Loan Party in connection therewith and in
connection with any appellate proceeding or post-judgment action involved
therein, together with all required service or use taxes.
(oo) Ground Leases.
(i) With respect to each Ground Lease, each Loan Party which is a
party to a Ground Lease covenants and agrees as follows: (A) to promptly
and faithfully observe, perform and comply with all the material terms,
covenants and provisions thereof on its part to be observed, performed and
complied with, at the times set forth therein and to do all things
necessary to preserve unimpaired its rights thereunder; (B) not to do,
permit, suffer or refrain from doing anything, as a result of which, there
could be a material default under any of the terms thereof beyond the
giving of any required notice and the expiration of any applicable cure
period or a breach of any of the terms thereof; (C) not to exercise any
right or option to cancel or otherwise terminate the Ground Lease; (D) not
to cancel, surrender, materially modify, materially amend or in any way
materially alter or permit the alteration of any of the terms thereof and
not to release the lessor under the Ground Lease from any obligations
imposed upon it thereby; (E) to immediately deliver to Agent copies of each
notice of default given or received by each such Loan Party and, after the
occurrence of an Event of Default, copies of all other notices,
communications, plans, specifications and other similar instruments
received or delivered by each such Loan Party in connection therewith; and
(F) to furnish to Agent such information and evidence as Agent may
reasonably require concerning each Loan Party's due observance, performance
and compliance with the terms, covenants and provisions thereof.
(ii) In the event of any material default by a Loan Party in the
performance of any of its obligations under the Ground Lease, including,
without limitation, any default in the payment of rent, additional rent and
other charges and impositions made payable by the lessee under the Ground
Lease beyond notice and cure then, in each and every case, Agent may, at
its option, cause the default or defaults to be remedied and otherwise
exercise any and all of the rights of such Loan Party thereunder in the
name of and on behalf of such Loan Party but no such action by Agent shall
release such Loan Party from any default under this Agreement. Such Loan
Party shall, on demand, reimburse Agent
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for all reasonable advances made and expenses incurred by Agent in curing
any such default (including, without limitation, reasonable attorneys' fees
and disbursements), together with interest thereon at the Default Rate,
from the date that an advance is made or expense is incurred, to and
including the date the same is paid and such monies so expended by Agent
with interest thereon shall be secured by this Agreement.
(iii) If the Ground Lease is canceled or terminated, and if Agent or
its nominee shall acquire an interest in any new lease of the property
demised thereby, Borrowers shall have no right, title or interest in or to
the new lease or the leasehold estate created by such new lease.
(iv) Agent shall have no liability or obligation under the Ground
Lease by reason of its acceptance of this Agreement or a Mortgage
encumbering the Ground Lease. Agent shall be liable for the obligations of
the lessee arising under the Ground Lease for only that period of time
which Agent is in possession of the Real Property or has acquired, by
foreclosure or otherwise, and is holding all of the applicable Loan Party's
right, title and interest therein.
(v) No release or forbearance of any of Borrowers' obligations under
the Ground Lease, pursuant to the Ground Lease or otherwise, shall release
Borrowers from any obligations under this Agreement or the other Loan
Documents.
(vi) Borrowers shall enforce the obligations of the lessor under the
Ground Lease to the end that Borrowers may enjoy all of the rights granted
to it under the Ground Lease and will immediately notify Agent of any
default by the lessor or by any Loan Party, as lessee, in the performance
or observance of any of the terms, covenants and conditions on the part of
such lessor or lessee to be performed or observed under the Ground Lease.
If, pursuant to the Ground Lease, the lessor shall deliver to Agent a copy
of any notice of default given to Borrowers, as lessee under the Ground
Lease, such notice shall constitute full authority and protection to Agent
for any action taken or omitted to be taken by Agent, in good faith and in
reliance thereon.
(vii) If the Ground Lease is rejected in any case, proceeding or other
action commenced by or against the lessor under the Ground Lease (or any
person or party constituting or having an interest in the Ground Lease)
under the Bankruptcy Code or any comparable federal or state statute or
law, (A) Borrowers, promptly after obtaining notice thereof, shall give
notice thereof to Agent, (B) Borrowers, without the prior written consent
of Agent not to be unreasonably withheld, shall not elect to treat the
Ground Lease as terminated pursuant to Section 365(h)(1)(A)(i) of the
Bankruptcy Code or any comparable federal or state statute or law, and (C)
this Agreement and the other Loan Documents shall extend to and cover the
applicable Loan Party's possessory rights under Section 365(h) of the
Bankruptcy Code and to any claim for damages due to lessor's rejection of
the Ground Lease. In addition, each Loan Party hereby assigns to Agent such
Loan Party's rights, subject to and limited by, Section 365(h)(1)(A)(i) of
the Bankruptcy Code to remain in possession of the premises demised under
the Ground Lease and to offset rents under the Ground Lease under Section
365(h)(1)(A)(ii) of the Bankruptcy Code in the event any case, proceeding
or other action is commenced by or against the
70
lessor under the Ground Lease under the Bankruptcy Code or any comparable
federal or state statute or law.
(viii) If any Loan Party shall desire to reject a Ground Lease under
the Bankruptcy Code or any comparable federal or state statute or law, such
Loan Party shall, at Agent's request, assign its interest, to the extent
allowed by applicable law, in such Ground Lease to Agent in lieu of
rejecting the Ground Lease, upon receipt by such Loan Party of written
notice from Agent of such request together with the agreement of Agent to
cure any existing defaults of such Loan Party under the Ground Lease.
(pp) Subject Transaction. Except in connection with the Corporate
Restructuring and the Mortgage Receivables Sale Transaction, in the event that
the Parent elects to execute or permits any Subsidiary to execute a transaction
greater than $25 million (1) involving (u) the acquisition or disposition of all
or substantially all of the Capital Stock of any other Person, (w) the
acquisition or disposition of all or substantially all of the Capital Stock of
the Parent or any of its Subsidiaries by any other Person, (x) the acquisition
or disposition of all or substantially all the assets of any other Person, (y)
the acquisition or disposition of all or substantially all the assets of the
Parent or any of its Subsidiaries by any other Person, whether in the case of
clauses (u), (w) (x) or (y), by purchase, sale, merger, reorganization, public
or private offering of securities or otherwise or (z) the public or private
offering of any securities using an underwriter, initial purchaser (in a Rule
144A transaction) or placement agent, or (2) for which the Parent has reasonably
determined that investment banking services are necessary (any such acquisition,
disposition or offering requiring investment banking services, a "Subject
Transaction"), the Parent shall discuss and disclose each Subject Transaction
with the Agent and its Affiliates and the Parent shall use its commercially
reasonable efforts to engage the Agent and its Affiliates as its investment
bank, underwriter, initial purchaser, placement agent and financial advisor with
respect to such Subject Transaction.
Section 6.2. Negative Covenants. So long as any principal of or
interest on any Loan or any other Obligation (whether or not due) shall remain
unpaid (other than Obligations that by the express terms of this Agreement
survive the termination hereof) or any Lender shall have any Commitment
hereunder, the Borrowers shall not, unless the Required Lenders shall otherwise
consent in writing:
(a) Liens, Etc. Except in connection with the Corporate Restructuring
and the Mortgage Receivables Sale Transaction, create, incur, assume or suffer
to exist, or permit any of their Subsidiaries to create, incur, assume or suffer
to exist, any Lien upon or with respect to any of their properties, whether now
owned or hereafter acquired, to file or suffer to exist under the Uniform
Commercial Code or any similar law or statute of any jurisdiction a financing
statement (or the equivalent thereof) that names any Loan Party or any of its
Subsidiaries as debtor, to sign or suffer to exist any security agreement
authorizing any secured party thereunder to file such financing statement (or
the equivalent thereof), to sell any of its property or assets subject to an
understanding or agreement, contingent or otherwise, to repurchase such property
or assets (including sales of accounts receivable) with recourse to any Loan
Party or any of its Subsidiaries or assign or otherwise transfer, or permit any
of its Subsidiaries to assign or otherwise transfer, any account or other right
to receive income; other than, as to all of the above, Permitted Liens.
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(b) Indebtedness. Except in connection with the Corporate
Restructuring and the Mortgage Receivables Sale Transaction, create, incur,
assume, guarantee or suffer to exist, or otherwise become or remain liable with
respect to, or permit any of their Subsidiaries to create, incur, assume,
guarantee or suffer to exist or otherwise become or remain liable with respect
to, any Indebtedness other than Permitted Indebtedness.
(c) Fundamental Changes. Wind up, liquidate or dissolve (or permit or
suffer any thereof) or merge, consolidate or amalgamate with any Person, convey,
sell, lease or sublease, transfer or otherwise dispose of, whether in one
transaction or a series of related transactions, all or any part of their
business, property or assets, whether now owned or hereafter acquired (or agree
to do any of the foregoing), or purchase or otherwise acquire, whether in one
transaction or a series of related transactions, all or substantially all of the
assets of any Person (or any division thereof) (or agree to do any of the
foregoing), or permit any of their Subsidiaries to do any of the foregoing;
provided, however, that:
(i) (A) any Loan Party may be merged into or may consolidate with
another Loan Party, (B) any wholly-owned Subsidiary of any Loan Party may
be merged into such Loan Party or another wholly-owned Subsidiary of such
Loan Party, or may consolidate with another wholly-owned Subsidiary of such
Loan Party, so long as (w) no other provision of this Agreement would be
violated thereby, (x) such Loan Party gives the Agent at least 30 days'
prior written notice of such merger or consolidation, (y) no Default or
Event of Default shall have occurred and be continuing either before or
after giving effect to such transaction and (z) the Lenders' rights in any
Collateral, including the existence, perfection and priority of any Lien
thereon, are not adversely affected by such merger or consolidation;
any of the Loan Parties and their Subsidiaries may (A) sell Time Share
Interests and other inventory in the ordinary course of business, (B) dispose of
obsolete or worn-out equipment in the ordinary course of business, (C) enter
into licenses or sublicenses in the ordinary course of business, (D) effect
transfers permitted by Section 6.2(e), (E) effect the disposition of Resorts
specified on Schedule 6.2(c)(ii), and (F) sell or otherwise dispose of other
property or assets for cash in an amount not less than the estimated fair market
value of such property or assets; provided, the aggregate amount of all such
dispositions referred to in this clause (F) shall not exceed $500,000 for one
any transaction or $1,500,000 in the aggregate for any fiscal year. The Lien of
the Agent and the Lenders in Time Share Inventory sold in the ordinary course of
business in which the net cash proceeds for any such sale are less than $100,000
shall be released automatically and without any further action on the part of
the Agent or the Lenders upon the effective date of such sale. Agent hereby
appoints First American Title Insurance Company (the "Title Company") as
attorney-in-fact for the Agent for the sole purpose of executing such documents
as are necessary to release Time Share Interests sold in accordance with the
provisions of Section 6.2(c)(ii)(A) from the Lien of the Mortgage, which
appointment shall remain in full force and effect unless and until the Agent
shall have give written notice to the Title Company that such appointment has
been revoked;
(ii) all of the various mergers, consolidations, transfers,
dissolutions and liquidations contemplated by the Corporate Restructuring
can be undertaken so long as (x) no Default or Event of Default shall have
occurred and be continuing either before or
72
after giving effect to the Corporate Restructuring and (y) the Lenders'
rights in any Collateral, including the existence, perfection and priority
of any Lien thereon, are not adversely affected by the transactions
accomplished pursuant to the Corporate Restructuring; and
(iii) all of the transfers, assignments, endorsements, and conveyances
and the payment of cash and issuance of purchase money installment
promissory notes (and the making of the payments required thereunder)
contemplated by the Mortgage Receivables Sale Transaction may be
consummated so long as (x) no Default or Event of Default shall have
occurred and be continuing either before or after giving effect to such
transaction and (y) SMH shall, concurrently with the conveyance and
endorsement to it of Time Share Mortgages and the corresponding notes,
cause to be deposited with the Custodian such allonges and assignments of
mortgage in blank so that the Lenders' rights in any Collateral transferred
pursuant to the Mortgage Receivables Sale Transaction, including the
existence, perfection and priority of any Lien thereon, is preserved.
(d) Change in Nature of Business. Except in connection with the
Corporate Restructuring, make, or permit any of their Subsidiaries to make, any
material change in the nature of its businesses as carried on at the date
hereof.
(e) Loans, Advances, Investments, Etc. Make or commit or agree to make
any loan, advance, guarantee or obligations or other extension of credit or
capital contribution to, or hold or invest in or commit or agree to hold or
invest in, or purchase or otherwise acquire or commit or agree to purchase or
otherwise acquire any shares of the Capital Stock, bonds, notes, debentures or
other securities of, or make or commit or agree to make any other investment in,
any other Person, or purchase or own any futures contract or otherwise become
liable for the purchase or sale of currency or other commodities at a future
date in the nature of a futures contract, or permit any of its Subsidiaries to
do any of the foregoing, except for: (i) investments existing on the Closing
Date, as set forth on Schedule 6.2(e) hereto, but not any increase in the amount
thereof as set forth in such Schedule or any other modification of the terms
thereof, (ii) transfers, investments or loans permitted by Section 6.2(c)(ii) or
in connection with the Corporate Restructuring or the Mortgage Receivables Sale
Transaction, (iii) other loans and advances by any Loan Party to another Loan
Party, or guarantees by any Loan Party for the benefit of another Loan Party,
made in the ordinary course of business, (iv) other loans and advances by any
Loan Party to any Subsidiary thereof that constitute Permitted Indebtedness, (v)
purchase money loans made by any Loan Party to the purchasers of Time Share
Inventory in the ordinary course of business, (v) Permitted Investments, (vi)
acquisitions of the Warrants or shares of New Sunterra Common Stock, in each
case in accordance with the provisions of the Warrant Agreement ("Warrant
Acquisitions"), (vii) other loans and advances by any Loan Party to any
homeowners' association made in the ordinary course of business; provided, the
aggregate principal amount of all such loans and advances outstanding shall not
exceed (x) $2,000,000 for any such loans and advances made as of the Closing
Date, and (y) $2,000,000 for any such loans and advances made after the Closing
Date, and (viii) loans required to be made to the Litigation Trust in accordance
with the requirements of the Plan of Reorganization.
(f) Lease Obligations. Create, incur or suffer to exist, or permit any
of their Subsidiaries to create, incur or suffer to exist, any obligations as
lessee (i) for the payment of rent
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for any real or personal property in connection with any sale and leaseback
transaction, or (ii) for the payment of rent for any real or personal property
under leases or agreements to lease other than (A) Capitalized Lease Obligations
which would not cause the aggregate amount of all obligations under Capitalized
Leases entered into after the Closing Date owing by the Loan Parties and their
Subsidiaries to exceed $3,000,000 and (B) Operating Lease Obligations which
would not cause the aggregate amount of all of the obligations under Operating
Lease Obligations entered into after the Closing Date owing by the Loan Parties
and their Subsidiaries to exceed $13,000,000.
(g) Capital Expenditures. Make or commit or agree to make, any Capital
Expenditure (by purchase or Capitalized Lease) that would cause the aggregate
amount of all such Capital Expenditures made by the Borrowers to exceed the
amounts set forth on Schedule 6.2(g) hereto, as measured quarterly on a trailing
12 month basis; provided, (i) the purchase of Time Share Mortgages (and
corresponding notes), installment purchase obligations and membership interests
as part of the Mortgage Receivables Sale Transaction and (ii) work performed in
connection with the restoration of a Real Property after the occurrence of a
casualty, shall not be deemed to constitute a Capital Expenditure for purposes
of this Section 6.2(g).
(h) Restricted Payments. (i) Declare or pay any dividend or other
distribution, direct or indirect, on account of any Capital Stock of any Loan
Party or any of its Subsidiaries, now or hereafter outstanding, except for the
following: (A) a dividend or distribution on account of any Capital Stock of any
Loan Party to another Loan Party, (B) any payment for Capital Stock in
connection with the acquisition of membership interests as part of the Mortgage
Receivables Sale Transaction and (C) any dividend or other distribution in
connection with the Corporate Restructuring, (ii) make any repurchase,
redemption, retirement, defeasance, sinking fund or similar payment, purchase or
other acquisition for value, direct or indirect, of any Capital Stock of any
Loan Party or any direct or indirect parent of any Loan Party, now or hereafter
outstanding, except for the acquisition of any Capital Stock contemplated by the
Mortgage Receivables Sale Transaction and the Corporate Restructuring, and any
Warrant Acquisition, (iii) except for any Warrant Acquisition, make any payment
to retire, or to obtain the surrender of, any outstanding warrants, options or
other rights for the purchase or acquisition of shares of any class of Capital
Stock of any Loan Party, now or hereafter outstanding except in connection with
the Mortgage Receivables Sale Transaction or the Corporate Restructuring, (iv)
except in connection with the Mortgage Receivables Sale Transaction and the
Corporate Restructuring and except for any Warrant Acquisition, return any
capital to any shareholders or other equity holders of any Loan Party or any of
its Subsidiaries, or make any other distribution of property, assets, shares of
Capital Stock, warrants, rights, options, obligations or securities thereto as
such or (v) pay any management fees or any other fees or expenses (including the
reimbursement thereof by any Loan Party or any of its Subsidiaries) pursuant to
any management, consulting or other services agreement to any of the
shareholders or other equityholders of any Loan Party or any of its
Subsidiaries, or to any other Subsidiaries of any Loan Party, except fees paid
by any Loan Party to any homeowners' association in the ordinary course of
business.
(i) Transactions with Affiliates. Enter into, renew, extend or be a
party to, or permit any of their Subsidiaries to enter into, renew, extend or be
a party to, any transaction or series of related transactions (including the
purchase, sale, lease, transfer or exchange of property
74
or assets of any kind or the rendering of services of any kind) with any
Affiliate, except (i) in the ordinary course of business in a manner and to an
extent consistent with past practice and necessary or desirable for the prudent
operation of its business, for fair consideration and on terms no less favorable
to the Loan Parties or such Subsidiaries than would be obtainable in a
comparable arm's length transaction with a Person that is not an Affiliate
thereof, (ii) transactions among the Loan Parties, (iii) loans and advances made
or fees paid by any Loan Party to any homeowners' association in the ordinary
course of business, (iv) the Mortgage Receivables Sale Transaction, (v) the
Corporate Restructuring and (vi) transactions expressly permitted by the Plan of
Reorganization or the Plan Documents (as such term is defined in the Plan of
Reorganization).
(j) Environmental. Permit the use, handling, generation, storage,
treatment, release or disposal of Hazardous Materials at any property owned or
leased by the Loan Parties or any of their Subsidiaries except in compliance
with Environmental Laws and so long as such use, handling, generation, storage,
treatment, release or disposal of Hazardous Materials does not result in a
Material Adverse Effect.
(k) Multiemployer Plans. Become or permit any ERISA Affiliate to
become obligated to contribute to any Multiemployer Plan, or assume or permit
any ERISA Affiliate to assume any obligation of any predecessor with respect to
any Multiemployer Plan.
(l) Zoning. Initiate or consent to any zoning reclassification of any
portion of any Real Property or seek any variance under any existing zoning
ordinance or use or permit the use of any portion of any Real Property in any
manner that could result in such use becoming a non-conforming use under any
zoning ordinance or any other applicable land use law, rule or regulation,
without the prior consent of Agent, except to the extent such non-conforming use
is not reasonably likely to have a Material Adverse Effect.
(m) No Joint Assessment. Suffer, permit or initiate the joint
assessment of any Real Property with (a) any other real property constituting a
tax lot separate from such Real Property that is not part of the Resort, or (b)
any portion of such Real Property which may be deemed to constitute personal
property, or any other procedure whereby the Lien of any taxes which may be
levied against such personal property shall be assessed or levied or charged to
such Real Property, provided, however, that the foregoing shall not prohibit a
Loan Party from owning Time Share Interests that are jointly assessed with Time
Share Interests owned by other Persons.
Section 6.3. Financial Covenants. So long as any principal of or
interest on any Loan or any other Obligation (whether or not due) shall remain
unpaid (other than Obligations that by the express terms of this Agreement
survive the termination hereof) or any Lender shall have any Commitment
hereunder, the Borrowers shall not, unless the Required Lenders shall otherwise
consent in writing:
(a) U.S. Sales Revenue. Permit the U.S. Sales Revenue to be less than
the levels set forth on Schedule 6.3(a) hereto, as measured on a quarterly
basis, beginning with the calendar quarter ending September 30, 2002.
75
(b) Consolidated EBITDA to Consolidated Interest Expense Ratio. Permit
the Consolidated EBITDA to Consolidated Interest Expense Ratio, as measured as
of the last day of each quarter, beginning with the calendar quarter ending
September 30, 2002, to be less than 1.50:1 at any time during the period ending
on the first anniversary of the Closing Date and 1.75:1 during the annual period
ending on the second anniversary of the Closing Date. For the purposes of
calculating the Consolidated EBITDA to Consolidated Interest Expense Ratio (i)
during the period ending the first anniversary of the Closing Date, Consolidated
EBITDA and Consolidated Interest Expense shall each be annualized based upon the
Parent's actual results measured from the date of emergence from the Chapter 11
Cases until the date such ratio is determined and (ii) during the period after
the first anniversary of the Closing Date, Consolidated EBITDA and Consolidated
Interest Expense shall each be determined according to the Parent's actual
results for the trailing twelve month period.
(c) Consolidated Adjusted Total Debt to Consolidated Adjusted EBITDA
Ratio. Permit the Consolidated Adjusted Total Debt to Consolidated Adjusted
EBITDA Ratio (i) to exceed 4.0:1 at December 31, 2002, or (ii) to exceed 3.0:1
at December 31, 2003. For the purposes of calculating the Consolidated Adjusted
Total Debt to Consolidated Adjusted EBITDA Ratio (i) at December 31, 2002,
Consolidated EBITDA shall be annualized based upon the Parent's actual results
measured from the date of emergence from the Chapter Cases protection until the
date such ratio is determined and (ii) at December 31, 2003, Consolidated EBITDA
shall be determined according to the Parent's actual results for the trailing
twelve month period.
(d) Minimum Tangible Net Worth. Permit at any time its minimum
Tangible Net Worth to be less than $175,000,000.
ARTICLE VII
EVENTS OF DEFAULT
Section 7.1. Events of Default. If any of the following Events of
Default shall occur and be continuing:
(a) the Borrowers shall fail to pay: (i) any amount required to be
paid pursuant to Section 2.7(b) when due, (ii) except for a payment referred to
in the foregoing item (i), any principal of any Loan when due, (iii) any
interest on any Loan, or any fee provided for in Section 2.8, within five (5)
Business Days after the date when due or (iv) any other amount due under this
Agreement or any of the other Loan Documents within five Business Days after
notice from the Agent or any Lender, in each case whether any such amount is due
at stated maturity, by acceleration or otherwise;
(b) any representation or warranty made or deemed made by or on behalf
of any Loan Party under or in connection with any Loan Document or in any
report, certificate or other document delivered to the Agent or the Lenders
pursuant to any Loan Document shall have been incorrect or misleading in any
material respect when made or deemed made;
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(c) any Loan Party shall fail to perform or comply with any covenant
or agreement contained in Section 6.1(a) (other than 6.1(a)(iii)), 6.1(d),
6.1.(f), 6.1(i), 6.1(p), 6.2 (other than 6.2(l) or 6.2(m)) or 6.3;
(d) any Loan Party shall fail to perform or comply with any other
term, covenant or agreement contained in this Agreement or any other Loan
Document (other than as described in Section 7.1(a) or 7.1(c)) to be performed
or observed by it and, such failure, if capable of being remedied, shall remain
unremedied for 30 days after the earlier of the date a senior officer of any
Loan Party becomes aware of such failure and the date written notice of such
default shall have been given by the Agent to such Loan Party;
(e) any Loan Party shall fail to pay any principal of or interest on
any of its Indebtedness (excluding the Loans) with an outstanding principal
amount in excess of $1,000,000, or any interest or premium on such Indebtedness,
when due (whether by scheduled maturity, required prepayment, acceleration,
demand or otherwise) and such failure shall continue after the applicable grace
period, if any, specified in the agreement or instrument relating to such
Indebtedness, or any other default under any agreement or instrument relating to
any such Indebtedness, or any other event, shall occur and shall continue after
the applicable grace period, if any, specified in such agreement or instrument,
if the effect of such default or event is to accelerate, or to permit the
acceleration of, the maturity of such Indebtedness; or any such Indebtedness
shall be declared to be due and payable, or required to be prepaid (other than
by a regularly scheduled required prepayment), redeemed, purchased or defeased
or an offer to prepay, redeem, purchase or defease such Indebtedness shall be
required to be made, in each case prior to the stated maturity thereof;
(f) the Parent or any Significant Subsidiary (i) shall institute any
proceeding or voluntary case seeking to adjudicate it a bankrupt or insolvent,
or seeking dissolution, liquidation, winding up, reorganization, arrangement,
adjustment, protection, relief or composition of it or its debts under any law
relating to bankruptcy, insolvency, reorganization or relief of debtors, or
seeking the entry of an order for relief or the appointment of a receiver,
trustee, custodian or other similar official for any such Person or for any
substantial part of its Property, (ii) shall be generally not paying its debts
as such debts become due or shall admit in writing its inability to pay its
debts generally, (iii) shall make a general assignment for the benefit of
creditors or (iv) shall take any action to authorize or effect any of the
actions set forth above in this subsection (f);
(g) any proceeding shall be instituted against the Parent or any
Significant Subsidiary seeking to adjudicate it a bankrupt or insolvent, or
seeking dissolution, liquidation, winding up, reorganization, arrangement,
adjustment, protection or relief of debtors, or seeking the entry of an order
for relief or the appointment of a receiver, trustee, custodian or other similar
official for any such Person or for any substantial part of its Property, and
either such proceeding shall remain undismissed or unstayed for a period of 30
days or any of the actions sought in such proceeding (including the entry of an
order for relief against any such Person or the appointment of a receiver,
trustee, custodian or other similar official for it or for any substantial part
of its Property) shall occur;
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(h) any provision of any Loan Document shall at any time for any
reason (other than pursuant to the express terms thereof) cease to be valid and
binding on or enforceable against any Loan Party intended to be a party thereto,
or the validity or enforceability thereof shall be contested by any Loan Party
or a proceeding shall be commenced by any Loan Party seeking to establish the
invalidity or unenforceability thereof or, any Loan Party shall deny in writing
that it has any liability or obligation purported to be created under any Loan
Document;
(i) any Collateral Document shall for any reason fail or cease to
create a valid and perfected and, except to the extent permitted by the terms
hereof or thereof, first priority Lien in favor of the Agent for the benefit of
the Lenders on any material portion of the Collateral purported to be covered
thereby;
(j) one or more judgments or orders for the payment of money exceeding
$1,000,000 in the aggregate shall be rendered against any Loan Party and remain
unsatisfied and either (i) enforcement proceedings shall have been commenced by
any creditor upon any such judgment or order or (ii) there shall be a period of
10 consecutive days after entry thereof during which a stay of enforcement of
any such judgment or order, by reason of a pending appeal or otherwise, shall
not be in effect; provided, however, that any such judgment or order shall not
give rise to an Event of Default under this subsection (j) if and for so long as
(A) the amount of such judgment or order is covered by a valid and binding
policy of insurance between the defendant and the insurer covering full payment
thereof (subject to customary deductibles) and (B) such insurer has been
notified, and has not disputed the claim made for payment, of the amount of such
judgment or order;
(k) any Termination Event with respect to any Employee Plan shall have
occurred, and, 30 days after notice thereof shall have been given to any Loan
Party by the Agent, (i) such Termination Event (if correctable) shall not have
been corrected and (ii) the then current value of such Employee Plan's vested
benefits exceeds the then current value of assets allocable to such benefits in
such Employee Plan by more than $2,000,000 (or, in the case of a Termination
Event involving liability under Section 409, 502(i), 502(l), 515, 4062, 4063,
4064, 4069, 4201, 4204 or 4212 of ERISA or Section 4971 or 4975 of the Code, the
liability is in excess of such amount);
(l) an event or development occurs which has or is reasonably likely
to have a Material Adverse Effect; or
(m) a Change of Control shall occur;
then, and in any such event, the Agent may, and shall at the request of the
Required Lenders, by notice to the Administrative Borrower, (i) terminate the
Commitments, whereupon each of the Commitments shall terminate immediately, (ii)
declare all Loans then outstanding to be due and payable, whereupon the
aggregate principal of such Loans, all accrued and unpaid interest thereon, all
fees and all other amounts payable under this Agreement shall become due and
payable immediately, without presentment, demand, protest or further notice of
any kind, all of which are hereby expressly waived by each Loan Party and (iii)
exercise any and all of its other rights and remedies under applicable law
(including the Uniform Commercial Code) or at equity, hereunder and under the
other Loan Documents.
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ARTICLE VIII
AGENT
Section 8.1. Appointment. Each Lender (and each subsequent holder of
any Note by its acceptance thereof) hereby irrevocably appoints and authorizes
the Agent to perform the duties of the Agent as set forth in this Agreement,
including: (i) to receive on behalf of each Lender any payment of principal of
or interest on the Notes outstanding hereunder and all other amounts accrued
hereunder for the account of the Lenders and paid to the Agent, and, subject to
Section 2.2 of this Agreement, to distribute promptly to each Lender its Pro
Rata Share of all payments so received, (ii) to distribute to each Lender copies
of all material notices and agreements received by the Agent and not required to
be delivered to each Lender pursuant to the terms of this Agreement, provided
that the Agent shall not have any liability to the Lenders for the Agent's
inadvertent failure to distribute any such notices or agreements to the Lenders
and (iii) subject to Section 8.3, to take such action as the Agent deems
appropriate on its behalf to administer the Loans and the Loan Documents and to
exercise such other powers delegated to the Agent by the terms hereof or the
Loan Documents (including the power to give or to refuse to give notices,
waivers, consents, approvals and instructions and the power to make or to refuse
to make determinations and calculations) together with such powers as are
reasonably incidental thereto to carry out the purposes hereof and thereof. As
to any matters not expressly provided for by this Agreement and the other Loan
Documents (including enforcement or collection of the Notes), the Agent shall
not be required to exercise any discretion or take any action, but shall be
required to act or to refrain from acting (and shall be fully protected in so
acting or refraining from acting) upon the instructions of the Required Lenders,
and such instructions of the Required Lenders shall be binding upon all Lenders
and all holders of Notes; provided, however, that the Agent shall not be
required to take any action which, in the reasonable opinion of the Agent,
exposes the Agent to liability or which is contrary to this Agreement or any
Loan Document or applicable law.
Section 8.2. Nature of Duties. The Agent shall have no duties or
responsibilities except those expressly set forth in this Agreement or in the
Loan Documents. The duties of the Agent shall be mechanical and administrative
in nature. The Agent shall not have by reason of this Agreement or any Loan
Document a fiduciary relationship in respect of any Lender. Nothing in this
Agreement or any of the Loan Documents, express or implied, is intended to or
shall be construed to impose upon the Agent any obligations in respect of this
Agreement or any of the Loan Documents except as expressly set forth herein or
therein. Each Lender shall make its own independent investigation of the
financial condition and affairs of the Loan Parties in connection with the
making and the continuance of the Loans hereunder and shall make its own
appraisal of the creditworthiness of the Loan Parties and the value of the
Collateral, and the Agent shall have no duty or responsibility, either initially
or on a continuing basis, to provide any Lender with any credit or other
information with respect thereto, whether coming into its possession before the
initial Loans hereunder or at any time or times thereafter, provided that, upon
the reasonable request of a Lender, the Agent shall provide to such Lender any
documents or reports delivered to the Agent by the Loan Parties pursuant to the
terms of this Agreement or any Loan Document. If the Agent seeks the consent or
approval of the Required Lenders to the taking or refraining from taking any
action hereunder, the Agent shall send notice thereof to each Lender. The Agent
shall promptly notify each Lender any time that the Required Lenders have
instructed the Agent to act or refrain from acting pursuant hereto.
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Section 8.3. Rights, Exculpation, Etc. The Agent and its directors,
officers, agents or employees shall not be liable for any action taken or
omitted to be taken by it under or in connection with this Agreement or the
other Loan Documents. Without limiting the generality of the foregoing, the
Agent (i) may treat the payee of any Note as the holder thereof until the Agent
receives written notice of the assignment or transfer thereof, pursuant to
Section 9.8, signed by such payee and in form satisfactory to the Agent; (ii)
may consult with legal counsel (including counsel to the Agent or counsel to the
Loan Parties), independent public accountants, and other experts selected by it
and shall not be liable for any action taken or omitted to be taken in good
faith by it in accordance with the advice of such counsel or experts; (iii) make
no warranty or representation to any Lender and shall not be responsible to any
Lender for any statements, certificates, warranties or representations made in
or in connection with this Agreement or the other Loan Documents; (iv) shall not
have any duty to ascertain or to inquire as to the performance or observance of
any of the terms, covenants or conditions of this Agreement or the other Loan
Documents on the part of any Person, the existence or possible existence of any
Default or Event of Default, or to inspect the Collateral or other property
(including the books and records) of any Person; (v) shall not be responsible to
any Lender for the due execution, legality, validity, enforceability,
genuineness, sufficiency or value of this Agreement or the other Loan Documents
or any other instrument or document furnished pursuant hereto or thereto; and
(vi) shall not be deemed to have made any representation or warranty regarding
the existence, value or collectibility of the Collateral, the existence,
priority or perfection of the Agent's Lien thereon or any certificate prepared
by any Loan Party in connection therewith, nor shall the Agent be responsible or
liable to the Lenders for any failure to monitor or maintain any portion of the
Collateral. The Agent shall not be liable for any apportionment or distribution
of payments made in good faith pursuant to Section 2.2(c), and if any such
apportionment or distribution is subsequently determined to have been made in
error the sole recourse of any Lender to whom payment was due but not made shall
be to recover from other Lenders any payment in excess of the amount which they
are determined to be entitled. The Agent may at any time request instructions
from the Lenders with respect to any actions or approvals which by the terms of
this Agreement or of any of the Loan Documents the Agent is permitted or
required to take or to grant, and if such instructions are promptly requested,
the Agent shall be absolutely entitled to refrain from taking any action or to
withhold any approval under any of the Loan Documents until it shall have
received such instructions from the Required Lenders. Without limiting the
foregoing, no Lender shall have any right of action whatsoever against the Agent
as a result of the Agent's acting or refraining from acting under this
Agreement, the Notes or any of the other Loan Documents in accordance with the
instructions of the Required Lenders.
