REVOLVING CREDIT FACILITY AGREEMENT
THIS REVOLVING CREDIT FACILITY AGREEMENT entered into as of July 9, 1998,
by FINOVA CAPITAL CORPORATION, a Delaware corporation, and VISTANA, INC., a
Florida corporation.
1. DEFINITIONS.
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As used in this Agreement and the other Documents (as defined below) unless
otherwise expressly indicated in this Agreement or the other Documents, the
following terms shall have the following meanings (such meanings to be
applicable equally both to the singular and plural terms defined).
1.1 "Acquisition Component": that portion of a Loan allocated for the purpose
of paying, or reimbursing the Borrower under such Loan for, the Acquisition
Cost of the Real Property which is the subject of such Loan.
1.2 "Acquisition Cost": with respect to any Real Property, its actual cost of
acquiring such Real Property, all interests therein and all development
rights related thereto, including, without limitation, all reasonable and
ordinary closing costs, attorneys' fees and other due diligence expenses
incurred in connection with such acquisition. Due diligence expenses may
include, at Borrower's option, fees and expenses of land planners,
engineers, architects, surveyors and similar professionals engaged with
respect to the Real Property as well as the cost of environmental reports
and other diligence items required to be delivered to Lender with respect
to the Real Property.
1.3 "Advance": an advance of the proceeds of a Loan by Lender to the Borrower
under such Loan.
1.4 "Affiliate": with respect to any individual or entity, any other individual
or entity that directly or indirectly, through one or more intermediaries,
controls, is controlled by or is under common control with, such individual
or entity.
1.5 "Agreement": this Revolving Credit Facility Agreement, as it may be from
time to time renewed, amended, restated or replaced.
1.6 "Applicable Usury Law": the usury law chosen by the parties pursuant to the
terms of paragraph 7.9 or such other usury law which is applicable if such
usury law is not.
1.7 "Borrower": with respect to a Loan, the Vistana Entity which has requested
the Loan and to whom the Loan is to be or has been made.
1.8 "Borrowing Term": the period during which a Vistana Entity may obtain a
Loan, commencing on the date of this Agreement and ending on July 9, 2001.
1.9 "Business Day": any day other than a Saturday, a Sunday, a national
holiday or a day on which banks in Phoenix, Arizona are required to be
closed.
1.10 "Collateral": with respect to a Loan, all collateral from time to time
serving as security for the Performance of any portion of the Obligations
under the Documents for such Loan, and all products and proceeds thereof.
1.11 "Construction Component": the portion of a Loan allocated to the payment
of the cost of Construction Work, excluding interest on the Loan.
1.12 "Construction Improvements": with respect to a Loan having a Construction
Component, the on-site and/or off-site improvements (including, without
limitation, renovations which are not part of the Renovation Work) to be
constructed upon or made to or for the benefit of the Real Property as
part of the Construction Work, which improvements shall consist of
purpose-built time-share buildings and related amenities and off-site
improvements.
1.13 "Construction Work": with respect to a Loan having a Construction
Component, the construction or making of Construction Improvements and the
acquisition and installation of any and all furniture, furnishings,
fixtures and/or equipment which are part of the Construction Improvements.
1.14 "Credit Facility": the credit facility made available pursuant to this
Agreement.
1.15 "Credit Facility Fee": Six Hundred Thousand Dollars ($600,000).
1.16 "Documents": with respect to a Loan, the Documents as defined in the
applicable Loan Agreement, as they may be from time to time renewed,
amended, restated or replaced.
1.17 "Event of Default": with respect to a Loan, the meaning given to it in the
applicable Loan Agreement.
1.18 "Incipient Default": with respect to a Loan, an event which after notice
and/or lapse of time would constitute an Event of Default under such Loan.
1.19 "Interest Reserve Component": that portion of a Loan allocated for the
monthly payment of monthly interest accrued on such Loan.
1.20 "Lender": FINOVA Capital Corporation and its successors and assigns.
1.21 "Loan": a loan made pursuant to the terms of this Agreement.
1.22 "Loan Agreement": with respect to a Loan, a loan agreement in form and
substance satisfactory to Lender, executed by Lender and the Borrower
under such Loan, as it may be from time to time renewed, amended, restated
or replaced.
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1.23 "Maximum Credit Facility Amount": at any time, the lesser of (a) Sixty
Million Dollars ($60,000,000) and (b) the positive difference between One
Hundred Million Dollars ($100,000,000) and the unpaid principal balance of
the VDI Receivables Loan.
1.24 "Maximum Loan Amount": with respect to a Loan, an amount equal to the sum
of (i) the Acquisition Cost of the Real Property which is the subject of
the Loan, if the Loan has an Acquisition Component; and (ii) the cost of
improving/renovating the Real Property which is the subject of the Loan as
shown in a budget which has been approved by Lender in writing prior to
the first Advance of the Loan, if the Loan has a Construction Component
and/or Renovation Component, as the case may be; provided, however, that
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in no event shall the Maximum Loan Amount for a Loan exceed thirty-five
percent (35%) of the time-share sales projected on the date of the
applicable Loan Agreement from sales of the number of Time-Share Interests
which can be created on or within the Real Property being acquired,
renovated or constructed with the proceeds of such Loan, as determined by
Lender.
1.25 "Obligations": all obligations, agreements, duties, covenants and
conditions that VI is now or hereafter required to Perform under this
Agreement.
1.26 "Performance" or "Perform": full, timely and faithful performance.
1.27 "Real Property": real property which meets the criteria set forth in
EXHIBIT 8.
1.28 "Related Other Loans": with respect to a Loan, another Loan made for the
purpose of acquiring, renovating or improving real property which is part
of the same Time-Share Project.
1.29 "Remaining Cost of the Credit Facilities Work": at any time, the excess of
(a ) the remaining unpaid cost of final completion of the phases of the
Construction Work under each Loan as to which vertical construction has
commenced and final completion of the phases of the Renovation Work under
each Loan as to which substantial remodeling has commenced plus, without
duplication, if Borrower has sold or contracted to sell Time-Share
Interests in such phases, the remaining unpaid cost of final completion of
any phases of Construction Work and Renovation Work in which Borrower has
sold or contracted to sell Time-Share Interests over (b) the amount of any
Required Completion Assurance Deposits (as defined in EXHIBIT 1) held by
Lender to assure the completion of such phases of the Construction Work or
Renovation Work, as the case may be.
1.30 "Renovation Component": the portion of a Loan allocated to the payment of
the cost of Renovation Work, excluding interest on the Loan.
1.31 "Renovation Improvements": with respect to a Loan having a Renovation
Component, the renovations, consisting exclusively of furniture,
furnishings and equipment and, unless otherwise agreed in writing by
Lender, minor labor and structural work to or for the benefit of the Real
Property as part of the Renovation Work. For purposes of this paragraph,
labor and structural work shall be considered "minor" if the budgeted
costs of such labor and work
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is less than fifteen percent (15%) of the total budgeted "hard" and "soft"
costs (excluding interest) of the Renovation Improvements
1.32 "Renovation Work": with respect to a Loan having a Renovation Component,
the making of the renovations and acquisition and installation of any and
all furniture, furnishings, fixtures and/or equipment which are part of
the Renovation Improvements or required by the terms of this Agreement or
the Renovation Work Contract(s) or shown as costs in the Renovation
Budget.
1.33 "Resolution": a resolution of a corporation certified as true and correct
by an authorized officer of such corporation, a certificate signed by the
manager of a limited liability company and such members whose approval is
required under the applicable organizational documents and owners'
agreements, or a partnership certificate signed by all of the general
partners of such partnership and such other partners whose approval is
required under the applicable organizational documents and owners'
agreements.
1.34 "Third Party Consents": those consents which Lender reasonably requires VI
to obtain, or which VI is contractually or legally obligated to obtain,
from others in connection with the execution of this Agreement or the
Performance of the Obligations.
1.35 "Time-Share Interest": an undivided fractional fee simple interest as
tenant-in-common (or an estate for years with a remainder over in
fractional fee simple as tenant-in-common) either (a) in a unit (coupled
with an undivided fractional fee simple interest as tenant-in-common in
the common areas of the Time-Share Project to which the Time-Share
Interest relates) or (b) in the entire Time-Share Project to which the
Time-Share Interest relates, in both cases together with the exclusive
right to occupy and use a specific unit (or an equivalent unit) for a
period of at least seven (7) consecutive days every calendar year (i.e.,
an annual Time-Share Interest) or every other calendar year (i.e., a
biennial Time-Share Interest) (on a fixed or floating basis) and the non-
exclusive right to use such common elements during the same occupancy
period, as more specifically described in the recorded declaration
pursuant to which such Time-Share Interest is created.
1.36 "Time-Share Project": dwellings dedicated to time-share use and common
areas which are part of a common scheme of development by the same Vistana
Entity pursuant to a recorded declaration relating to such Time-Share
Project.
1.37 "VI": Vistana, Inc., a Florida corporation, and, subject to restrictions
on transfer or assignment contained herein, its successors and assigns.
1.38 "VDI Receivables Loan": that revolving receivables line of credit made
available by Lender to Vistana Development, Inc., a Florida corporation,
pursuant to that Loan and Security Agreement dated as of October 30, 1991,
and originally executed between Vistana Development, Ltd., and Greyhound
Real Estate Finance Company, as now or hereafter renewed, amended,
restated or replaced.