Section 8.4. Reliance. The Agent shall be entitled to rely upon any
written notices, statements, certificates, orders or other documents or any
telephone message believed by it in good faith to be genuine and correct and to
have been signed, sent or made by the proper Person, and with respect to all
matters pertaining to this Agreement or any of the Loan Documents and its duties
hereunder or thereunder, upon advice of counsel selected by it.
Section 8.5. Indemnification. To the extent that the Agent is not
reimbursed and indemnified by any Loan Party, the Lenders will reimburse and
indemnify the Agent from and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses, advances
or disbursements of any kind or nature whatsoever
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which may be imposed on, incurred by, or asserted against the Agent in any way
relating to or arising out of this Agreement or any of the Loan Documents or any
action taken or omitted by the Agent under this Agreement or any of the Loan
Documents, in proportion to each Lender's Pro Rata Share, including advances and
disbursements made pursuant to Section 8.8; provided, however, that no Lender
shall be liable for any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses, advances or
disbursements for which there has been a final judicial determination that such
resulted from the Agent's gross negligence or willful misconduct. The
obligations of the Lenders under this Section 8.5 shall survive the payment in
full of the Loans and the termination of this Agreement.
Section 8.6. Agent Individually. With respect to its Pro Rata Share of
the Total Commitment hereunder, the Loans made by it and the Notes issued to or
held by it, the Agent shall have and may exercise the same rights and powers
hereunder and is subject to the same obligations and liabilities as and to the
extent set forth herein for any other Lender or holder of a Note. The terms
"Lenders" or "Required Lenders" or any similar terms shall, unless the context
clearly otherwise indicates, include the Agent in its individual capacity as a
Lender or one of the Required Lenders. The Agent and its Affiliates may accept
deposits from, lend money to and generally engage in any kind of banking, trust
or other business with the Borrowers as if it were not acting as an Agent
pursuant hereto without any duty to account to the Lenders.
Section 8.7. Successor Agent. (a) The Agent may resign from the
performance of all its functions and duties hereunder and under the other Loan
Documents at any time by giving at least thirty (30) Business Days' prior
written notice to the Administrative Borrower and each Lender. Such resignation
shall take effect upon the acceptance by a successor Agent of appointment
pursuant to clauses (b) and (c) below or as otherwise provided below.
(b) Upon any such notice of resignation, the Required Lenders shall
appoint a successor Agent who, in the absence of a continuing Event of Default,
shall be reasonably satisfactory to the Borrowers. Upon the acceptance of any
appointment as Agent hereunder by a successor Agent, such successor Agent shall
thereupon succeed to and become vested with all the rights, powers, privileges
and duties of the retiring Agent, and the retiring Agent shall be discharged
from its duties and obligations under this Agreement and the other Loan
Documents. After the Agent's resignation hereunder as the Agent, the provisions
of this Article VIII shall inure to its benefit as to any actions taken or
omitted to be taken by it while it was Agent under this Agreement and the other
Loan Documents.
(c) If a successor Agent shall not have been so appointed within said
thirty (30) Business Day period, the retiring Agent shall then appoint a
successor Agent who, if an Event of Default is not continuing, shall be
reasonably satisfactory to the Borrowers, who shall serve as Agent until such
time, if any, as the Required Lenders appoint a successor Agent as provided
above.
Section 8.8. Collateral Matters. (a) The Agent may from time to time,
during the occurrence and continuance of an Event of Default, make such
disbursements and advances ("Agent Advances") which the Agent deems necessary or
desirable to preserve or protect the Collateral or any portion thereof, to
enhance the likelihood or maximize the amount
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of repayment by the Borrowers of the Loans and other Obligations or to pay any
other amount chargeable to the Borrowers pursuant to the terms of this
Agreement, including, without limitation, costs, fees and expenses described in
Section 9.4. The Agent Advances shall be repayable on demand and be secured by
the Collateral. The Agent Advances shall not constitute Loans but shall
otherwise constitute Obligations hereunder. The Agent shall notify each Lender
and the Administrative Borrower in writing of each Agent Advance, which notice
shall include a description of the purpose of such Agent Advance. Without
limitation to its obligations pursuant to Section 8.5, each Lender agrees that
it shall make available to the Agent, upon the Agent's demand, in Dollars in
immediately available funds, the amount equal to such Lender's Pro Rata Share of
such Agent Advance. If such funds are not made available to the Agent by such
Lender, the Agent shall be entitled to recover such funds on demand from such
Lender, together with interest thereon, for each day from the date such payment
was due until the date such amount is paid to the Agent, at the Federal Funds
Rate for three Business Days and thereafter at the Reference Rate.
(b) The Lenders hereby irrevocably authorize the Agent, at its option
and in its discretion, to release any Lien granted to or held by the Agent upon
any Collateral upon termination of the Total Commitment and payment and
satisfaction of all Loans and all other Obligations which have matured, or
constituting property being sold or disposed of in compliance with the terms of
this Agreement and the other Loan Documents, including, without limitation, the
sale of Time Share Interest in accordance with the provision of Section
6.2(c)(2)(a), or constituting property in which the Loan Parties owned no
interest at the time the Lien was granted or at any time thereafter, or if
approved, authorized or ratified in writing by the Lenders. Upon request by the
Agent at any time, the Lenders will confirm in writing the Agent's authority to
release particular types or items of Collateral pursuant to this Section 8.8(b).
(c) Without in any manner limiting the Agent's authority to act
without any specific or further authorization or consent by the Lenders (as set
forth in Section 8.8(b)), each Lender agrees to confirm in writing, upon request
by the Agent, the authority to release Collateral conferred upon the Agent under
Section 8.8(b). Upon receipt by the Agent of confirmation from the Lenders of
its authority to release any particular item or types of Collateral, and upon
prior written request by any Loan Party, the Agent shall (and is hereby
irrevocably authorized by the Lenders to) execute such documents as may be
necessary to evidence the release of the Liens granted to the Agent for the
benefit of the Lenders upon such Collateral; provided, however, that (i) the
Agent shall not be required to execute any such document on terms which, in the
Agent's opinion, would expose the Agent to liability or create any obligations
or entail any consequence other than the release of such Liens without recourse
or warranty, and (ii) such release shall not in any manner discharge, affect or
impair the Obligations or any Lien upon (or obligations of any Loan Party in
respect of) all interests in the Collateral retained by any Loan Party.
(d) The Agent shall have no obligation whatsoever to any Lenders to
assure that the Collateral exists or is owned by the Loan Parties or is cared
for, protected or insured or has been encumbered or that the Lien granted to the
Agent pursuant to this Agreement has been properly or sufficiently or lawfully
created, perfected, protected or enforced or is entitled to any particular
priority, or to exercise at all or in any particular manner or under any duty of
care,
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disclosure or fidelity, or to continue exercising, any of the rights,
authorities and powers granted or available to the Agent in this Section 8.8 or
in any of the Loan Documents, it being understood and agreed that in respect of
the Collateral, or any act, omission or event related thereto, the Agent may act
in any manner it may deem appropriate, in its sole discretion, given the Agent's
own interest in the Collateral as one of the Lenders and that the Agent shall
have no duty or liability whatsoever to any other Lender.
(e) With respect to Permitted Liens referred to in paragraph (r) of
the definition of such term in Section 1.1 (such Permitted Liens being referred
to herein as the "B of A Permitted Liens"), the Lenders and the Agent
acknowledge and agree, for the benefit of the Borrowers and expressly for the
benefit of the holder or holders from time to time of the B of A Permitted
Liens, that the Liens of the Agent and the Lenders under this Agreement and the
other Loan Documents are subordinate and subject to the B of A Permitted Liens
and that the Agent and the Lenders will not take any action to enforce any Lien,
interest, right or remedy that they may have with respect to any of the
properties and assets that are subject to the B of A Permitted Liens until all
obligations of the Borrowers that are secured by such Liens shall have been paid
in full.
ARTICLE IX
MISCELLANEOUS
Section 9.1. Notices, Etc. All notices and other communications
provided for hereunder shall be in writing and shall be mailed, telecopied or
delivered, at the address set forth in Appendix B hereto or, as to each party,
at such other address as shall be designated by such party in a written notice
to the other parties complying as to delivery with the terms of this Section
9.1. All such notices and other communications shall be effective (i) if mailed,
when received or three days after deposited in the mails, whichever occurs
first, (ii) if telecopied, when transmitted with confirmation received or (iii)
if delivered, upon delivery, except that notices to the Agent pursuant to
Article II shall not be effective until received by the Agent.
Section 9.2. Amendments, Etc. No amendment or waiver of any provision
of this Agreement or any Note, and no consent to any departure by the Borrowers
or any other Loan Party therefrom, shall in any event be effective unless the
same shall be in writing and signed by the Required Lenders and, in the case of
an amendment, the Borrowers, and then such waiver or consent shall be effective
only in the specific instance and for the specific purpose for which given,
provided, however, that no amendment, waiver or consent shall (i) increase the
Commitment of any Lender, reduce the principal of, or interest on, the Loans
payable to any Lender, reduce the amount of any fee payable for the account of
any Lender, or postpone or extend any date fixed for any payment of principal
of, or interest or fees on, the Loans payable to any Lender, in each case
without the written consent of each Lender affected thereby, (ii) increase the
Tranche A Loan Commitment, the Tranche B Commitment or the Tranche C Loan
Commitment, (iii) change the percentage of any Commitment or of the aggregate
unpaid principal amount of the Notes that is required for the Lenders or any of
them to take any action hereunder, (iv) amend the definition of "Required
Lenders" or "Pro Rata Share", (v) release all or a substantial portion of the
Collateral (except as otherwise provided in this Agreement and the other Loan
Documents), subordinate any Lien granted in favor of the Agent for the benefit
of the Lenders or release any Borrower or any Guarantor or (vi) amend, modify or
waive this Section 9.2 in the case of clauses (i) through (vi), without the
written consent of each Lender.
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Notwithstanding the foregoing, no amendment, waiver or consent shall, unless in
writing and signed by the Agent, affect the rights or duties of the Agent (but
not in its capacity as a Lender) under this Agreement or the other Loan
Documents.
Section 9.3. No Waiver; Remedies, Etc. No failure on the part of the
Agent or any Lender to exercise, and no delay in exercising, any right hereunder
or under any other Loan Document shall operate as a waiver thereof; nor shall
any single or partial exercise of any right under any Loan Document preclude any
other or further exercise thereof or the exercise of any other right. The rights
and remedies of the Agent and the Lenders provided herein and in the other Loan
Documents are cumulative and are in addition to, and not exclusive of, any
rights or remedies provided by law. The rights of the Agent and the Lenders
under any Loan Document against any party thereto are not conditional or
contingent on any attempt by the Agent and the Lenders to exercise any of their
rights under any other Loan Document against such party or against any other
Person.
Section 9.4. Expenses; Taxes; Attorneys' Fees. The Borrowers will pay
on demand all reasonable costs and expenses incurred by or on behalf of the
Agent (and, in the case of clauses (c) through (m) below, the Lenders),
regardless of whether the transactions contemplated hereby are consummated,
including reasonable fees, costs and expenses of counsel for the Agent (and, in
the case of clauses (c) through (m) below, the Lenders), and due diligence
expenses in connection with the negotiation of this Agreement (provided that the
maximum reimbursement for such due diligence expenses shall be $200,000), and
periodic field audits, physical counts, valuations, investigations, searches and
filings, monitoring of assets, appraisals of Collateral and environmental
assessments (all conducted on a reasonable basis and, unless an Event of Default
shall have occurred and be continuing, in consultation with the Administrative
Borrower and up to a maximum reimbursable amount of $20,000 per year), travel,
lodging and meals, arising from or relating to: (a) the negotiation,
preparation, execution, delivery, performance and administration of this
Agreement and the other Loan Documents (including the preparation of any
additional Loan Documents, pursuant to Section 6.1(b) or the review of any of
the agreements, instruments and documents referred to in Section 6.1(f)), (b)
any requested amendments, waivers or consents to this Agreement, the other Loan
Documents or the Custodial Agreements whether or not such documents become
effective or are given, (c) the preservation and protection of any of the
Lenders' rights under this Agreement, the other Loan Documents or the Custodial
Agreements, (d) the defense of any claim or action asserted or brought against
the Agent or the Lenders by any Person that arises from or relates to this
Agreement, any other Loan Document, either of the Custodial Agreements, the
Agent's or the Lenders' claims against the Borrowers and each other Loan Party
or any and all matters in connection therewith, (e) the commencement or defense
of, or intervention in, any court proceeding arising from or related to this
Agreement, any other Loan Document or either of the Custodial Agreements, (f)
the filing of any petition, complaint, answer, motion or other pleading by the
Agent or the Lenders, or the taking of any action in respect of the Collateral
or other security, in connection with this Agreement, any other Loan Document or
either of the Custodial Agreements, (g) the protection, collection, lease, sale,
taking possession of or liquidation of any Collateral or other security in
connection with this Agreement, any other Loan Document or either of the
Custodial Agreements, (h) any attempt to enforce any Lien or security interest
in any Collateral or other security in connection with this Agreement, any other
Loan Document or either of the Custodial Agreements, (i) any attempt to collect
from the Borrowers or any other Loan Party, (j) the receipt
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by the Agent or the Lenders of any advice from professionals with respect to any
of the foregoing, (k) all liabilities and costs arising from or in connection
with the past, present or future operations of the Borrowers and each other Loan
Party involving any damage to real or personal property or natural resources or
harm or injury alleged to have resulted from any Release of Hazardous Materials
on, upon or into such property, (l) any Environmental Liabilities and Costs
incurred in connection with the investigation, removal, cleanup and/or
remediation of any Hazardous Materials present or arising out of the operations
of any facility of any Borrower or any other Loan Party or (m) any Environmental
Liabilities and Costs incurred in connection with any Environmental Lien.
Without limitation of the foregoing or any other provision of any Loan Document:
(x) the Borrowers agree to pay all stamp, document, transfer, recording or
filing taxes or fees and similar impositions now or hereafter payable in
connection with this Agreement, any other Loan Document or either of the
Custodial Agreements, and the Borrowers agree to save the Agent and the Lenders
harmless from and against any and all present or future claims, liabilities or
losses with respect to or resulting from any omission to pay or delay in paying
any such taxes, fees or impositions, (y) the Borrowers agree to pay all broker
fees that may become due in connection with the transactions contemplated by
this Agreement (other than any such fees that become payable solely as a result
of actions of the Agent or any of the Lenders) and (z) if the Borrowers fail to
perform any covenant or agreement contained herein or in any other Loan
Document, the Agent may itself perform or cause performance of such covenant or
agreement, and the reasonable expenses of the Agent incurred in connection
therewith shall be reimbursed on demand by the Borrowers.
Section 9.5. Right of Set-off. Upon the occurrence and during the
continuance of any Event of Default, any Lender may, and is hereby authorized
to, at any time and from time to time, without notice to the Borrowers, any such
notice being expressly waived by the Borrowers, and to the fullest extent
permitted by law, set off and apply any and all deposits (general or special,
time or demand, provisional or final) at any time held and other indebtedness at
any time owing by such Lender to or for the credit or the account of the
Borrowers against any and all obligations of any of them now or hereafter
existing under any Loan Document, irrespective of whether or not such Lender
shall have made any demand hereunder or thereunder and although such obligations
may be contingent or unmatured. Each Lender agrees to notify the Administrative
Borrower promptly after any such set-off and application made by such Lender,
provided that the failure to give such notice shall not affect the validity of
such set-off and application.
Section 9.6. Survival. All covenants, agreements, representations and
warranties made by the Borrowers herein and in the certificates or other
instruments delivered in connection with or pursuant to this Agreement shall be
considered to have been relied upon by the other parties hereto and shall
survive the execution and delivery of this Agreement and the making of any
Loans, regardless of any investigation made by any such other party or on its
behalf, and shall continue in full force and effect as long as the principal of
or any accrued interest on any Loan or any fee or any other amount payable under
this Agreement is outstanding and unpaid and so long as the Commitments have not
expired or terminated. The provisions of Sections 2.9, 3.4, 9.4, 9.14 and
Article VIII shall survive and remain in full force and effect regardless of the
consummation of the transactions contemplated hereby, the repayment of the
Loans, the expiration or termination of the Commitments or the termination of
this Agreement or any provision hereof.
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Section 9.7. Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining portions hereof or affecting the validity or
enforceability of such provision in any other jurisdiction.
Section 9.8. Assignments and Participations. (a) This Agreement and
the Notes shall be binding upon and inure to the benefit of the Borrowers and
the Agent and each Lender and their respective successors and assigns; provided,
however, other than in connection with the Corporate Restructuring, each of the
Borrowers may not assign or transfer any of its rights hereunder, or under the
Notes, without the prior written consent of each Lender and any such assignment
without the Lenders' prior written consent shall be null and void.
(b) Each Lender may, with the written consent of the Agent and, unless
an Event of Default has occurred and is continuing, the written consent of the
Administrative Borrower (which consent shall not be required in connection with
any assignment to any Affiliate of such Lender), such consent of the
Administrative Borrower not to be unreasonably withheld, assign to one or more
other lenders or other entities all or a portion of its rights and obligations
under this Agreement (including all or a portion of any Commitment, the Loans
made by it and the Notes held by it); provided, however, that (i) such
assignment is in an amount which is at least $5,000,000 or a multiple of
$1,000,000 in excess thereof (or the remainder of such Lender's Commitments) and
(ii) the parties to each assignment shall execute and deliver to the Agent, for
its acceptance, an Assignment and Acceptance, together with any Note subject to
such assignment, and such parties shall deliver to the Agent a processing and
recordation fee of $5,000. Upon such execution, delivery and acceptance, from
and after the effective date specified in each Assignment and Acceptance, which
effective date shall be at least three Business Days after the delivery thereof
to the Agent (or such shorter period as shall be agreed to by the Agent and the
parties to such assignment), (A) the assignee thereunder shall become a "Lender"
hereunder and, in addition to the rights and obligations hereunder held by it
immediately prior to such effective date, have the rights and obligations
hereunder that have been assigned to it pursuant to such Assignment and
Acceptance and (B) the assigning Lender thereunder shall, to the extent that
rights and obligations hereunder have been assigned by it pursuant to such
Assignment and Acceptance, relinquish its rights and be released from its
obligations under this Agreement (and, in the case of an Assignment and
Acceptance covering all or the remaining portion of an assigning Lender's rights
and obligations under this Agreement, such Lender shall cease to be a party
hereto). Notwithstanding anything in this Agreement to the contrary, at no time
shall there be more than three (3) Lenders that are Lenders party to this
Agreement.
(i) By executing and delivering an Assignment and Acceptance, the
assigning Lender and the assignee thereunder confirm to and agree with each
other and the other parties hereto as follows: (A) other than as provided
in such Assignment and Acceptance, the assigning Lender makes no
representation or warranty and assumes no responsibility with respect to
any statements, warranties or representations made in or in connection with
this Agreement or any other Loan Document or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of this
Agreement or any other Loan Document furnished pursuant hereto; (B) the
assigning Lender makes no representation or warranty and assumes no
responsibility with respect to the financial
86
condition of the Loan Parties or any of their Subsidiaries or the
performance or observance by the Loan Parties of any of their obligations
under this Agreement or any other Loan Document furnished pursuant hereto;
(C) such assignee confirms that it has received a copy of this Agreement
and the other Loan Documents, together with such other documents and
information it has deemed appropriate to make its own credit analysis and
decision to enter into such Assignment and Acceptance; (D) such assignee
will, independently and without reliance upon the Assigning Lender, the
Agent or any Lender and based on such documents and information as it shall
deem appropriate at the time, continue to make its own credit decisions in
taking or not taking action under this Agreement and the other Loan
Documents; (E) such assignee appoints and authorizes the Agent to take such
action as Agent on its behalf and to exercise such powers under this
Agreement and the other Loan Documents as are delegated to the Agent by the
terms thereof, together with such powers as are reasonably incidental
thereto; and (F) such assignee agrees that it will perform in accordance
with their terms all of the obligations which by the terms of this
Agreement and the other Loan Documents are required to be performed by it
as a Lender.
(ii) The Agent shall maintain, or cause to be maintained at the
Payment Office a copy of each Assignment and Acceptance delivered to and
accepted by it and a register for the recordation of the names and
addresses of the Lenders and the Commitments of, and principal amount of
the Loans owing to, each Lender from time to time (the "Register"). The
entries in the Register shall be conclusive and binding for all purposes,
absent manifest error, and the Borrowers, the Agent and the Lenders may
treat each Person whose name is recorded in the Register as a Lender
hereunder for all purposes of this Agreement. The Register shall be
available for inspection by the Administrative Borrower and any Lender at
any reasonable time and from time to time upon reasonable prior notice.
(iii) Upon its receipt of an Assignment and Acceptance executed by an
assigning Lender and an assignee, together with the Notes subject to such
assignment, the Agent shall, if the Agent consents to such assignment and
if such Assignment and Acceptance has been completed, (i) accept such
Assignment and Acceptance, (ii) give prompt notice thereof to the
Administrative Borrower, (iii) record the information contained therein in
the Register and (iv) prepare and distribute to each Lender and the
Administrative Borrower a revised Xxxxxxxx X-0, X-0 or A-3, as applicable,
hereto after giving effect to such assignment, which revised Appendix shall
replace the prior Appendix and become part of this Agreement.
(iv) A Registered Loan (and the Registered Note, if any, evidencing
the same) may be assigned or sold in whole or in part only by registration
of such assignment or sale on the Register (and each Registered Note shall
expressly so provide). Any assignment or sale of all or part of such
Registered Loan (and the Registered Note, if any, evidencing the same) may
be effected only by registration of such assignment or sale on the
Register, together with the surrender of the Registered Note, if any,
evidencing the same duly endorsed by (or accompanied by a written
instrument of assignment or sale duly executed by) the holder of such
Registered Note, whereupon, at the request of the designated assignee(s) or
transferee(s), one or more new Registered Notes in the same
87
aggregate principal amount and of the same Tranche shall be issued to the
designated assignee(s) or transferee(s). Prior to the registration of
assignment or sale of any Registered Loan (and the Registered Note, if any
evidencing the same), the Agent shall treat the Person in whose name such
Registered Loan (and the Registered Note, if any, evidencing the same) is
registered as the owner thereof for the purpose of receiving all payments
thereon and for all other purposes, notwithstanding notice to the contrary.
(v) In the event that any Lender sells participations in a Registered
Loan, such Lender shall maintain a register on which it enters the name of
all participants in the Registered Loans held by it (the "Participant
Register"). A Registered Loan (and the Registered Note, if any, evidencing
the same) may be participated in whole or in part only by registration of
such participation on the Participant Register (and each Registered Note
shall expressly so provide). Any participation of such Registered Loan (and
the Registered Note, if any, evidencing the same) may be effected only by
the registration of such participation on the Participant Register.
(vi) Any foreign Person who purchases or is assigned or participates
in any portion of such Registered Loan shall provide the Agent (in the case
of a purchase or assignment) or the Lender (in the case of a participation)
with a completed Internal Revenue Service Form W-8 (Certificate of Foreign
Status) or a substantially similar form for such purchaser, participant or
any other affiliate who is a holder of beneficial interests in the
Registered Loan.
(c) Each Lender may sell participations to one or more banks or other
entities in or to all or a portion of its rights and obligations under this
Agreement and the other Loan Documents (including all or a portion of its
Commitments and the Loans made by it); provided that (i) such Lender's
obligations under this Agreement (including its Commitments hereunder) and the
other Loan Documents shall remain unchanged; (ii) such Lender shall remain
solely responsible to the other parties hereto for the performance of such
obligations, and the Borrowers, the Agent and the other Lenders shall continue
to deal solely and directly with such Lender in connection with such Lender's
rights and obligations under this Agreement and the other Loan Documents and
(iii) a participant shall not be entitled to require such Lender to take or omit
to take any action hereunder except (A) action directly effecting an extension
of the maturity date or decrease in the principal amount of the Loans, or (B)
action directly effecting an extension of the due dates or a decrease in the
rate of interest payable on the Loans or the fees payable under this Agreement,
or (C) actions directly effecting a release of all or a substantial portion of
the Collateral or any Borrower or any Guarantor (except as set forth in Section
8.8 of this Agreement or any Loan Document).
Section 9.9. Counterparts. This Agreement may be executed in any
number of counterparts and by different parties hereto in separate counterparts,
each of which shall be deemed to be an original, but all of which taken together
shall constitute one and the same agreement.
Section 9.10. GOVERNING LAW. THIS AGREEMENT, THE NOTES AND THE OTHER
LOAN DOCUMENTS SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
INTERNAL LAWS OF THE STATE OF NEW YORK
88
(INCLUDING SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW
YORK) APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED IN THE STATE OF NEW YORK.
Section 9.11. WAIVER OF JURY TRIAL, ETC. EACH LOAN PARTY, THE AGENT
AND THE LENDERS HEREBY WAIVE ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION,
PROCEEDING OR COUNTERCLAIM CONCERNING ANY RIGHTS UNDER THIS AGREEMENT, THE NOTES
OR OTHER LOAN DOCUMENTS, OR UNDER ANY AMENDMENT, WAIVER, CONSENT, INSTRUMENT,
DOCUMENT OR OTHER AGREEMENT DELIVERED OR WHICH IN THE FUTURE MAY BE DELIVERED IN
CONNECTION THEREWITH, OR ARISING FROM ANY FINANCING RELATIONSHIP EXISTING IN
CONNECTION WITH THIS AGREEMENT, AND AGREE THAT ANY SUCH ACTION, PROCEEDINGS OR
COUNTERCLAIM SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY. EACH LOAN
PARTY CERTIFIES THAT NO OFFICER, REPRESENTATIVE, AGENT OR ATTORNEY OF THE AGENT
OR ANY LENDER HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT THE AGENT OR ANY
LENDER WOULD NOT, IN THE EVENT OF ANY ACTION, PROCEEDING OR COUNTERCLAIM, SEEK
TO ENFORCE THE FOREGOING WAIVERS. EACH LOAN PARTY HEREBY ACKNOWLEDGES THAT THIS
PROVISION IS A MATERIAL INDUCEMENT FOR THE LENDERS TO ENTER INTO THIS AGREEMENT.
Section 9.12. No Party Deemed Drafter. Each of the parties hereto
agrees that no party hereto shall be deemed to be the drafter of this Agreement.
Section 9.13. Parent as Agent for Borrowers. Each Borrower hereby
irrevocably appoints Parent as the borrowing agent and attorney-in-fact for the
Borrowers (the "Administrative Borrower"), which appointment shall remain in
full force and effect unless and until the Agent shall have received prior
written notice signed by all of the Borrowers that such appointment has been
revoked and that another Borrower has been appointed Administrative Borrower.
Each Borrower hereby irrevocably appoints and authorizes the Administrative
Borrower (i) to provide the Agent with all notices with respect to Loans
obtained for the benefit of any Borrower and all other notices and instructions
under this Agreement and (ii) to take such action as the Administrative Borrower
deems appropriate on its behalf to obtain Loans and to exercise such other
powers as are reasonably incidental thereto to carry out the purposes of this
Agreement. Each of the Borrowers hereby jointly and severally agrees to
indemnify the Indemnitees (as hereinafter defined) and hold the Indemnitees
harmless against any and all liability, expense, loss or claim of damage or
injury, made against such Indemnitee by any of the Borrowers or by any third
party whosoever, arising from or incurred by reason of the Agent and the Lenders
relying on any instructions of the Administrative Borrower as provided herein.
Section 9.14. Indemnification. In addition to each Borrower's other
Obligations under this Agreement, each Borrower agrees to, jointly and
severally, defend, protect, indemnify and hold harmless the Agent, each Lender
and all of their respective officers, directors, employees, attorneys,
consultants and agents (collectively called the "Indemnitees") from and against
any and all losses, damages, liabilities, obligations, penalties, fees,
reasonable costs and expenses (including, without limitation, reasonable
attorneys' fees, costs and expenses) incurred by such Indemnitees, whether prior
to or from and after the Closing Date, whether
89
direct, indirect or consequential, as a result of or arising from or relating to
or in connection with any of the following: (i) the negotiation, preparation,
execution or performance or enforcement of this Agreement, any other Loan
Document, either of the Custodial Agreements or of any other document executed
in connection with the transactions contemplated by this Agreement, (ii) the
Agent's or any Lender's furnishing of funds to the Borrowers under this
Agreement, including, without limitation, the management of any such Loans,
(iii) any matter relating to the financing transactions contemplated by this
Agreement, the other Loan Documents or either of the Custodial Agreements or by
any document executed in connection with the transactions contemplated by this
Agreement, the other Loan Documents or either of the Custodial Agreements or
(iv) any claim, litigation, investigation or proceeding relating to any of the
foregoing, whether or not any Indemnitee is a party thereto (collectively, the
"Indemnified Matters"); provided, however, that the Loan Parties shall not have
any obligation to any Indemnitee under this Section 9.14 for any Indemnified
Matter caused by the gross negligence or willful misconduct of such Indemnitee,
as determined by a final judgment of a court of competent jurisdiction. To the
extent that the undertaking to indemnify, pay and hold harmless set forth in
this Section 9.14 may be unenforceable because it is violative of any law or
public policy, each Borrower shall, jointly and severally, contribute the
maximum portion which it is permitted to pay and satisfy under applicable law,
to the payment and satisfaction of all Indemnified Matters incurred by the
Indemnitees. This Indemnity shall survive the repayment of the Obligations and
the discharge of the Liens granted under the Loan Documents.
Section 9.15. Binding Effect. This Agreement shall become effective
when it shall have been executed by each Borrower, the Agent and each Lender and
when the conditions precedent set forth in Section 4.1 have been satisfied or
waived in writing by the Agent, and thereafter shall be binding upon and inure
to the benefit of each Borrower, the Agent and each Lender, and their respective
successors and assigns, except that the Borrowers shall not have the right to
assign their rights hereunder or any interest herein without the prior written
consent of each Lender, and any assignment by any Lender shall be governed by
Section 9.8 hereof.
Section 9.16. Acknowledgment Regarding Sunterra Securitizations.
Nothing in this Agreement, or in any agreement or instrument entered into in
connection herewith, shall be construed as affecting or altering the rights or
obligations of any Person with respect to any of the Prior Sunterra
Securitizations or as granting to any Lender or the Agent any Lien or other
claim on: (i) any mortgage loans, mortgage notes or other installment
obligations ("Securitization Mortgage Notes") that were issued or transferred as
part of a Prior Sunterra Securitization, or any proceeds or profits of such
Securitization Mortgage Notes; (ii) any funds or other assets that are held or
received by the Parent or any of its Subsidiaries or Affiliates in their
capacities as servicers or sub-servicers pursuant to the Prior Sunterra
Securitizations and in which the servicers or sub-servicers do not hold an
equitable interest; or (iii) any funds or other assets of Finance L.L.C.,
TerraSun L.L.C. or Dutch Elm LLC. Notwithstanding anything in this Agreement to
the contrary, none of Finance L.L.C., TerraSun Holding, TerraSun L.L.C., DE
Holdings or Dutch Elm, LLC or any assignee of TerraSun Holding's interest in
TerraSun, L.L.C., DE Holdings' interest in Dutch Elm, LLC or Sunterra Mortgage,
Inc.'s interest in Finance L.L.C. as a result of the Mortgage Receivables Sale
Transaction shall be a Loan Party or shall otherwise be liable in respect of any
of the Obligations. The foregoing provisions are not intended to prohibit any
Lien in favor of any Lender or the Agent in any right which any Loan
90
Party possesses now or in the future in respect of the Prior Sunterra
Securitizations (including amounts representing excess cash flow distributed to
such Loan Party and any rights with respect to the servicing of such
Securitization Mortgage Notes); provided, that the existence of such Lien does
not violate of any provision contained in any document relating to any Prior
Sunterra Securitization or other off-balance sheet financing facility.
91
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their respective officers thereunto duly authorized, as of the
date first above written.
BORROWERS:
SUNTERRA CORPORATION
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
AKGI LAKE TAHOE INVESTMENTS, INC.
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
AKGI ST. MAARTEN, NV
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
ALL SEASONS PROPERTIES, INC.
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
ALL SEASONS REALTY, INC.
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
ALL SEASONS RESORTS, INC.,
an Arizona corporation (AZ)
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
ALL SEASONS RESORTS, INC.,
a Texas corporation (TX)
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
ARGOSY GRAND BEACH, INC.
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
ARGOSY HILTON HEAD, INC.
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
ARGOSY PARTNERS, INC.
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
ARGOSY/KGI GRAND BEACH
INVESTMENT PARTNERSHIP
By: Argosy Grand Beach, Inc.,
Its General Partner
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
By: Argosy Partners, Inc.,
Its General Partner
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
By: KGI Grand Beach Investments Inc.,
its Managing General Partner
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
ARGOSY/KGI PORT ROYAL PARTNERS
By: Argosy Grand Beach, Inc.,
Its General Partner
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
By: KGI Port Royal, Inc.
ITS Managing General Partner
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
AVCOM INTERNATIONAL, INC. (n/k/a Sunterra
Developer and Sales Holding Company)
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
CLUB SUNTERRA, INC.
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
DESIGN INTERNATIONALE-RMI, INC.
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
XXXXXX ACQUISITION SUBSIDIARY, INC.
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
GRAND BEACH PARTNERS, L.P.
By: Argosy/KGI Grand Beach Investment
Partnership, its General Partner
By: Argosy partners, Inc.,
its General partner
By: /s/ Xxxxx X. Xxxxxxxx
-------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
By: Argosy Grand Beach, Inc.,
its General partner
By: /s/ Xxxxx X. Xxxxxxxx
-------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
By: KGI Grand Beach Investments, Inc.
its Managing General Partner
By: /s/ Xxxxx X. Xxxxxxxx
-------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
GRAND BEACH RESORT,
LIMITED PARTNERSHIP
By: Grand Beach Partners, LP,
its General Partner
By: Argosy/KGI Grand Beach Investment
Partnership, its General Partner
By: KGI Grand Beach Investments, Inc.,
its Managing General Partner
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
By: Argosy Partners, Inc.,
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
By: Argosy Grand Beach, Inc.,
its General partners
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
GREENSPRINGS ASSOCIATES
By: Plantation Resorts Group, Inc.,
its Joint Venturer
By: /s/ Xxxxx X. Xxxxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
By: Greensprings Plantation Resort, Inc.,
its Joint Venturer
By: /s/ Xxxxx X. Xxxxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
GREENSPRINGS PLANTATION RESORT, INC.
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
XXXXXX TAHOE DEVELOPMENTS PARTNERSHIP
By: Lakewood Development Inc.,
its Managing General Partner
By: /s/ Xxxxx X. Xxxxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
By: Ridgewood Development Inc.,
its General Partner
By: /s/ Xxxxx X. Xxxxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
INTERNATIONAL TIMESHARES, INC.
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
KABUSHIKI GAISHA KEI, LLC
By: KGK Investors, Inc., its
Member
By: /s/ Xxxxx X. Xxxxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
By: KGK Partners, Inc., its Member
By: /s/ Xxxxx X. Xxxxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
By: Argosy Partners, Inc., its Member
By: /s/ Xxxxx X. Xxxxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
KGI GRAND BEACH INVESTMENTS, INC.
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
KGI PORT ROYAL, INC.
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
KGK LAKE TAHOE DEVELOPMENT, INC.
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
LAKE TAHOE RESORT PARTNERS, LLC
By: AKGI Lake Tahoe Investments, Inc.,
its Managing Member
By: /s/ Xxxxx X. Xxxxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
By: KGK Lake Tahoe Development, Inc.,
its Member
By: /s/ Xxxxx X. Xxxxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
LAKEWOOD DEVELOPMENT, INC.
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
MMG DEVELOPMENT CORP.
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
PLANTATION RESORTS GROUP, INC.
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
POINTE PARTNERS, LIMITED PARTNERSHIP
By: Xxxxxx Tahoe Developments,
its Managing General Partner
By: Lakewood Development Inc.,
its Managing General Partner
By: /s/ Xxxxx X. Xxxxxxxx
-------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
By: Ridgewood Development Inc.,
its General Partner
By: /s/ Xxxxx X. Xxxxxxxx
-------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
PORT ROYAL RESORT, L.P.
By: Argosy/KGI Port Royal Partners,
its General Partner
By: KGI Port Royal, Inc.,
its Managing General Partner
By: /s/ Xxxxx X. Xxxxxxxx
-------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
By: Argosy Hilton Head, Inc.,
its General Partner
By: /s/ Xxxxx X. Xxxxxxxx
-------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
POWHATAN ASSOCIATES
By: Plantation Resorts Group, Inc.,
its Joint Venturer
By: /s/ Xxxxx X. Xxxxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
By: Williamsburg Vacations, Inc.,
its Joint Venturer
By: /s/ Xxxxx X. Xxxxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
PREMIER VACATIONS, INC.
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
RESORT CONNECTIONS, INC.
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
RESORT MARKETING INTERNATIONAL, INC.
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
RESORTS DEVELOPMENT INTERNATIONAL, INC.
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
RIDGE POINTE, LIMITED PARTNERSHIP
By: Pointe Partners Limited Partnership,
its Managing General Partner
By: Xxxxxx Tahoe Development,
its Managing General Partner
By: Lakewood Development Inc.,
its Managing General Partner
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
By: Ridgewood Development Inc.,
its General Partner
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
RIDGEWOOD DEVELOPMENT INC.
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
RKG, CORP.
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
RPM MANGEMENT, INC.
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
SUNTERRA COMMUNICATIONS CORPORATION
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
SUNTERRA FINANCIAL SERVICES, INC.
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
SUNTERRA PACIFIC, INC.
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
SUNTERRA ST. CROIX, INC.
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
SUNTERRA TRAVEL, INC.
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
S.V.L.H., INC.
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
WILLIAMSBURG VACATIONS, INC.
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
SUNTERRA FINANCE HOLDING COMPANY
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
SUNTERRA CENTRALIZED SERVICES
COMPANY
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
SUNTERRA MANAGEMENT AND EXCHANGE
HOLDING COMPANY
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
CLUB SUNTERRA, LLC
By: Sunterra Management and Exchange Holding
Company, its Manager
By: /s/ Xxxxx X. Xxxxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
INTERNATIONAL TIMESHARES
MARKETING, LLC
By: Resort Marketing International, Inc., its
Manager
By: /s/ Xxxxx X. Xxxxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
RPM MANAGEMENT, LLC
By: Sunterra Management and Exchange Holding
Company, its Manager
By: /s/ Xxxxx X. Xxxxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
SUNTERRA BENT CREEK GOLF COURSE DEVELOPMENT, LLC
By: Sunterra Developer and Sales Holding
Company, its Manager
By: /s/ Xxxxx X. Xxxxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
SUNTERRA BENT CREEK VILLAGE
DEVELOPMENT, LLC
By: Sunterra Developer and Sales Holding
Company, its Manager
By: /s/ Xxxxx X. Xxxxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
SUNTERRA COMMUNICATIONS, LLC
By: Sunterra Management and Exchange Holding
Company, its Manager
By: /s/ Xxxxx X. Xxxxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
SUNTERRA XXXXX XXXXX DEVELOPMENT,
LLC
By: Sunterra Developer and Sales Holding
Company, its Manager
By: /s/ Xxxxx X. Xxxxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
SUNTERRA CYPRESS POINTE I
DEVELOPMENT, LLC
By: Sunterra Developer and Sales Holding
Company, its Manager
By: /s/ Xxxxx X. Xxxxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
SUNTERRA CYPRESS POINTE II
DEVELOPMENT, LLC
By: Sunterra Developer and Sales Holding
Company, its Manager
By: /s/ Xxxxx X. Xxxxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
SUNTERRA CYPRESS POINTE III
DEVELOPMENT, LLC
By: Sunterra Developer and Sales Holding
Company, its Manager
By: /s/ Xxxxx X. Xxxxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
SUNTERRA EAST MARKETING, LLC
By: Resort Marketing International, Inc., its
Manager
By: /s/ Xxxxx X. Xxxxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
SUNTERRA FALL CREEK DEVELOPMENT,
LLC
By: Sunterra Developer and Sales Holding
Company, its Manager
By: /s/ Xxxxx X. Xxxxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
SUNTERRA GRAND BEACH I
DEVELOPMENT, LLC
By: Sunterra Developer and Sales Holding
Company, its Manager
By: /s/ Xxxxx X. Xxxxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
SUNTERRA GRAND BEACH II
DEVELOPMENT, LLC
By: Sunterra Developer and Sales Holding
Company, its Manager
By: /s/ Xxxxx X. Xxxxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
SUNTERRA GREENSPRINGS DEVELOPMENT,
LLC
By: Sunterra Developer and Sales Holding
Company, its Manager
By: /s/ Xxxxx X. Xxxxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
SUNTERRA KGK PARTNERS FINANCE, LLC
By: Sunterra Finance Holding Company, its
Manager
By: /s/ Xxxxx X. Xxxxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
SUNTERRA KALLOF PLACE DEVELOPMENT,
LLC
By: All Seasons Resorts, Inc. (AZ), its Manager
By: /s/ Xxxxx X. Xxxxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
SUNTERRA LAKE TAHOE DEVELOPMENT,
LLC
By: Sunterra Developer and Sales Holding
Company, its Manager
By: /s/ Xxxxx X. Xxxxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
SUNTERRA NORTH MARKETING, LLC
By: Resort Marketing International, Inc., its
Manager
By: /s/ Xxxxx X. Xxxxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
SUNTERRA POCO DIABLO DEVELOPMENT,
LLC
By: All Seasons Resorts, Inc. (AZ), its Manager
By: /s/ Xxxxx X. Xxxxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
SUNTERRA POIPU GP DEVELOPMENT, LLC
By: Sunterra Developer and Sales Holding
Company, its Manager
By: /s/ Xxxxx X. Xxxxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
SUNTERRA POLYNESIAN ISLES
DEVELOPMENT, LLC
By: Sunterra Developer and Sales Holding
Company, its Manager
By: /s/ Xxxxx X. Xxxxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
SUNTERRA PORT ROYAL DEVELOPMENT,
LLC
By: Sunterra Developer and Sales Holding
Company, its Manager
By: /s/ Xxxxx X. Xxxxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
SUNTERRA POWHATAN DEVELOPMENT,
LLC
By: Sunterra Developer and Sales Holding
Company, its Manager
By: /s/ Xxxxx X. Xxxxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
SUNTERRA RESIDUAL ASSETS
DEVELOPMENT, LLC
By: Sunterra Developer and Sales Holding
Company, its Manager
By: /s/ Xxxxx X. Xxxxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
SUNTERRA RIDGE ON SEDONA
DEVELOPMENT, LLC
By: All Seasons Resorts, Inc. (AZ), its Manager
By: /s/ Xxxxx X. Xxxxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
SUNTERRA RIDGE POINTE DEVELOPMENT,
LLC
By: Sunterra Developer and Sales Holding
Company, its Manager
By: /s/ Xxxxx X. Xxxxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
SUNTERRA SAN XXXX BAY DEVELOPMENT,
LLC
By: Sunterra Developer and Sales Holding
Company, its Manager
By: /s/ Xxxxx X. Xxxxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
SUNTERRA SANTA FE DEVELOPMENT, LLC
By: Sunterra Developer and Sales Holding
Company, its Manager
By: /s/ Xxxxx X. Xxxxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
SUNTERRA SEDONA SPRINGS DEVELOPMENT, LLC
By: All Seasons Resorts, Inc. (AZ), its Manager
By: /s/ Xxxxx X. Xxxxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
SUNTERRA SEDONA SUMMIT DEVELOPMENT, LLC
By: All Seasons Resorts, Inc. (AZ), its Manager
By: /s/ Xxxxx X. Xxxxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
SUNTERRA SOUTH MARKETING, LLC
By: Resort Marketing International, Inc., its
Manager
By: /s/ Xxxxx X. Xxxxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
SUNTERRA ST. CROIX DEVELOPMENT, LLC
By: Sunterra Developer and Sales Holding
Company, its Manager
By: /s/ Xxxxx X. Xxxxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
SUNTERRA STEAMBOAT DEVELOPMENT,
LLC
By: Sunterra Developer and Sales Holding
Company, its Manager
By: /s/ Xxxxx X. Xxxxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
SUNTERRA TAHOE BEACH & SKI
DEVELOPMENT, LLC
By: Sunterra Developer and Sales Holding
Company, its Manager
By: /s/ Xxxxx X. Xxxxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
SUNTERRA VILLA MIRAGE DEVELOPMENT,
LLC
By: All Seasons Resorts, Inc. (AZ), its Manager
By: /s/ Xxxxx X. Xxxxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
SUNTERRA VILLAS OF SEDONA DEVELOPMENT, LLC
By: All Seasons Resorts, Inc. (AZ), its Manager
By: /s/ Xxxxx X. Xxxxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
SUNTERRA WEST MARKETING, LLC
By: Resort Marketing International, Inc., its
Manager
By: /s/ Xxxxx X. Xxxxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
SUNTERRA RESIDUAL ASSETS FINANCE,
LLC
By: Sunterra Finance Holding Company, its
Manager
By: /s/ Xxxxx X. Xxxxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
SUNTERRA RESIDUAL ASSETS M&E, LLC
By: Sunterra Management and Exchange Holding
Company, its Manager
By: /s/ Xxxxx X. Xxxxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
SUNTERRA MORTGAGE HOLDINGS, LLC
By: Sunterra Finance Holding Company, its
Manager
By: /s/ Xxxxx X. Xxxxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
AGENT:
XXXXXXX XXXXX MORTGAGE CAPITAL INC.
By: /s/ Xxxxxxx Xxxxx
---------------------------------------------
Name: Xxxxxxx Xxxxx
Title: Director
LENDER:
XXXXXXX XXXXX MORTGAGE LENDING, INC.
By: /s/ Xxxxxxx Xxxxx
---------------------------------------------
Name: Xxxxxxx Xxxxx
Title: Director
TRANCHE A LOAN NOTE
$225,000,000 July 29, 0000
Xxx Xxxx, Xxx Xxxx
FOR VALUE RECEIVED, THE PERSONS SIGNATORY HERETO (each, a "Borrower"), jointly
and severally promise to pay XXXXXXX XXXXX MORTGAGE LENDING, INC. ("Payee") or
its registered assigns, on or before July 29, 2004 the lesser of (a) TWO HUNDRED
TWENTY-FIVE MILLION DOLLARS ($225,000,000) and (b) the unpaid principal amount
of all advances made by Payee to the Borrowers as Tranche A Loans under the Loan
Agreement referred to below.
The Borrowers jointly and severally also promise to pay interest on the unpaid
principal amount hereof, from the date hereof until paid in full, at the rates
and at the times which shall be determined in accordance with the provisions of
that certain Loan Agreement, dated as of July 29, 2002 (as it may be amended,
supplemented or otherwise modified, the "Loan Agreement"; the terms defined
therein and not otherwise defined herein being used herein as therein defined),
by and among Sunterra Corporation, a Maryland corporation (the "Parent"), the
subsidiaries of the Parent listed on Schedule I thereto, the financial
institutions from time to time party thereto and Xxxxxxx Xxxxx Mortgage Capital
Inc., a Delaware corporation, as administrative and collateral agent for the
Lenders.
This Note is one of the "Tranche A Loan Notes" in the aggregate principal amount
of $225,000,000 and is issued pursuant to and entitled to the benefits of the
Loan Agreement, to which reference is hereby made for a more complete statement
of the terms and conditions under which the Loans evidenced hereby were made and
are to be repaid.
All payments of principal and interest in respect of this Note shall be made in
lawful money of the United States of America in same day funds at the Payment
Office of Agent or at such other place as shall be designated in writing for
such purpose in accordance with the terms of the Loan Agreement. Unless and
until an Assignment and Acceptance effecting the assignment or transfer of the
obligations evidenced hereby shall have been accepted by Agent and recorded in
the Register, the Borrowers, the Agent and Lenders shall be entitled to deem and
treat Payee as the owner and holder of this Note and the obligations evidenced
hereby. Payee hereby agrees, by its acceptance hereof, that before disposing of
this Note or any part hereof it will make a notation hereon of all principal
payments previously made hereunder and of the date to which interest hereon has
been paid; provided, however, that the failure to make a notation of any payment
made on this Note shall not limit or otherwise affect the obligations of the
Borrowers hereunder with respect to payments of principal of or interest on this
Note.
This Note is subject to mandatory prepayment and to prepayment at the option of
the Borrowers, each as provided in the Loan Agreement.
THIS NOTE AND THE RIGHTS AND OBLIGATIONS OF THE BORROWERS AND PAYEE HEREUNDER
SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND TO BE
PERFORMED WHOLLY WITHIN THE
STATE OF NEW YORK, WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES THEREOF.
Upon the occurrence of an Event of Default, the unpaid balance of the principal
amount of this Note, together with all accrued and unpaid interest thereon, may
become, or may be declared to be, due and payable in the manner, upon the
conditions and with the effect provided in the Loan Agreement.
The terms of this Note are subject to amendment only in the manner provided in
the Loan Agreement.
This Note is subject to restrictions on transfer or assignment as provided in
the Loan Agreement.
No reference herein to the Loan Agreement and no provision of this Note or the
Loan Agreement shall alter or impair the obligations of the Borrowers, which are
absolute and unconditional, to pay the principal of and interest on this Note at
the place, at the respective times, and in the currency herein prescribed.
The Borrowers promise to pay all costs and expenses, including reasonable
attorneys' fees, all as provided in the Loan Agreement, incurred in the
collection and enforcement of this Note. The Borrowers and any endorsers of this
Note hereby consent to renewals and extensions of time at or after the maturity
hereof, without notice, and hereby waive diligence, presentment, protest, demand
and, except as expressly provided in the Loan Agreement, notice of every kind
and, to the full extent permitted by law, the right to plead any statute of
limitations as a defense to any demand hereunder.
IN WITNESS WHEREOF, each of the Borrowers has caused this Note to be
duly executed and delivered by its officer thereunto duly authorized as of the
date and at the place first written above.
BORROWERS:
SUNTERRA CORPORATION
By: /s/ Xxxxx X. Xxxxxxxx
-------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
AKGI LAKE TAHOE INVESTMENTS, INC.
By: /s/ Xxxxx X. Xxxxxxxx
-------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
AKGI-ST. MAARTEN N.V
By: /s/ Xxxxx X. Xxxxxxxx
-------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
ALL SEASONS PROPERTIES, INC.
By: /s/ Xxxxx X. Xxxxxxxx
-------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
ALL SEASONS REALTY, INC.
By: /s/ Xxxxx X. Xxxxxxxx
-------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
ALL SEASONS RESORTS, INC., an Arizona
corporation (AZ)
By: /s/ Xxxxx X. Xxxxxxxx
-------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
ALL SEASONS RESORTS, INC., an Texas
corporation (TX)
By: /s/ Xxxxx X. Xxxxxxxx
-------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
ARGOSY GRAND BEACH, INC.
By: /s/ Xxxxx X. Xxxxxxxx
-------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
ARGOSY HILTON HEAD, INC.
By: /s/ Xxxxx X. Xxxxxxxx
-------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
ARGOSY PARTNERS, INC.
By: /s/ Xxxxx X. Xxxxxxxx
-------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
ARGOSY/KGI GRAND BEACH INVESTMENT
PARTNERSHIP
By: Argosy Grand Beach, Inc.,
its General Partner
By: /s/ Xxxxx X. Xxxxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
By: Argosy Partners, Inc.,
its General Partner
By: /s/ Xxxxx X. Xxxxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
By: KGI Grand Beach Investments Inc.,
its Managing General Partner
By: /s/ Xxxxx X. Xxxxxxxx
-------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
ARGOSY/KGI PORT ROYAL PARTNERS
By: Argosy Grand Beach, Inc.,
its General Partner
By: /s/ Xxxxx X. Xxxxxxxx
-------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
By: KGI Port Royal, Inc.,
its Managing General Partner
By: /s/ Xxxxx X. Xxxxxxxx
-------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
AVCOM INTERNATIONAL, INC. (n/k/a Sunterra
Developer and Sales Holding Company)
By: /s/ Xxxxx X. Xxxxxxxx
-------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
CLUB SUNTERRA, INC.
By: /s/ Xxxxx X. Xxxxxxxx
-------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
DESIGN INTERNATIONALE-RMI, INC.
By: /s/ Xxxxx X. Xxxxxxxx
-------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
XXXXXX ACQUISITION SUBSIDIARY, INC.
By: /s/ Xxxxx X. Xxxxxxxx
--------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
GRAND BEACH PARTNERS, L.P.
By: Argosy/KGI Grand Beach Investment
Partnership, its General Partner
By: Argosy partners, Inc.,
its General partner
By: /s/ Xxxxx X. Xxxxxxxx
------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
By: Argosy Grand Beach, Inc.,
its General partner
By: /s/ Xxxxx X. Xxxxxxxx
------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
By: KGI Grand Beach Investments, Inc.,
its Managing General Partner
By: /s/ Xxxxx X. Xxxxxxxx
----------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
GRAND BEACH RESORT, LIMITED PARTNERSHIP
By: Grand Beach Partners, LP,
its General Partner
By: Argosy/KGI Grand Beach Investment
Partnership, its General Partner
By: KGI Grand Beach Investments,
Inc., its Managing General
Partner
By: /s/ Xxxxx X. Xxxxxxxx
-------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
By: Argosy Partners, Inc.,
its General Partner
By: /s/ Xxxxx X. Xxxxxxxx
-------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
By: Argosy Grand Beach, Inc.,
its General Partner
By: /s/ Xxxxx X. Xxxxxxxx
-------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
GREENSPRINGS ASSOCIATES
By: Plantation Resorts Group, Inc.,
its Joint Venturer
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
By: Greensprings Plantation Resort, Inc.,
its Joint Venturer
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
GREENSPRINGS PLANTATION RESORT, INC.
By: /s/ Xxxxx X. Xxxxxxxx
-------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
XXXXXX TAHOE DEVELOPMENTS PARTNERSHIP
By: Lakewood Development Inc.,
its Managing General Partner
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
By: Ridgewood Development Inc.,
its General Partner
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
INTERNATIONAL TIMESHARES, INC.
By: /s/ Xxxxx X. Xxxxxxxx
-------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
KABUSHIKI GAISHA KEI, LLC
By: KGK Investors, Inc., its
Member
By: /s/ Xxxxx X. Xxxxxxxx
-------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
By: KGK Partners, Inc., its
Member
By: /s/ Xxxxx X. Xxxxxxxx
-------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
By: Argosy Partners, Inc., its
Member
By: /s/ Xxxxx X. Xxxxxxxx
-------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
KGI GRAND BEACH INVESTMENTS, INC.
By: /s/ Xxxxx X. Xxxxxxxx
-------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
KGI PORT ROYAL, INC.
By: /s/ Xxxxx X. Xxxxxxxx
-------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
KGK LAKE TAHOE DEVELOPMENT, INC.
By: /s/ Xxxxx X. Xxxxxxxx
-------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
LAKE TAHOE RESORT PARTNERS, LLC
By: AKGI Lake Tahoe Investments, Inc.,
its Managing Member
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
By: KGK Lake Tahoe Development, Inc.,
its Member
By: /s/ Xxxxx X. Xxxxxxxx
-------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
LAKEWOOD DEVELOPMENT, INC.
By: /s/ Xxxxx X. Xxxxxxxx
-------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
MMG DEVELOPMENT CORP.
By: /s/ Xxxxx X. Xxxxxxxx
-------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
PLANTATION RESORTS GROUP, INC.
By: /s/ Xxxxx X. Xxxxxxxx
-------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
POINTE PARTNERS, LIMITED PARTNERSHIP
By: Xxxxxx Tahoe Developments,
its Managing General Partner
By: Lakewood Development Inc.,
its Managing General Partner
By: /s/ Xxxxx X. Xxxxxxxx
-----------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
By: Ridgewood Development Inc.,
its General Partner
By: /s/ Xxxxx X. Xxxxxxxx
-----------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
PORT ROYAL RESORT, L.P.
By: Argosy/KGI Port Royal Partners,
its General Partner
By: KGI Port Royal, Inc.,
its Managing General Partner
By: /s/ Xxxxx X. Xxxxxxxx
-----------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
By: Argosy Hilton Head, Inc.,
its General Partner
By: /s/ Xxxxx X. Xxxxxxxx
-----------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
POWHATAN ASSOCIATES
By: Plantation Resorts Group, Inc.,
its Joint Venturer
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
By: Williamsburg Vacations, Inc.,
its Joint Venturer
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
PREMIER VACATIONS, INC.
By: /s/ Xxxxx X. Xxxxxxxx
-------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
RESORT CONNECTIONS, INC.
By: /s/ Xxxxx X. Xxxxxxxx
-------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
RESORT MARKETING INTERNATIONAL, INC.
By: /s/ Xxxxx X. Xxxxxxxx
-------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
RESORTS DEVELOPMENT INTERNATIONAL, INC.
By: /s/ Xxxxx X. Xxxxxxxx
-------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
RIDGE POINTE, LIMITED PARTNERSHIP
By: Pointe Partners Limited Partnership,
its Managing General Partner
By: Xxxxxx Tahoe Development,
its Managing General Partner
By: Lakewood Development Inc.,
its Managing General Partner
By: /s/ Xxxxx X. Xxxxxxxx
-------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
By: Ridgewood Development Inc.,
its General Partner
By: /s/ Xxxxx X. Xxxxxxxx
-------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
RIDGEWOOD DEVELOPMENT INC.
By: /s/ Xxxxx X. Xxxxxxxx
-------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
RKG, CORP.
By: /s/ Xxxxx X. Xxxxxxxx
-------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
RPM MANGEMENT, INC.
By: /s/ Xxxxx X. Xxxxxxxx
-------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
SUNTERRA COMMUNICATIONS CORPORATION
By: /s/ Xxxxx X. Xxxxxxxx
-------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
SUNTERRA FINANCIAL SERVICES, INC.
By: /s/ Xxxxx X. Xxxxxxxx
-------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
SUNTERRA PACIFIC, INC.
By: /s/ Xxxxx X. Xxxxxxxx
-------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
SUNTERRA ST. CROIX, INC.
By: /s/ Xxxxx X. Xxxxxxxx
-------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
SUNTERRA TRAVEL, INC.
By: /s/ Xxxxx X. Xxxxxxxx
-------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
S.V.L.H., INC.
By: /s/ Xxxxx X. Xxxxxxxx
-------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
WILLIAMSBURG VACATIONS, INC.
By: /s/ Xxxxx X. Xxxxxxxx
-------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
SUNTERRA FINANCE HOLDING COMPANY
By: /s/ Xxxxx X. Xxxxxxxx
-------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
SUNTERRA CENTRALIZED SERVICES COMPANY
By: /s/ Xxxxx X. Xxxxxxxx
-------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
SUNTERRA MANAGEMENT AND EXCHANGE HOLDING
COMPANY
By: /s/ Xxxxx X. Xxxxxxxx
-------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
CLUB SUNTERRA, LLC
By: Sunterra Management and Exchange
Holding Company, its Manager
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
INTERNATIONAL TIMESHARES MARKETING, LLC
By: Resort Marketing International, Inc.,
its Manager
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
RPM MANAGEMENT, LLC
By: Sunterra Management and Exchange
Holding Company, its Manager
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
SUNTERRA BENT CREEK GOLF COURSE
DEVELOPMENT, LLC
By: Sunterra Developer and Sales Holding
Company, its Manager
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
SUNTERRA BENT CREEK VILLAGE DEVELOPMENT,
LLC
By: Sunterra Developer and Sales Holding
Company, its Manager
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
SUNTERRA COMMUNICATIONS, LLC
By: Sunterra Management and Exchange
Holding Company, its Manager
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
SUNTERRA XXXXX XXXXX DEVELOPMENT, LLC
By: Sunterra Developer and Sales Holding
Company, its Manager
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
SUNTERRA CYPRESS POINTE I DEVELOPMENT,
LLC
By: Sunterra Developer and Sales Holding
Company, its Manager
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
SUNTERRA CYPRESS POINTE II DEVELOPMENT,
LLC
By: Sunterra Developer and Sales Holding
Company, its Manager
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
SUNTERRA CYPRESS POINTE III DEVELOPMENT,
LLC
By: Sunterra Developer and Sales Holding
Company, its Manager
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
SUNTERRA EAST MARKETING, LLC
By: Resort Marketing International, Inc.,
its Manager
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
SUNTERRA FALL CREEK DEVELOPMENT, LLC
By: Sunterra Developer and Sales Holding
Company, its Manager
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
SUNTERRA GRAND BEACH I DEVELOPMENT, LLC
By: Sunterra Developer and Sales Holding
Company, its Manager
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
SUNTERRA GRAND BEACH II DEVELOPMENT, LLC
By: Sunterra Developer and Sales Holding
Company, its Manager
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
SUNTERRA GREENSPRINGS DEVELOPMENT, LLC
By: Sunterra Developer and Sales Holding
Company, its Manager
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
SUNTERRA KGK PARTNERS FINANCE, LLC
By: Sunterra Finance Holding Company,
its Manager
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
SUNTERRA KALLOF PLACE DEVELOPMENT, LLC
By: All Seasons Resorts, Inc. (AZ),
its Manager
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
SUNTERRA LAKE TAHOE DEVELOPMENT, LLC
By: Sunterra Developer and Sales Holding
Company, its Manager
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
SUNTERRA NORTH MARKETING, LLC
By: Resort Marketing International, Inc.,
its Manager
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
SUNTERRA POCO DIABLO DEVELOPMENT, LLC
By: All Seasons Resorts, Inc. (AZ),
its Manager
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
SUNTERRA POIPU GP DEVELOPMENT, LLC
By: Sunterra Developer and Sales Holding
Company, its Manager
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
SUNTERRA POLYNESIAN ISLES DEVELOPMENT,
LLC
By: Sunterra Developer and Sales Holding
Company, its Manager
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
SUNTERRA PORT ROYAL DEVELOPMENT, LLC
By: Sunterra Developer and Sales Holding
Company, its Manager
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
SUNTERRA POWHATAN DEVELOPMENT, LLC
By: Sunterra Developer and Sales Holding
Company, its Manager
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
SUNTERRA RESIDUAL ASSETS DEVELOPMENT, LLC
By: Sunterra Developer and Sales Holding
Company, its Manager
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
SUNTERRA RIDGE ON SEDONA DEVELOPMENT, LLC
By: All Seasons Resorts, Inc.,
its Manager
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
SUNTERRA RIDGE POINTE DEVELOPMENT, LLC
By: Sunterra Developer and Sales Holding
Company, its Manager
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
SUNTERRA SAN XXXX BAY DEVELOPMENT, LLC
By: Sunterra Developer and Sales Holding
Company, its Manager
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
SUNTERRA SANTA FE DEVELOPMENT, LLC
By: Sunterra Developer and Sales Holding
Company, its Manager
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
SUNTERRA SEDONA SPRINGS DEVELOPMENT, LLC
By: All Seasons Resorts, Inc. (AZ),
its Manager
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
SUNTERRA SEDONA SUMMIT DEVELOPMENT, LLC
By: All Seasons Resorts, Inc. (AZ),
its Manager
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
SUNTERRA SOUTH MARKETING, LLC
By: Resort Marketing International, Inc.,
its Manager
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
SUNTERRA ST. CROIX DEVELOPMENT, LLC
By: Sunterra Developer and Sales Holding
Company, its Manager
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
SUNTERRA STEAMBOAT DEVELOPMENT, LLC
By: Sunterra Developer and Sales Holding
Company, its Manager
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
SUNTERRA TAHOE BEACH & SKI DEVELOPMENT,
LLC
By: Sunterra Developer and Sales Holding
Company, its Manager
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
SUNTERRA VILLA MIRAGE DEVELOPMENT, LLC
By: All Seasons Resorts, Inc. (AZ),
its Manager
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
SUNTERRA VILLAS OF SEDONA DEVELOPMENT,
LLC
By: All Seasons Resorts, Inc.,
its Manager
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
SUNTERRA WEST MARKETING, LLC
By: Resort Marketing International, Inc.,
its Manager
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
SUNTERRA RESIDUAL ASSETS FINANCE, LLC
By: Sunterra Finance Holding Company,
its Manager
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
SUNTERRA RESIDUAL ASSETS M&E, LLC
By: Sunterra Management and Exchange
Holding Company, its Manager
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
SUNTERRA MORTGAGE HOLDINGS, LLC
By: Sunterra Finance Holding Company,
its Manager
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
TRANCHE B LOAN NOTE
$100,000,000 July 29, 0000
Xxx Xxxx, Xxx Xxxx
FOR VALUE RECEIVED, THE PERSONS SIGNATORY HERETO (each, a "Borrower"),
jointly and severally promise to XXXXXXX XXXXX MORTGAGE LENDING, INC. ("Payee")
or its registered assigns, on or before July 29, 2004 the lesser of (a) ONE
HUNDRED MILLION DOLLARS ($100,000,000) and (b) the unpaid principal amount of
all advances made by Payee to the Borrowers as Tranche A Loans under the Loan
Agreement referred to below.