1.39 "Vistana Entity": VI or an Affiliate thereof.
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2. CREDIT FACILITY COMMITMENT; USE OF PROCEEDS.
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2.1 Credit Facility Commitment. Lender hereby agrees, if all of the
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Obligations then due to be Performed have been Performed, to make Loans
having one or more Loan Components upon the terms and conditions set forth
in the form of Loan Agreement attached hereto as EXHIBIT 1.
2.2 Credit Facility a Revolver; Each Loan a Non-Revolver Borrowing Term. The
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Credit Facility is a revolving line of credit (i.e., Advances may be
obtained in accordance with the terms and conditions of this Agreement; and
as those Advances are repaid, other Advances may be obtained), provided,
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however, that Lender shall have no obligation to make an Advance under a
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Loan if, after giving effect thereto, the principal balance outstanding
under all Loans plus the Remaining Cost of the Credit Facilities Work
exceeds the Maximum Credit Facilities Amount; and provided, further, that
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the aggregate Advances under a Loan may not exceed the Maximum Amount for
such Loan (i.e., each Loan is non-revolving). Each Loan shall be viewed as
a separate loan. Vistana Entities shall not be entitled to obtain Loans or
Advances of Loans after the expiration of the Borrowing Term unless Lender
agrees in writing with VI to make Loans thereafter on terms and conditions
satisfactory to Lender.
2.3 Use of Advances. Unless otherwise permitted in the applicable Loan
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Agreement, the proceeds of a Loan Component may be used only for the
purposes specified in the Loan Agreement attached hereto as EXHIBIT 1.
3. SECURITY.
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3.1 Maintenance of Security; Cross Collateralization. With respect to each
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Loan, the required security for the Loan shall be the Collateral (as that
term is defined in the Loan Agreement attached hereto as EXHIBIT 1) unless
otherwise provided in the applicable Loan Agreement. The required security
for a Loan shall, at Lender's option, secure the repayment of all Related
Other Loans and the payment and performance of all other obligations under
the Documents executed in connection with the Related Other Loans.
However, if neither an Event of Default nor an Incipient Default then
exists under any Document executed by such Borrower in connection with such
Loan, the security documents executed by a Borrower in connection with a
Loan shall be released when the obligations (other than those arising from
a cross-collateralization provision) under the Documents executed in
connection with such Loan have been paid and performed in full and no
default exists under any other obligation owing to Lender which is secured
under such security documents.
3.2 Determination of Partial Release Fee. As used in this Agreement, the term
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"Partial Release Fee" means an amount to be paid under a Loan in
consideration of the partial release of a Time-Share Interest as security
for such Loan. The Partial Release Fees for Time-Share Interests encumbered
by a Mortgage which is part of the security for a Loan shall be determined
by Lender prior to the time of the first Advance under such Loan and shall
be in amounts sufficient to repay such Loan (based upon the Maximum Loan
Amount for such Loan) when ninety percent (90%) of all Time-Share Interests
into which the Real Property has been or will be subdivided have been sold.
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4. CONDITIONS PRECEDENT TO THIS AGREEMENT AND TO LOANS AND ADVANCES.
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4.1 Conditions Precedent to This Agreement. Lender's obligation to enter into
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this Agreement shall be subject to and conditioned upon VI having delivered
to Lender the Articles of Organization of VI and following Documents, duly
executed, delivered and in form and substance satisfactory to Lender:
(a) the Resolutions of VI;
(b) a favorable opinion from independent counsel for VI, in form and
substance reasonably satisfactory to Lender as to the formation and
good standing of VI, the due authorization, execution and delivery of
this Agreement by VI and the enforceability of this Agreement against
VI.
(c) this Agreement;
(d) any and all Third Party Consents required with respect to execution by
VI of this Agreement and Performance of its Obligations under this
Agreement; and
(e) such other documents as Lender may reasonably require.
4.2 Conditions Precedent to be Satisfied Prior to Each First Advance of a Loan.
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With respect to each Loan, Lender's obligation to make the first Advance of
such Loan shall be subject to and conditioned upon the Borrower under such
Loan having satisfied the following conditions:
(a) Documents. The Borrower under such Loan shall have delivered, or
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caused to be delivered, to Lender, property completed, duly executed,
delivered, recorded/filed, if applicable, and otherwise in form and
substance satisfactory to Lender, the loan documents required to be
executed and delivered to Lender pursuant to the terms of the Loan
Agreement attached hereto as EXHIBIT 1. Such Documents shall be
delivered to Lender by the time required pursuant to the Loan
Agreement attached hereto as EXHIBIT 1. Lender acknowledges that
except as provided below in this subparagraph, the requirements under
the Loan Agreement attached hereto as EXHIBIT 1 for the delivery of an
"Agreement," a "Note," a "Mortgage," an "Environmental Certificate," a
"Subordination Agreement" and a "Guaranty" shall be satisfied by the
delivery of the Loan Agreement, the Promissory Note, the Mortgage and
Financing Statement (With Security Agreement and Assignment of Leases,
Rents, Sales Documents, Sales Proceeds and Developer's Rights), the
Environmental Certificate, the Subordination Agreement and the
Guaranty attached hereto as EXHIBITS 2-6, respectively; and the
requirements for the delivery of a Security Agreement and Assignments
shall be satisfied through the delivery of the Mortgage and Financing
Statement (With Security Agreement and Assignment of Leases, Rents,
Sales Documents, Sales Proceeds and Developer's Rights) and the
Assignment of Contracts, Licenses, Permits and Other Intangibles
attached hereto as
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EXHIBIT 2 and EXHIBIT 7, respectively. However, as a condition to the
first Advance of a Loan, Lender may require changes to any or all of
the Documents it deems necessary or appropriate (i) to assure the
enforceability of the terms and conditions of such Documents or (ii)
to conform to customs and practices of prudent lenders doing business
in the jurisdiction where the applicable Real Property is located
pertaining to the creation and perfection of liens, security
interests, assignments and other charges upon the applicable
Collateral. Without limiting the generality of the foregoing, Lender
may require the use of a deed of trust or deed to secure debt in
jurisdictions where it is the custom or practice of prudent lenders in
the jurisdiction where the Real Property is located to do so.
(b) Other Due Diligence Documents. Unless otherwise provided in the
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applicable Loan Agreement, the Borrower under such Loan shall have
delivered to Lender, at Borrower's expense, the due diligence items
required pursuant to the Loan Agreement attached hereto as EXHIBIT 1.
Such items shall be delivered to Lender by the times required pursuant
to the terms of the Loan Agreement attached hereto as EXHIBIT 1.
(c) Other Conditions Precedent. Unless otherwise provided in the
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applicable Loan Agreement, the Borrower under such Loan shall have
satisfied at its expense the other applicable conditions to the
initial Advance of such Loan which are set forth in the Loan Agreement
attached hereto as EXHIBIT 1.
4.3 Conditions Precedent to Subsequent Advances of Loan. Unless otherwise
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provided in the applicable Loan Agreement, for each Advance of a Loan after
the initial Advance, Lender's obligation to make such Advance shall be
subject to the terms and conditions set forth in the Loan Agreement
attached as EXHIBIT 1, including delivery to Lender of the items called for
therein by the dates required pursuant to the terms of the Loan Agreement
attached hereto as EXHIBIT 1.
5. MANDATORY REPAYMENT OF LOANS; PREPAYMENT.
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5.1 Repayment of Loans. Unless otherwise provided in the applicable Loan
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Agreement, each Loan shall be evidenced by a separate promissory note; and
unless otherwise provided in the applicable Loan Agreement and/or in the
applicable promissory note, each Loan shall accrue interest and be repaid
in immediately available funds with interest according to the terms of the
form of Loan Agreement and Promissory Note attached hereto as EXHIBITS 1
and 2, respectively.
5.2 Prepayments. Except as permitted pursuant to the terms of the form of Loan
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Agreement and Promissory Note attached hereto as EXHIBITS 1 and 2,
respectively, or unless otherwise provided in the applicable Loan Agreement
or Note, no Loan shall be entitled to be prepaid in whole or in part.
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6. REPRESENTATIONS, WARRANTIES AND COVENANTS OF VISTANA, INC.
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6.1 (a) Financial Information. VI will furnish or cause to be furnished to
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Lender, within one hundred twenty (120) days after the end of each
fiscal year of VI, a copy of the current annual consolidated financial
statements of VI; and will furnish to Lender, within forty-five (45)
days after the end of each interim quarterly fiscal period of VI, a
copy of the current consolidated financial statements of VI, for the
period commencing with the first day of the fiscal year and concluding
with such quarter end. Such financial statements shall contain a
balance sheet as of the end of the relevant fiscal period and
statements of income and of cash flow for such fiscal period
(together, in each case, with the comparable figures for the
corresponding period of the previous fiscal year), all in reasonable
detail. All financial statements shall be prepared in accordance with
generally accepted accounting principles, consistently applied. All
financial statements required pursuant to this paragraph shall be
certified by the chief financial officer or chief accounting officer
of VI. Annual statements shall be audited and certified by a
recognized firm of certified public accountants reasonably
satisfactory to Lender. Together with such financial statements, VI
will deliver to Lender a certificate signed by VI's chief financial
officer or chief operating officer stating that there exists no Event
of Default under any Loan or Incipient Default under any Loan or, if
any such Event of Default or Incipient Default exists, specifying the
nature and period of its existence and what action VI and any
pertinent VI Entity proposes to take with respect to it.