The Borrowers jointly and severally also promise to pay interest on the
unpaid principal amount hereof, from the date hereof until paid in full, at the
rates and at the times which shall be determined in accordance with the
provisions of that certain Loan Agreement, dated as of July 29, 2002 (as it may
be amended, supplemented or otherwise modified, the "Loan Agreement"; the terms
defined therein and not otherwise defined herein being used herein as therein
defined), by and among Sunterra Corporation, a Maryland corporation (the
"Parent"), the subsidiaries of the Parent listed on Schedule I thereto, the
financial institutions from time to time party thereto and Xxxxxxx Xxxxx
Mortgage Capital Inc., a Delaware corporation, as administrative and collateral
agent for the Lenders.
This Note is one of the "Tranche B Loan Notes" in the aggregate principal
amount of $100,000,000 and is issued pursuant to and entitled to the benefits of
the Loan Agreement, to which reference is hereby made for a more complete
statement of the terms and conditions under which the Loans evidenced hereby
were made and are to be repaid.
All payments of principal and interest in respect of this Note shall be
made in lawful money of the United States of America in same day funds at the
Payment Office of Agent or at such other place as shall be designated in writing
for such purpose in accordance with the terms of the Loan Agreement. Unless and
until an Assignment and Acceptance effecting the assignment or transfer of the
obligations evidenced hereby shall have been accepted by Agent and recorded in
the Register, the Borrowers, the Agent and Lenders shall be entitled to deem and
treat Payee as the owner and holder of this Note and the obligations evidenced
hereby. Payee hereby agrees, by its acceptance hereof, that before disposing of
this Note or any part hereof it will make a notation hereon of all principal
payments previously made hereunder and of the date to which interest hereon has
been paid; provided, however, that the failure to make a notation of any payment
made on this Note shall not limit or otherwise affect the obligations of the
Borrowers hereunder with respect to payments of principal of or interest on this
Note.
This Note is subject to mandatory prepayment and to prepayment at the
option of the Borrowers, each as provided in the Loan Agreement.
THIS NOTE AND THE RIGHTS AND OBLIGATIONS OF THE BORROWERS AND PAYEE
HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND
ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO
CONTRACTS MADE AND TO BE PERFORMED WHOLLY WITHIN THE STATE OF NEW YORK, WITHOUT
REGARD TO CONFLICTS OF LAWS PRINCIPLES THEREOF.
Upon the occurrence of an Event of Default, the unpaid balance of the
principal amount of this Note, together with all accrued and unpaid interest
thereon, may become, or may be declared to be, due and payable in the manner,
upon the conditions and with the effect provided in the Loan Agreement.
The terms of this Note are subject to amendment only in the manner provided
in the Loan Agreement.
This Note is subject to restrictions on transfer or assignment as provided
in the Loan Agreement.
No reference herein to the Loan Agreement and no provision of this Note or
the Loan Agreement shall alter or impair the obligations of the Borrowers, which
are absolute and unconditional, to pay the principal of and interest on this
Note at the place, at the respective times, and in the currency herein
prescribed.
The Borrowers promise to pay all costs and expenses, including reasonable
attorneys' fees, all as provided in the Loan Agreement, incurred in the
collection and enforcement of this Note. The Borrowers and any endorsers of this
Note hereby consent to renewals and extensions of time at or after the maturity
hereof, without notice, and hereby waive diligence, presentment, protest, demand
and, except as expressly provided in the Loan Agreement, notice of every kind
and, to the full extent permitted by law, the right to plead any statute of
limitations as a defense to any demand hereunder.
IN WITNESS WHEREOF, each of the Borrowers has caused this Note to be
duly executed and delivered by its officer thereunto duly authorized as of the
date and at the place first written above.
BORROWERS:
SUNTERRA CORPORATION
By: /s/ Xxxxx X. Xxxxxxxx
------------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
AKGI LAKE TAHOE INVESTMENTS, INC.
By: /s/ Xxxxx X. Xxxxxxxx
------------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
AKGI-ST. MAARTEN N.V
By: /s/ Xxxxx X. Xxxxxxxx
------------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
ALL SEASONS PROPERTIES, INC.
By: /s/ Xxxxx X. Xxxxxxxx
------------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
ALL SEASONS REALTY, INC.
By: /s/ Xxxxx X. Xxxxxxxx
------------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
ALL SEASONS RESORTS, INC., an Arizona
corporation (AZ)
By: /s/ Xxxxx X. Xxxxxxxx
------------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
ALL SEASONS RESORTS, INC., an Texas
corporation (TX)
By: /s/ Xxxxx X. Xxxxxxxx
------------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
ARGOSY GRAND BEACH, INC.
By: /s/ Xxxxx X. Xxxxxxxx
------------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
ARGOSY HILTON HEAD, INC.
By: /s/ Xxxxx X. Xxxxxxxx
------------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
ARGOSY PARTNERS, INC.
By: /s/ Xxxxx X. Xxxxxxxx
------------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
ARGOSY/KGI GRAND BEACH
INVESTMENT PARTNERSHIP
By: Argosy Grand Beach, Inc.,
its General Partner
By: /s/ Xxxxx X. Xxxxxxxx
------------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
By: Argosy Partners, Inc.,
its General Partner
By: /s/ Xxxxx X. Xxxxxxxx
------------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
By: KGI Grand Beach Investments Inc.,
its Managing General Partner
By: /s/ Xxxxx X. Xxxxxxxx
------------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
ARGOSY/KGI PORT ROYAL PARTNERS
By: Argosy Grand Beach, Inc.,
its General Partner
By: /s/ Xxxxx X. Xxxxxxxx
------------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
By: KGI Port Royal, Inc.,
its Managing General Partner
By: /s/ Xxxxx X. Xxxxxxxx
------------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
AVCOM INTERNATIONAL, INC. (n/k/a
Sunterra Developer and Sales Holding
Company)
By: /s/ Xxxxx X. Xxxxxxxx
------------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
CLUB SUNTERRA, INC.
By: /s/ Xxxxx X. Xxxxxxxx
------------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
DESIGN INTERNATIONALE-RMI, INC.
By: /s/ Xxxxx X. Xxxxxxxx
------------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
XXXXXX ACQUISITION SUBSIDIARY, INC.
By: /s/ Xxxxx X. Xxxxxxxx
------------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
GRAND BEACH PARTNERS, L.P.
By: Argosy/KGI Grand Beach Investment
Partnership, its General Partner
By: Argosy partners, Inc.,
its General partner
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
By: Argosy Grand Beach, Inc.,
its General partner
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
By: KGI Grand Beach Investments, Inc.,
its Managing General Partner
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
GRAND BEACH RESORT,
LIMITED PARTNERSHIP
By: Grand Beach Partners, LP,
its General Partner
By: Argosy/KGI Grand Beach Investment
Partnership, its General Partner
By: KGI Grand Beach Investments, Inc.,
its Managing General Partner
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
By: Argosy Partners, Inc.,
its General Partner
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
By: Argosy Grand Beach, Inc.,
its General Partner
By: /s/ Xxxxx X. Xxxxxxxx
------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
GREENSPRINGS ASSOCIATES
By: Plantation Resorts Group, Inc.,
its Joint Venturer
By: /s/ Xxxxx X. Xxxxxxxx
-------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
By: Greensprings Plantation Resort, Inc.,
its Joint Venturer
By: /s/ Xxxxx X. Xxxxxxxx
-------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
GREENSPRINGS PLANTATION RESORT, INC.
By: /s/ Xxxxx X. Xxxxxxxx
------------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
XXXXXX TAHOE DEVELOPMENTS PARTNERSHIP
By: Lakewood Development Inc.,
its Managing General Partner
By: /s/ Xxxxx X. Xxxxxxxx
------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
By: Ridgewood Development Inc.,
its General Partner
By: /s/ Xxxxx X. Xxxxxxxx
------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
INTERNATIONAL TIMESHARES, INC.
By: /s/ Xxxxx X. Xxxxxxxx
------------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
KABUSHIKI GAISHA KEI, LLC
By: KGK Investors, Inc., its
Member
By: /s/ Xxxxx X. Xxxxxxxx
------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
By: KGK Partners, Inc., its Member
By: /s/ Xxxxx X. Xxxxxxxx
------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
By: Argosy Partners, Inc., its
Member
By: /s/ Xxxxx X. Xxxxxxxx
------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
KGI GRAND BEACH INVESTMENTS, INC.
By: /s/ Xxxxx X. Xxxxxxxx
------------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
KGI PORT ROYAL, INC.
By: /s/ Xxxxx X. Xxxxxxxx
------------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
KGK LAKE TAHOE DEVELOPMENT, INC.
By: /s/ Xxxxx X. Xxxxxxxx
------------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
LAKE TAHOE RESORT PARTNERS, LLC
By: AKGI Lake Tahoe Investments, Inc.,
its Managing Member
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
By: KGK Lake Tahoe Development, Inc.,
its Member
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
LAKEWOOD DEVELOPMENT, INC.
By: /s/ Xxxxx X. Xxxxxxxx
------------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
MMG DEVELOPMENT CORP.
By: /s/ Xxxxx X. Xxxxxxxx
------------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
PLANTATION RESORTS GROUP, INC.
By: /s/ James F. Anderson
------------------------------------------
Name: James F. Anderson
Title: Vice President
POINTE PARTNERS, LIMITED PARTNERSHIP
By: Harich Tahoe Developments,
its Managing General Partner
By: Lakewood Development Inc.,
its Managing General Partner
By: /s/ James F. Anderson
------------------------------------
Name: James F. Anderson
Title: Vice President
By: Ridgewood Development Inc.,
its General Partner
By: /s/ James F. Anderson
------------------------------------
Name: James F. Anderson
Title: Vice President
PORT ROYAL RESORT, L.P.
By: Argosy/KGI Port Royal Partners,
its General Partner
By: KGI Port Royal, Inc.,
its Managing General Partner
By: /s/ James F. Anderson
------------------------------------
Name: James F. Anderson
Title: Vice President
By: Argosy Hilton Head, Inc.,
its General Partner
By: /s/ James F. Anderson
------------------------------------
Name: James F. Anderson
Title: Vice President
POWHATAN ASSOCIATES
By: Plantation Resorts Group, Inc.,
its Joint Venturer
By: /s/ James F. Anderson
---------------------------------------
Name: James F. Anderson
Title: Vice President
By: Williamsburg Vacations, Inc.,
its Joint Venturer
By: /s/ James F. Anderson
---------------------------------------
Name: James F. Anderson
Title: Vice President
PREMIER VACATIONS, INC.
By: /s/ James F. Anderson
------------------------------------------
Name: James F. Anderson
Title: Vice President
RESORT CONNECTIONS, INC.
By: /s/ James F. Anderson
------------------------------------------
Name: James F. Anderson
Title: Vice President
RESORT MARKETING INTERNATIONAL, INC.
By: /s/ James F. Anderson
------------------------------------------
Name: James F. Anderson
Title: Vice President
RESORTS DEVELOPMENT INTERNATIONAL, INC.
By: /s/ James F. Anderson
------------------------------------------
Name: James F. Anderson
Title: Vice President
RIDGE POINTE, LIMITED PARTNERSHIP
By: Pointe Partners Limited Partnership,
its Managing General Partner
By: Harich Tahoe Development,
its Managing General Partner
By: Lakewood Development Inc.,
its Managing General Partner
By: /s/ James F. Anderson
---------------------------------
Name: James F. Anderson
Title: Vice President
By: Ridgewood Development Inc.,
its General Partner
By: /s/ James F. Anderson
---------------------------------
Name: James F. Anderson
Title: Vice President
RIDGEWOOD DEVELOPMENT INC.
By: /s/ James F. Anderson
------------------------------------------
Name: James F. Anderson
Title: Vice President
RKG, CORP.
By: /s/ James F. Anderson
------------------------------------------
Name: James F. Anderson
Title: Vice President
RPM MANGEMENT, INC.
By: /s/ James F. Anderson
------------------------------------------
Name: James F. Anderson
Title: Vice President
SUNTERRA COMMUNICATIONS CORPORATION
By: s/ James F. Anderson
------------------------------------------
Name: James F. Anderson
Title: Vice President
SUNTERRA FINANCIAL SERVICES, INC.
By: /s/ James F. Anderson
------------------------------------------
Name: James F. Anderson
Title: Vice President
SUNTERRA PACIFIC, INC.
By: /s/ James F. Anderson
------------------------------------------
Name: James F. Anderson
Title: Vice President
SUNTERRA ST. CROIX, INC.
By: /s/ James F. Anderson
------------------------------------------
Name: James F. Anderson
Title: Vice President
SUNTERRA TRAVEL, INC.
By: /s/ James F. Anderson
------------------------------------------
Name: James F. Anderson
Title: Vice President
S.V.L.H., INC.
By: /s/ James F. Anderson
------------------------------------------
Name: James F. Anderson
Title: Vice President
WILLIAMSBURG VACATIONS, INC.
By: /s/ James F. Anderson
------------------------------------------
Name: James F. Anderson
Title: Vice President
SUNTERRA FINANCE HOLDING COMPANY
By: /s/ James F. Anderson
------------------------------------------
Name: James F. Anderson
Title: Vice President
SUNTERRA CENTRALIZED SERVICES
COMPANY
By: /s/ James F. Anderson
------------------------------------------
Name: James F. Anderson
Title: Vice President
SUNTERRA MANAGEMENT AND
EXCHANGE HOLDING COMPANY
By: /s/ James F. Anderson
------------------------------------------
Name: James F. Anderson
Title: Vice President
CLUB SUNTERRA, LLC
By: Sunterra Management and Exchange Holding
Company, its Manager
By: /s/ James F. Anderson
---------------------------------------
Name: James F. Anderson
Title: Vice President
INTERNATIONAL TIMESHARES
MARKETING, LLC
By: Resort Marketing International, Inc., its
Manager
By: /s/ James F. Anderson
---------------------------------------
Name: James F. Anderson
Title: Vice President
RPM MANAGEMENT, LLC
By: Sunterra Management and Exchange Holding
Company, its Manager
By: /s/ James F. Anderson
---------------------------------------
Name: James F. Anderson
Title: Vice President
SUNTERRA BENT CREEK GOLF COURSE
DEVELOPMENT, LLC
By: Sunterra Developer and Sales Holding
Company, its Manager
By: /s/ James F. Anderson
---------------------------------------
Name: James F. Anderson
Title: Vice President
SUNTERRA BENT CREEK VILLAGE DEVELOPMENT, LLC
By: Sunterra Developer and Sales Holding
Company, its Manager
By: /s/ James F. Anderson
---------------------------------------
Name: James F. Anderson
Title: Vice President
SUNTERRA COMMUNICATIONS, LLC
By: Sunterra Management and Exchange Holding
Company, its Manager
By: /s/ James F. Anderson
---------------------------------------
Name: James F. Anderson
Title: Vice President
SUNTERRA CORAL SANDS
DEVELOPMENT, LLC
By: Sunterra Developer and Sales Holding
Company, its Manager
By: /s/ James F. Anderson
---------------------------------------
Name: James F. Anderson
Title: Vice President
SUNTERRA CYPRESS POINTE I
DEVELOPMENT, LLC
By: Sunterra Developer and Sales Holding
Company, its Manager
By: /s/ James F. Anderson
---------------------------------------
Name: James F. Anderson
Title: Vice President
SUNTERRA CYPRESS POINTE II DEVELOPMENT, LLC
By: Sunterra Developer and Sales Holding
Company, its Manager
By: /s/ James F. Anderson
---------------------------------------
Name: James F. Anderson
Title: Vice President
SUNTERRA CYPRESS POINTE III
DEVELOPMENT, LLC
By: Sunterra Developer and Sales Holding
Company, its Manager
By: /s/ James F. Anderson
---------------------------------------
Name: James F. Anderson
Title: Vice President
SUNTERRA EAST MARKETING, LLC
By: Resort Marketing International, Inc., its
Manager
By: /s/ James F. Anderson
---------------------------------------
Name: James F. Anderson
Title: Vice President
SUNTERRA FALL CREEK DEVELOPMENT,
LLC
By: Sunterra Developer and Sales Holding
Company, its Manager
By: /s/ James F. Anderson
---------------------------------------
Name: James F. Anderson
Title: Vice President
SUNTERRA GRAND BEACH I
DEVELOPMENT, LLC
By: Sunterra Developer and Sales Holding
Company, its Manager
By: /s/ James F. Anderson
---------------------------------------
Name: James F. Anderson
Title: Vice President
SUNTERRA GRAND BEACH II
DEVELOPMENT, LLC
By: Sunterra Developer and Sales Holding
Company, its Manager
By: /s/ James F. Anderson
---------------------------------------
Name: James F. Anderson
Title: Vice President
SUNTERRA GREENSPRINGS
DEVELOPMENT, LLC
By: Sunterra Developer and Sales Holding
Company, its Manager
By: /s/ James F. Anderson
---------------------------------------
Name: James F. Anderson
Title: Vice President
SUNTERRA KGK PARTNERS FINANCE,
LLC
By: Sunterra Finance Holding Company, its
Manager
By: /s/ James F. Anderson
---------------------------------------
Name: James F. Anderson
Title: Vice President
SUNTERRA KALLOF PLACE
DEVELOPMENT, LLC
By: All Seasons Resorts, Inc.(AZ),its Manager
By: /s/ James F. Anderson
---------------------------------------
Name: James F. Anderson
Title: Vice President
SUNTERRA LAKE TAHOE DEVELOPMENT,
LLC
By: Sunterra Developer and Sales Holding
Company, its Manager
By: /s/ James F. Anderson
---------------------------------------
Name: James F. Anderson
Title: Vice President
SUNTERRA NORTH MARKETING, LLC
By: Resort Marketing International, Inc., its
Manager
By: /s/ James F. Anderson
---------------------------------------
Name: James F. Anderson
Title: Vice President
SUNTERRA POCO DIABLO DEVELOPMENT, LLC
By: All Seasons Resorts,Inc.(AZ), its Manager
By: /s/ James F. Anderson
---------------------------------------
Name: James F. Anderson
Title: Vice President
SUNTERRA POIPU GP DEVELOPMENT, LLC
By: Sunterra Developer and Sales Holding
Company, its Manager
By: /s/ James F. Anderson
---------------------------------------
Name: James F. Anderson
Title: Vice President
SUNTERRA POLYNESIAN ISLES
DEVELOPMENT, LLC
By: Sunterra Developer and Sales Holding
Company, its Manager
By: /s/ James F. Anderson
---------------------------------------
Name: James F. Anderson
Title: Vice President
SUNTERRA PORT ROYAL DEVELOPMENT,
LLC
By: Sunterra Developer and Sales Holding
Company, its Manager
By: /s/ James F. Anderson
---------------------------------------
Name: James F. Anderson
Title: Vice President
SUNTERRA POWHATAN DEVELOPMENT,
LLC
By: Sunterra Developer and Sales Holding
Company, its Manager
By: /s/ James F. Anderson
---------------------------------------
Name: James F. Anderson
Title: Vice President
SUNTERRA RESIDUAL ASSETS
DEVELOPMENT, LLC
By: Sunterra Developer and Sales Holding
Company, its Manager
By: /s/ James F. Anderson
---------------------------------------
Name: James F. Anderson
Title: Vice President
SUNTERRA RIDGE ON SEDONA
DEVELOPMENT, LLC
By: All Seasons Resorts, Inc., its Manager
By: /s/ James F. Anderson
---------------------------------------
Name: James F. Anderson
Title: Vice President
SUNTERRA RIDGE POINTE
DEVELOPMENT, LLC
By: Sunterra Developer and Sales Holding
Company, its Manager
By: /s/ James F. Anderson
---------------------------------------
Name: James F. Anderson
Title: Vice President
SUNTERRA SAN LUIS BAY
DEVELOPMENT, LLC
By: Sunterra Developer and Sales Holding
Company, its Manager
By: /s/ James F. Anderson
---------------------------------------
Name: James F. Anderson
Title: Vice President
SUNTERRA SANTA FE DEVELOPMENT, LLC
By: Sunterra Developer and Sales Holding
Company, its Manager
By: /s/ James F. Anderson
---------------------------------------
Name: James F. Anderson
Title: Vice President
SUNTERRA SEDONA SPRINGS
DEVELOPMENT, LLC
By: All Seasons Resorts, Inc.(AZ), its Manager
By: /s/ James F. Anderson
---------------------------------------
Name: James F. Anderson
Title:Vice President
SUNTERRA SEDONA SUMMIT
DEVELOPMENT, LLC
By: All Seasons Resorts, Inc.(AZ), its Manager
By: /s/ James F. Anderson
---------------------------------------
Name: James F. Anderson
Title: Vice President
SUNTERRA SOUTH MARKETING, LLC
By: Resort Marketing International, Inc., its
Manager
By: /s/ James F. Anderson
---------------------------------------
Name: James F. Anderson
Title: Vice President
SUNTERRA ST. CROIX DEVELOPMENT,
LLC
By: Sunterra Developer and Sales Holding
Company, its Manager
By: /s/ James F. Anderson
---------------------------------------
Name: James F. Anderson
Title: Vice President
SUNTERRA STEAMBOAT DEVELOPMENT,
LLC
By: Sunterra Developer and Sales Holding
Company, its Manager
By: /s/ James F. Anderson
---------------------------------------
Name: James F. Anderson
Title: Vice President
SUNTERRA TAHOE BEACH & SKI
DEVELOPMENT, LLC
By: Sunterra Developer and Sales Holding
Company, its Manager
By: /s/ James F. Anderson
---------------------------------------
Name: James F. Anderson
Title: Vice President
SUNTERRA VILLA MIRAGE DEVELOPMENT, LLC
By: All Seasons Resorts, Inc.(AZ), its Manager
By: /s/ James F. Anderson
---------------------------------------
Name: James F. Anderson
Title: Vice President
SUNTERRA VILLAS OF SEDONA
DEVELOPMENT, LLC
By: All Seasons Resorts, Inc., its Manager
By: /s/ James F. Anderson
---------------------------------------
Name: James F. Anderson
Title: Vice President
SUNTERRA WEST MARKETING, LLC
By: Resort Marketing International, Inc., its
Manager
By: /s/ James F. Anderson
---------------------------------------
Name: James F. Anderson
Title: Vice President
SUNTERRA RESIDUAL ASSETS FINANCE,
LLC
By: Sunterra Finance Holding Company, its
Manager
By: /s/ James F. Anderson
---------------------------------------
Name: James F. Anderson
Title: Vice President
SUNTERRA RESIDUAL ASSETS M&E, LLC
By: Sunterra Management and Exchange Holding
Company, its Manager
By: /s/ James F. Anderson
---------------------------------------
Name: James F. Anderson
Title: Vice President
SUNTERRA MORTGAGE HOLDINGS, LLC
By: Sunterra Finance Holding Company, its
Manager
By: /s/ James F. Anderson
---------------------------------------
Name: James F. Anderson
Title: Vice President
TRANCHE C LOAN NOTE
$70,000,000 July 29, 2002
New York, New York
FOR VALUE RECEIVED, THE PERSONS SIGNATORY HERETO (each, a "Borrower"),
jointly and severally promise to pay MERRILL LYNCH MORTGAGE LENDING, INC.
("Payee") or its registered assigns, on or before July 29, 2004, the lesser of
(a) SEVENTY MILLION DOLLARS ($70,000,000) and (b) the unpaid principal amount of
all advances made by Payee to the Borrowers as Tranche C Loans under the Loan
Agreement referred to below.
The Borrowers also jointly and severally promise to pay interest on the
unpaid principal amount hereof, from the date hereof until paid in full, at the
rates and at the times which shall be determined in accordance with the
provisions of that certain Loan Agreement, dated as of July 29, 2002 (as it may
be amended, supplemented or otherwise modified, the "Loan Agreement"; the terms
defined therein and not otherwise defined herein being used herein as therein
defined), by and among Sunterra Corporation, a Maryland corporation (the
"Parent"), the subsidiaries of the Parent listed on Schedule I thereto, the
financial institutions from time to time party thereto and Merrill Lynch
Mortgage Capital Inc., a Delaware corporation, as administrative and collateral
agent for the Lenders.
This Note is one of the "Tranche C Loan Notes" in the aggregate principal
amount of $70,000,000 and is issued pursuant to and entitled to the benefits of
the Loan Agreement, to which reference is hereby made for a more complete
statement of the terms and conditions under which the Loans evidenced hereby
were made and are to be repaid.
All payments of principal and interest in respect of this Note shall be
made in lawful money of the United States of America in same day funds at the
Payment Office of Agent or at such other place as shall be designated in writing
for such purpose in accordance with the terms of the Loan Agreement. Unless and
until an Assignment and Acceptance effecting the assignment or transfer of the
obligations evidenced hereby shall have been accepted by Agent and recorded in
the Register, the Borrowers, Agent and Lenders shall be entitled to deem and
treat Payee as the owner and holder of this Note and the obligations evidenced
hereby. Payee hereby agrees, by its acceptance hereof, that before disposing of
this Note or any part hereof it will make a notation hereon of all principal
payments previously made hereunder and of the date to which interest hereon has
been paid; provided, however, that the failure to make a notation of any payment
made on this Note shall not limit or otherwise affect the obligations of the
Borrowers hereunder with respect to payments of principal of or interest on this
Note.
This Note is subject to mandatory prepayment and to prepayment at the
option of the Borrowers, each as provided in the Loan Agreement.
THIS NOTE AND THE RIGHTS AND OBLIGATIONS OF THE BORROWERS AND PAYEE
HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE
AND TO BE PERFORMED WHOLLY WITHIN THE STATE OF NEW YORK, WITHOUT REGARD TO
CONFLICTS OF LAWS PRINCIPLES THEREOF.
Upon the occurrence of an Event of Default, the unpaid balance of the
principal amount of this Note, together with all accrued and unpaid interest
thereon, may become, or may be declared to be, due and payable in the manner,
upon the conditions and with the effect provided in the Loan Agreement.
The terms of this Note are subject to amendment only in the manner provided
in the Loan Agreement.
This Note is subject to restrictions on transfer or assignment as provided
in the Loan Agreement.
No reference herein to the Loan Agreement and no provision of this Note or
the Loan Agreement shall alter or impair the obligations of the Borrowers, which
are absolute and unconditional, to pay the principal of and interest on this
Note at the place, at the respective times, and in the currency herein
prescribed.
The Borrowers promise to pay all costs and expenses, including reasonable
attorneys' fees, all as provided in the Loan Agreement, incurred in the
collection and enforcement of this Note. The Borrowers and any endorsers of this
Note hereby consent to renewals and extensions of time at or after the maturity
hereof, without notice, and hereby waive diligence, presentment, protest, demand
and, except as expressly provided in the Loan Agreement, notice of every kind
and, to the full extent permitted by law, the right to plead any statute of
limitations as a defense to any demand hereunder.
IN WITNESS WHEREOF, each of the Borrowers has caused this Note to be
duly executed and delivered by its officer thereunto duly authorized as of the
date and at the place first written above.
BORROWERS:
SUNTERRA CORPORATION
By: /s/ James F. Anderson
-------------------------------------------
Name: James F. Anderson
Title: Vice President
AKGI LAKE TAHOE INVESTMENTS, INC.
By: /s/ James F. Anderson
-------------------------------------------
Name: James F. Anderson
Title: Vice President
AKGI-ST.MAARTEN N.V
By: /s/ James F. Anderson
-------------------------------------------
Name: James F. Anderson
Title: Vice President
ALL SEASONS PROPERTIES, INC.
By: /s/ James F. Anderson
-------------------------------------------
Name: James F. Anderson
Title: Vice President
ALL SEASONS REALTY, INC.
By: /s/ James F. Anderson
-------------------------------------------
Name: James F. Anderson
Title: Vice President
ALL SEASONS RESORTS, INC., an Arizona
corporation (AZ)
By: /s/ James F. Anderson
-------------------------------------------
Name: James F. Anderson
Title: Vice President
ALL SEASONS RESORTS, INC., an Texas
corporation (TX)
By: /s/ James F. Anderson
-------------------------------------------
Name: James F. Anderson
Title: Vice President
ARGOSY GRAND BEACH, INC.
By: /s/ James F. Anderson
-------------------------------------------
Name: James F. Anderson
Title: Vice President
ARGOSY HILTON HEAD, INC.
By: /s/ James F. Anderson
-------------------------------------------
Name: James F. Anderson
Title: Vice President
ARGOSY PARTNERS, INC.
By: /s/ James F. Anderson
-------------------------------------------
Name: James F. Anderson
Title: Vice President
ARGOSY/KGI GRAND BEACH INVESTMENT PARTNERSHIP
By: Argosy Grand Beach, Inc., its General
Partner
By: /s/ James F. Anderson
-------------------------------------------
Name: James F. Anderson
Title: Vice President
By: Argosy Partners, Inc.,
its General Partner
By: /s/ James F. Anderson
-------------------------------------------
Name: James F. Anderson
Title: Vice President
By: KGI Grand Beach Investments Inc., its
Managing General Partner
By: /s/ James F. Anderson
---------------------------------------
Name: James F. Anderson
Title: Vice President
ARGOSY/KGI PORT ROYAL PARTNERS
By: Argosy Grand Beach, Inc., its General
Partner
By: /s/ James F. Anderson
-------------------------------------------
Name: James F. Anderson
Title: Vice President
By: KGI Port Royal, Inc., its Managing General
Partner
By: /s/ James F. Anderson
-------------------------------------------
Name: James F. Anderson
Title: Vice President
AVCOM INTERNATIONAL, INC. (n/k/a Sunterra
Developer and Sales Holding Company)
By: /s/ James F. Anderson
-------------------------------------------
Name: James F. Anderson
Title: Vice President
CLUB SUNTERRA, INC.
By: /s/ James F. Anderson
-------------------------------------------
Name: James F. Anderson
Title: Vice President
DESIGN INTERNATIONALE-RMI, INC.
By: /s/ James F. Anderson
-------------------------------------------
Name: James F. Anderson
Title: Vice President
GEORGE ACQUISITION SUBSIDIARY, INC.
By: /s/ James F. Anderson
-------------------------------------------
Name: James F. Anderson
Title: Vice President
GRAND BEACH PARTNERS, L.P.
By: Argosy/KGI Grand Beach Investment
Partnership, its General Partner
By: Argosy partners, Inc.,
its General partner
By: /s/ James F. Anderson
-----------------------------------
Name: James F. Anderson
Title: Vice President
By: Argosy Grand Beach, Inc., its General
partner
By: /s/ James F. Anderson
-----------------------------------
Name: James F. Anderson
Title: Vice President
By: KGI Grand Beach Investments, Inc., its
Managing General Partner
By: /s/ James F. Anderson
-----------------------------------
Name: James F. Anderson
Title: Vice President
GRAND BEACH RESORT, LIMITED PARTNERSHIP
By: Grand Beach Partners, LP, its General
Partner
By: Argosy/KGI Grand Beach Investment
Partnership, its General Partner
By: KGI Grand Beach Investments, Inc.,
its Managing General Partner
By: /s/ James F. Anderson
-------------------------------
Name: James F. Anderson
Title: Vice President
By: Argosy Partners, Inc.,
its General Partner
By: /s/ James F. Anderson
-------------------------------
Name: James F. Anderson
Title: Vice President
By: Argosy Grand Beach, Inc.,
its General Partner
By: /s/ James F. Anderson
-------------------------------
Name: James F. Anderson
Title: Vice President
GREENSPRINGS ASSOCIATES
By: Plantation Resorts Group, Inc., its Joint
Venturer
By: /s/ James F. Anderson
---------------------------------------
Name: James F. Anderson
Title: Vice President
By: Greensprings Plantation Resort, Inc., its
Joint Venturer
By: /s/ James F. Anderson
---------------------------------------
Name: James F. Anderson
Title: Vice President
GREENSPRINGS PLANTATION RESORT, INC.
By: /s/ James F. Anderson
-------------------------------------------
Name: James F. Anderson
Title: Vice President
HARICH TAHOE DEVELOPMENTS PARTNERSHIP
By: Lakewood Development Inc., its Managing
General Partner
By: /s/ James F. Anderson
---------------------------------------
Name: James F. Anderson
Title: Vice President
By: Ridgewood Development Inc., its General
Partner
By: /s/ James F. Anderson
---------------------------------------
Name: James F. Anderson
Title: Vice President
INTERNATIONAL TIMESHARES, INC.
By: /s/ James F. Anderson
-------------------------------------------
Name: James F. Anderson
Title: Vice President
KABUSHIKI GAISHA KEI, LLC
By: KGK Investors, Inc., its Member
By: /s/ James F. Anderson
---------------------------------------
Name: James F. Anderson
Title: Vice President
By: KGK Partners, Inc., its Member
By: /s/ James F. Anderson
---------------------------------------
Name: James F. Anderson
Title: Vice President
By: Argosy Partners, Inc., its
Member
By: /s/ James F. Anderson
---------------------------------------
Name: James F. Anderson
Title: Vice President
KGI GRAND BEACH INVESTMENTS, INC.
By: /s/ James F. Anderson
-------------------------------------------
Name: James F. Anderson
Title: Vice President
KGI PORT ROYAL, INC.
By: /s/ James F. Anderson
-------------------------------------------
Name: James F. Anderson
Title: Vice President
KGK LAKE TAHOE DEVELOPMENT, INC.
By: /s/ James F. Anderson
-------------------------------------------
Name: James F. Anderson
Title: Vice President
LAKE TAHOE RESORT PARTNERS, LLC
By: AKGI Lake Tahoe Investments, Inc., its
Managing Member
By: /s/ James F. Anderson
---------------------------------------
Name: James F. Anderson
Title: Vice President
By: KGK Lake Tahoe Development, Inc., its
Member
By: /s/ James F. Anderson
---------------------------------------
Name: James F. Anderson
Title: Vice President
LAKEWOOD DEVELOPMENT, INC.
By: /s/ James F. Anderson
-------------------------------------------
Name: James F. Anderson
Title: Vice President
MMG DEVELOPMENT CORP.
By: /s/ James F. Anderson
-------------------------------------------
Name: James F. Anderson
Title: Vice President
PLANTATION RESORTS GROUP, INC.
By: /s/ James F. Anderson
-------------------------------------------
Name: James F. Anderson
Title: Vice President
POINTE PARTNERS, LIMITED PARTNERSHIP
By: Harich Tahoe Developments,
its Managing General Partner
By: Lakewood Development Inc., its Managing
General Partner
By: /s/ James F. Anderson
-----------------------------------
Name: James F. Anderson
Title: Vice President
By: Ridgewood Development Inc., its General
Partner
By: /s/ James F. Anderson
-----------------------------------
Name: James F. Anderson
Title: Vice President
PORT ROYAL RESORT, L.P.
By: Argosy/KGI Port Royal Partners, its General
Partner
By: KGI Port Royal, Inc.,
its Managing General Partner
By: /s/ James F. Anderson
-----------------------------------
Name: James F. Anderson
Title: Vice President
By: Argosy Hilton Head, Inc., its General
Partner
By: /s/ James F. Anderson
-----------------------------------
Name: James F. Anderson
Title: Vice President
POWHATAN ASSOCIATES
By: Plantation Resorts Group, Inc., its Joint
Venturer
By: /s/ James F. Anderson
---------------------------------------
Name: James F. Anderson
Title: Vice President
By: Williamsburg Vacations, Inc., its Joint
Venturer
By: /s/ James F. Anderson
---------------------------------------
Name: James F. Anderson
Title: Vice President
PREMIER VACATIONS, INC.
By: /s/ James F. Anderson
-------------------------------------------
Name: James F. Anderson
Title: Vice President
RESORT CONNECTIONS, INC.
By: /s/ James F. Anderson
-------------------------------------------
Name: James F. Anderson
Title: Vice President
RESORT MARKETING INTERNATIONAL, INC.
By: /s/ James F. Anderson
-------------------------------------------
Name: James F. Anderson
Title: Vice President
RESORTS DEVELOPMENT INTERNATIONAL, INC.
By: /s/ James F. Anderson
-------------------------------------------
Name: James F. Anderson
Title: Vice President
RIDGE POINTE, LIMITED PARTNERSHIP
By: Pointe Partners Limited Partnership, its
Managing General Partner
By: Harich Tahoe Development, its Managing
General Partner
By: Lakewood Development Inc.,
its Managing General Partner
By: /s/ James F. Anderson
-------------------------------
Name: James F. Anderson
Title: Vice President
By: Ridgewood Development Inc.,
its General Partner
By: /s/ James F. Anderson
-------------------------------
Name: James F. Anderson
Title: Vice President
RIDGEWOOD DEVELOPMENT INC.
By: /s/ James F. Anderson
-------------------------------------------
Name: James F. Anderson
Title: Vice President
RKG, CORP.
By: /s/ James F. Anderson
-------------------------------------------
Name: James F. Anderson
Title: Vice President
RPM MANGEMENT, INC.
By: /s/ James F. Anderson
-------------------------------------------
Name: James F. Anderson
Title: Vice President
SUNTERRA COMMUNICATIONS CORPORATION
By: /s/ James F. Anderson
-------------------------------------------
Name: James F. Anderson
Title: Vice President
SUNTERRA FINANCIAL SERVICES, INC.
By: /s/ James F. Anderson
-------------------------------------------
Name: James F. Anderson
Title: Vice President
SUNTERRA PACIFIC, INC.
By: /s/ James F. Anderson
-------------------------------------------
Name: James F. Anderson
Title: Vice President
SUNTERRA ST. CROIX, INC.
By: /s/ James F. Anderson
-------------------------------------------
Name: James F. Anderson
Title: Vice President
SUNTERRA TRAVEL, INC.
By: /s/ James F. Anderson
-------------------------------------------
Name: James F. Anderson
Title: Vice President
S.V.L.H., INC.
By: /s/ James F. Anderson
-------------------------------------------
Name: James F. Anderson
Title: Vice President
WILLIAMSBURG VACATIONS, INC.
By: /s/ James F. Anderson
-------------------------------------------
Name: James F. Anderson
Title: Vice President
SUNTERRA FINANCE HOLDING COMPANY
By: /s/ James F. Anderson
-------------------------------------------
Name: James F. Anderson
Title: Vice President
SUNTERRA CENTRALIZED SERVICES COMPANY
By: /s/ James F. Anderson
-------------------------------------------
Name: James F. Anderson
Title: Vice President
SUNTERRA MANAGEMENT AND EXCHANGE HOLDING
COMPANY
By: /s/ James F. Anderson
-------------------------------------------
Name: James F. Anderson
Title: Vice President
CLUB SUNTERRA, LLC
By: Sunterra Management and Exchange Holding
Company, its Manager
By: /s/ James F. Anderson
---------------------------------------
Name: James F. Anderson
Title: Vice President
INTERNATIONAL TIMESHARES MARKETING, LLC
By: Resort Marketing International, Inc., its
Manager
By: /s/ James F. Anderson
---------------------------------------
Name: James F. Anderson
Title: Vice President
RPM MANAGEMENT, LLC
By: Sunterra Management and Exchange Holding
Company, its Manager
By: /s/ James F. Anderson
---------------------------------------
Name: James F. Anderson
Title: Vice President
SUNTERRA BENT CREEK GOLF COURSE DEVELOPMENT,
LLC
By: Sunterra Developer and Sales Holding
Company, its Manager
By: /s/ James F. Anderson
---------------------------------------
Name: James F. Anderson
Title: Vice President
SUNTERRA BENT CREEK VILLAGE DEVELOPMENT, LLC
By: Sunterra Developer and Sales Holding
Company, its Manager
By: /s/ James F. Anderson
---------------------------------------
Name: James F. Anderson
Title: Vice President
SUNTERRA COMMUNICATIONS, LLC
By: Sunterra Management and Exchange Holding
Company, its Manager
By: /s/ James F. Anderson
---------------------------------------
Name: James F. Anderson
Title: Vice President
SUNTERRA CORAL SANDS DEVELOPMENT, LLC
By: Sunterra Developer and Sales Holding
Company, its Manager
By: /s/ James F. Anderson
---------------------------------------
Name: James F. Anderson
Title: Vice President
SUNTERRA CYPRESS POINTE I DEVELOPMENT, LLC
By: Sunterra Developer and Sales Holding
Company, its Manager
By: /s/ James F. Anderson
---------------------------------------
Name: James F. Anderson
Title: Vice President
SUNTERRA CYPRESS POINTE II DEVELOPMENT, LLC
By: Sunterra Developer and Sales Holding
Company, its Manager
By: /s/ James F. Anderson
---------------------------------------
Name: James F. Anderson
Title: Vice President
SUNTERRA CYPRESS POINTE III DEVELOPMENT, LLC
By: Sunterra Developer and Sales Holding
Company, its Manager
By: /s/ James F. Anderson
---------------------------------------
Name: James F. Anderson
Title: Vice President
SUNTERRA EAST MARKETING, LLC
By: Resort Marketing International, Inc.,
its Manager
By: /s/ James F. Anderson
---------------------------------------
Name: James F. Anderson
Title: Vice President
SUNTERRA FALL CREEK DEVELOPMENT, LLC
By: Sunterra Developer and Sales Holding
Company, its Manager
By: /s/ James F. Anderson
---------------------------------------
Name: James F. Anderson
Title: Vice President
SUNTERRA GRAND BEACH I DEVELOPMENT, LLC
By: Sunterra Developer and Sales Holding
Company, its Manager
By: /s/ James F. Anderson
---------------------------------------
Name: James F. Anderson
Title: Vice President
SUNTERRA GRAND BEACH II DEVELOPMENT, LLC
By: Sunterra Developer and Sales Holding
Company, its Manager
By: /s/ James F. Anderson
---------------------------------------
Name: James F. Anderson
Title: Vice President
SUNTERRA GREENSPRINGS DEVELOPMENT, LLC
By: Sunterra Developer and Sales Holding
Company, its Manager
By: /s/ James F. Anderson
---------------------------------------
Name: James F. Anderson
Title: Vice President
SUNTERRA KGK PARTNERS FINANCE, LLC
By: Sunterra Finance Holding Company, its
Manager
By: /s/ James F. Anderson
---------------------------------------
Name: James F. Anderson
Title: Vice President
SUNTERRA KALLOF PLACE DEVELOPMENT, LLC
By: All Seasons Resorts, Inc. (AZ),
its Manager
By: /s/ James F. Anderson
---------------------------------------
Name: James F. Anderson
Title: Vice President
SUNTERRA LAKE TAHOE DEVELOPMENT, LLC
By: Sunterra Developer and Sales Holding
Company, its Manager
By: /s/ James F. Anderson
---------------------------------------
Name: James F. Anderson
Title: Vice President
SUNTERRA NORTH MARKETING, LLC
By: Resort Marketing International, Inc., its
Manager
By: /s/ James F. Anderson
---------------------------------------
Name: James F. Anderson
Title: Vice President
SUNTERRA POCO DIABLO DEVELOPMENT, LLC
By: All Seasons Resorts, Inc. (AZ), its Manager
By: /s/ James F. Anderson
---------------------------------------
Name: James F. Anderson
Title: Vice President
SUNTERRA POIPU GP DEVELOPMENT, LLC
By: Sunterra Developer and Sales Holding
Company, its Manager
By: /s/ James F. Anderson
---------------------------------------
Name: James F. Anderson
Title: Vice President
SUNTERRA POLYNESIAN ISLES DEVELOPMENT, LLC
By: Sunterra Developer and Sales Holding
Company, its Manager
By: /s/ James F. Anderson
---------------------------------------
Name: James F. Anderson
Title: Vice President
SUNTERRA PORT ROYAL DEVELOPMENT, LLC
By: Sunterra Developer and Sales Holding
Company, its Manager
By: /s/ James F. Anderson
---------------------------------------
Name: James F. Anderson
Title: Vice President
SUNTERRA POWHATAN DEVELOPMENT, LLC
By: Sunterra Developer and Sales Holding
Company, its Manager
By: /s/ James F. Anderson
---------------------------------------
Name: James F. Anderson
Title: Vice President
SUNTERRA RESIDUAL ASSETS DEVELOPMENT, LLC
By: Sunterra Developer and Sales Holding
Company, its Manager
By: /s/ James F. Anderson
---------------------------------------
Name: James F. Anderson
Title: Vice President
SUNTERRA RIDGE ON SEDONA DEVELOPMENT, LLC
By: All Seasons Resorts, Inc., its Manager
By: /s/ James F. Anderson
---------------------------------------
Name: James F. Anderson
Title: Vice President
SUNTERRA RIDGE POINTE DEVELOPMENT, LLC
By: Sunterra Developer and Sales Holding
Company, its Manager
By: /s/ James F. Anderson
---------------------------------------
Name: James F. Anderson
Title: Vice President
SUNTERRA SAN LUIS BAY DEVELOPMENT, LLC
By: Sunterra Developer and Sales Holding
Company, its Manager
By: /s/ James F. Anderson
---------------------------------------
Name: James F. Anderson
Title: Vice President
SUNTERRA SANTA FE DEVELOPMENT, LLC
By: Sunterra Developer and Sales Holding
Company, its Manager
By: /s/ James F. Anderson
---------------------------------------
Name: James F. Anderson
Title: Vice President
SUNTERRA SEDONA SPRINGS DEVELOPMENT, LLC
By: All Seasons Resorts, Inc. (AZ), its Manager
By: /s/ James F. Anderson
---------------------------------------
Name: James F. Anderson
Title: Vice President
SUNTERRA SEDONA SUMMIT DEVELOPMENT, LLC
By: All Seasons Resorts, Inc. (AZ), its Manager
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
SUNTERRA SOUTH MARKETING, LLC
By: Resort Marketing International, Inc., its
Manager
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
SUNTERRA ST. CROIX DEVELOPMENT, LLC
By: Sunterra Developer and Sales Holding
Company, its Manager
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
SUNTERRA STEAMBOAT DEVELOPMENT, LLC
By: Sunterra Developer and Sales Holding
Company, its Manager
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
SUNTERRA TAHOE BEACH & SKI DEVELOPMENT, LLC
By: Sunterra Developer and Sales Holding
Company, its Manager
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
SUNTERRA VILLA MIRAGE DEVELOPMENT, LLC
By: All Seasons Resorts, Inc. (AZ), its Manager
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
SUNTERRA VILLAS OF SEDONA DEVELOPMENT, LLC
By: All Seasons Resorts, Inc., its Manager
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
SUNTERRA WEST MARKETING, LLC
By: Resort Marketing International, Inc., its
Manager
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
SUNTERRA RESIDUAL ASSETS FINANCE, LLC
By: Sunterra Finance Holding Company, its
Manager
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
SUNTERRA RESIDUAL ASSETS M&E, LLC
By: Sunterra Management and Exchange Holding
Company, its Manager
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
SUNTERRA MORTGAGE HOLDINGS, LLC
By: Sunterra Finance Holding Company, its
Manager
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
PLEDGE AGREEMENT
PLEDGE AGREEMENT, dated as of July 29, 2002, made by EACH OF THE
UNDERSIGNED, whether as an original signatory hereto or as an Additional Pledgor
(as herein defined) (each, a "Pledgor," and collectively, the "Pledgors"), in
favor of Xxxxxxx Xxxxx Mortgage Capital Inc., as agent for the Lenders party to
the Loan Agreement referred to below (in such capacity, the "Agent").
W I T N E S S E T H:
WHEREAS, reference is made to that certain Loan Agreement, dated as of
the date hereof (as it may be amended, supplemented or otherwise modified, the
"Loan Agreement"; the terms defined therein and not otherwise defined herein
being used herein as therein defined), by and among Sunterra Corporation, a
Maryland corporation (the "Parent"), the subsidiaries of the Parent listed on
Schedule I thereto, the financial institutions from time to time party thereto
and the Agent, as administrative and collateral agent for the Lenders;
WHEREAS, it is a condition precedent to the Lenders making and
maintaining Loans under the Loan Agreement that each Pledgor shall have executed
and delivered to the Agent a pledge agreement providing for the pledge to the
Agent of, and the grant to the Agent for the benefit of the Lenders of a
security interest in, certain indebtedness from time to time owing to each
Pledgor and certain of the outstanding shares of capital stock from time to time
owned by each Pledgor of each Subsidiary now or hereafter existing and in which
each Pledgor has any interest at any time; and
WHEREAS, each Pledgor has determined that the execution, delivery and
performance of this Agreement directly benefits, and is in the best interest of
such Pledgor;
NOW, THEREFORE, in consideration of the premises and the agreements
herein and in order to induce the Agent and the Lenders to enter into the Loan
Agreement with the Borrowers, each Pledgor hereby agrees with the Agent as
follows:
SECTION 1. Definitions. All terms used in this Agreement which are
defined in the Loan Agreement or in Article 8 or Article 9 of the Uniform
Commercial Code (the "Code") currently in effect in the State of New York and
which are not otherwise defined herein shall have the same meanings herein as
set forth therein.
SECTION 2. Pledge and Grant of Security Interest. As collateral
security for all of the Obligations (as defined in Section 3 hereof), each
Pledgor hereby pledges and assigns to the Agent, and grants to the Agent for the
benefit of the Lenders a continuing security interest in, the following (the
"Pledged Collateral"):
(a) the indebtedness owed to such Pledgor, described in Schedule I
hereto and indebtedness from time to time required to be pledged by such Pledgor
to the Agent pursuant to
the terms of the Loan Agreement (the "Pledged Debt"), the promissory notes and
other instruments evidencing such Pledged Debt and all interest, cash,
instruments, investment property and other property from time to time received,
receivable or otherwise distributed in respect of or in exchange for any or all
of such Pledged Debt;
(b) the shares of stock owned by such Pledgor described in Schedule II
hereto (the "Pledged Shares") issued by the corporations described in such
Schedule II (the "Existing Subsidiaries"), the certificates representing such
Pledged Shares, all options and other rights, contractual or otherwise, in
respect thereof and all dividends, cash, instruments, investment property and
other property (including but not limited to, any stock dividend and any
distribution in connection with a stock split) from time to time received,
receivable or otherwise distributed in respect of or in exchange for any or all
of such Pledged Shares;
(c) the shares of stock at any time and from time to time acquired by
each Pledgor of any and all of such Pledgor's Subsidiaries, whether now or
hereafter existing, all or a portion of the stock of which is acquired by each
Pledgor at any time (such Subsidiaries, together with the Pledgor's Existing
Subsidiaries, being hereinafter referred to collectively, as the "Pledged
Subsidiaries" and individually, as a "Pledged Subsidiary"), the certificates
representing such shares, all options and other rights, contractual or
otherwise, in respect thereof and all dividends, cash, instruments, investment
property and other property from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of such shares;
(d) all additional shares of stock, from time to time acquired by such
Pledgor, of any of such Pledgor's Pledged Subsidiaries, the certificates
representing such additional shares, all options and other rights, contractual
or otherwise, in respect thereof and all dividends, cash, instruments,
investment property and other property from time to time received, receivable or
otherwise distributed in respect of or in exchange for any or all of such
additional shares; and
(e) all "accounts", "general intangibles", "instruments", "investment
property" and "deposit accounts" (as each such term is defined in the Code) of
such Pledgor constituting or relating to any of the foregoing; and
(f) all proceeds of any and all of the foregoing;
in each case, whether now owned or hereafter acquired by each Pledgor and
howsoever its interest therein may arise or appear (whether by ownership,
security interest, claim or otherwise).
SECTION 3. Security for Obligations. The security interest created
hereby in the Pledged Collateral constitutes continuing collateral security for
all of the following obligations whether now existing or hereafter incurred (the
"Obligations"):
(a) the prompt payment by each Pledgor, as and when due and payable
(by scheduled maturity, required prepayment, acceleration, demand or otherwise),
of all amounts from time to time owing by it in respect of the Loan Agreement,
the Notes, and the other Loan Documents, including, without limitation,
principal of and interest on the Loans (including, without limitation, all
interest that accrues after the commencement of any case, proceeding or other
action relating to the bankruptcy, insolvency or reorganization of any Borrower,
whether or not a claim for post-filing interest is allowed in such proceeding),
and all interest thereon, all
fees, commissions, expense reimbursements, indemnifications and all other
amounts due or to become due under any Loan Document; and
(b) the due performance and observance by each Pledgor of all of its
other obligations from time to time existing in respect of the Loan Agreement
and the other Loan Documents.
SECTION 4. Delivery of the Pledged Collateral.
(a) All promissory notes currently evidencing such Pledgor's Pledged
Debt and all certificates currently representing such Pledgor's Pledged Shares
shall be delivered to the Agent on or prior to the execution and delivery of
this Agreement. All other promissory notes, certificates and instruments
constituting such Pledgor's Pledged Collateral from time to time or required to
be pledged to the Agent pursuant to the terms of the Loan Agreement (the
"Additional Collateral") shall be delivered to the Agent within ten (10) days of
receipt thereof by or on behalf of such Pledgor. All such promissory notes,
certificates and instruments shall be held by the Agent or by a third party on
behalf of the Agent pursuant hereto, and, if held by a third party, shall be
subject to an "authenticated" record (within the meaning of the Code) in which
such third party acknowledges that it is holding such Pledged Collateral for the
benefit of Agent, and shall be delivered in suitable form for transfer by
delivery or shall be accompanied by duly executed instruments of transfer or
assignment in blank, all in form and substance reasonably satisfactory to the
Agent. Within ten (10) days of the receipt by any Pledgor of the Additional
Collateral, a Pledge Amendment, duly executed by such Pledgor, in substantially
the form of Schedule III hereto (a "Pledge Amendment") shall be delivered to the
Agent, in respect of such Pledgor's Additional Collateral which is to be pledged
pursuant to this Agreement and the Loan Agreement, which Pledge Amendment shall
from and after delivery thereof constitute part of Schedules I and II hereto.
Each Pledgor hereby authorizes the Agent to attach each Pledge Amendment to this
Agreement and agrees that all promissory notes, certificates or instruments
listed on any Pledge Amendment delivered to the Agent shall for all purposes
hereunder constitute Pledged Collateral and such Pledgor shall be deemed upon
delivery thereof to have made the representations and warranties set forth in
Section 5 with respect to such Additional Collateral.
(b) If any Pledgor shall receive, by virtue of its being or having
been an owner of any Pledged Collateral, any (i) stock certificate (including,
without limitation, any certificate representing a stock dividend or
distribution in connection with any increase or reduction of capital,
reclassification, merger, consolidation, sale of assets, combination of shares,
stock split, spin-off or split-off), promissory note or other instrument, (ii)
option or right, whether as an addition to, substitution for, or in exchange
for, any Pledged Collateral, or otherwise, (iii) dividends payable in cash
(except such dividends permitted to be retained by such Pledgor pursuant to
Section 7 hereof) or in securities or other property or (iv) dividends or other
distributions in connection with a partial or total liquidation or dissolution
or in connection with a reduction of capital, capital surplus or paid-in
surplus, such Pledgor shall receive such stock certificate, promissory note,
instrument, option, right, payment or distribution in trust for the benefit of
the Agent, shall segregate it from such Pledgor's other property and shall
deliver it forthwith to the Agent in the exact form received, with any necessary
endorsement and/or
appropriate stock powers duly executed in blank, to be held by the Agent as
Pledged Collateral and as further collateral security for the Obligations.
SECTION 5. Representations and Warranties. Each Pledgor individually
represents and warrants as follows:
(a) Such Pledgor's Existing Subsidiaries set forth in Schedule II
hereto are such Pledgor's only Subsidiaries required to be pledged by such
Pledgor pursuant to the Loan Agreement existing on the date hereof. Such
Pledgor's Pledged Shares have been duly authorized and validly issued, are fully
paid and non-assessable and, except as noted in Schedule II hereto, constitute
100% of the issued shares of capital stock of such Pledgor's Pledged
Subsidiaries as of the date hereof. All other shares of stock constituting such
Pledgor's Pledged Collateral will be, when issued, duly authorized and validly
issued, fully paid and non-assessable.
(b) The promissory notes currently evidencing such Pledgor's Pledged
Debt have been, and all other promissory notes from time to time evidencing such
Pledgor's Pledged Debt, when executed and delivered, will have been, duly
authorized, executed and delivered by the respective makers thereof, and all
such promissory notes are or will be, as the case may be, legal, valid and
binding obligations of such makers, enforceable against such makers in
accordance with their respective terms.
(c) Such Pledgor is and will be at all times the legal and beneficial
owner of such Pledgor's Pledged Collateral free and clear of any Lien, security
interest, option or other charge or encumbrance except for the security interest
created by this Agreement.
(d) The exercise by the Agent of any of its rights and remedies
hereunder will not contravene law or any material contractual restriction
binding on or affecting such Pledgor or any of its properties and will not
result in or require the creation of any Lien, security interest or other charge
or encumbrance upon or with respect to any of its properties other than pursuant
to this Agreement and the other Loan Documents.
(e) No authorization or approval or other action by, and no notice to
or filing with, any Governmental Authority is required to be obtained or made by
such Pledgor for (i) the due execution, delivery and performance by such Pledgor
of this Agreement, (ii) the grant by such Pledgor, or the perfection, of the
security interest created hereby in such Pledgor's Pledged Collateral or (iii)
the exercise by the Agent or the Lenders of any of their rights and remedies
hereunder, except as may be required in connection with any sale of any Pledged
Collateral by laws affecting the offering and sale of securities generally.
(f) This Agreement creates a valid security interest in favor of the
Agent in such Pledgor's Pledged Collateral, as security for the Obligations. The
Agent's having possession of the promissory notes evidencing such Pledgor's
Pledged Debt, the certificates representing such Pledgor's Pledged Shares and
all other certificates, instruments and cash constituting such Pledgor's Pledged
Collateral from time to time results in the perfection of such security
interest. Such security interest is, or in the case of Pledged Collateral in
which such Pledgor obtains rights after the date hereof, will be, a perfected,
first priority security interest. All action necessary or
desirable to perfect and protect such security interest has been duly taken,
except for the Agent's having possession of certificates, instruments and cash
constituting such Pledgor's Pledged Collateral after the date hereof.
SECTION 6. Covenants as to the Pledged Collateral. So long as any
Obligations shall remain outstanding, or the Commitments shall not have been
terminated, each Pledgor will, unless the Agent shall otherwise consent in
writing:
(a) keep adequate records concerning such Pledgor's Pledged Collateral
and permit the Agent or any agents or representatives thereof at any time or
from time to time to examine and make copies of and abstracts from such records
pursuant to the terms of Section 6.1(f) of the Loan Agreement;
(b) at its expense, promptly deliver to the Agent a copy of each
notice or other communication received by it in respect of such Pledgor's
Pledged Collateral;
(c) at its expense, defend the Agent's right, title and security
interest in and to such Pledgor's Pledged Collateral against the claims of any
Person;
(d) at its expense, at any time and from time to time, promptly
execute and deliver all further instruments and documents and take all further
action that may be necessary or that the Agent may reasonably request in order
to (i) perfect and protect the security interest purported to be created hereby,
(ii) enable the Agent to exercise and enforce its rights and remedies hereunder
in respect of such Pledgor's Pledged Collateral or (iii) otherwise affect the
purposes of this Agreement, including, without limitation, delivering to the
Agent, after the occurrence and during the continuation of an Event of Default,
irrevocable proxies in respect of such Pledgor's Pledged Collateral;
(e) not sell, assign (by operation of law or otherwise), exchange or
otherwise dispose of any of such Pledgor's Pledged Collateral or any interest
therein except (i) as permitted by Section 7(a)(i) hereof and (ii) as permitted
under the Loan Agreement;
(f) not create or suffer to exist any Lien, security interest or other
charge or encumbrance upon or with respect to any of such Pledgor's Pledged
Collateral except for the security interest created hereby or pursuant to any
other Loan Document;
(g) not make or consent to any amendment or other modification or
waiver with respect to any of such Pledgor's Pledged Collateral or enter into
any agreement or permit to exist any restriction with respect to any of such
Pledgor's Pledged Collateral other than pursuant to the Loan Documents;
(h) not permit the issuance of (i) any additional shares of any class
of capital stock of any of such Pledgor's Pledged Subsidiaries, (ii) any
securities convertible voluntarily by the holder thereof or automatically upon
the occurrence or non-occurrence of any event or condition into, or exchangeable
for, any such shares of capital stock or (iii) any warrants, options, contracts
or other commitments entitling any Person to purchase or otherwise acquire any
such shares of capital stock; and
(i) not take or fail to take any action which would in any manner
impair the value or enforceability of the Agent's security interest in any such
Pledgor's Pledged Collateral.
SECTION 7. Voting Rights, Dividends, Etc. in Respect of the Pledged
Collateral.
(a) So long as no Event of Default shall have occurred and be
continuing:
(i) Each Pledgor may exercise any and all voting and other consensual
rights pertaining to any such Pledgor's Pledged Collateral for any purpose
not inconsistent with the terms of this Agreement, the Loan Agreement or
the other Loan Documents; provided, however, that (A) each Pledgor will not
exercise or refrain from exercising any such right, as the case may be, if
the Agent gives it notice that, in the Agent's reasonable judgment, such
action would have a Material Adverse Effect on the value of any of such
Pledgor's Pledged Collateral and (B) each Pledgor will give the Agent at
least five (5) Business Days' notice of the manner in which it intends to
exercise, or the reasons for refraining from exercising, any such right
which is reasonably likely to have a Material Adverse Effect;
(ii) each Pledgor may receive and retain any and all dividends or
interest paid in respect of the such Pledgor's Pledged Collateral to the
extent not prohibited hereby or by the Loan Agreement; provided, however,
that any and all (A) dividends and interest paid or payable other than in
cash in respect of, and instruments and other property received, receivable
or otherwise distributed in respect of or in exchange for, any such Pledged
Collateral, (B) dividends and other distributions paid or payable in cash
in respect of any such Pledged Collateral in connection with a partial or
total liquidation or dissolution or in connection with a reduction of
capital, capital surplus or paid-in surplus, and (C) cash paid, payable or
otherwise distributed in redemption of, or in exchange for, any such
Pledged Collateral, together with any dividend or interest payment which at
the time of such payment was not permitted by the Loan Agreement, shall be,
and shall forthwith be delivered to the Agent to hold as, Pledged
Collateral and shall, if received by such Pledgor, be received in trust for
the benefit of the Agent, shall be segregated from the other property or
funds of such Pledgor, and shall be forthwith delivered to the Agent in the
exact form received with any necessary endorsement and/or appropriate stock
powers duly executed in blank, to be held by the Agent as Pledged
Collateral and as further collateral security for the Obligations; and
(iii) the Agent will execute and deliver (or cause to be executed and
delivered) to each Pledgor all such proxies and other instruments as such
Pledgor may reasonably request for the purpose of enabling such Pledgor to
exercise the voting and other rights which it is entitled to exercise
pursuant to paragraph (i) of this Section 7(a) and to receive the dividends
which it is authorized to receive and retain pursuant to paragraph (ii) of
this Section 7(a).
(b) Upon the occurrence and during the continuance of an Event of
Default:
(i) all rights of each Pledgor to exercise the voting and other
consensual rights which it would otherwise be entitled to exercise pursuant
to paragraph (i) of subsection (a) of this Section 7, and to receive the
dividends and interest payments which it would otherwise be authorized to
receive and retain pursuant to paragraph (ii) of subsection (a) of this
Section 7, shall cease, and all such rights shall thereupon become vested
in the Agent which shall thereupon have the sole right to exercise such
voting and other consensual rights and to receive and hold as Pledged
Collateral such dividends and interest payments;
(ii) the Agent is authorized to notify each debtor with respect to
such Pledgor's Pledged Debt to make payment directly to the Agent and may
collect any and all monies due or to become due to any Pledgor in respect
of such Pledged Debt and each Pledgor hereby authorizes each such debtor to
make such payment directly to the Agent without any duty of inquiry;
(iii) without limiting the generality of the foregoing, the Agent may
at its option exercise any and all rights of conversion, exchange,
subscription or any other rights, privileges or options pertaining to any
of such Pledgor's Pledged Collateral as if it were the absolute owner
thereof, including, without limitation, the right to exchange, in its
discretion, any and all of such Pledged Collateral upon the merger,
consolidation, reorganization, recapitalization or other adjustment of any
of such Pledgor's Pledged Subsidiaries, or upon the exercise by any of such
Pledgor's Pledged Subsidiaries of any right, privilege or option pertaining
to any of such Pledgor's Pledged Collateral, and, in connection therewith,
to deposit and deliver any and all of such Pledgor's Pledged Collateral
with any committee, depository, transfer agent, registrar or other
designated agent upon such terms and conditions as it may determine; and
(iv) all dividends and interest payments which are received by any
Pledgor contrary to the provisions of paragraph (i) of this Section 7(b)
shall be received in trust for the benefit of the Agent, shall be
segregated from other funds of such Pledgor, and shall be forthwith paid
over to the Agent as Pledged Collateral in the exact form received with any
necessary endorsement and/or appropriate stock powers duly executed in
blank, to be held by the Agent as Pledged Collateral and as further
collateral security for the Obligations.
SECTION 8. Additional Provisions Concerning the Pledged Collateral.
(a) Each Pledgor hereby authorizes the Agent to file, without the
further authorization of such Pledgor, one or more financing or continuation
statements, and amendments thereto, relating to such Pledgor's Pledged
Collateral.
(b) Each Pledgor hereby irrevocably appoints the Agent such Pledgor's
attorney-in-fact and proxy, with full authority in the place and stead of such
Pledgor and in the name of such Pledgor or otherwise, from time to time in the
Agent's discretion exercised reasonably, to take any action and to execute any
instrument which the Agent may deem
necessary or advisable to accomplish the purposes of this Agreement (subject to
the rights of such Pledgor under Section 7(a) hereof), including, without
limitation, to receive, indorse and collect all instruments made payable to such
Pledgor representing any dividend, interest payment or other distribution in
respect of such Pledgor's Pledged Collateral and to give full discharge for the
same.
(c) If any Pledgor fails to perform any agreement or obligation
contained herein, the Agent itself may perform, or cause performance of, such
agreement or obligation, and the expenses of the Agent incurred in connection
therewith shall be payable by such Pledgor pursuant to Section 10 hereof.
(d) Other than the exercise of reasonable care to assure the safe
custody of the Pledged Collateral while held hereunder, the Agent shall have no
duty or liability to preserve rights pertaining thereto and shall be relieved of
all responsibility for the Pledged Collateral upon surrendering it or tendering
surrender of it to the Pledgors. The Agent shall be deemed to have exercised
reasonable care in the custody and preservation of the Pledged Collateral in its
possession if the Pledged Collateral is accorded treatment substantially equal
to that which the Agent accords its own property, it being understood that the
Agent shall not have responsibility for (i) ascertaining or taking action with
respect to calls, conversions, exchanges, maturities, tenders or other matters
relating to any Pledged Collateral, whether or not the Agent has or is deemed to
have knowledge of such matters, or (ii) taking any necessary steps to preserve
rights against any parties with respect to any Pledged Collateral.