(b) Right to Inspect. VI will permit, and will cause each VI Entity which
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is a Borrower to permit, Lender and its representatives at all
reasonable times, upon reasonable prior notice to inspect, audit and
copy, its records as shall be relevant to the Performance of the
terms, covenants or conditions of this Agreement or the financial
condition of VI or such VI Entity.
(c) Additional Information. VI will make available, and will cause each
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VI Entity which is a Borrower to make available, to Lender such
further information as Lender may from time to time reasonably
request.
6.2 Net Worth Maintenance. VI will at all times maintain as of the end of each
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calendar quarter a tangible net worth, as reflected on VI's annual audited
financial statements and interim quarterly financial statements delivered
pursuant to paragraph 6.1 and determined in accordance with generally
accepted accounting principles, in an amount not less than Seventy-Five
Million Dollars ($75,000,000).
6.3 Payment of Taxes. VI has filed (or has requested extensions of the time
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within which to file) returns for all federal, state, local and other taxes
which are required to be filed and taxes shown to be due and payable on
such filed returns have been paid or have been reserved against as required
by generally accepted accounting principles.
6.4 Credit Facility Fee, Non-Utilization Fee and Other Fees and Expenses.
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Unless one or more of the other Vistana Entities have paid such amounts, VI
will pay to Lender the Credit
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Facility Fee in three (3) installments equal to Two Hundred Thousand
Dollars each (each such payment amount, a "Credit Facility Fee Installment
Payment"). Credit Facility Installment Payments shall be due and payable on
July 9, 1998, and on the next two (2) anniversaries of such date; provided,
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however, that unless one or more of the other Vistana Entities have paid
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such amount, VI will pay to Lender upon the acceleration of any Loan under
which VI is the Borrower, a default by VI under a guaranty given by it for
a Loan beyond any applicable cure period, the filing of bankruptcy or
similar proceeding by or against VI, or the termination by VI of the Credit
Facility, whichever event first occurs, the excess of the Credit Facility
Fee over the aggregate of all Credit Facility Fee Installment Payments
previously received by Lender. After Lender has received the full amount of
the Credit Facility Fee, no further Credit Facility Fee Installment
Payments will be due. Furthermore, VI will pay to Lender on the first
anniversary (or if not a Business Day, the first Business Day thereafter)
of the date of this Agreement, a fee equal to two percent (2%) of the
excess, if any, of (a) Fifteen Million Dollars ($15,000,000) over (b) the
aggregate principal amount of Advances made during the period ending on the
day preceding the first anniversary of this Agreement. VI will also pay on
demand any and all reasonable costs and expenses incurred by Lender in
connection with negotiation of this transaction and the preparation and
negotiation of this Agreement (including, without limitation, the Exhibits
hereto) including, without limitation: all reasonable attorneys' and other
professionals' fees and charges (including, without limitation, normal
charges for photocopy, telecopy and computer services). Without limiting
the generality of the foregoing, if a bankruptcy proceeding is commenced by
or against VI, Lender shall, to the extent not already provided for herein,
be entitled to recover, and VI shall be obligated to pay, Lender's
reasonable attorneys' fees incurred in connection with: (i) any
determination of the applicability of the bankruptcy laws to the terms of
this Agreement; (ii) any attempt by Lender to enforce or preserve its
rights under the bankruptcy laws or to prevent such Borrower or any other
person from seeking to deny Lender its rights thereunder; or (iii) any
proceeding(s) arising under the bankruptcy laws or arising in or related to
a case under bankruptcy laws.
6.5 Indemnification. VI will INDEMNIFY, PROTECT, HOLD HARMLESS, and defend
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Lender, its successors, assigns and shareholders (including corporate
shareholders), and the directors, officers, employees, agents and servants
of the foregoing, for, from and against, except to the extent arising from
the indemnitee's gross negligence or willful misconduct, any and all
losses, costs, expenses (including, without limitation, court costs and
attorneys' fees), demands, claims, suits, proceedings (whether civil or
criminal), orders, judgments, penalties, fines and other sanctions arising
from or brought in connection with (a) any of the Collateral, the terms of
the Documents or the transactions related thereto, or any act or omission
of VI or any Vistana Entity which is a Borrower or their respective
employees or agents, whether actual or alleged, and (b) any and all
brokers' commissions or finders' fees or other costs of similar type by any
party engaged by VI or any Vistana Entity which is a Borrower in connection
with the Credit Facility. On written request by a person or other entity
covered by the above agreement of indemnity, VI will undertake, at its own
cost and expense, on behalf of such indemnitee, using counsel satisfactory
to the indemnitee, the defense of any legal action or proceeding to which
such person or entity shall be a party and for which such indemnitee is
entitled to be indemnified pursuant to this paragraph.
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6.6 Survival and Additional Representations, Warranties and Covenants. The
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representations, warranties and covenants contained in this Article VI are
in addition to, and not in derogation of, the representations, warranties
and covenants contained elsewhere in the Documents for the Loans and shall
be deemed to be made and reaffirmed prior to the making of each Advance.
7. CONSTRUCTION AND GENERAL TERMS.
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7.1 Payment Location. All monies payable under this Agreement shall be paid to
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Lender at its address set forth on the signature page of this Agreement in
lawful monies of the United States of America, unless otherwise designated
by Lender by notice.
7.2 Entire Agreement. This Agreement and the Documents executed from time to
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time in connection with the Loans shall exclusively and completely state
the rights and obligations of Lender, VI and Borrower with respect to the
transactions contemplated hereby. No modification, variation, termination,
discharge, abandonment, or waiver of any of the terms or conditions of this
Agreement shall be valid unless in writing and signed by duly authorized
representatives of the party sought to be bound by such action. This
Agreement shall supersede any and all prior representations, warranties
and/or inducements, written or oral, heretofore made by Lender concerning
the transaction contemplated hereby, including any commitment for
financing.
7.3 Counterparts. This Agreement may be executed simultaneously in any number
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of identical copies, each of which shall constitute an original for all
purposes.
7.4 Notices. All notices, requests or demands required or permitted to be
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given under this Agreement shall be in writing, and shall be deemed
effective (a) upon hand delivery, if hand delivered; (b) one (1) Business
Day after such are deposited for delivery via Federal Express or other
nationally recognized overnight courier service; or (c) three (3) Business
Days after such are deposited in the United States mails, certified or
registered mail, all with delivery charges and/or postage prepaid, and
addressed as shown below, or to such other address as the party being
notified may have designated in a notice given to the other party, which
notice shall be effective on the day of receipt if received prior to the
expiration of the recipient's normal business hours on the day of the
receipt or otherwise on the next Business Day. Written notice may be given
by telecopy to the telecopier number shown below or to such other
telecopier number as the party being notified may have designated in a
notice given to the other party, provided that such notice shall not be
deemed effective unless not later than the next Business Day, a copy of
such notice is hand delivered, or deposited for delivery via courier or in
the United States mail in accordance with the requirements set forth above.
If to Lender: FINOVA Capital Corporation
0000 Xxxx Xxxxxx Xxxxxx Xxxx, Xxxxx 000
Xxxxxxxxxx, Xxxxxxx 00000
Attn: Vice President-Resort Finance
Telecopy: (000) 000-0000
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with a copy to:
FINOVA Capital Corporation
0000 Xxxx Xxxxxx Xxxxxx Xxxx, Xxxxx 000
Xxxxxxxxxx, Xxxxxxx 00000
Attn: Vice President-Associate General Counsel
Telecopy: (000) 000-0000
If to VI Vistana, Inc.
0000 Xxxxxxx Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxx 00000
Attn: Chief Financial Officer
Telecopy No.: (000) 000-0000
with a copy to: Xxxxx Xxxxx, Esq.
Vistana, Inc.
000 Xxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxx, Xxxxxxx 00000
Telecopy No.: (000) 000-0000
7.5 Successors and Assigns. All the covenants of VI and all the rights and
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remedies of Lender contained in this Agreement shall bind VI, and, subject
to the restrictions on merger, consolidation and assignment contained in
the Documents, its successors and assigns, and shall inure to the benefit
of Lender, its successors and assigns, whether so expressed or not. VI may
not assign its rights in this Agreement in whole or in part. Except as may
be expressly provided in this Agreement, no person or other entity
(including, without limitation, any Affiliate of VI) shall be deemed a
third party beneficiary of any provision of this Agreement.
7.6 Severability. If any one or more of the provisions contained in this
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Agreement shall be held invalid, illegal or unenforceable in any respect,
the validity, legality and enforceability of the remaining provisions
contained in this Agreement shall not in any way be affected or impaired
thereby. In lieu of each such illegal, invalid or unenforceable provision,
there shall be added automatically as a part of this Agreement a provision
that is legal, valid, binding and enforceable and as similar in terms to
such illegal, invalid and unenforceable provision as may be possible.
7.7 Time of the Essence. Time is of the essence in the Performance of the
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Obligations.
7.8 Miscellaneous. All headings are inserted for convenience only and shall
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not affect any construction or interpretation of this Agreement. Unless
otherwise indicated, all references in this Agreement to clauses and other
subdivisions refer to the corresponding paragraphs, clauses and other
subdivisions of this Agreement; the words "herein," "hereof," "hereto,"
"hereunder" and words of similar import refer to this Agreement as a whole
and not to any particular paragraph, clause or other subdivision; and
reference to a numbered or lettered subdivision of an Article or paragraph,
or paragraph shall include relevant matter within the
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Article or paragraph which is applicable to but not within such numbered or
lettered subdivision. All Schedules and Exhibits referred to in this
Agreement are incorporated in this Agreement by reference.
7.9 (A) CHOICE OF LAW. THIS AGREEMENT AND THE RIGHTS, DUTIES AND OBLIGATIONS
-------------
OF THE PARTIES HERETO SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE INTERNAL LAWS OF THE STATE OF ARIZONA (WITHOUT REGARD TO
PRINCIPLES OF CONFLICTS OF LAWS) AND TO THE EXTENT THEY PREEMPT THE
LAWS OF SUCH STATE, THE LAWS OF THE UNITED STATES.
(B) CHOICE OF JURISDICTION AND VENUE. EACH OF LENDER AND VI: (A) HEREBY
--------------------------------
IRREVOCABLY SUBMITS ITSELF TO THE PROCESS, JURISDICTION AND VENUE OF
THE COURTS OF THE STATE OF ARIZONA, MARICOPA COUNTY, AND TO THE
PROCESS, JURISDICTION, AND VENUE OF THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF ARIZONA, FOR THE PURPOSES OF SUIT, ACTION OR OTHER
PROCEEDINGS ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE
SUBJECT MATTER HEREOF, AND, IF LENDER INITIATES SUCH ACTION, ANY COURT
IN WHICH LENDER SHALL INITIATE SUCH ACTION, AND THE CHOICE OF SUCH
VENUE SHALL IN ALL INSTANCES BE AT THE LENDER'S ELECTION; AND (B)
WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, HEREBY WAIVES AND
AGREES NOT TO ASSERT BY WAY OF MOTION, DEFENSE OR OTHERWISE IN ANY
SUCH SUIT, ACTION OR PROCEEDING ANY CLAIM THAT SUCH PERSON IS NOT
PERSONALLY SUBJECT TO THE JURISDICTION OF THE ABOVE-NAMED COURTS, THAT
SUCH SUIT, ACTION OR PROCEEDING IS BROUGHT IN AN INCONVENIENT FORUM OR
THAT THE VENUE OF SUCH SUIT, ACTION OR PROCEEDING IS IMPROPER. EACH
OF VI AND LENDER HEREBY WAIVES THE RIGHT TO COLLATERALLY ATTACK ANY
JUDGMENT OR ACTION IN ANY OTHER FORUM.
(C) WAIVER OF JURY TRIAL. LENDER AND VI ACKNOWLEDGE AND AGREE THAT ANY
--------------------
CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT WOULD BE BASED UPON
DIFFICULT AND COMPLEX ISSUES; AND, THEREFORE, THE PARTIES AGREE THAT
ANY LAWSUIT ARISING OUT OF ANY SUCH CONTROVERSY SHALL BE TRIED BY A
JUDGE SITTING WITHOUT A JURY, AND KNOWINGLY AND VOLUNTARILY WAIVE
TRIAL BY JURY IN ANY SUCH PROCEEDING.
(D) INDUCEMENT TO LENDER. ALL OF THE PROVISIONS SET FORTH IN THIS
--------------------
PARAGRAPH ARE MATERIAL INDUCEMENTS FOR LENDER'S EXTENDING THE CREDIT
FACILITY TO VI AND MAKING ADVANCES TO BORROWERS.
-12-
(________ VI INITIALS)]
7.10 Compliance With Applicable Usury Law. It is the intent of the parties
------------------------------------
hereto to comply with the Applicable Usury Law. Accordingly,
notwithstanding any provisions to the contrary in this Agreement, in no
event shall this Agreement require the payment or permit the collection of
interest in excess of the maximum contract rate permitted by the
Applicable Usury Law.
7.11 NO PARTNERSHIP OR JOINT VENTURE. THE RELATIONSHIP OF EACH BORROWER AND VI
-------------------------------
ON ONE HAND AND LENDER ON THE OTHER HAND WILL BE THAT OF DEBTOR AND
CREDITOR. IT IS NOT THE INTENTION OF EITHER OF VI OR LENDER TO ESTABLISH A
PARTNERSHIP BETWEEN VI AND LENDER OR ANY BORROWER AND LENDER, AND VI AND
LENDER AND THE BORROWERS AND LENDER SHALL NOT UNDER ANY CIRCUMSTANCES BE
CONSTRUED TO BE PARTNERS OR JOINT VENTURERS.
7.12 Standards Applied to Lender's Action. Unless otherwise specifically
------------------------------------
stipulated elsewhere in this Agreement, if a matter is left in this
Agreement to the decision, requirement, request, determination, judgment,
opinion, approval, consent, waiver, satisfaction, acceptance, agreement,
option or discretion of Lender, its employees, Lender's counsel or any
agent for or contractor of Lender, such action shall be deemed to be
exercisable by Lender or such other person in its sole and absolute
discretion and according to standards established in its sole and absolute
discretion. Without limiting the generality of the foregoing, "option" and
"discretion" shall be implied by use of the words "if" or "may."
7.13 Scope of Reimbursable Attorney's Fees. As used in the Documents, the term
-------------------------------------
"attorneys' fees" includes the fees of attorneys licensed to practice law
in any jurisdiction, the fees of law clerks, paralegals, investigators and
others not admitted to the bar but performing services under the
supervision of a licensed attorney, and the expenses incurred by them in
the performance of their services. As used in the Documents, attorneys'
fees incurred by Lender in the enforcement of any remedy or covenant
include, without limitation, attorneys' fees incurred in any foreclosure
of the Documents, in protecting or sustaining the lien or priority of the
collateral, or in any proceeding arising from or connected with any such
matter, including any bankruptcy, receivership, injunction or other
similar proceeding, or any appeal from or petition for review of any such
matter, and with or without litigation.
7.14 Publicity. Lender routinely advertises the transactions to which it is a
---------
party in newspapers, industry periodicals, and other miscellaneous print
and electronic literature. Without the prior written consent of VI, not to
be unreasonably withheld, Lender will not use VI's name, logo, insignia,
descriptive art work, trade name, trademark, or other similar material,
whether or not protected by copyright (or otherwise), in any such
advertisement.
-13-
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed in their respective name, personally or by their duly authorized
representatives as of the date above written.
VI: VISTANA, INC., a Florida corporation
By: /s/ Xxxxx Xxxxx
-----------------------------------------
Type/Print Name: XXXXX XXXXX
----------------------------
Title: Senior Vice President
--------------------------------------
LENDER: FINOVA CAPITAL CORPORATION, a
Delaware corporation
By: /s/ Xxxxxxx X. Xxxxxx
-----------------------------------------
Type/Print Name: XXXXXXX X. XXXXXX
----------------------------
Title: Vice President
--------------------------------------
-14-
LIST OF EXHIBITS
EXHIBIT 1 Form of Loan Agreement
EXHIBIT 2 Form of Promissory Note
EXHIBIT 3 Form of Mortgage
EXHIBIT 4 Form of Environmental Certificate
EXHIBIT 5 Form of Subordination Agreement
EXHIBIT 6 Form of Guaranty
EXHIBIT 7 Form of Assignment of Contracts, Licenses, Permits and Other
Intangibles
EXHIBIT 8 Real Property Suitability Standards
-15-
EXHIBIT 1
FORM OF LOAN AGREEMENT
LOAN AGREEMENT
--------------
This LOAN AGREEMENT is entered into as of (Month, Day) ,
------------------
(Year), by and between FINOVA CAPITAL CORPORATION, a Delaware corporation, and
------
(Name of Borrower) , an (State Where Borrower Organized and Type of
-------------------- -----------------------------------------------
Business Organization).
-----------------------
INTRODUCTION
This Loan Agreement is entered into pursuant to a Credit Facilities
Agreement dated as of July 9, 1998, between FINOVA Capital Corporation, a
Delaware corporation, and Vistana, Inc., a Florida corporation. The Credit
Facilities Agreement provides for the making of loans which include one or more
of the following components: an Acquisition Component, an Interest Reserve
Component, a Construction Component and a Renovation Component (as those terms
are defined in Article 1). The loan made pursuant to this Loan Agreement
contains the components identified in the SCHEDULE (as that term is defined in
Article 1) as the Loan Components.
1. DEFINITIONS
-----------
As used in this Agreement and the other Documents (as defined below) unless
otherwise expressly indicated in this Agreement or the other Documents, the
following terms shall have the following meanings (such meanings to be
applicable equally both to the singular and plural terms defined):
1.1 "Acquisition": the acquisition of the Property.
1.2 "Acquisition Advance": if the Loan includes an Acquisition Component,
an advance by Lender of the proceeds of the Acquisition Component.
1.3 "Acquisition Cost": the actual cost of acquiring the Real Property,
all interests therein and all development rights related thereto,
including, without limitation, all reasonable and ordinary closing
costs, attorneys' fees and other due diligence expenses incurred in
connection with such acquisition. Due diligence expenses may include,
at Borrower's option, fees and expenses of land planners, engineers,
architects, surveyors and similar professionals engaged with respect
to the Real Property as well as the cost of environmental reports and
other diligence items required to be delivered to Lender with respect
to the Real Property.