(e) The Agent may at any time after the occurrence and during the
continuation of an Event of Default in its discretion (i) without notice to any
Pledgor, transfer or register in the name of the Agent or any of its nominees
any or all of the Pledged Collateral, subject only to the revocable rights of
each Pledgor under Section 7(a) hereof, and (ii) exchange certificates or
instruments constituting Pledged Collateral for certificates or instruments of
smaller or larger denominations.
SECTION 9. Remedies Upon Default. If any Event of Default shall have
occurred and be continuing:
(a) The Agent may exercise in respect of the Pledged Collateral,
without further order of, or application to, the Bankruptcy Court and in
addition to other rights and remedies provided for herein or otherwise available
to it, all of the rights and remedies of a secured party on default under the
Bankruptcy Code and the Code then in effect in the State of New York; and
without limiting the generality of the foregoing and without notice except as
specified below, sell the Pledged Collateral or any part thereof in one or more
parcels at public or private sale, at any exchange or broker's board or
elsewhere, at such price or prices and on such other terms as the Agent may deem
commercially reasonable. Each Pledgor agrees that, to the extent notice of sale
shall be required by law, at least ten (10) days' notice to such Pledgor of the
time and place of any public sale or the time after which any private sale is to
be made shall constitute reasonable notification. The Agent shall not be
obligated to make any sale of Pledged Collateral regardless of notice of sale
having been given. The Agent may adjourn any public or private sale from time to
time by announcement at the time and place fixed therefor, and such sale may,
without further notice, be made at the time and place to which it was so
adjourned.
(b) Each Pledgor recognizes that it may be impracticable to effect a
public sale of all or any part of such Pledgor's Pledged Shares or any other
securities constituting such Pledgor's Pledged Collateral and that the Agent
may, therefore, determine to make one or more private sales of any such
securities to a restricted group of purchasers who will be obligated to agree,
among other things, to acquire such securities for their own account, for
investment and not with a view to the distribution or resale thereof. Each
Pledgor acknowledges that any such private sale may be at prices and on terms
less favorable to the seller than the prices and other terms which might have
been obtained at a public sale and, notwithstanding the foregoing, agrees that
such private sales shall be deemed to have been made in a commercially
reasonable manner and that the Agent shall have no obligation to delay sale of
any such securities for the period of time necessary to permit the issuer of
such securities to register such securities for public sale under the Securities
Act of 1933, as amended (the "Securities Act"). Each Pledgor further
acknowledges and agrees that any offer to sell such securities which has been
(i) publicly advertised on a bona fide basis in a newspaper or other publication
of general circulation in the financial community of New York, New York (to the
extent that such an offer may be so advertised without prior registration under
the Securities Act) or (ii) made privately in the manner described above to not
less than fifteen bona fide offerees shall be deemed to involve a "public
disposition" for the purposes of Section 9-610 of the Code (or any successor or
similar, applicable statutory provision) as then in effect in the State of New
York, notwithstanding that such sale may not constitute a "public offering"
under the Securities Act, and that the Agent may, in such event, bid for the
purchase of such securities.
(c) Any cash held by the Agent as Pledged Collateral and all cash
proceeds received by the Agent in respect of any sale of, collection from, or
other realization upon, all or any part of the Pledged Collateral may, in the
discretion of the Agent, be held by the Agent as collateral for, and/or then or
at any time thereafter applied (after payment of any amounts payable to the
Agent pursuant to Section 10 hereof) in whole or in part by the Agent against,
all or any part of the Obligations in such order as the Agent shall elect
consistent with the provisions of the Loan Agreement. Any surplus of such cash
or cash proceeds held by the Agent and remaining after payment in full of all of
the Obligations shall be paid over to the Pledgors or to such person as may be
lawfully entitled to receive such surplus.
(d) In the event that the proceeds of any such sale, collection or
realization are insufficient to pay all amounts to which the Agent or any Lender
is legally entitled, each Pledgor shall be liable for the deficiency, together
with interest thereon at the highest rate specified in the Loan Agreement for
interest on overdue principal thereof or such other rate as shall be fixed by
applicable law, together with the costs of collection and the reasonable fees of
any attorneys employed by the Agent and any Lender to collect such deficiency.
SECTION 10. Indemnity and Expenses.
a) Each Pledgor agrees to indemnify the Agent from and against any and
all claims, losses and liabilities growing out of or resulting from this
Agreement (including, without limitation, enforcement of this Agreement), except
claims, losses or liabilities resulting solely and directly from the Agent's
gross negligence or willful misconduct as determined by a final judgment of a
court of competent jurisdiction.
(b) Each Pledgor will upon demand pay to the Agent the amount of any
and all reasonable costs and expenses, including the fees and disbursements of
the Agent's counsel and of any experts and agents, which the Agent may incur in
connection with (i) the administration of this Agreement, (ii) the custody,
preservation, use or operation of, or the sale of, collection from, or other
realization upon, any of such Pledgor's Pledged Collateral, (iii) the exercise
or enforcement of any of the rights of the Agent or any of the Lenders
hereunder, or (iv) the failure by such Pledgor to perform or observe any of the
provisions hereof.
SECTION 11. Notices, Etc. All notices and other communications
provided for hereunder shall be in writing and shall be mailed (by certified
mail, postage prepaid and return receipt requested), telecopied or delivered, if
to a Pledgor, c/o the Parent at its address specified in the Loan Agreement, and
if to the Agent, to it at its address specified in the Loan Agreement, or as to
either such Person at such other address as shall be designated by such Person
in a written notice to such other Person complying as to delivery with the terms
of this Section 11. All such notices and other communications shall be effective
(i) if sent by certified mail, return receipt requested, when received or three
(3) Business Days after mailing, whichever first occurs, (ii) if telecopied,
when transmitted and confirmation is received, provided same is on a Business
Day and, if not, on the next Business Day, or (iii) if delivered, upon delivery,
provided same is on a Business Day and, if not, on the next Business Day.
SECTION 12. Waiver of Jury Trial. EACH OF THE PLEDGORS AND THE AGENT
(BY ACCEPTING THIS AGREEMENT) WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION,
PROCEEDING OR COUNTERCLAIM CONCERNING ANY RIGHTS UNDER THIS AGREEMENT OR ANY
OTHER LOAN DOCUMENT OR ARISING FROM ANY OTHER LOAN DOCUMENT AND AGREES THAT ANY
SUCH ACTION, PROCEEDING OR COUNTERCLAIM SHALL BE TRIED BEFORE A COURT AND NOT
BEFORE A JURY.
SECTION 13. Miscellaneous.
(a) No amendment of any provision of this Agreement shall be effective
unless it is in writing and signed by each Pledgor and the Agent, and no waiver
of any provision of this Agreement, and no consent to any departure by any
Pledgor therefrom, shall be effective unless it is in writing and signed by the
Agent, and then such waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given.
(b) No failure on the part of the Agent to exercise, and no delay in
exercising, any right hereunder or under any other document shall operate as a
waiver thereof, nor shall any single or partial exercise of any such right
preclude any other or further exercise thereof or the exercise of any other
right. The rights and remedies of the Agent provided herein and in the other
Loan Documents are cumulative and are in addition to, and not exclusive of, any
rights or remedies provided by law. The rights of the Agent under any document
against any party thereto are not conditional or contingent on any attempt by
the Agent to exercise any of its rights under any other document against such
party or against any other person.
(c) Any provision of this Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or
unenforceability without invalidating the remaining portions hereof or thereof
or affecting the validity or enforceability of such provision in any other
jurisdiction.
(d) This Agreement shall create a continuing security interest in the
Pledged Collateral and shall (i) remain in full force and effect until the
payment in full or release of the Obligations after the Commitments have been
terminated and (ii) be binding on each Pledgor and by its acceptance hereof, the
Agent, and their respective successors and assigns and shall inure, together
with all rights and remedies of the Agent and the Lenders hereunder, to the
benefit of each Pledgor, the Agent and the Lenders and their respective
successors, transferees and assigns. Without limiting the generality of clause
(ii) of the immediately preceding sentence, the Agent may assign or otherwise
transfer its rights and obligations under this Agreement to any other Person
pursuant to the terms of the Loan Agreement, and such other Person shall
thereupon become vested with all of the benefits in respect thereof granted to
the Agent herein or otherwise. Upon any such assignment or transfer, all
references in this Agreement to the Agent shall mean the assignee of the Agent.
None of the rights or obligations of any Pledgor hereunder may be assigned or
otherwise transferred without the prior written consent of the Agent, and any
attempted assignment by any Pledgor in violation of this Section 13(d) shall be
null and void.
(e) Upon the satisfaction in full of the Obligations after the
Commitments have been terminated, (i) this Agreement and the security interest
created hereby shall terminate and all rights to the Pledged Collateral shall
revert to the Pledgors, and (ii) the Agent will, upon the Pledgors' request and
at the Pledgors' expense, (A) return to the Pledgors such of the Pledged
Collateral as shall not have been sold or otherwise disposed of or applied
pursuant to the terms hereof and (B) execute and deliver to the Pledgors,
without recourse, representation or warranty, such documents as the Pledgors
shall reasonably request to evidence such termination.
(f) This Agreement shall be governed by and construed in accordance
with the laws of the State of New York, except as required by mandatory
provisions of law and except to the extent that the validity and perfection or
the perfection and the effect of perfection or non-perfection of the security
interest created hereby, or remedies hereunder, in respect of any particular
Pledged Collateral are governed by the law of a jurisdiction other than the
State of New York.
(g) This Agreement may be executed in one or more counterparts and by
different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed an original, but all such counterparts
together shall constitute but one and the same instrument; signature pages may
be detached from multiple separate counterparts and attached to a single
counterpart so that all signature pages are physically attached to the same
document.
(h) From time to time subsequent to the date hereof, additional
Persons may become parties hereto as additional Pledgors (each, an "Additional
Pledgor"), by executing a counterpart agreement in form an substance reasonably
satisfactory to the Agent (a "Counterpart Agreement"). Upon delivery of any such
Counterpart Agreement to the Agent, notice of which is hereby waived by
Pledgors, each Additional Pledgor shall be a Pledgor and shall be as fully a
party hereto as if Additional Pledgor were an original signatory hereto. Each
Pledgor expressly agrees that its obligations arising hereunder shall not be
affected or diminished by the addition or release of any other Pledgor
hereunder. This Agreement shall be fully effective as to any
Pledgor that is or becomes a party hereto regardless of whether any other Person
becomes or fails to become or ceases to be a Pledgor hereunder.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their respective officers thereunto duly authorized, as of the
date first above written.
BORROWERS:
SUNTERRA CORPORATION
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
AKGI LAKE TAHOE INVESTMENTS, INC.
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
AKGI ST. MAARTEN, NV
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
ALL SEASONS PROPERTIES, INC.
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
ALL SEASONS REALTY, INC.
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
ALL SEASONS RESORTS, INC.,
an Arizona corporation (AZ)
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
ALL SEASONS RESORTS, INC.,
a Texas corporation (TX)
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
ARGOSY GRAND BEACH, INC.
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
ARGOSY HILTON HEAD, INC.
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
ARGOSY PARTNERS, INC.
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
ARGOSY/KGI GRAND BEACH
INVESTMENT PARTNERSHIP
By: Argosy Grand Beach, Inc.,
Its General Partner
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
By: Argosy Partners, Inc.,
Its General Partner
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
By: KGI Grand Beach Investments Inc.,
its Managing General Partner
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
ARGOSY/KGI PORT ROYAL PARTNERS
By: Argosy Grand Beach, Inc.,
Its General Partner
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
By: KGI Port Royal, Inc.
ITS Managing General Partner
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
AVCOM INTERNATIONAL, INC. (n/k/a Sunterra
Developer and Sales Holding Company)
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
CLUB SUNTERRA, INC.
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
DESIGN INTERNATIONALE-RMI, INC.
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
XXXXXX ACQUISITION SUBSIDIARY, INC.
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
GRAND BEACH PARTNERS, L.P.
By: Argosy/KGI Grand Beach Investment
Partnership, its General Partner
By: Argosy partners, Inc.,
its General partner
By: /s/ Xxxxx X. Xxxxxxxx
-------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
By: Argosy Grand Beach, Inc.,
its General partner
By: /s/ Xxxxx X. Xxxxxxxx
-------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
By: KGI Grand Beach Investments, Inc.
its Managing General Partner
By: /s/ Xxxxx X. Xxxxxxxx
-------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
GRAND BEACH RESORT,
LIMITED PARTNERSHIP
By: Grand Beach Partners, LP,
its General Partner
By: Argosy/KGI Grand Beach Investment
Partnership, its General Partner
By: KGI Grand Beach
Investments, Inc.,
its Managing General Partner
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
By: Argosy Partners, Inc.,
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
By: Argosy Grand Beach, Inc.,
its General partners
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
GREENSPRINGS ASSOCIATES
By: Plantation Resorts Group, Inc.,
its Joint Venturer
By: /s/ Xxxxx X. Xxxxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
By: Greensprings Plantation Resort, Inc.,
its Joint Venturer
By: /s/ Xxxxx X. Xxxxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
GREENSPRINGS PLANTATION RESORT, INC.
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
XXXXXX TAHOE DEVELOPMENTS PARTNERSHIP
By: Lakewood Development Inc.,
its Managing General Partner
By: /s/ Xxxxx X. Xxxxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
By: Ridgewood Development Inc.,
its General Partner
By: /s/ Xxxxx X. Xxxxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
INTERNATIONAL TIMESHARES, INC.
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
KABUSHIKI GAISHA KEI, LLC
By: KGK Investors, Inc., its Member
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
By: KGK Partners, Inc., its Member
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
By: Argosy Partners, Inc., its Member
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
KGI GRAND BEACH INVESTMENTS, INC.
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
KGI PORT ROYAL, INC.
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
KGK LAKE TAHOE DEVELOPMENT, INC.
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
LAKE TAHOE RESORT PARTNERS, LLC
By: AKGI Lake Tahoe Investments, Inc.,
its Managing Member
By: /s/ Xxxxx X. Xxxxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
By: KGK Lake Tahoe Development, Inc.,
its Member
By: /s/ Xxxxx X. Xxxxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
LAKEWOOD DEVELOPMENT, INC.
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
MMG DEVELOPMENT CORP.
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
PLANTATION RESORTS GROUP, INC.
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
POINTE PARTNERS, LIMITED PARTNERSHIP
By: Xxxxxx Tahoe Developments,
its Managing General Partner
By: Lakewood Development Inc.,
its Managing General Partner
By: /s/ Xxxxx X. Xxxxxxxx
-------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
By: Ridgewood Development Inc.,
its General Partner
By: /s/ Xxxxx X. Xxxxxxxx
-------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
PORT ROYAL RESORT, L.P.
By: Argosy/KGI Port Royal Partners,
its General Partner
By: KGI Port Royal, Inc.,
its Managing General Partner
By: /s/ Xxxxx X. Xxxxxxxx
-------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
By: Argosy Hilton Head, Inc.,
its General Partner
By: /s/ Xxxxx X. Xxxxxxxx
-------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
POWHATAN ASSOCIATES
By: Plantation Resorts Group, Inc.,
its Joint Venturer
By: /s/ Xxxxx X. Xxxxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
By: Williamsburg Vacations, Inc.,
its Joint Venturer
By: /s/ Xxxxx X. Xxxxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
PREMIER VACATIONS, INC.
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
RESORT CONNECTIONS, INC.
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
RESORT MARKETING INTERNATIONAL, INC.
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
RESORTS DEVELOPMENT INTERNATIONAL, INC.
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
RIDGE POINTE, LIMITED PARTNERSHIP
By: Pointe Partners Limited Partnership,
its Managing General Partner
By: Xxxxxx Tahoe Development,
its Managing General Partner
By: Lakewood Development Inc.,
its Managing General Partner
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
By: Ridgewood Development Inc.,
its General Partner
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
RIDGEWOOD DEVELOPMENT INC.
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
RKG, CORP.
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
RPM MANGEMENT, INC.
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
SUNTERRA COMMUNICATIONS CORPORATION
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
SUNTERRA FINANCIAL SERVICES, INC.
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
SUNTERRA PACIFIC, INC.
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
SUNTERRA ST. CROIX, INC.
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
SUNTERRA TRAVEL, INC.
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
S.V.L.H., INC.
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
WILLIAMSBURG VACATIONS, INC.
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
SUNTERRA FINANCE HOLDING COMPANY
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
SUNTERRA CENTRALIZED SERVICES COMPANY
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
SUNTERRA MANAGEMENT AND EXCHANGE HOLDING
COMPANY
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
CLUB SUNTERRA, LLC
By: Sunterra Management and Exchange Holding
Company, its Manager
By: /s/ Xxxxx X. Xxxxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
INTERNATIONAL TIMESHARES MARKETING, LLC
By: Resort Marketing International, Inc., its
Manager
By: /s/ Xxxxx X. Xxxxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
RPM MANAGEMENT, LLC
By: Sunterra Management and Exchange Holding
Company, its Manager
By: /s/ Xxxxx X. Xxxxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
SUNTERRA BENT CREEK GOLF COURSE DEVELOPMENT,
LLC
By: Sunterra Developer and Sales Holding
Company, its Manager
By: /s/ Xxxxx X. Xxxxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
SUNTERRA BENT CREEK VILLAGE DEVELOPMENT, LLC
By: Sunterra Developer and Sales Holding
Company, its Manager
By: /s/ Xxxxx X. Xxxxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
SUNTERRA COMMUNICATIONS, LLC
By: Sunterra Management and Exchange Holding
Company, its Manager
By: /s/ Xxxxx X. Xxxxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
SUNTERRA XXXXX XXXXX DEVELOPMENT, LLC
By: Sunterra Developer and Sales Holding
Company, its Manager
By: /s/ Xxxxx X. Xxxxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
SUNTERRA CYPRESS POINTE I DEVELOPMENT, LLC
By: Sunterra Developer and Sales Holding
Company, its Manager
By: /s/ Xxxxx X. Xxxxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
SUNTERRA CYPRESS POINTE II DEVELOPMENT, LLC
By: Sunterra Developer and Sales Holding
Company, its Manager
By: /s/ Xxxxx X. Xxxxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
SUNTERRA CYPRESS POINTE III DEVELOPMENT, LLC
By: Sunterra Developer and Sales Holding
Company, its Manager
By: /s/ Xxxxx X. Xxxxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
SUNTERRA EAST MARKETING, LLC
By: Resort Marketing International, Inc., its
Manager
By: /s/ Xxxxx X. Xxxxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
SUNTERRA FALL CREEK DEVELOPMENT, LLC
By: Sunterra Developer and Sales Holding
Company, its Manager
By: /s/ Xxxxx X. Xxxxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
SUNTERRA GRAND BEACH I DEVELOPMENT, LLC
By: Sunterra Developer and Sales Holding
Company, its Manager
By: /s/ Xxxxx X. Xxxxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
SUNTERRA GRAND BEACH II DEVELOPMENT, LLC
By: Sunterra Developer and Sales Holding
Company, its Manager
By: /s/ Xxxxx X. Xxxxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
SUNTERRA GREENSPRINGS DEVELOPMENT, LLC
By: Sunterra Developer and Sales Holding
Company, its Manager
By: /s/ Xxxxx X. Xxxxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
SUNTERRA KGK PARTNERS FINANCE, LLC
By: Sunterra Finance Holding Company, its
Manager
By: /s/ Xxxxx X. Xxxxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
SUNTERRA KALLOF PLACE DEVELOPMENT, LLC
By: All Seasons Resorts, Inc. (AZ), its
Manager
By: /s/ Xxxxx X. Xxxxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
SUNTERRA LAKE TAHOE DEVELOPMENT, LLC
By: Sunterra Developer and Sales Holding
Company, its Manager
By: /s/ Xxxxx X. Xxxxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
SUNTERRA NORTH MARKETING, LLC
By: Resort Marketing International, Inc., its
Manager
By: /s/ Xxxxx X. Xxxxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
SUNTERRA POCO DIABLO DEVELOPMENT, LLC
By: All Seasons Resorts, Inc. (AZ), its
Manager
By: /s/ Xxxxx X. Xxxxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
SUNTERRA POIPU GP DEVELOPMENT, LLC
By: Sunterra Developer and Sales Holding
Company, its Manager
By: /s/ Xxxxx X. Xxxxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
SUNTERRA POLYNESIAN ISLES DEVELOPMENT, LLC
By: Sunterra Developer and Sales Holding
Company, its Manager
By: /s/ Xxxxx X. Xxxxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
SUNTERRA PORT ROYAL DEVELOPMENT, LLC
By: Sunterra Developer and Sales Holding
Company, its Manager
By: /s/ Xxxxx X. Xxxxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
SUNTERRA POWHATAN DEVELOPMENT, LLC
By: Sunterra Developer and Sales Holding
Company, its Manager
By: /s/ Xxxxx X. Xxxxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
SUNTERRA RESIDUAL ASSETS DEVELOPMENT, LLC
By: Sunterra Developer and Sales Holding
Company, its Manager
By: /s/ Xxxxx X. Xxxxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
SUNTERRA RIDGE ON SEDONA DEVELOPMENT, LLC
By: All Seasons Resorts, Inc. (AZ), its
Manager
By: /s/ Xxxxx X. Xxxxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
SUNTERRA RIDGE POINTE DEVELOPMENT, LLC
By: Sunterra Developer and Sales Holding
Company, its Manager
By: /s/ Xxxxx X. Xxxxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
SUNTERRA SAN XXXX BAY DEVELOPMENT, LLC
By: Sunterra Developer and Sales Holding
Company, its Manager
By: /s/ Xxxxx X. Xxxxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
SUNTERRA SANTA FE DEVELOPMENT, LLC
By: Sunterra Developer and Sales Holding
Company, its Manager
By: /s/ Xxxxx X. Xxxxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
SUNTERRA SEDONA SPRINGS DEVELOPMENT, LLC
By: All Seasons Resorts, Inc. (AZ), its
Manager
By: /s/ Xxxxx X. Xxxxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
SUNTERRA SEDONA SUMMIT DEVELOPMENT, LLC
By: All Seasons Resorts, Inc. (AZ), its
Manager
By: /s/ Xxxxx X. Xxxxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
SUNTERRA SOUTH MARKETING, LLC
By: Resort Marketing International, Inc., its
Manager
By: /s/ Xxxxx X. Xxxxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
SUNTERRA ST. CROIX DEVELOPMENT, LLC
By: Sunterra Developer and Sales Holding
Company, its Manager
By: /s/ Xxxxx X. Xxxxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
SUNTERRA STEAMBOAT DEVELOPMENT, LLC
By: Sunterra Developer and Sales Holding
Company, its Manager
By: /s/ Xxxxx X. Xxxxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
SUNTERRA TAHOE BEACH & SKI DEVELOPMENT, LLC
By: Sunterra Developer and Sales Holding
Company, its Manager
By: /s/ Xxxxx X. Xxxxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
SUNTERRA VILLA MIRAGE DEVELOPMENT, LLC
By: All Seasons Resorts, Inc. (AZ), its
Manager
By: /s/ Xxxxx X. Xxxxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
SUNTERRA VILLAS OF SEDONA DEVELOPMENT, LLC
By: All Seasons Resorts, Inc. (AZ), its
Manager
By: /s/ Xxxxx X. Xxxxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
SUNTERRA WEST MARKETING, LLC
By: Resort Marketing International, Inc., its
Manager
By: /s/ Xxxxx X. Xxxxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
SUNTERRA RESIDUAL ASSETS FINANCE, LLC
By: Sunterra Finance Holding Company, its
Manager
By: /s/ Xxxxx X. Xxxxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
SUNTERRA RESIDUAL ASSETS M&E, LLC
By: Sunterra Management and Exchange Holding
Company, its Manager
By: /s/ Xxxxx X. Xxxxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
SUNTERRA MORTGAGE HOLDINGS, LLC
By: Sunterra Finance Holding Company, its
Manager
By: /s/ Xxxxx X. Xxxxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
ACCEPTED AND AGREED:
XXXXXXX XXXXX MORTGAGE CAPITAL INC.,
as Agent
By: /s/ Xxxxxxx Xxxxx
--------------------------------
Name: Xxxxxxx Xxxxx
Title: Director
SECURITY AGREEMENT
SECURITY AGREEMENT, dated as of July 29, 2002, made by EACH OF THE
UNDERSIGNED, whether as an original signatory hereto or as an Additional Grantor
(as herein defined) (each, a "Grantor," and collectively, the "Grantors"), in
favor of Xxxxxxx Xxxxx Mortgage Capital Inc., as agent for the Lenders party to
the Loan Agreement referred to below (in such capacity, the "Agent").
W I T N E S S E T H:
WHEREAS, reference is made to that certain Loan Agreement, dated as of
the date hereof (as it may be amended, supplemented or otherwise modified, the
"Loan Agreement"; the terms defined therein and not otherwise defined herein
being used herein as therein defined), by and among Sunterra Corporation, a
Maryland corporation (the "Parent"), the subsidiaries of the Parent listed on
Schedule I thereto, the financial institutions from time to time party thereto
and the Agent, as administrative and collateral agent for the Lenders;
WHEREAS, it is a condition precedent to the Lenders making and
maintaining Loans under the Loan Agreement that each Grantor shall have executed
and delivered to the Agent a security agreement providing for the grant to the
Agent for the benefit of the Lenders of a security interest in all personal
property of such Grantor, except as otherwise noted herein; and
WHEREAS, each Grantor has determined that the execution, delivery and
performance of this Agreement directly benefits, and is in the best interest of
such Grantor;
NOW, THEREFORE, in consideration of the premises and the agreements
herein and in order to induce the Lenders to make and maintain the Loans
pursuant to the Loan Agreement, each Grantor hereby agrees with the Agent as
follows:
SECTION 1. Definitions. Reference is hereby made to the Loan Agreement
for a statement of the terms thereof. All terms used in this Agreement which are
defined in the Loan Agreement or in Article 9 of the Uniform Commercial Code
(the "Code") currently in effect in the State of New York and which are not
otherwise defined herein shall have the same meanings herein as set forth
therein.
SECTION 2. Grant of Security Interest. As collateral security for all
of the Obligations (as defined in Section 3 hereof), each Grantor hereby pledges
and assigns to the Agent, and grants to the Agent for the benefit of the Lenders
a continuing security interest in, all personal property and fixtures of such
Grantor, wherever located and whether now or hereafter existing and whether now
owned or hereafter acquired, of every kind and description, tangible or
intangible, consisting of all of such Grantor's right, title and interest in and
to the following (the "Collateral"):
(a) all equipment of any kind including, without limitation, all
furniture, fixtures and machinery, wherever located and whether now or hereafter
existing and whether now owned or hereafter acquired, together with all
substitutes, replacements, accessions and additions thereto, and all tools,
parts, accessories and attachments used in connection therewith (hereinafter
collectively referred to as the "Equipment");
(b) all inventory of any kind wherever located and whether now or
hereafter existing and whether now owned or hereafter acquired (including,
without limitation, all types of inventory, merchandise, goods, property and
other assets that are held by such Grantor for sale, lease or other disposition
or to be furnished under a contract for services, whether such inventory,
merchandise, goods, property and other assets are raw, in process or finished
goods, and materials used or consumed in the business of such Grantor, and goods
returned to or repossessed by such Grantor and goods in which such Grantor has
an interest in mass or in joint or other interest or right of any kind,
including consigned goods and goods being processed), and all accessions thereto
and products thereof and all packing and shipping materials (any and all such
inventory, accessions and products being hereinafter referred to as the
"Inventory");
(c) (i) all present and future accounts, contract rights, chattel
paper, documents, instruments, general intangibles and other obligations of any
kind arising out of or in connection with the sale, lease or other disposition
of goods or the rendering of services or otherwise; (ii) all of such Grantor's
right, title and interest, and all of such Grantor's rights, remedies, security
and Liens, in, to and in respect of any credit insurance, accounts (including,
without limitation, rights of stoppage in transit, replevin, repossession,
reclamation and other rights and remedies of an unpaid vendor, lienor or secured
party), guaranties or other contracts of suretyship with respect to accounts,
and deposits or other security for the obligation of any Account Debtor; (iii)
all rights relating to the sale or other transfer of property to, or the
construction, renovation, processing or other improvement of property by or for
such Grantor; (iv) all rights now or hereafter existing in and to all letters of
credit, security agreements, leases and other contracts now or hereafter
existing and securing or otherwise relating to such accounts, contract rights,
chattel paper, instruments, documents, general intangibles or other rights or
obligations (including, without limitation, the contracts described in the
Collateral Certificate); and (v) all of such Grantor's right, title and interest
in, to and in respect of all goods relating to, or which by sale have resulted
in, accounts, including, without limitation, all goods described in invoices or
other documents or instruments with respect to, or otherwise representing or
evidencing, any accounts, and all returned, reclaimed or repossessed goods (any
and all such accounts, contract rights, chattel paper, instruments, documents,
general intangibles and obligations being hereinafter referred to collectively
as the "Receivables", and any and all such credit insurance, guaranties, letters
of credit, security agreements, leases and other contracts being hereinafter
referred to collectively as the "Related Contracts");
(d) (i) all trademarks, service marks, trade names, business names,
d/b/a's, Internet domain names, trade styles, designs, logos and other source or
business identifiers and all general intangibles of like nature, now or
hereafter owned, adopted, acquired or used by such Grantor (including, without
limitation, all trademarks and service marks described in the Collateral
Certificate and all trade names, business names, trade styles, designs, logos
and other source or business identifiers described in the Collateral
Certificate), all applications (except for U.S. "intent to use" applications for
trademark or service xxxx registrations filed pursuant to
-2-
Section 1(b) of the Xxxxxx Act, unless and until an Amendment to Allege Use or a
Statement of Use under Sections 1(c) and 1(d) of said Act has been filed),
registrations and recordings thereof (including, without limitation,
applications, registrations and recordings in the United States Patent and
Trademark Office or in any similar office or agency of the United States, any
state thereof or any other country or any political subdivision thereof), and
all reissues, extensions or renewals thereof, together with all goodwill of the
business symbolized by such marks and all customer lists, formulae and other
records of such Grantor relating to the distribution of products and services in
connection with which any of such marks are used, and all income, royalties,
damages and payments now or hereafter due and/or payable under and with respect
thereto, including, without limitation, payments under all licenses entered into
in connection therewith and damages and payments for past and future
infringements or dilutions thereof and the right to xxx for past, present and
future infringements and dilutions thereof (hereinafter referred to collectively
as the "Trademarks"), and (ii) all licenses, contracts or other agreements,
whether written or oral, naming such Grantor as licensor or licensee and
providing for the grant of any right to use any Trademark, including, without
limitation, all trademark licenses described in the Collateral Certificate,
together with any goodwill connected with and symbolized by any such trademark
licenses or agreements and the right to prepare for sale and sell any and all
Inventory now or hereafter owned by such Grantor and now or hereafter covered by
such licenses (hereinafter referred to collectively as the "Trademark
Licenses");
(e) (i) all letters patent, design patents and utility patents, and
all inventions, trade secrets, proprietary information and technology, know-how,
formulae and other general intangibles of like nature, now existing or hereafter
acquired (including, without limitation, all letters patent, design patents and
utility patents and applications therefor described in the Collateral
Certificate), all applications, issuances and recordings thereof (including,
without limitation, applications, issuances and recordings in the United States
Patent and Trademark Office or in any similar office or agency of the United
States or any other country or any political subdivision thereof), and all
reissues, divisions, continuations, continuations-in-part and extensions or
renewals thereof (hereinafter referred to collectively as the "Patents"), and
(ii) all licenses, contracts or other agreements, whether written or oral,
naming such Grantor as licensee or licensor and providing for the grant of any
right to manufacture, use or sell any invention covered by any patent
(hereinafter referred to collectively as the "Patent Licenses") (including,
without limitation, all Patent Licenses set forth in the Collateral
Certificate);
(f) (i) all copyrights, including, without limitation, all original
works of authorship fixed in any tangible medium of expression, acquired by such
Grantor (including, without limitation, all copyrights described in the
Collateral Certificate), all applications, registrations and recordings thereof
(including, without limitation, applications, registrations and recordings in
the United States Copyright Office or in any similar office or agency of the
United States or any other country or any political subdivision thereof), and
all reversions, restorations, continuations, continuations in part and
extensions or renewals thereof (hereinafter referred to collectively as the
"Copyrights"), and (ii) all licenses, contracts or other agreements, whether
written or oral, naming such Grantor as licensee or licensor and providing for
the grant of any right to use or sell any works covered by any copyright
(hereinafter referred to collectively as the "Copyright Licenses" and together
with the Trademark Licenses and the Patent Licenses, the "Licenses") (including,
without limitation, all Copyright Licenses set forth in the Collateral
Certificate);
-3-
(g) all investment property, securities, securities accounts,
financial assets, security entitlements, commodity contracts and commodity
accounts of such Grantor (collectively, "Investment Related Property");
(h) (i) all moneys, deposit accounts and other property and the
proceeds thereof, now or hereafter held or received by, or in transit to, the
Agent or any Lender from or for such Grantor, whether for safekeeping, pledge,
custody, transmission, collection or otherwise, and all of such Grantor's sums
and credits with, and all of such Grantor's claims against the Agent or any
Lender at any time existing; (ii) all rights, interests, choses in action,
causes of actions, claims and all other intangible property of every kind and
nature, in each instance whether now owned or hereafter acquired by such
Grantor, including, without limitation, all corporate and other business
records, all loans, royalties, and all other forms of obligations receivable
whatsoever (other than Receivables); (iii) all computer programs, software,
printouts and other computer materials, customer lists, credit files,
correspondence, advertising materials and other source or business identifiers;
(iv) all customer and supplier contracts, sale orders, rights under license and
franchise agreements, and other contracts and contract rights; (v) all interests
in partnerships, limited liability companies, business trusts and joint
ventures, including all moneys due from time to time in respect thereof; (vi)
all federal, state and local tax refunds and federal, state and local tax refund
claims and all judgments in favor of such Grantor and all of such Grantor's
rights with respect thereto; (vii) all right, title and interest under leases,
subleases, licenses and concessions and other agreements relating to personal
property, including all moneys due from time to time in respect thereof; (viii)
all payments due or made to such Grantor in connection with any requisition,
confiscation, condemnation, seizure or forfeiture of any property by any Person
or Governmental Authority; (ix) all lock-box and all deposit accounts (general
or special) or other accounts with any bank or other financial institution,
including, without limitation, all depository or other accounts maintained by
such Grantor at the Agent or any Lender and all funds on deposit therein; (x)
all credits with and other claims against third parties (including carriers and
shippers) (other than Receivables); (xi) all rights to indemnification; (xii)
all reversionary interests in pension and profit sharing plans and reversionary,
beneficial and residual interests in trusts; (xiii) all proceeds of insurance of
which such Grantor is the beneficiary; (xiv) all letters of credit,
letter-of-credit rights, guaranties, liens, security interests and other
security held by or granted to such Grantor; (xv) all instruments, files,
records, ledger sheets and documents covering or relating to any of the
Collateral; and (xvi) all general intangibles, whether or not similar to the
foregoing, in each instance, however and wherever arising;
(i) all commercial tort claims, as defined in the Code, that such
Grantor holds that have not been assigned to the Litigation Trust pursuant to
the terms of the Plan of Reorganization, as modified by the Confirmation Order,
including, but not limited to, avoidance actions and claims of such Grantor
pursuant to Sections 544, 545, 547, 548, 549, 550, 551 and/or 553 of the
Bankruptcy Code that were not previously assigned to the Creditor's Committee
(collectively, the "Commercial Tort Claims");
(j) the books and records of such Grantor relating to any of the
foregoing Collateral, including, without limitation, all customer contracts,
sale orders, minute books, ledgers, records, computer programs, software,
printouts and other computer materials, customer
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lists, credit files, correspondence and advertising materials, in each case
indicating, summarizing or evidencing any of the Collateral;
(k) all cash and non-cash proceeds of any and all of the foregoing
Collateral (including, without limitation, (i) damages and payments for past or
future infringements of the Trademarks, the Patents or the Copyrights and (ii)
the right to xxx for past, present and future infringements of the Trademarks,
the Patents or the Copyrights) and, to the extent not otherwise included, all
payments under insurance (whether or not the Agent is the loss payee thereof)
and any indemnity, warranty or guaranty payable by reason of loss or damage to
or otherwise with respect to any of the foregoing Collateral;
in each case howsoever such Grantor's interest therein may arise or appear
(whether by ownership, security interest, claim or otherwise).
Notwithstanding any provision to the contrary in this Agreement or in
any of the other Loan Documents, the Collateral shall not include any of the
Mortgage Receivables referred to in paragraph (r) of the definition of the term
"Permitted Liens" in Section 1.1 of the Loan Agreement. For purposes of this
provision, no notice requirements shall be applicable.
SECTION 3. Security for Obligations. The security interest created
hereby in the Collateral constitutes continuing collateral security for all of
the following obligations, whether now existing or hereafter incurred (the
"Obligations"):
(a) the prompt payment by each Grantor, as and when due and payable
(by scheduled maturity, required prepayment, acceleration, demand or otherwise),
of all amounts from time to time owing by it in respect of the Loan Agreement,
the Notes and the other Loan Documents, including, without limitation, principal
of and interest on the Loans (including, without limitation, all interest that
accrues after the commencement of any case, proceeding or other action relating
to the bankruptcy, insolvency or reorganization of any Borrower, whether or not
a claim for post-filing interest is allowed in such proceeding), and all
interest thereon, all fees, commissions, expense reimbursements,
indemnifications and all other amounts due or to become due under any Loan
Document; and
(b) the due performance and observance by each Grantor of all of its
other obligations from time to time existing in respect of the Loan Agreement
and all other Loan Documents.
SECTION 4. Representations and Warranties. Each Grantor individually
represents and warrants as follows:
(a) There is no pending or, to the knowledge of such Grantor,
threatened action, suit, proceeding or claim before any court or other
Governmental Authority or any arbitrator, or any order, judgment or award by any
court or other Governmental Authority or arbitrator, that may adversely affect
the grant by such Grantor, or the perfection, of the security interest purported
to be created hereby in such Grantor's Collateral, or the exercise by the Agent
of any of its rights or remedies hereunder.
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(b) All federal, state and material local tax returns and other
reports required by applicable law to be filed by such Grantor have been filed,
or extensions have been obtained, and all material taxes, assessments and other
governmental charges imposed upon such Grantor or any property of such Grantor
and which have become due and payable on or prior to the date hereof have been
paid, except as set forth on Schedule 5.1(k) to the Loan Agreement and except to
the extent contested in good faith by proper proceedings which stay the
imposition of any penalty, fine or Lien resulting from the non-payment thereof
and with respect to which adequate reserves have been set aside for the payment
thereof. All Equipment and Inventory relating to such Grantor now existing is,
and all Equipment and Inventory relating to such Grantor hereafter existing will
be located at the addresses specified therefor in the Collateral Certificate or
at such other locations permitted by the terms of Section 5(b) of this
Agreement. Such Grantor's chief place of business and chief executive office,
the place where the Grantor keeps its records concerning Receivables and all
originals of all chattel paper which constitute Receivables are located at the
address(es) specified therefor in the Collateral Certificate. Except for the
Mortgage Receivables or as set forth in the schedule to the Pledge Agreement,
none of such Grantor's Receivables is evidenced by a promissory note or other
instrument. Set forth in the Collateral Certificate is a complete and correct
list of each trade, assumed and/or previous name used by such Grantor.
(c) All Equipment and Inventory relating to such Grantor now existing
is, and all Equipment and Inventory relating to such Grantor hereafter existing
will be located at the addresses specified therefor in the Collateral
Certificate or at such other locations permitted by the terms of Section 5(b)
hereof. Such Grantor's chief place of business and chief executive office, the
place where the Grantor keeps its records concerning Receivables and all
originals of all chattel paper which constitute Receivables are located at the
address(es) specified therefor in the Collateral Certificate. None of such
Grantor's Receivables is evidenced by a promissory note or other instrument. Set
forth in the Collateral Certificate is a complete and correct list of each
trade, assumed and/or previous name used by such Grantor.
(d) The Collateral Certificate sets forth all of the securities
accounts and commodities accounts in which such Grantor has an interest. Except
as set forth in the Collateral Certificate, (i) such Grantor is the sole
entitlement holder of each such securities account and commodities account and
(ii) such Grantor has not consented to, and is not otherwise aware of, any
Person having "control" (as defined in Sections 8-106 and 9-106 of the Code)
over, or any other interest in, any such securities account or commodity account
or any securities or other property credited thereto.
(e) The Collateral Certificate sets forth all of the deposit accounts
in which such Grantor has an interest and except as set forth in the Collateral
Certificate (i) such Grantor is the sole account holder of each such deposit
account and (ii) such Grantor has not consented to, and is not otherwise aware
of, any Person (other than the Agent pursuant hereto) having either sole
dominion and control or "control" (within the meaning of Section 9-104 of the
Code) over, or any other interest in, any such deposit account or any money or
other property deposited therein.
(f) Each Grantor shall take all actions necessary or desirable,
including those specified in Section 5(k) hereof to establish the collateral
agent's "control" (within the meaning of Section 9-104 of the Code) over all of
such Grantor's deposit accounts requiring Deposit
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Account Control Agreements pursuant to the Loan Agreement (each such account a
"Control Deposit Account").
(g) Such Grantor's exact legal name is as specified therefor in the
Collateral Certificate.
(h) Such Grantor is, and at all times has been, a corporation or other
entity, organized exclusively under the laws of the state is as specified
therefor in the Collateral Certificate.
(i) Such Grantor's organizational identification number is as
specified therefor in the Collateral Certificate.
(j) Except as set forth in the Collateral Certificate and except for
transactions accomplished pursuant to the Mortgage Receivable Sale Transaction,
during the previous two (2) years, such Grantor has not (i) merged with or into,
or (ii) acquired all or substantially all of the assets of, any other entity.
(k) Such Grantor's Related Contracts described on the Collateral
Certificate, represent all of such Grantor's related Contracts and Licenses
existing on the date of this Agreement. Each of such Grantor's Related Contracts
and Licenses sets forth the entire agreement and understanding of the parties
thereto relating to the subject matter thereof, and there are no other
agreements, arrangements or understandings, written or oral, relating to the
matters covered thereby or the rights of such Grantor in respect thereof. Each
of such Grantor's Related Contracts now existing is, and each other of such
Grantor's Related Contracts will be, the legal, valid and binding obligation of
such Grantor, and to the best knowledge of such Grantor, the other parties
thereto, enforceable against such Grantor, and to the best knowledge of such
Grantor, the other parties thereto, in accordance with its terms. No default
thereunder by such Grantor and, to the best knowledge of such Grantor, any other
party thereto, has occurred, nor does any defense, offset, deduction or
counterclaim exist thereunder in favor of such Grantor, or to the best knowledge
of such Grantor, the other party thereto.
(l) Such Grantor owns, or otherwise possesses adequate rights to use,
all of such Grantor's Trademarks, Patents and Copyrights necessary to conduct
its business in substantially the same manner as conducted as of the date
hereof. The Collateral Certificate sets forth a true and complete list of all
Trademarks owned by such Grantor and all Trademark Licenses to which such
Grantor is a party, in each case as of the date hereof. The Collateral
Certificate sets forth a true and complete list of all Patents and Patent
Licenses owned or used by such Grantor as of the date hereof. The Collateral
Certificate sets forth a true and complete list of all registered Copyrights
owned by such Grantor and all Copyright Licenses (other than licenses for
commercially available software entered into by such Grantor in the ordinary
course of its business) to which such Grantor is a party, in each case as of the
date hereof. Except as set forth in the Collateral Certificate, all of such
Grantor's Patents, Trademarks and Copyrights are subsisting and in full force
and effect, have not been abandoned in whole or in part, have not been adjudged
invalid or unenforceable, and to the best knowledge of such Grantor, are valid
and enforceable. Except as set forth in the Collateral Certificate, (i) none of
such Grantor's Patents, Trademarks or Copyrights is the subject of any licensing
or franchising agreement and (ii) such
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Grantor has no knowledge of any conflict with the rights of others to any of
such Grantor's Trademarks, Patents or Copyrights and, to the best knowledge of
such Grantor, the Grantor is not now infringing or in conflict with any such
rights of others in any material respect, and to the best knowledge of such
Grantor, no other Person is now infringing or in conflict in any material
respect with any such properties, assets and rights owned or used by such
Grantor.
(m) The Collateral Certificate sets forth all Commercial Tort Claims
of such Grantor.
(n) Such Grantor is and will be at all times the sole and exclusive
owner of such Grantor's Collateral free and clear of any Lien, except for (i)
the security interest created by this Agreement, and (ii) the security interests
and other encumbrances permitted by the Loan Agreement. No effective financing
statement or other instrument similar in effect covering all or any part of such
Grantor's Collateral is on file in any recording or filing office, except (i)
such as may have been filed in favor of the Agent relating to this Agreement,
(ii) such as may have been filed to perfect or protect any security interest or
encumbrance permitted by the Loan Agreement, and (iii) filings in respect of
discharged indebtedness for which such Grantor is in the process of terminating.
(o) The exercise by the Agent of any of its rights and remedies
hereunder will not contravene law or any contractual restriction binding on or
otherwise affecting such Grantor or any of its properties and will not result in
or require the creation of any Lien, security interest or other charge or
encumbrance upon or with respect to any of its properties.
(p) No authorization or approval or other action by, and no notice to
or filing with, any Governmental Authority or any other Person, is required for
(i) the grant by such Grantor, or the perfection, of the security interest
purported to be created hereby in such Grantor's Collateral or (ii) the exercise
by the Agent of any of its rights and remedies hereunder, except (A) for the
filing under the Code as in effect in the applicable jurisdiction of the
financing statements described in the Collateral Certificate, (B) with respect
to the perfection of the security interest created hereby in such Grantor's
United States Trademarks and United States Patents, for the recording of the
Collateral Assignment for Security (Trademarks), substantially in the form of
Exhibit A hereto and the Collateral Assignment for Security (Patents),
substantially in the form of Exhibit B hereto, in the United States Patent and
Trademark Office, (C) with respect to the perfection of the security interest
created hereby in such Grantor's United States Copyrights, the recordation of
the Collateral Assignment for Security (Copyrights), substantially in the form
of Exhibit C hereto, in the United States Copyright Office, (D) with respect to
the perfection of the security interest created hereby in such Grantor's foreign
Trademarks, Patents and Copyrights, for recordings and filings in jurisdictions
located outside of the United States and covering rights in such jurisdictions
relating to such Grantor's Patents, Trademarks, Copyrights, Patent Licenses,
Trademark Licenses and Copyright Licenses, or (E) with respect to the perfection
of the security interest created hereby in each of such Grantor's Control
Deposit Accounts, the execution and delivery of the agreements referred to in
Section 5(k) in order to give the Agent "control" with respect thereto.
(q) This Agreement creates valid security interests in favor of the
Agent for the benefit of the Agent and the Lenders in such Grantor's Collateral,
as security for the Obligations.
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The Agent's having possession of all instruments and cash constituting such
Grantor's Collateral from time to time, the execution and delivery of the
agreements referred to in Section 5(k) in order to give the Agent "control" with
respect to each of such Grantor's Control Deposit Accounts, the recording of the
Collateral Assignment for Security (Trademarks), the Collateral Assignment for
Security (Patents) and the Collateral Assignment for Security (Copyrights), as
applicable, executed pursuant hereto in the United States Patent and Trademark
Office and the United States Copyright Office, as applicable, and the filing of
the financing statements described in the Collateral Certificate and, with
respect to such Grantor's Patents, Trademarks and Copyrights hereafter existing
and not covered by a Collateral Assignment for Security (Trademarks), a
Collateral Assignment for Security (Patents) or a Collateral Assignment for
Security (Copyrights), as applicable, the recording in the United States Patent
and Trademark Office or the United States Copyright Office, as applicable, of
appropriate instruments of assignment with respect to such after-acquired
Patents, Trademarks and Copyrights and, in the case of such after acquired
Copyrights, the registration of such Copyrights in the United States Copyright
Office, shall result in the perfection of such security interests. Such security
interests are, or in the case of Collateral in which such Grantor obtains rights
after the date hereof, will be, perfected, first priority security interests,
subject only to the security interests and other encumbrances permitted pursuant
to the Loan Agreement. Such filings and all other action necessary or desirable
to perfect and protect such security interests have been duly taken, except for
the Agent's having possession of Collateral consisting of instruments or cash
after the date hereof, the recording of a Collateral Assignment for Security
(Trademarks), a Collateral Assignment for Security (Patents) or a Collateral
Assignment for Security (Copyrights), as applicable, with respect to such
Grantor's hereafter existing Trademarks, Patents or Copyrights, the taking of
appropriate action with respect to such Grantor's foreign Trademarks and
execution and delivery of the Deposit Account Control Agreements relating to
such Grantor's Control Deposit Accounts.
SECTION 5. Covenants as to the Collateral. So long as any of the
Obligations shall remain outstanding or the Commitments shall not have been
terminated, unless the Agent shall otherwise consent in writing:
(a) Further Assurances. Each Grantor will at its expense, at any time
and from time to time, promptly execute and deliver all further instruments and
documents and take all further action that may be necessary or desirable or that
the Agent may reasonably request in order (i) to perfect and protect the
security interest purported to be created hereby; (ii) to enable the Agent to
exercise and enforce its rights and remedies hereunder in respect of such
Grantor's Collateral; or (iii) otherwise to effect the purposes of this
Agreement, including, without limitation: (A) marking conspicuously each chattel
paper included in such Grantor's Receivables and each of such Grantor's Licenses
and Related Contracts and, at the request of the Agent, each of its records
pertaining to such Grantor's Collateral with a legend, in form and substance
satisfactory to the Agent, indicating that such chattel paper, License, Related
Contract or Collateral is subject to the security interest created hereby, (B)
if any of such Grantor's Receivables shall be evidenced by a promissory note or
other instrument or chattel paper, delivering and pledging to the Agent
hereunder any such note, instrument or chattel paper duly endorsed and
accompanied by executed instruments of transfer or assignment, all in form and
substance satisfactory to the Agent, (C) filing such financing or continuation
statements, or amendments thereto, as may be necessary or desirable or that the
Agent may request in order to
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perfect and preserve the security interest purported to be created hereby, and
(D) furnishing to the Agent from time to time statements and schedules further
identifying and describing such Grantor's Collateral and such other reports in
connection with such Grantor's Collateral as the Agent may reasonably request,
all in reasonable detail.
(b) Location of Equipment and Inventory. Each Grantor will keep its
Equipment and Inventory (other than used Equipment and Inventory sold in the
ordinary course of business in accordance with Section 5(h) hereof) at the
locations specified therefor in Section 4(c) hereof, or, upon not less than
thirty (30) days' prior written notice to the Agent accompanied by an updated
Collateral Certificate indicating each new location of the Equipment and
Inventory, at such other locations in the continental United States as such
Grantor may elect, provided that (i) all action has been taken to grant to the
Agent a perfected, first priority security interest in such Equipment and
Inventory (subject to Permitted Liens (to the extent that such Permitted Liens
are accorded priority as a matter of law or pursuant to agreement)), and (ii)
the Agent's rights in such Equipment and Inventory, including, without
limitation, the existence, perfection and priority of the security interest
created hereby in such Equipment and Inventory, are not adversely affected
thereby; provided, further, no such notice or other such action shall be
required to be taken by any Grantor with respect to the move of any Inventory or
Equipment from such Grantor's offices in Orlando, Florida to such Grantor's
offices in Las Vegas, Nevada.
(c) Name, Jurisdiction of Organization; No Merger, etc. Unless such
Grantor shall have given the Agent at least thirty (30) days' prior written
notice, and except as otherwise permitted by the Loan Agreement, such Grantor
shall not: (i) change its name or corporate structure; (ii) reorganize or
reincorporate under the laws of any other jurisdiction; (iii) (A) merge with or
into, (B) acquire all or substantially all of the assets of, or (C) transfer all
or substantially all of its assets to, any other entity.
(d) Condition of Equipment. Each Grantor will maintain or cause to be
maintained in good repair, working order and condition, excepting ordinary wear
and tear and damage due to casualty, all of such Grantor's Equipment and make or
cause to be made all of the appropriate repairs, renewals and replacements
thereof which are necessary or desirable and consistent with past practice of
such Grantor, as quickly as practicable after the occurrence of any loss or
damage thereto. Each Grantor shall promptly furnish to the Agent a statement
describing in reasonable detail any loss or damage in excess of $100,000 to any
of such Grantor's Equipment or Inventory due to casualty.
(e) Taxes, Etc. Except for such noncompliance which is not reasonably
likely to have a Material Adverse Effect, each Grantor will pay promptly when
due all property and other taxes, assessments and governmental charges or levies
imposed upon, and all claims (including claims for labor, materials and
supplies) against such Grantor's Equipment and Inventory, except in any such
case to the extent the validity thereof is being contested in good faith by
proper proceedings which stay the imposition of any penalty, fine or Lien
resulting from the non-payment thereof and with respect to which adequate
reserves in accordance with GAAP have been set aside for the payment thereof.
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(f) Insurance.
(i) Each Grantor will, at its own expense, maintain insurance
(including, without limitation, comprehensive general liability and
property insurance) with respect to such Grantor's Equipment and Inventory
in such amounts, against such risks, in such form and with such insurers as
shall be reasonably satisfactory to the Agent from time to time. Each
policy for liability insurance shall provide for all losses to be paid on
behalf of the Agent and such Grantor as their respective interests may
appear. Each such policy shall in addition (A) name such Grantor and the
Agent as insured parties thereunder (without any representation or warranty
by or obligation upon the Agent) as their interests may appear, (B) contain
the agreement by the insurer that any loss thereunder shall be payable to
the Agent on its own account, notwithstanding any action, inaction or
breach of representation or warranty by such Grantor, (C) provide that
there shall be no recourse against the Agent for payment of premiums or
other amounts with respect thereto, and (D) provide that at least 30 days'
prior written notice of cancellation or of lapse shall be given to the
Agent by the insurer. Each Grantor will, if so requested by the Agent,
deliver to the Agent original or duplicate policies of such insurance and,
as often as the Agent may reasonably request, a report of a reputable
insurance broker with respect to such insurance. Each Grantor will also, at
the request of the Agent, execute and deliver instruments of assignment of
such insurance policies and cause the respective insurers to acknowledge
notice of such assignment.
(ii) Payment under any liability insurance maintained by each Grantor
pursuant to this Section 5(f) may be paid directly to the Person who shall
have incurred liability covered by such insurance. In the case of any loss
involving damage a Grantor's Equipment or Inventory as to which clause
(iii) of this Section 5(f) is not applicable, such Grantor will make or
cause to be made the necessary repairs to or replacements of such Equipment
and Inventory, and any proceeds of insurance maintained by such Grantor
pursuant to this Section 5(f) shall be paid to such Grantor as
reimbursement for the costs of such repairs or replacements.
(iii) Upon the occurrence and during the continuance of an Event of
Default under the Loan Agreement or the actual or constructive total loss
of any Equipment that will not be promptly replaced with the proceeds of
such insurance or Inventory, all insurance payments in respect of such
Equipment and Inventory shall, to the extent required by the Loan
Agreement, be paid to the Agent and applied as specified in Section 7(b)
hereof.
(g) Provisions Concerning the Receivables, the Related Contracts and
the Licenses.
(i) Each Grantor will keep adequate records concerning such Grantor's
Receivables and all chattel paper which constitute Receivables and permit
representatives of the Agent to inspect and make abstracts from such
records and chattel paper pursuant to the terms of the Loan Agreement.
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(ii) Each Grantor will duly perform and observe all of its obligations
under each of its Related Contracts and, except as otherwise provided in
this subsection (g), continue to collect, at its own expense, all amounts
due or to become due under its Receivables. In connection with such
collections, each Grantor may (and, at the Agent's direction, will) take
such action as such Grantor or the Agent may deem necessary or advisable to
enforce collection or performance of such Grantor's Receivables; provided,
however, that the Agent shall have the right at any time, upon the
occurrence and during the continuance of an Event of Default, to notify the
Account Debtors or obligors under any of such Grantor's Receivables of the
assignment of such Receivables to the Agent and to direct such Account
Debtors or obligors to make payment of all amounts due or to become due to
such Grantor thereunder directly to the Agent or its designated agent and,
upon such notification and at the expense of such Grantor and to the extent
permitted by law, to enforce collection of any such Receivables and to
adjust, settle or compromise the amount or payment thereof, in the same
manner and to the same extent as such Grantor might have done. After
receipt by each Grantor of a notice from the Agent that the Agent has
notified or intends to notify the Account Debtors or obligors under any
Receivables as referred to in the proviso to the immediately preceding
sentence, (A) all amounts and proceeds (including instruments) received by
such Grantor in respect of such Grantor's Receivables shall be received in
trust for the benefit of the Agent hereunder, shall be segregated from
other funds of such Grantor and shall be forthwith paid over to the Agent
in the same form as so received (with any necessary indorsement) to be held
as cash collateral and either (1) credited to an account of such Grantor so
long as no Event of Default shall have occurred and be continuing or (2) if
any Event of Default shall have occurred and be continuing, applied as
specified in Section 7(b) hereof, and (B) such Grantor will not adjust,
settle or compromise the amount or payment of any of such Grantor's
Receivables or release, in whole or in part, any Account Debtor or obligor
thereof or allow any credit or discount thereon. In addition, upon the
occurrence and during the continuance of an Event of Default, the Agent
shall have the right to notify the United States Postal Service authorities
to change the address for delivery of mail addressed to such Grantor to
such address as the Agent may designate and to do all other acts and things
necessary to carry out this Agreement.
(iii) Upon the occurrence and during the continuance of any material
breach or default under any of such Grantor's Related Contracts referred to
in the Collateral Certificate or otherwise specified in writing by the
Agent from time to time or any of such Grantor's Licenses referred to in
the Collateral Certificate by any party thereto other than a Grantor, such
Grantor will (A) promptly after obtaining knowledge thereof, give the Agent
written notice of the nature and duration thereof, specifying what action,
if any, it has taken and proposes to take with respect thereto, and (B)
upon written instructions from the Agent and at such Grantor's expense,
take such action as the Agent may deem necessary or advisable in respect
thereof.
(iv) Each Grantor will, at its expense, promptly deliver to the Agent
a copy of each notice or other communication received by it by which any
other party to any of such Grantor's Related Contracts referred to in the
Collateral Certificate or otherwise specified by the Agent from time to
time or any of such Grantor's Licenses referred to in
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the Collateral Certificate purports to exercise any of its rights or affect
any of its obligations thereunder, together with a copy of any reply by
such Grantor thereto.
(v) Each Grantor will exercise promptly and diligently each and every
right which it may have under each of its Licenses (other than any right of
termination) to the extent warranted in the conduct of its business and
will duly perform and observe in all respects all of its obligations under
each such License and will take all action necessary to maintain all
Licenses necessary for the operation of its business in full force and
effect. Each Grantor will not, without the prior written consent of the
Agent, cancel, terminate, amend or otherwise modify in any material
respect, or waive any material provision of, any Related Contract referred
to the Collateral Certificate or any License referred to in the Collateral
Certificate.
(h) Transfers and Other Liens.
(i) No Grantor will sell, assign (by operation of law or otherwise),
lease, exchange or otherwise transfer or dispose of any of its Collateral
except to the extent permitted in the Loan Agreement.
(ii) No Grantor will create or suffer to exist any Lien, security
interest or other charge or encumbrance upon or with respect to its
Collateral, except for (A) the Liens and security interest created by this
Agreement and the other Loan Documents and (B) the Liens, security
interests and other encumbrances permitted by the Loan Agreement.
(i) Trademarks, Patents and Copyrights.
(i) If applicable, each Grantor has duly executed and delivered the
Collateral Assignment for Security (Trademarks) in the form attached hereto
as Exhibit A, the Collateral Assignment for Security (Patents) in the form
attached hereto as Exhibit B or the Collateral Assignment for Security
(Copyrights) in the form attached hereto as Exhibit C. Each Grantor (either
itself or through licensees) will, and will cause each licensee thereof to,
take all action necessary to maintain all of such Grantor's Trademarks,
Patents and Copyrights in full force and effect, including, without
limitation, using the proper statutory notices and markings and using the
Trademarks on each applicable trademark class of goods in order to so
maintain the Trademarks in full force free from any claim of abandonment
for non-use, and such Grantor will not (and will not permit any licensee
thereof to) do any act or knowingly omit to do any act whereby any of its
Trademarks, Patents or Copyrights may become invalidated; provided,
however, that so long as no Event of Default has occurred and is
continuing, such Grantor shall have no obligation to use or to maintain any
of its Trademark, Patent or Copyright (A) that relates solely to any
product or work that has been, or is in the process of being, discontinued,
abandoned or terminated, (B) that is being replaced with a trademark,
patent or copyright substantially similar to the Trademark, Patent or
Copyright, as the case may be, that may be abandoned or otherwise become
invalid, so long as such replacement Trademark, Patent or Copyright, as the
case may be, is subject to the security interest purported to be created by
this Agreement, (C) that is substantially the same as another Trademark,
Patent or Copyright that is in full force, so long as such other
-13-
Trademark, Patent or Copyright, as the case may be, is subject to the Lien
and security interest created by this Agreement, or (D) that is not
necessary for the operation of such Grantor's business and is discontinued
or disposed of in the ordinary course of business. Each Grantor will cause
to be taken all necessary steps in any proceeding before the United States
Patent and Trademark Office and the United States Copyright Office to
maintain each registration of its Trademarks, the Patents and the
Copyrights (other than those Trademarks, Patents and Copyrights described
in the proviso to the immediately preceding sentence), including, without
limitation, filing of renewals, affidavits of use, affidavits of
incontestability and opposition, interference and cancellation proceedings
and payment of taxes. If any of such Grantor's Trademarks, Patents or
Copyrights is infringed, misappropriated or diluted in any material respect
by a third party, such Grantor shall (x) upon learning of such
infringement, misappropriation or dilution, promptly notify the Agent and
(y) to the extent such Grantor shall deem appropriate under the
circumstances, promptly xxx for infringement, misappropriation or dilution,
seek injunctive relief where appropriate and recover any and all damages
for such infringement, misappropriation or dilution, or take such other
actions as such Grantor shall deem appropriate under the circumstances to
protect such Trademark, Patent or Copyright. Each Grantor shall furnish to
the Agent from time to time (but, unless an Event of Default has occurred
and is continuing, no more frequently than quarterly) statements and
schedules further identifying and describing its Patents, the Trademarks
and the Copyrights and such other reports in connection with such Patents,
the Trademarks and the Copyrights as the Agent may reasonably request, all
in reasonable detail and promptly upon request of the Agent, following
receipt by the Agent of any such statements, schedules or reports, such
Grantor shall modify this Agreement by executing and delivering an updated
Collateral Certificate to include any Patent, Trademark or Copyright which
becomes part of such Grantor's Collateral under this Agreement.
Notwithstanding anything herein to the contrary, upon the occurrence and
during the continuance of an Event of Default each Grantor may not abandon
or otherwise permit any of its Trademarks, Patents or Copyrights to become
invalid without the prior written consent of the Agent, and if any of its
Trademarks, Patents or Copyrights is infringed, misappropriated or diluted
in any material respect by a third party, such Grantor will take such
action as the Agent shall deem appropriate under the circumstances to
protect such Trademark, Patent or Copyright.
(ii) If either any Grantor or any agent, employee, licensee or
designee of such Grantor files an application for the registration of any
Trademark or Copyright or for the issuance of any Patent with the United
States Patent and Trademark Office or the United States Copyright Office,
as applicable, within five (5) days of such filing such Grantor shall
provide the Agent written notice thereof. Upon request of the Agent, such
Grantor shall execute and deliver any and all assignments, agreements,
instruments, documents and papers as the Agent may reasonably request to
evidence the Agent's security interest hereunder in such Trademark, Patent
or Copyright and the general intangibles of such Grantor relating thereto
or represented thereby, and such Grantor hereby constitutes the Agent as
its attorney-in-fact (such appointment being coupled with an interest and
irrevocable) to execute and file all such writings for the foregoing
purposes, all acts of such attorney being hereby ratified and confirmed,
and such power (being coupled with
-14-
an interest) shall be irrevocable until the termination of the Commitments,
the repayment of all of the Obligations in full and the termination of each
of the Loan Documents.
(j) Inspection and Reporting. Each Grantor shall permit the Agent or
any Lender, or any agents or representatives thereof or such professionals or
other Persons as the Agent may designate (i) to examine and inspect the books
and records of such Grantor and take copies and extracts therefrom, (ii) to
verify materials, leases, notes, receivables, inventory and other assets of such
Grantor from time to time, and (iii) to conduct physical counts, appraisals
and/or valuations at the locations of such Grantor, in each case as provided in
the Loan Agreement.
(k) Delivery and Control. Each Grantor agrees that with respect to
each of such Grantor's Control Deposit Accounts it shall use its best efforts to
comply with the provisions of this Section 5(k) on the Closing Date, but in any
event, shall comply with these provisions within 45 days of the Closing Date and
with respect to any such Control Deposit Accounts hereafter acquired by such
Grantor it shall comply with the provisions of this Section 5(k) within 15 days
of acquiring rights therein, in each case in form and substance reasonably
satisfactory to the Collateral Agent. With respect to any such Control Deposit
Account, such Grantor shall cause the depositary institution maintaining such
account to execute an agreement in form and substance reasonably satisfactory to
the Agent pursuant to which the Agent shall have both sole dominion and control
over such deposit account (within the meaning of the common law) and "control"
(as defined in Section 9-104 of the Code) over such deposit account. Upon the
occurrence and during the continuance of an Event of Default, the Collateral
Agent shall have the right, without notice to any Grantor, to transfer all or
any portion of the Investment Related Property to its name or the name of its
nominee or agent.
(l) Commercial Tort Claim. Each Grantor hereby covenants and agrees
that with respect to any Commercial Tort Claim hereafter arising it shall
deliver to the Agent an updated Collateral Certificate identifying such new
Commercial Tort Claims
SECTION 6. Additional Provisions Concerning the Collateral. (a) Each
Grantor hereby authorizes the Agent to file, without further authorization by
such Grantor, one or more financing or continuation statements, and amendments
thereto, relating to the Collateral of such Grantor.