1.4 "Acquisition Component": if the Loan includes an Acquisition
Component, that portion of the Acquisition Loan, not to exceed the
Maximum Acquisition Component Amount, allocated to pay the Acquisition
Cost.
1.5 "Additional Retainage": the meaning given to it in paragraph 2.1(c).
1.6 "Advances": as applicable, the Acquisition Advance(s), the Interest
Reserve Advances, the Construction Work-Related Advances and the
Renovation Work-Related Advances; and "Advance": one of the Advances.
1.7 "Affidavit of Borrower": a sworn Affidavit of Borrower (and such
other parties as Lender may require) in the form of EXHIBIT I-3, to
accompany a Construction Work-Related Advance Request.
1.8 "Affiliate": with respect to any individual or entity, any other
individual or entity that directly or indirectly, through one or more
intermediaries, controls, or is controlled by, or is under common
control with, such individual or entity.
1.9 "Agreement": this Loan Agreement, as it may be from time to time
renewed, amended, restated or replaced.
1.10 "Applicable Usury Law": the usury law chosen by the parties pursuant
to the terms of paragraph 9.10 or such other usury law which is
applicable if such usury law is not.
1.11 "Approved Pre-Sales Financing": the meaning given to it in paragraph
6.8(a).
1.12 "Architect/Engineer": an architect, design professional or engineer
employed by Borrower to perform architectural, design or engineering
services for any portion of the Construction Work.
1.13 "Architect/Engineer Agreement": a contract (written or oral, now or
hereafter in effect) between Borrower and an Architect/Engineer for
the performance of architectural, design or engineering services, as
approved by Lender in writing and modified from time to time in
accordance with the terms of the Documents.
1.14 "Articles of Organization": the charter, articles, operating
agreement, limited partnership agreement, by-laws and any other
written documents evidencing the formation, organization and
continuing existence of an entity.
1.15 "Assignments": collectively, a written assignment or assignments
(which may be separate from and/or included within the Mortgage),
executed by Borrower pursuant to the terms of this Agreement and
creating in favor of Lender, to facilitate Performance of the
Obligations, a perfected, direct, first and exclusive assignment
(subject only to the Permitted Encumbrances) of all Contracts,
Licenses, Permits and Other Intangibles and other portions of the
Mortgaged Property (as defined in the Mortgage) exclusive of the Real
Property; as such assignments may be from time to time renewed,
amended, restated or replaced.
-2-
1.16 "Basic Retainage": the meaning given to it in paragraph 2.1(c).
1.17 "Borrower": (Name of Borrower) , a(n) (State Where
------------------------- -----------------
Borrower Organized and Type of Business Organization) , and, subject
------------------------------------------------------
to the restrictions on assignment and transfer contained in this
Agreement, its successors and assigns.
1.18 "Business Day": any day other than a Saturday, a Sunday, a national
holiday or a day on which banks in Phoenix, Arizona are required to
be closed.
1.19 "CLPI Assignment": the Assignment of Contracts, Licenses, Permits and
Other Intangibles executed and delivered by Borrower pursuant to the
terms of this Agreement and creating in favor of Lender, to
facilitate Performance of the Obligations, a perfected, direct, first
and exclusive assignment (subject only to the Permitted Encumbrances)
of the Contracts, Licenses, Permits and other Intangibles.
1.20 "Collateral": the Real Property, the Personal Property, the Insurance
Policies, any and all other property now or hereafter serving as
security for the Performance of the Obligations, and all products and
proceeds thereof.
1.21 "Completion of the Construction Work Phase": with respect to a
Construction Work Phase, the occurrence of both the Substantial
Completion of such Work Phase and final completion of the
Construction Work Phase (including "punch-list" items) remaining
incomplete at the time of Substantial Completion of such Work Phase.
1.22 "Completion of the Renovation Work": the occurrence of final
completion of the Renovation Work in substantial compliance with the
Renovation Work Contract(s), applicable Legal Requirements, the
Documents, and otherwise in a good and workmanlike manner, lien free
and free from defective materials and workmanship.
1.23 "Construction Budget": with respect to a Construction Work Phase, the
detailed budget cost itemization for such Construction Work Phase
prepared by Borrower and approved in writing by Lender and modified
from time to time in accordance with the terms of the Documents,
which specifies by item the cost and source of payment of: (a) all
labor, materials and services necessary for Completion of the
Construction Work Phase in accordance with the applicable Plans and
Specifications, the applicable Construction Work Contract(s), the
Documents, all Legal Requirements, sound construction, engineering
and architectural principles, and commonly accepted safety standards;
(b) interest on the Construction Component allocated to such
Construction Work Phase and on any portion of the Acquisition Cost
that Lender reasonably requires be allocated to such Construction
Work Phase; and (c) all other expenses incidental to the Completion
of the Construction Work Phase. The Construction Budget shall include
within the costs
-3-
of the Construction Work Phase to be paid from the Construction
Component an interest reserve and a contingency reserve determined to
be adequate by Lender. The total costs within a Construction Work
Phase to be paid from the Construction Component shall not exceed on
a per Unit basis the Maximum Per Unit Cost for Units within such
Construction Work Phase. Without limiting Lender's discretion in
approving a Construction Budget, Lender shall be satisfied that any
"construction overhead" contained therein does not constitute a
developer fee of any kind.
1.24 "Construction Component": if the Loan includes a Construction
Component, that portion of the Loan, not to exceed the Maximum
Construction Component Amount, allocated to payment of the cost of
the Construction Work, excluding interest on the Loan.
1.25 "Construction Component Borrowing Term": the period commencing on the
date of this Agreement and ending on the close of Lender's normal
business day on July 9, 2001.
1.26 "Construction Improvements": the on-site and/or off-site improvements
(including, without limitation, renovations which are not part of the
Renovation Work) to be constructed upon or made to or for the benefit
of the Real Property as part of the Construction Work, all as set
forth in the Plans and Specifications and the Construction Work
Contract(s) and as described in the Construction Budget, which
improvements are generally described in the SCHEDULE as the
Construction Improvements.
1.27 "Construction Work": if the Loan includes a Construction Component,
the construction or making of the Construction Improvements and the
acquisition and installation of any and all furniture, furnishings,
fixtures and/or equipment which are part of the Construction
Improvements or required by the terms of this Agreement or shown on
or described in the Plans and Specifications or the Construction Work
Contract(s) or shown as costs in the Construction Budget(s).
1.28 "Construction Work Contract": if the Loan includes a Construction
Component, a contract (written or oral, now or hereafter in effect)
between Borrower and a Construction Work Contractor or between a
Construction Work Contractor and any other person or entity relating
in any way to the Construction Work, including the performing of
labor and the furnishing of equipment, materials or services (other
than architectural, design or engineering services).
1.29 "Construction Work Contractor": if the Loan includes a Construction
Component, a contractor employed by Borrower to provide labor and/or
to furnish equipment, materials or services (other than
architectural, design or engineering services) for any portion of the
Construction Work.
-4-
1.30 "Construction Work Phase": a phase of the Construction Work which
consists of (a) the construction of (i) some or all of the time-share
buildings which are part of the Construction Improvements or of the
renovating (other than as part of the Renovation Work) of some or all
of the Units or a portion but not all of the Time-Share Project or
(ii) some (but not less than those which are necessary to the use of
the time-share buildings being constructed as part of the same
Construction Phase) or all of the on-site and off-site improvements
which are part of the Construction Work (including, without
limitation, amenities and ancillary buildings) and (b) the
acquisition and installation of any and all furniture, furnishings,
fixtures and/or equipment which are part of the improvements being
constructed or made in such Construction Work Phase or required by
terms of this Agreement or shown on or described in the applicable
Plans and Specifications or the applicable Construction Work
Contract(s) or as costs in the applicable Construction Budget; and
each Construction Work Phase is more specifically described in the
SCHEDULE.
1.31 "Construction Work Phase Progress Schedule": with respect to a
Construction Work Phase, the schedule for the Completion of the
Construction Work Phase and parts thereof, as approved by Lender in
writing.
1.32 "Construction Work-Related Advance": if the Loan includes a
Construction Component, an advance by Lender of the proceeds of the
Construction Component for the purpose of paying or reimbursing
Borrower for costs of the Construction Work, excluding interest on
the Loan.
1.33 "Construction Work-Related Advance Request": if the Loan includes a
Construction Component, the written application of Borrower on the
forms described on EXHIBIT I specifying by name and amount all
parties to whom Borrower is obligated for labor, materials, equipment
or services supplied for the performance of the Construction Work and
all other expenses incidental thereto, the Real Property and the
Completion of the Construction Work, and requesting a Work-Related
Advance for payment of such items.
1.34 "Contracts, Licenses, Permits and other Intangibles": all contracts,
licenses, and other intangibles now or hereafter held or owned by
Borrower and used in connection with the Property and/or the business
of Borrower conducted on the Real Property or with respect thereto,
excluding those items excluded from the definition of "Assigned
Assets" in the CLPI Assignment.
1.35 "Declaration": collectively, the Time-Share Declaration and any and
all other declarations of covenants, conditions and restrictions
governing the Real Property.