(b) Each Grantor hereby irrevocably appoints the Agent as such
Grantor's attorney-in-fact (such appointment being coupled with an interest) and
proxy, with full authority in the place and stead of such Grantor and in the
name of such Grantor or otherwise, from time to time in the Agent's discretion
upon the occurrence and during the continuance of an Event of Default, to take
any action and to execute any instrument which the Agent may deem necessary or
advisable to accomplish the purposes of this Agreement (subject to the rights of
such Grantor under Section 5(g) hereof), including, without limitation, (i) to
obtain and adjust insurance required to be paid to the Agent pursuant to Section
5(f) hereof, and to receive, indorse and collect any drafts or other
instruments, documents and chattel paper in connection therewith, (ii) to ask,
demand, collect, xxx for, recover, compound, receive and give acquittance and
receipts for moneys due and to become due under or in respect of any of such
Grantor's Collateral, (iii) to receive, indorse, and collect any drafts or other
instruments, documents and chattel paper in connection with clause (i) or (ii)
above, and (iv) to file any claims or take any
-15-
action or institute any proceedings which the Agent may deem necessary or
desirable for the collection of any of such Grantor's Collateral or otherwise to
enforce the rights of the Agent and the Lenders with respect to any of such
Grantor's Collateral.
(c) For the purpose of enabling the Agent to exercise rights and
remedies hereunder, at such time as the Agent shall be lawfully entitled to
exercise such rights and remedies, and for no other purpose, each Grantor hereby
grants to the Agent, to the extent assignable, an irrevocable, non-exclusive
license (exercisable without payment of royalty or other compensation to such
Grantor) to use, assign, license or sublicense any of the Patents, Trademarks or
Copyrights now owned or hereafter acquired by such Grantor, wherever the same
may be located, including in such license reasonable access to all media in
which any of the licensed items may be recorded or stored and to all computer
programs used for the compilation or printout thereof, subject with respect to
Trademarks to the reasonable rights of quality control and inspection in favor
of such Grantor as shall be reasonably necessary to preserve the validity of
such Trademarks. Notwithstanding anything contained herein to the contrary, but
subject to the provisions of the Loan Agreement that limit the right of each
Grantor to dispose of its property and Section 5(i) hereof, so long as no Event
of Default shall have occurred and be continuing, such Grantor may exploit, use,
enjoy, protect, license, sublicense, assign, sell, dispose of or take other
actions with respect to the Patents, Trademarks or Copyrights in the ordinary
course of the business of such Grantor. In furtherance of the foregoing, unless
an Event of Default shall have occurred and be continuing, the Agent shall from
time to time, upon the request of any Grantor, execute and deliver any
instruments, certificates or other documents, in the form so requested, which
such Grantor shall have certified are appropriate (in its judgment) to allow it
to take any action permitted above (including relinquishment of the license
provided pursuant to this clause (c) as to any Patents, Trademarks or
Copyrights). Further, upon the payment in full of all of the Obligations and
cancellation or termination of the Commitments, the Agent (subject to Section
11(e) hereof) shall release and reassign to such Grantor all of the Agent's
right, title and interest in and to the Patents, Trademarks, Copyrights and the
Licenses, all without recourse, representation or warranty whatsoever. The
exercise of rights and remedies hereunder by the Agent shall not terminate the
rights of the holders of any licenses or sublicenses theretofore granted by any
Grantor in accordance with the second sentence of this clause (c). Each Grantor
hereby releases the Agent from any claims, causes of action and demands at any
time arising out of or with respect to any actions taken or omitted to be taken
by the Agent under the powers of attorney granted herein other than actions
taken or omitted to be taken through the Agent's gross negligence or willful
misconduct.
(d) If any Grantor fails to perform any agreement contained herein,
the Agent may itself perform, or cause performance of, such agreement or
obligation, in the name of such Grantor or the Agent, and the expenses of the
Agent incurred in connection therewith shall be payable by such Grantor pursuant
to Section 8 hereof and shall be secured by the Collateral.
(e) The powers conferred on the Agent hereunder are solely to protect
its interest in the Collateral and shall not impose any duty upon it to exercise
any such powers. Except for the safe custody of any Collateral in its possession
and the accounting for moneys actually received by it hereunder, the Agent shall
have no duty as to any Collateral or as to the taking of any necessary steps to
preserve rights against prior parties or any other rights pertaining to any
Collateral.
-16-
(f) Anything herein to the contrary notwithstanding (i) each Grantor
shall remain liable under its Related Contracts and Licenses and otherwise with
respect to any of its Collateral to the extent set forth therein to perform all
of its obligations thereunder to the same extent as if this Agreement had not
been executed, (ii) the exercise by the Agent of any of its rights hereunder
shall not release any Grantor from any of its obligations under its Related
Contracts and Licenses or otherwise in respect of its Collateral, and (iii) the
Agent shall not have any obligation or liability by reason of this Agreement
under the Related Contracts and Licenses or with respect to any of the other
Collateral, nor shall the Agent be obligated to perform any of the obligations
or duties of any Grantor thereunder or to take any action to collect or enforce
any claim for payment assigned hereunder.
SECTION 7. Remedies Upon Default. If any Event of Default shall have
occurred and be continuing:
(a) The Agent may exercise in respect of the Collateral, in addition
to other rights and remedies provided for herein or otherwise available to it,
all of the rights and remedies of a secured party upon default under the Code
(whether or not the Code applies to the affected Collateral), and also may (i)
require any Grantor to, and each Grantor hereby agrees that it will at its
expense and upon request of the Agent forthwith, assemble all or part of such
Grantor's Collateral as directed by the Agent and make it available to the Agent
at a place or places to be designated by the Agent which is reasonably
convenient to both parties and (ii) without notice except as specified below,
sell the Collateral or any part thereof in one or more parcels at public or
private sale, at any of the Agent's offices or elsewhere, for cash, on credit or
for future delivery, and at such price or prices and upon such other terms as
the Agent may deem commercially reasonable. Each Grantor agrees that, to the
extent notice of sale shall be required by law, at least 10 days' notice to such
Grantor of the time and place of any public sale or the time after which any
private sale is to be made shall constitute reasonable notification. The Agent
shall not be obligated to make any sale of Collateral regardless of notice of
sale having been given. The Agent may adjourn any public or private sale from
time to time by announcement at the time and place fixed therefor, and such sale
may, without further notice, be made at the time and place to which it was so
adjourned. Each Grantor hereby waives any claims against the Agent and the
Lenders arising by reason of the fact that the price at which the Collateral may
have been sold at a private sale was less than the price which might have been
obtained at a public sale or was less than the aggregate amount of the
Obligations, even if the Agent accepts the first offer received and does not
offer the Collateral to more than one offeree and waives all rights which such
Grantor may have to require that all or any part of the Collateral be marshalled
upon any sale (public or private) thereof. In addition to the foregoing, (i)
upon written notice from the Agent, each Grantor shall cease any use of its
Trademarks, Patents or Copyrights or any xxxx or patent similar thereto for any
purpose described in such notice; (ii) the Agent may, at any time and from time
to time, upon 10 days' prior notice to any Grantor, license, whether general,
special or otherwise, and whether on an exclusive or non-exclusive basis, any of
such Grantor's Trademarks, Patents and Copyrights throughout the world for such
term or terms, on such conditions, and in such manner, as the Agent shall in its
sole discretion determine; and (iii) the Agent may, at any time, pursuant to the
authority granted in Section 6 hereof (such authority being effective upon the
occurrence of an Event of Default), execute and deliver on behalf of any
Grantor, one or more instruments of assignment of such Grantor's Trademarks,
-17-
Patents and Copyrights (or any application or registration thereof), in form
suitable for filing, recording or registration in any country.
(b) Any cash held by the Agent as Collateral and all cash proceeds
received by the Agent in respect of any sale of or collection from, or other
realization upon, all or any part of the Collateral may, in the discretion of
the Agent, be held by the Agent as collateral for, and/or then or at any time
thereafter applied in whole or in part by the Agent against, all or any part of
the Obligations as provided in Section 3.3 of the Loan Agreement.
(c) In the event that the proceeds of any such sale, collection or
realization are insufficient to pay all amounts to which the Agent and the
Lenders are legally entitled, each Grantor shall be liable for the deficiency,
together with interest thereon at the highest rate specified in any applicable
Loan Document for interest on overdue principal thereof or such other rate as
shall be fixed by applicable law, together with the costs of collection and the
reasonable fees, costs and expenses of any attorneys employed by the Agent to
collect such deficiency.
SECTION 8. Indemnity and Expenses.
(a) Each Grantor agrees to indemnify and hold the Agent harmless from
and against any and all claims, damages, losses, liabilities, obligations,
penalties, costs or expenses (including, without limitation, reasonable legal
fees and disbursements of the Agent's counsel) to the extent that they arise out
of or otherwise result from this Agreement (including, without limitation,
enforcement of this Agreement), except claims, losses or liabilities resulting
solely and directly from the Agent's gross negligence or willful misconduct as
determined by a final judgment of a court of competent jurisdiction.
(b) Each Grantor will upon demand pay to the Agent the amount of any
and all costs and expenses, including the reasonable fees and disbursements of
the Agent's counsel and of any experts and agents, which the Agent may incur in
connection with (i) the preparation, negotiation, execution, delivery,
recordation, administration, amendment, waiver or other modification or
termination of this Agreement, or (ii) the custody, preservation, use or
operation of, or the sale of, collection from, or other realization upon, any of
such Grantor's Collateral, (iii) the exercise or enforcement of any of the
rights of the Agent hereunder, or (iv) the failure by such Grantor to perform or
observe any of the provisions hereof.
SECTION 9. Notices, Etc. All notices and other communications provided
for hereunder shall be in writing and shall be mailed (by certified mail,
postage prepaid and return receipt requested), telecopied or delivered, if to a
Grantor, c/o the Parent at its address specified in the Loan Agreement or if to
the Agent, to it at the address specified in the Loan Agreement; or as to either
such Person at such other address as shall be designated by such Person in a
written notice to such other Person complying as to delivery with the terms of
this Section 9. All such notices and other communications shall be effective (i)
if sent by certified mail, return receipt requested, when received or three
Business Days after mailing, whichever first occurs, (ii) if telecopied, when
transmitted and confirmation is received, provided same is on a Business Day
and, if not, on the next Business Day or (iii) if delivered, upon delivery,
provided same is on a Business Day and, if not, on the next Business Day.
-18-
SECTION 10. Waiver of Jury Trial. EACH OF THE GRANTORS AND THE AGENT
(BY ACCEPTING THIS AGREEMENT) WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION,
PROCEEDING OR COUNTERCLAIM CONCERNING ANY RIGHTS UNDER THIS AGREEMENT OR ANY
OTHER LOAN DOCUMENT OR ARISING FROM ANY OTHER LOAN DOCUMENT AND AGREES THAT ANY
SUCH ACTION, PROCEEDING OR COUNTERCLAIM SHALL BE TRIED BEFORE A COURT AND NOT
BEFORE A JURY.
SECTION 11. Miscellaneous.
(a) No amendment of any provision of this Agreement shall be effective
unless it is in writing and signed by each Grantor and the Agent, and no waiver
of any provision of this Agreement, and no consent to any departure by any
Grantor therefrom, shall be effective unless it is in writing and signed by the
Agent, and then such waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given.
(b) No failure on the part of the Agent to exercise, and no delay in
exercising, any right hereunder or under any other Loan Document shall operate
as a waiver thereof; nor shall any single or partial exercise of any such right
preclude any other or further exercise thereof or the exercise of any other
right. The rights and remedies of the Agent provided herein and in the other
Loan Documents are cumulative and are in addition to, and not exclusive of, any
rights or remedies provided by law. The rights of the Agent under any Loan
Document against any party thereto are not conditional or contingent on any
attempt by the Agent to exercise any of its rights under any other Loan Document
against such party or against any other Person.
(c) Any provision of this Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining portions hereof or thereof or affecting the validity or enforceability
of such provision in any other jurisdiction.
(d) This Agreement shall create a continuing security interest in the
Collateral and shall (i) remain in full force and effect until the payment in
full of the Obligations and the termination of the Commitments and (ii) be
binding on each Grantor and its successors and assigns and shall inure, together
with all rights and remedies of the Agent hereunder, to the benefit of the Agent
and the Lenders and their respective permitted successors, transferees and
assigns. Without limiting the generality of clause (ii) of the immediately
preceding sentence and subject to the terms of the Loan Agreement, the Agent and
Lenders may assign or otherwise transfer their rights under this Agreement and
any other Loan Document to any other Person and such other Person shall
thereupon become vested with all of the benefits in respect thereof granted to
the Agent and the Lenders herein or otherwise. None of the rights or obligations
of any Grantor hereunder may be assigned or otherwise transferred without the
prior written consent of the Agent, and any such assignment or transfer shall be
null and void.
(e) Upon the satisfaction in full of the Obligations and the
termination of the Commitments, (i) this Agreement and the security interests
created hereby shall terminate and all rights to the Collateral shall revert to
the Grantors, and (ii) the Agent will, upon the Grantors' request and at the
Grantors' expense, (A) return to the Grantors such of the Collateral as shall
not
-19-
have been sold or otherwise disposed of or applied pursuant to the terms hereof,
and (B) execute and deliver to the Grantors such documents as the Grantors shall
reasonably request to evidence such termination, all without any representation,
warranty or recourse whatsoever.
(f) This Agreement shall be governed by, and construed and interpreted
in accordance with, the laws of the State of New York, except as required by
mandatory provisions of law and except to the extent that the validity and
perfection or the perfection and effect of perfection or non-perfection of the
security interest created hereby or remedies hereunder, in respect of any
particular Collateral are governed by the law of a jurisdiction other than the
State of New York.
(g) This Agreement may be executed in one or more counterparts and by
different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed an original, but all such counterparts
together shall constitute but one and the same instrument; signature pages may
be detached from multiple separate counterparts and attached to a single
counterpart so that all signature pages are physically attached to the same
document.
(h) From time to time subsequent to the date hereof, additional
Persons may become parties hereto as additional Grantors (each, an "Additional
Grantor"), by executing a counterpart agreement in form an substance reasonably
satisfactory to the Agent (a "Counterpart Agreement"). Upon delivery of any such
Counterpart Agreement to the Agent, notice of which is hereby waived by
Grantors, each Additional Grantor shall be a Grantor and shall be as fully a
party hereto as if Additional Grantor were an original signatory hereto. Each
Grantor expressly agrees that its obligations arising hereunder shall not be
affected or diminished by the addition or release of any other Grantor
hereunder. This Agreement shall be fully effective as to any Grantor that is or
becomes a party hereto regardless of whether any other Person becomes or fails
to become or ceases to be a Grantor hereunder.
(i) With respect to Permitted Liens referred to in paragraph (r) of
the definition of such term in Section 1.1 of the Loan Agreement (such Permitted
Liens being referred to herein as the "B of A Permitted Liens"), the Agent
acknowledges and agrees, for the benefit of the Grantors and expressly for the
benefit of the holder or holders from time to time of the B of A Permitted
Liens, that the Liens of the Agent and the Lenders under this Agreement and the
other Loan Documents are subordinate and subject to the B of A Permitted Liens
and that the Agent and the Lenders will not take any action to enforce any Lien,
interest, right or remedy that they may have with respect to any of the
properties and assets that are subject to the B of A Permitted Liens until all
obligations of the Grantors that are secured by such Liens shall have been paid
in full.
SECTION 12. Perfection.
(a) Perfection by Filing. The Agent may at any time and from time to
time, pursuant to this Agreement, file financing statements, continuation
statements and amendments thereto that describe the Collateral as all assets of
each Grantor or words of similar effect.
(b) Other Perfection, etc. Each Grantor shall at any time and from
time to time, take such steps as the Agent may reasonably request for the Agent
(i) to obtain an
-20-
acknowledgment, in form and substance satisfactory to the Agent, of any bailee
having possession of any of the Collateral that the bailee holds such Collateral
for the Agent, (ii) to obtain "control" of any investment property, deposit
accounts, letter-of-credit rights or electronic chattel paper (as such terms are
defined in (S)(S) 8-106, 9-104, 9-105, 9-106 and 9-107 of the Code relating to
what constitutes "control" for such items of Collateral), with any agreements
establishing control to be in form and substance satisfactory to the Agent, and
(iii) otherwise to insure the continued perfection and priority of the Agent's
security interest in any of the Collateral and of the preservation of its rights
therein.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
-21-
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their respective officers thereunto duly authorized, as of the
date first above written.
BORROWERS:
SUNTERRA CORPORATION
By: /s/ Xxxxx X. Xxxxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
AKGI LAKE TAHOE INVESTMENTS, INC.
By: /s/ Xxxxx X. Xxxxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
AKGI ST. MAARTEN, NV
By: /s/ Xxxxx X. Xxxxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
ALL SEASONS PROPERTIES, INC.
By: /s/ Xxxxx X. Xxxxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
Exh. C-1
ALL SEASONS REALTY, INC.
By: /s/ Xxxxx X. Xxxxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
ALL SEASONS RESORTS, INC.,
an Arizona corporation (AZ)
By: /s/ Xxxxx X. Xxxxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
ALL SEASONS RESORTS, INC.,
a Texas corporation (TX)
By: /s/ Xxxxx X. Xxxxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
ARGOSY GRAND BEACH, INC.
By: /s/ Xxxxx X. Xxxxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
ARGOSY HILTON HEAD, INC.
By: /s/ Xxxxx X. Xxxxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
ARGOSY PARTNERS, INC.
By: /s/ Xxxxx X. Xxxxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
Exh. C-2
ARGOSY/KGI GRAND BEACH
INVESTMENT PARTNERSHIP
By: Argosy Grand Beach, Inc.,
Its General Partner
By: /s/ Xxxxx X. Xxxxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
By: Argosy Partners, Inc.,
Its General Partner
By: /s/ Xxxxx X. Xxxxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
By: KGI Grand Beach Investments Inc.,
its Managing General Partner
By: /s/ Xxxxx X. Xxxxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
Exh. C-3
ARGOSY/KGI PORT ROYAL PARTNERS
By: Argosy Grand Beach, Inc.,
Its General Partner
By: /s/ Xxxxx X. Xxxxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
By: KGI Port Royal, Inc.
ITS Managing General Partner
By: /s/ Xxxxx X. Xxxxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
AVCOM INTERNATIONAL, INC. (n/k/a Sunterra
Developer and Sales Holding Company)
By: /s/ Xxxxx X. Xxxxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
CLUB SUNTERRA, INC.
By: /s/ Xxxxx X. Xxxxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
DESIGN INTERNATIONALE-RMI, INC.
By: /s/ Xxxxx X. Xxxxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
Exh. C-4
XXXXXX ACQUISITION SUBSIDIARY, INC.
By: /s/ Xxxxx X. Xxxxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
GRAND BEACH PARTNERS, L.P.
By: Argosy/KGI Grand Beach Investment
Partnership, its General Partner
By: Argosy partners, Inc.,
its General partner
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
By: Argosy Grand Beach, Inc.,
its General partner
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
By: KGI Grand Beach Investments, Inc.
its Managing General Partner
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
Exh. C-5
GRAND BEACH RESORT,
LIMITED PARTNERSHIP
By: Grand Beach Partners, LP,
its General Partner
By: Argosy/KGI Grand Beach Investment
Partnership, its General Partner
By: KGI Grand Beach Investments, Inc.,
its Managing General Partner
By: /s/ Xxxxx X. Xxxxxxxx
------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
By: Argosy Partners, Inc.,
By: /s/ Xxxxx X. Xxxxxxxx
------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
By: Argosy Grand Beach, Inc.,
its General partners
By: /s/ Xxxxx X. Xxxxxxxx
------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
Exh. C-6
GREENSPRINGS ASSOCIATES
By: Plantation Resorts Group, Inc.,
its Joint Venturer
By: /s/ Xxxxx X. Xxxxxxxx
-------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
By: Greensprings Plantation Resort, Inc.,
its Joint Venturer
By: /s/ Xxxxx X. Xxxxxxxx
-------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
GREENSPRINGS PLANTATION RESORT, INC.
By: /s/ Xxxxx X. Xxxxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
Exh. C-7
XXXXXX TAHOE DEVELOPMENTS PARTNERSHIP
By: Lakewood Development Inc.,
its Managing General Partner
By: /s/ Xxxxx X. Xxxxxxxx
-------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
By: Ridgewood Development Inc.,
its General Partner
By: /s/ Xxxxx X. Xxxxxxxx
-------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
INTERNATIONAL TIMESHARES, INC.
By: /s/ Xxxxx X. Xxxxxxxx
-------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
Exh. C-8
KABUSHIKI GAISHA KEI, LLC
By: KGK Investors, Inc., its Member
By: /s/ Xxxxx X. Xxxxxxxx
-----------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
By: KGK Partners, Inc., its Member
By: /s/ Xxxxx X. Xxxxxxxx
-----------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
By: Argosy Partners, Inc., its Member
By: /s/ Xxxxx X. Xxxxxxxx
-----------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
KGI GRAND BEACH INVESTMENTS, INC.
By: /s/ Xxxxx X. Xxxxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
KGI PORT ROYAL, INC.
By: /s/ Xxxxx X. Xxxxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
Exh. C-9
KGK LAKE TAHOE DEVELOPMENT, INC.
By: /s/ Xxxxx X. Xxxxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
LAKE TAHOE RESORT PARTNERS, LLC
By: AKGI Lake Tahoe Investments, Inc.,
its Managing Member
By: /s/ Xxxxx X. Xxxxxxxx
-------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
By: KGK Lake Tahoe Development, Inc.,
its Member
By: /s/ Xxxxx X. Xxxxxxxx
-------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
LAKEWOOD DEVELOPMENT, INC.
By: /s/ Xxxxx X. Xxxxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
Exh. C-10
MMG DEVELOPMENT CORP.
By: /s/ Xxxxx X. Xxxxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
PLANTATION RESORTS GROUP, INC.
By: /s/ Xxxxx X. Xxxxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
POINTE PARTNERS, LIMITED PARTNERSHIP
By: Xxxxxx Tahoe Developments,
its Managing General Partner
By: Lakewood Development Inc.,
its Managing General Partner
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
By: Ridgewood Development Inc.,
its General Partner
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
Exh. C-11
PORT ROYAL RESORT, L.P.
By: Argosy/KGI Port Royal Partners,
its General Partner
By: KGI Port Royal, Inc.,
its Managing General Partner
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
By: Argosy Hilton Head, Inc.,
its General Partner
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
Exh. C-12
POWHATAN ASSOCIATES
By: Plantation Resorts Group, Inc.,
its Joint Venturer
By: /s/ Xxxxx X. Xxxxxxxx
-------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
By: Williamsburg Vacations, Inc.,
its Joint Venturer
By: /s/ Xxxxx X. Xxxxxxxx
-------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
PREMIER VACATIONS, INC.
By: /s/ Xxxxx X. Xxxxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
RESORT CONNECTIONS, INC.
By: /s/ Xxxxx X. Xxxxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
Exh. C-13
RESORT MARKETING INTERNATIONAL, INC.
By: /s/ Xxxxx X. Xxxxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
RESORTS DEVELOPMENT INTERNATIONAL, INC.
By: /s/ Xxxxx X. Xxxxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
RIDGE POINTE, LIMITED PARTNERSHIP
By: Pointe Partners Limited Partnership,
its Managing General Partner
By: Xxxxxx Tahoe Development,
its Managing General Partner
By: Lakewood Development Inc.,
its Managing General Partner
By: /s/ Xxxxx X. Xxxxxxxx
-----------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
By: Ridgewood Development Inc.,
its General Partner
By: /s/ Xxxxx X. Xxxxxxxx
-----------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
Exh. C-14
RIDGEWOOD DEVELOPMENT INC.
By: /s/ Xxxxx X. Xxxxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
RKG, CORP.
By: /s/ Xxxxx X. Xxxxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
RPM MANGEMENT, INC.
By: /s/ Xxxxx X. Xxxxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
SUNTERRA COMMUNICATIONS CORPORATION
By: s/ Xxxxx X. Xxxxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
SUNTERRA FINANCIAL SERVICES, INC.
By: /s/ Xxxxx X. Xxxxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
SUNTERRA PACIFIC, INC.
By: /s/ Xxxxx X. Xxxxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
Exh. C-15
SUNTERRA ST. CROIX, INC.
By: /s/ Xxxxx X. Xxxxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
SUNTERRA TRAVEL, INC.
By: /s/ Xxxxx X. Xxxxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
S.V.L.H., INC.
By: /s/ Xxxxx X. Xxxxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
WILLIAMSBURG VACATIONS, INC.
By: /s/ Xxxxx X. Xxxxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
SUNTERRA FINANCE HOLDING COMPANY
By: /s/ Xxxxx X. Xxxxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
SUNTERRA CENTRALIZED SERVICES COMPANY
By: /s/ Xxxxx X. Xxxxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
Exh. C-16
SUNTERRA MANAGEMENT AND EXCHANGE
HOLDING COMPANY
By: /s/ Xxxxx X. Xxxxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
CLUB SUNTERRA, LLC
By: Sunterra Management and Exchange Holding
Company, its Manager
By: /s/ Xxxxx X. Xxxxxxxx
-------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
INTERNATIONAL TIMESHARES MARKETING, LLC
By: Resort Marketing International, Inc., its
Manager
By: /s/ Xxxxx X. Xxxxxxxx
-------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
RPM MANAGEMENT, LLC
By: Sunterra Management and Exchange Holding
Company, its Manager
By: /s/ Xxxxx X. Xxxxxxxx
-------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
Exh. C-17
SUNTERRA BENT CREEK GOLF COURSE
DEVELOPMENT, LLC
By: Sunterra Developer and Sales Holding
Company, its Manager
By: /s/ Xxxxx X. Xxxxxxxx
-------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
SUNTERRA BENT CREEK VILLAGE DEVELOPMENT, LLC
By: Sunterra Developer and Sales Holding
Company, its Manager
By: /s/ Xxxxx X. Xxxxxxxx
-------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
SUNTERRA COMMUNICATIONS, LLC
By: Sunterra Management and Exchange Holding
Company, its Manager
By: /s/ Xxxxx X. Xxxxxxxx
-------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
Exh. C-18
SUNTERRA XXXXX XXXXX DEVELOPMENT, LLC
By: Sunterra Developer and Sales Holding
Company, its Manager
By: /s/ Xxxxx X. Xxxxxxxx
-------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
SUNTERRA CYPRESS POINTE I DEVELOPMENT, LLC
By: Sunterra Developer and Sales Holding
Company, its Manager
By: /s/ Xxxxx X. Xxxxxxxx
-------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
SUNTERRA CYPRESS POINTE II DEVELOPMENT, LLC
By: Sunterra Developer and Sales Holding
Company, its Manager
By: /s/ Xxxxx X. Xxxxxxxx
-------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
Exh. C-19
SUNTERRA CYPRESS POINTE III DEVELOPMENT, LLC
By: Sunterra Developer and Sales Holding
Company, its Manager
By: /s/ Xxxxx X. Xxxxxxxx
-------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
SUNTERRA EAST MARKETING, LLC
By: Resort Marketing International, Inc., its
Manager
By: /s/ Xxxxx X. Xxxxxxxx
-------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
SUNTERRA FALL CREEK DEVELOPMENT, LLC
By: Sunterra Developer and Sales Holding
Company, its Manager
By: /s/ Xxxxx X. Xxxxxxxx
-------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
SUNTERRA GRAND BEACH I DEVELOPMENT, LLC
By: Sunterra Developer and Sales Holding
Company, its Manager
By: /s/ Xxxxx X. Xxxxxxxx
-------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
Exh. C-20
SUNTERRA GRAND BEACH II DEVELOPMENT, LLC
By: Sunterra Developer and Sales Holding
Company, its Manager
By: /s/ Xxxxx X. Xxxxxxxx
-------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
SUNTERRA GREENSPRINGS DEVELOPMENT, LLC
By: Sunterra Developer and Sales Holding
Company, its Manager
By: /s/ Xxxxx X. Xxxxxxxx
-------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
SUNTERRA KGK PARTNERS FINANCE, LLC
By: Sunterra Finance Holding Company, its
Manager
By: /s/ Xxxxx X. Xxxxxxxx
-------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
SUNTERRA KALLOF PLACE DEVELOPMENT, LLC
By: All Seasons Resorts, Inc. (AZ), its
Manager
By: /s/ Xxxxx X. Xxxxxxxx
-------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
Exh. C-21
SUNTERRA LAKE TAHOE DEVELOPMENT, LLC
By: Sunterra Developer and Sales Holding
Company, its Manager
By: /s/ Xxxxx X. Xxxxxxxx
-------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
SUNTERRA NORTH MARKETING, LLC
By: Resort Marketing International, Inc., its
Manager
By: /s/ Xxxxx X. Xxxxxxxx
-------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
SUNTERRA POCO DIABLO DEVELOPMENT, LLC
By: All Seasons Resorts, Inc. (AZ), its
Manager
By: /s/ Xxxxx X. Xxxxxxxx
-------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
SUNTERRA POIPU GP DEVELOPMENT, LLC
By: Sunterra Developer and Sales Holding
Company, its Manager
By: /s/ Xxxxx X. Xxxxxxxx
-------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
Exh. C-22
SUNTERRA POLYNESIAN ISLES DEVELOPMENT, LLC
By: Sunterra Developer and Sales Holding
Company, its Manager
By: /s/ Xxxxx X. Xxxxxxxx
-------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
SUNTERRA PORT ROYAL DEVELOPMENT, LLC
By: Sunterra Developer and Sales Holding
Company, its Manager
By: /s/ Xxxxx X. Xxxxxxxx
-------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
SUNTERRA POWHATAN DEVELOPMENT, LLC
By: Sunterra Developer and Sales Holding
Company, its Manager
By: /s/ Xxxxx X. Xxxxxxxx
-------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
Exh. C-23
SUNTERRA RESIDUAL ASSETS DEVELOPMENT, LLC
By: Sunterra Developer and Sales Holding
Company, its Manager
By: /s/ Xxxxx X. Xxxxxxxx
-------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
SUNTERRA RIDGE ON SEDONA DEVELOPMENT, LLC
By: All Seasons Resorts, Inc. (AZ), its
Manager
By: /s/ Xxxxx X. Xxxxxxxx
-------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
Exh. C-24
SUNTERRA RIDGE POINTE DEVELOPMENT, LLC
By: Sunterra Developer and Sales Holding
Company, its Manager
By: /s/ Xxxxx X. Xxxxxxxx
-------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
SUNTERRA SAN XXXX BAY DEVELOPMENT, LLC
By: Sunterra Developer and Sales Holding
Company, its Manager
By: /s/ Xxxxx X. Xxxxxxxx
-------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
SUNTERRA SANTA FE DEVELOPMENT, LLC
By: Sunterra Developer and Sales Holding
Company, its Manager
By: /s/ Xxxxx X. Xxxxxxxx
-------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
Exh. C-25
SUNTERRA SEDONA SPRINGS DEVELOPMENT, LLC
By: All Seasons Resorts, Inc. (AZ), its
Manager
By: /s/ Xxxxx X. Xxxxxxxx
-------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
SUNTERRA SEDONA SUMMIT DEVELOPMENT, LLC
By: All Seasons Resorts, Inc. (AZ), its
Manager
By: /s/ Xxxxx X. Xxxxxxxx
-------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
SUNTERRA SOUTH MARKETING, LLC
By: Resort Marketing International, Inc., its
Manager
By: /s/ Xxxxx X. Xxxxxxxx
-------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
SUNTERRA ST. CROIX DEVELOPMENT, LLC
By: Sunterra Developer and Sales Holding
Company, its Manager
By: /s/ Xxxxx X. Xxxxxxxx
-------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
Exh. C-26
SUNTERRA STEAMBOAT DEVELOPMENT, LLC
By: Sunterra Developer and Sales Holding
Company, its Manager
By: /s/ Xxxxx X. Xxxxxxxx
-------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
SUNTERRA TAHOE BEACH & SKI DEVELOPMENT, LLC
By: Sunterra Developer and Sales Holding
Company, its Manager
By: /s/ Xxxxx X. Xxxxxxxx
-------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
SUNTERRA VILLA MIRAGE DEVELOPMENT, LLC
By: All Seasons Resorts, Inc. (AZ), its
Manager
By: /s/ Xxxxx X. Xxxxxxxx
-------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
SUNTERRA VILLAS OF SEDONA DEVELOPMENT, LLC
By: All Seasons Resorts, Inc. (AZ), its
Manager
By: /s/ Xxxxx X. Xxxxxxxx
-------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
Exh. C-27
SUNTERRA WEST MARKETING, LLC
By: Resort Marketing International, Inc., its
Manager
By: /s/ Xxxxx X. Xxxxxxxx
-------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
SUNTERRA RESIDUAL ASSETS FINANCE, LLC
By: Sunterra Finance Holding Company, its
Manager
By: /s/ Xxxxx X. Xxxxxxxx
-------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
SUNTERRA RESIDUAL ASSETS M&E, LLC
By: Sunterra Management and Exchange Holding
Company, its Manager
By: /s/ Xxxxx X. Xxxxxxxx
-------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
Exh. C-28
SUNTERRA MORTGAGE HOLDINGS, LLC
By: Sunterra Finance Holding Company, its
Manager
By: /s/ Xxxxx X. Xxxxxxxx
-------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
Exh. C-29
ACCEPTED AND AGREED:
XXXXXXX XXXXX MORTGAGE CAPITAL INC.,
as Agent
By: /s/ Xxxxxxx Xxxxx
----------------------------
Name: Xxxxxxx Xxxxx
Title: Vice President
Exh. C-30