1.36 "Developer's Rights": all special rights and privileges of Borrower
under any declaration of covenants, conditions and restrictions
and/or other documents
-5-
governing the Real Property which are not enjoyed by all other owners
of portions of the Real Property.
1.37 "Default Rate": as defined in and determined under the Note.
1.38 "Documents": this Agreement, the Note, the Mortgage, the Security
Agreement, the Assignments, the Subordination Agreement(s), the
Guaranty, the Environmental Certificate, and all other documents,
excluding the Master Credit Facilities Agreement and the Other Loan
Documents, now or hereafter executed in connection with the Loan, as
they may be from time to time renewed, amended, restated or replaced.
1.39 "Environmental Certificate": an environmental certificate executed
pursuant to this Agreement by Borrower and such other persons or
parties as required by Lender, as it may be from time to time
renewed, amended, restated or replaced.
1.40 "Event of Default": the meaning set forth in paragraph 7.1.
1.41 "Force Majeure Event": an "act of God," a fire, a strike, a law, a
regulation, a governmental order and/or injunction which is issued by
a court of competent jurisdiction for reasons other than for
Borrower's acts or omissions which would constitute a default under
this Agreement, an inability to obtain materials or supplies which is
beyond Borrower's reasonable control, an inability to obtain
necessary permits or other governmental approvals for reasons which
are beyond Borrower's reasonable control, or any similar event beyond
Borrower's reasonable control.
1.42 "Guaranty": if Borrower is an entity other than VI, a primary, joint
and several guaranty made by VI, guarantying the repayment of the
Loan, together with interest thereon as provided in the Note, and the
payment and performance of all other Obligations, in accordance with
the requirements of this Agreement.
1.43 "Incipient Default": an event which after notice and/or lapse of time
would constitute an Event of Default.
1.44 "Insurance Policies": the insurance policies that Borrower is
required to maintain and deliver pursuant to paragraph 6.9.
1.45 "Interest Reserve Advance": if the Loan includes an Interest Reserve
Component, an advance by Lender of the proceeds of the Interest
Reserve Component.
1.46 "Interest Reserve Component": if the Loan includes an Interest
Reserve Component, that portion of the Loan, not to exceed the
Maximum Interest Reserve
-6-
Amount, which is allocated for the monthly payment of interest
accrued on the Loan.
1.47 "Legal Requirements": (a) all present and future judicial decisions,
statutes, regulations, permits or certificates of any governmental
authority in any way applicable to Borrower or any of the Collateral;
(b) all covenants, conditions and restrictions contained in any
document by which any of the Collateral is bound; (c) all business
association agreements forming, or granting and/or limiting the
powers of, Borrower; and (d) all contracts or agreements (written or
oral) by which Borrower is bound or, if compliance therewith would
otherwise be in conflict with any of the Documents for the Loan, by
which Borrower becomes bound with Lender's prior written consent.
1.48 "Lender": FINOVA Capital Corporation and its successors and assigns.
1.49 "Lender's Inspector": the meaning given to it in paragraph 8.1.
1.50 "Loan": the Loan made pursuant to paragraph 2.1.
1.51 "Loan Components": collectively, the Acquisition Component, the
Construction Component, the Interest Reserve Component and the
Renovation Component but only to the extent identified in the
SCHEDULE as Loan Components; and "Loan Component": one of the Loan
Components.
1.52 "Manager/General Partner": if Borrower is a limited liability company
and is not member-managed, each manager of the limited liability
company, individually and collectively, or if Borrower is a
partnership, each general partner of the partnership, individually
and collectively.
1.53 "Master Credit Facilities Agreement": that Revolving Credit
Facilities Agreement dated as of July 9, 1998, between Lender and VI,
as it may be from time to time renewed, amended, restated or
replaced.
1.54 "Material Construction Work Contract": a Construction Work Contract
requiring payments in the aggregate of more than Two Hundred Fifty
Thousand Dollars ($250,000).
1.55 "Material Renovation Work Contract": a Renovation Work Contract
requiring payments in the aggregate of more than Two Hundred Fifty
Thousand Dollars ($250,000).
1.56 "Maturity Date": if the Loan has only an Acquisition Component, the
date which is sixty (60) months from the date of the initial
Acquisition Advance; and otherwise July 9, 2006.
-7-
1.57 "Maximum Acquisition Component Amount": if the Loan includes an
Acquisition Component, the amount identified in the SCHEDULE as the
Maximum Acquisition Component Amount.
1.58 "Maximum Construction Component Amount": if the Loan includes a
Construction Component, the amount identified in the SCHEDULE as the
Maximum Construction Component Amount.
1.59 "Maximum Credit Facility Amount": the meaning given to it in the
Master Credit Facilities Agreement.
1.60 "Maximum Interest Reserve Amount": if the Loan has an Interest
Reserve Component, the amount identified in the SCHEDULE as the
Maximum Interest Reserve Amount.
1.61 "Maximum Loan Amount": the amount identified in the SCHEDULE as the
Maximum Loan Amount.
1.62 "Maximum Per Unit Cost": if the Loan includes a Construction
Component or a Renovation Component, the amount identified in the
SCHEDULE as the Maximum Per Unit Cost for such Loan Component.
1.63 "Maximum Renovation Component Amount": if the Loan includes a
Renovation Component, the amount identified in the SCHEDULE as the
Maximum Renovation Component Amount.
1.64 "Minimum Initial Equity Contribution": the amount identified in the
SCHEDULE as the Minimum Initial Equity Contribution, which equals the
amount, if any, by which (a) the sum of the Acquisition Cost, the
costs necessary to be incurred to cause Completion of the
Construction Work Phases and the costs necessary to be incurred to
cause Completion of the Renovation Work Phases exceeds (b) the
Maximum Loan Amount; provided, however, that costs which have been
-------- -------
paid by Borrower and are not to be reimbursed from the Loan shall be
excluded in making the calculation required pursuant to subparagraph
(a).
1.65 "Minimum Required Time-Share Approvals": all approvals required from
governmental agencies in the state where the Real Property is located
in order to subdivide the Real Property into Time-Share Interests and
to sell Time-Share Interests and offer them for sale at the Time-
Share Project.
1.66 "Mortgage": a mortgage, deed to secure debt or deed of trust executed
and delivered by Borrower pursuant to the terms of this Agreement and
under the terms of which Borrower has conveyed or granted in favor of
Lender, as security for the Performance of the Obligations, a
perfected, direct, first and exclusive lien (subject
-8-
only to the Permitted Encumbrances), upon the Real Property, as it
may be from time to time renewed, amended, restated or replaced.
1.67 "Note": the promissory note in form and substance identical to
EXHIBIT A to be made and delivered by Borrower to Lender pursuant to
paragraph 4.1, as it may from time to time be renewed, amended,
restated or replaced.
1.68 "Obligations": all obligations, agreements, duties, covenants and
conditions of Borrower to Lender which Borrower is now or hereafter
required to Perform under the Documents.
1.69 "Other Loan": a loan which has been requested from Lender under the
Master Credit Facilities Agreement and which Lender is committed to
make thereunder, but excluding the Loan.
1.70 "Other Loan Documents": with respect to an Other Loan, all documents
now or hereafter entered into by Lender and a Vistana Entity in
connection with such Other Loan.
1.71 "Partial Release Fee": the amount identified in the SCHEDULE as the
Partial Release Fee.
1.72 "Performance" or "Perform": full, timely and faithful performance.
1.73 "Permitted Encumbrances": ad valorem real property taxes and
assessments, a lien not yet due and payable; inchoate liens for ad
valorem real property taxes; inchoate assessments; and inchoate
mechanics', artisans' and similar liens; zoning and use laws and
related regulations, to the extent any non-compliance therewith does
not violate any representations, warranty, covenant or agreement of
Borrower contained in the Documents; a lien on the Property in favor
of the holder of the indebtedness owing under the Approved Pre-Sales
Financing but only to the extent permitted pursuant to paragraph
6.7(a), and the other rights, restrictions, reservations,
encumbrances, easements and liens of record which Lender has agreed
to accept as set forth in EXHIBIT B or in any other written agreement
by Lender.
1.74 "Personal Property": that portion of the Mortgaged Property (as
defined in the Mortgage) consisting of personal property.
1.75 "Plans and Specifications": if the Loan includes a Construction
Component or a Renovation Component, the architectural, structural,
mechanical, electrical and other plans and specifications which are
for the construction of the Construction Improvements or Renovation
Improvements, as applicable, and the completion of the rest of the
Construction Work or Renovation Work, as applicable, and have
-9-
been prepared by Architect(s)/Engineer(s), as approved in writing by
Lender and modified from time to time in accordance with the terms of
the Documents.
1.76 "Principal Construction Work-Related Items": if the Loan includes a
Construction Component, the Plans and Specifications, all agreements
between Borrower and third parties pertaining to the Construction
Work, and all other Contracts, Licenses, Permits and other
Intangibles pertaining to the Construction Work, including, without
limitation, Construction Work Contract(s) and Architect/Engineer
Agreement(s).
1.77 "Property": the Real Property and Personal Property.
1.78 "Purchase Contract": a contract pursuant to which Borrower has agreed
to sell and a third party has agreed to purchase a Time-Share
Interest created or to be created from the Real Property.
1.79 "Purchaser": a purchaser of a Time-Share Interest from Borrower
pursuant to a Purchase Contract.
1.80 "Real Property": the real property described in EXHIBIT C.
1.81 "Related Other Loan": an Other Loan which was made for the purpose of
acquiring real property within or to be added to the Time-Share
Project or financing the construction or renovation of improvements
on such Real Property or within such Time-Share Project.
1.82 "Renovation Budget": with respect to a Renovation Work Phase, the
detailed budget cost itemization for such Renovation Work Phase
prepared by Borrower and approved in writing by Lender and modified
from time to time in accordance with the terms of the Documents,
which specifies by item the cost and source of payment of: (a) all
labor, materials and services necessary for Completion of the
Renovation Work Phase in accordance with the applicable Plans and
Specifications, the applicable Renovation Contract(s), the Documents,
all Legal Requirements, sound construction, engineering and
architectural principles, and commonly accepted safety standards; (b)
interest on the Renovation Component allocated to the Renovation Work
Phase and any portion of the Acquisition Cost that Lender reasonably
requires to be allocated to the Renovation Work Phase; and (c) all
other expenses incidental to the Completion of the Renovation Work
Phase. The Renovation Budget shall include within the costs of the
Renovation Work Phase to be paid from the Renovation Component an
interest reserve and a contingency reserve determined to be adequate
by Lender. The total costs within a Renovation Work Phase to be paid
from the Renovation Component shall not exceed on a per Unit basis
the Maximum Per Unit Cost for Units within such Renovation Work
Phase. Without limiting Lender's discretion in approving the
Renovation Budget,
-10-
Lender shall be satisfied that any "construction overhead" contained
therein does not constitute a developer fee of any kind.
1.83 "Renovation Component": if the Loan includes a Renovation Component, that
portion of the Loan, not to exceed the Maximum Renovation Component
Amount, allocated to payment of the cost of the Renovation Work, excluding
interest on the Loan.
1.84 "Renovation Component Borrowing Term": the period commencing on the
date of this Agreement and ending on July 9, 2001.
1.85 "Renovation Improvements": the renovations, consisting exclusively of
furniture, furnishings and equipment and, unless otherwise agreed in
writing by Lender, minor labor and structural work to be or for the
benefit of the Real Property as part of the Renovation Work, all as set
forth in the Plans and Specifications and the Renovation Work Contract(s)
and as described in the Renovation Budget, which improvements are
generally described in the SCHEDULE as the Renovation Improvements. For
purposes of this paragraph, labor and structural work shall be considered
"minor" if the budgeted costs of labor and work is less than fifteen
percent (15%) of the total budgeted "hard" and "soft" costs (excluding
interest) of the Renovation Improvements .
1.86 "Renovation Work": if the Loan includes a Renovation Component, the making
of the renovations and the acquisition and installation of any and all
furniture, furnishings, fixtures and/or equipment which are part of the
Renovation Improvements or required by the terms of this Agreement or the
Renovation Work Contract(s) or shown as costs in the Renovation Budget(s).
1.87 "Renovation Work Contract": if the Loan includes a Renovation Component, a
contract (written or oral, now or hereafter in effect) between Borrower
and a Renovation Work Contractor, between a Renovation Work Contractor and
any other person or entity relating in any way to the Renovation Work,
including the performing of labor and the furnishing of equipment,
materials or services.
1.88 "Renovation Work Contractor": if the Loan includes a Renovation Component,
a contractor employed by Borrower to provide labor and/or to furnish
equipment, materials or services for any portion of the Renovation Work.
1.89 "Renovation Work Phase": a phase of the Renovation Work which consists of
the renovation of some or all of the Units or some or all of the Time-
Share Project and the acquisition and installation of any and all
furniture, furnishings, fixtures, and/or equipment which are part of such
phase or required by the terms of this Agreement or the applicable
Renovation Work Contract(s) or shown as costs in the applicable
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Renovation Budget; and each Renovation Work Phase is more specifically
described in the SCHEDULE.
1.90 "Renovation Work Phase Progress Schedule": if the Loan includes a
Renovation Component, the schedule for the final completion of each
Renovation Work and parts thereof, as approved by Lender in writing.
1.91 "Renovation Work-Related Advance": with respect to Renovation Work Phase,
an advance by Lender of the proceeds of the Renovation Component for the
purpose of paying or reimbursing Borrower for costs of the Renovation
Work, excluding interest on the Loan.
1.92 "Renovation Work-Related Advance Request": if the Loan includes a
Renovation Component, the written application of Borrower in the form
attached as EXHIBIT K-1.
1.93 "Required Completion Assurance Deposits": collectively, all Required
Completion Assurance Deposits (Construction) and all Required Completion
Assurance Deposits (Renovation); and "Required Completion Assurance
Deposit": one of the Required Completion Assurance Deposits.
1.94 "Required Completion Assurance Deposit (Construction)": if the Loan
includes a Construction Component, the meaning given to it in paragraph
6.4(k).
1.95 "Required Completion Assurance Deposit (Renovation)": if the Loan includes
a Renovation Component, the meaning given to it in paragraph 6.5(f).
1.96 "Required Completion Date (Construction)": with respect to a Construction
Work Phase, the date ["Anticipated Required Completion Date
(Construction)"] which occurs the number of months specified in the
SCHEDULE as the Required Completion Period (Construction) from the earlier
of (i) the date on which Borrower commences vertical construction in the
Construction Work Phase or (ii) the date on which Borrower first sells or
contracts to sell Time-Share Interests in time-share buildings being
constructed as part of such Construction Work Phase, plus such additional
time which is necessary to achieve Completion of the Construction Work
Phase and is due solely to the occurrence of one or more Force Majeure
Events, but in no event (regardless of the length of delay resulting from
Force Majeure Events) later than the later of (a) July 9, 2001 or (b) one
hundred twenty (120) days after the Anticipated Required Completion Date
(Construction).
1.97 "Required Completion Date (Renovation)": with respect to a Renovation Work
Phase, the date ["Anticipated Required Completion Date (Renovation)"]
which occurs the number of months specified in the SCHEDULE as the
Required Completion Period (Renovation) from the earlier of (i) the date
on which Borrower commences
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substantially remodeling the Renovation Work Phase or (ii) the date on
which Borrower first sells or contracts to sell Time-Share Interests
in time-share buildings being constructed as part of such Renovation
Work Phase, plus such additional time which is necessary to achieve
Completion of the Renovation Work Phase and is due solely to the
occurrence of one or more Force Majeure Events, but in no event
(regardless of the length of delays resulting from Force Majeure
Events) later than the later of (a) July 9, 2001 or (b) one hundred
twenty (120) days after the Anticipated Required Completion Date
(Renovation).
1.98 "Resolution": a resolution of a corporation certified as true and
correct by an authorized officer of such corporation, a certificate
signed by the manager (if any) of a limited liability company and such
members whose approval is required under the applicable Articles of
Organization and owners' agreements, or a partnership certificate
signed by all of the general partners of such partnership and such
other partners whose approval is required under the applicable
Articles of Organization and owners' agreements.
1.99 "SCHEDULE": the Schedule of Additional Terms which follows the
signature pages of the parties.
1.100 "Security Agreement": a written security agreement which may be
separate from and/or included within the Mortgage, an Assignment or
this Agreement, executed by Borrower and creating in favor of Lender,
as security for the Performance of the Obligations, a perfected,
direct, first and exclusive security interest (subject only to the
Permitted Encumbrances) in the Personal Property, as it may be from
time to time renewed, amended, restated or replaced.
1.101 "Security Documents": the Mortgage, the Security Agreement, the
Assignments, and all other documents now or hereafter securing the
Obligations, as they may be from time to time renewed, amended,
restated or replaced.
1.102 "Security Interest": with respect to any Collateral, a perfected,
direct, first and exclusive (subject only to the Permitted
Encumbrances) lien on, security interest in and charge upon such
Collateral.
1.103 "Subordination Agreement(s)": the subordination agreement(s) made and
delivered pursuant to the terms of this Agreement, as it/they may be
from time to time renewed, amended, restated or replaced.
1.104 "Substantial Completion of the Construction Work": if the Loan
includes a Construction Component,
(a) substantial completion (as defined in AIA Document 201, most
current version) of the Construction Work, in accordance with the
Plans and
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Specifications, the Construction Work Contract(s), the Documents,
all applicable Legal Requirements, sound construction,
engineering and architectural principles and commonly accepted
safety-standards, free of liens (except for Permitted
Encumbrances) and defective materials and workmanship; and
(b) receipt by Lender of the following in form and substance
satisfactory to it: (i) a certificate from Borrower and
Architect(s)/ Engineer(s) and, if Lender elects, from Lender's
Inspector to the effect that Construction Work has been so
completed, all utilities necessary to serve the Real Property
have been connected and are operating, the Construction
Improvements are fully furnished and ready for occupancy for
time-share or other intended purposes, and final payment is due
under all Construction Work Contracts between Borrower and all
Construction Work Contractors; (ii) a certificate of occupancy
(or its equivalent) from the appropriate governmental authority
having jurisdiction over the Construction Work which has the
effect of allowing the use of Construction Improvements for time-
share or other intended purposes, to the extent such a
certificate is customarily issued or available; (iii) if
applicable Legal Requirements provide that the recording of a
notice of completion will cause the expiration upon a date
certain of the statutory period within which mechanics' and
similar liens can be filed, verification of the recording of such
notice in the manner prescribed by such laws; (iv) final lien
waivers, other than lien waivers for Construction Work remaining
to be performed prior to Completion and for which Lender is still
holding any Basic Retainage or Additional Retainage; (v) the as-
built survey required pursuant to paragraph 6.4(g) after
substantial completion of the Construction Work; (vi) the title
policy endorsements required pursuant to paragraph 6.4(h) after
substantial completion of the Construction Work; and (vii) if any
portion of the Construction Improvements is required to be
dedicated to a governmental authority, evidence that such
dedication has occurred and that the governmental authority has
accepted such Construction Improvements, subject only to
customary warranty obligations on the part of Borrower.
1.105 "Substantial Completion of the Construction Work Phase": with respect
to a Construction Work Phase,
(a) substantial completion of the Construction Work Phase (as defined
in AIA Document 201, most current version), in accordance with
the applicable Plans and Specifications, the applicable
Construction Work Contract(s), the Documents, all applicable
Legal Requirements, sound construction, engineering and
architectural principles and commonly accepted safety-standards,
free of liens (except for Permitted Encumbrances) and defective
materials and workmanship; and
-14-
(b) receipt by Lender of the following in form and substance
satisfactory to it: (i) a certificate from Borrower and
Architect(s)/ Engineer(s) and, if Lender elects, from Lender's
Inspector to the effect that Construction Work has been so
completed, all utilities necessary to serve the portions of the
Real Property improved as part of such Construction Work Phase
have been connected and are operating, the applicable
Construction Improvements are fully furnished and ready for
occupancy for time-share or other intended purposes, and final
payment is due under all applicable Construction Work Contracts
between Borrower and all applicable Construction Work
Contractors; (ii) a certificate of occupancy (or its equivalent)
from the appropriate governmental authority having jurisdiction
over the Construction Work Phase which has the effect of allowing
the use of applicable Construction Improvements for time-share or
other intended purposes, to the extent such a certificate is
customarily issued or available; (iii) if applicable Legal
Requirements provide that the recording of a notice of completion
will cause the expiration upon a date certain of the statutory
period within which mechanics' and similar liens can be filed,
verification of the recording of such notice in the manner
prescribed by such laws; (iv) final lien waivers, other than lien
waivers for work in such Construction Work Phase remaining to be
performed prior to Completion and for which Lender is still
holding any Basic Retainage or Additional Retainage; (v) the as-
built survey required pursuant to paragraph 6.4(g) after
substantial completion of the Construction Work Phase; (vi) the
title policy endorsements required pursuant to paragraph 6.4(h)
after substantial completion of the Construction Work Phase; and
(vii) if any portion of the applicable Construction Improvements
is required to be dedicated to a governmental authority, evidence
that such dedication has occurred and that the governmental
authority has accepted such Construction Improvements, subject
only to customary warranty obligations on the part of Borrower.
1.106 "Term": the duration of this Agreement, commencing on the date as of
which this Agreement is entered into and ending when all of the
monetary Obligations shall have been Performed.
1.107 "Third Party Consents": those consents which Lender reasonably
requires Borrower to obtain, or which Borrower is contractually or
legally obligated to obtain, from others in connection with the
transaction contemplated by the Documents.
1.108 "Time-Share Association": the association provided for in the Time-
Share Declaration to manage the Time-Share Project and in which all
owners of Time-Share Interests are members.
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1.109 "Time-Share Declaration": the declaration identified in the SCHEDULE
as the Time-Share Declaration, which has established or, if identified
in the SCHEDULE as to be recorded, will establish, the Time-Share
Program with respect to the Real Property.
1.110 "Time-Share Interest": an undivided fractional fee simple interest as
tenant-in-common (or an estate for years with a remainder over in
fractional fee simple as tenant-in-common) either (a) in a Unit
(coupled with an undivided fractional fee simple interest as tenant-
in-common in the common areas of the Time-Share Project) or (b) in the
entire Time-Share Project, in both cases together with the exclusive
right to occupy and use a specific Unit (or an equivalent Unit) for a
period of at least seven (7) consecutive days every calendar year
(i.e., an annual Time-Share Interest) or every other calendar year
(i.e., a biennial Time-Share Interest) (on a fixed or floating basis)
and the non-exclusive right to use such common elements during the
same occupancy period, as more specifically described in the Time-
Share Declaration.
1.111 "Time-Share Management Agreement": the management agreement from time
to time entered into between the Time-Share Association and the Time-
Share Manager for the management of the Time-Share Program.
1.112 "Time-Share Manager": the person from time to time employed by the
Time-Share Association to manage the Time-Share Program.
1.113 "Time-Share Program": the program established by the Time-Share
Declaration, by which purchasers may own Time-Share Interests in fee
simple, enjoy their respective Time-Share Interests on a recurring
basis not less often than seven (7) days every year or every other
year, and share the expenses associated with the operation and
management of such program.
1.114 "Time-Share Program Consumer Documents": the Purchase Contract,
promissory note, purchase money mortgage, deed of conveyance, credit
application (if any), credit disclosure, rescission right notices,
final subdivision public reports/ prospectuses/public offering
statements, receipt for public report, and other documents used or to
be used by Borrower in connection with the sale of Time-Share
Interests created or to be created from the Real Property.
1.115 "Time-Share Program Governing Documents": the Time-Share Declaration,
the Articles of Organization for the Time-Share Association, any and
all rules and regulations from time to time adopted by the Time-Share
Association, the Time-Share Management Agreement and any subsidy
agreement by which Borrower is obligated to subsidize shortfalls in
the budget of the Time-Share Program in lieu of paying assessments.
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1.116 "Time-Share Project": the time-share resort or part of the resort
described in the SCHEDULE as the Time-Share Project.
1.117 "Title Insurer": a title company which is acceptable to Lender and
issues the Title Policy.
1.118 "Title Policy": an ALTA lender's policy of title insurance in an
amount not less than the Maximum Loan Amount (or, if less, due to
Borrower performing the Construction Work and/or Renovation Work in
Work Phases, the sum of all Advances made by Lender and the committed
and undisbursed portion of the Loan with respect to such Work Phases),
insuring Lender's interest in the Mortgage as a perfected, direct,
first and exclusive lien on the Real Property, subject only to the
Permitted Encumbrances, issued by Title Insurer and in form and
substance acceptable to Lender.
1.119 "Uncovered Cost of the Construction Work Phase": with respect to a
Construction Work Phase, at any time, the amount equal to the excess
(if any) of (a) the remaining unpaid cost of Completion of the
Construction Work Phase over (b) the committed and undisbursed portion
of the Construction Component and the balance of any Required
Completion Assurance Deposits (Construction) held by Lender with
respect to such Construction Work Phase.
1.120 "Uncovered Cost of the Renovation Work Phase": with respect to a
Renovation Work Phase, at any time, the amount equal to the excess (if
any) of (a) the remaining unpaid cost of final completion of the
Renovation Work Phase over (b) the committed and undisbursed portion
of the Renovation Component and the balance of any Required Completion
Assurance Deposits (Renovation) held by Lender with respect to such
Renovation Work Phase.
1.121 "Uncovered Cost of the Work": at any time, the sum of the Uncovered
Cost of the Construction Work Phases and the Uncovered Cost of the
Renovation Work Phases.
1.122 "Unit": a dwelling unit in which a Time-Share Interest has been
created or is intended to be created within the Real Property.
1.123 "VI": Vistana, Inc. a Florida corporation.
1.124 "Work-Related Advances": collectively, the Construction Work-Related
Advances and the Renovation Work-Related Advances; and "Work-Related
Advance": one of the Work-Related Advances.
1.125 "Work Phase": a Construction Work Phase or a Renovation Work Phase.
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In addition, when the term "vertical construction" is used in connection with a
Construction Work Phase including remodeling, the term shall also be interpreted
to include, as to such remodeling segment, "substantial remodeling."
2. LOAN COMMITMENT; USE OF PROCEEDS
--------------------------------
2.1 Loan Commitment.
---------------
(a) Acquisition Advance Commitment; Determination of Acquisition
------------------------------------------------------------
Advance Amount. Lender hereby agrees, if the Loan includes an
--------------
Acquisition Component and Borrower has Performed all Obligations
then due, Lender will make the Acquisition Advance(s) as provided
for in the SCHEDULE. Unless otherwise expressly provided in the
SCHEDULE or Lender otherwise agrees in writing to do so, Borrower
will not be not be entitled to obtain any Acquisition Advance
after the Required Closing Date
(b) Interest Reserve Advances. Lender hereby agrees that if the Loan
-------------------------
has an Interest Reserve Component and Borrower has Performed all
Obligations then due, Lender will make Interest Reserve Advances
for the purpose of paying interest due on the Loan. Subject to
the provisions of paragraph 4.3, the amount of each Interest
Reserve Advance shall be in the amount of interest then accrued
and unpaid on the Loan. Interest Reserve Advances shall be
available from and after the initial Advance made hereunder.
Borrower shall not be entitled to obtain Interest Reserve
Advances after the expiration of the Interest Reserve Borrowing
Term unless Lender, in its discretion, agrees in writing with
Borrower to make such Advances thereafter on terms and conditions
satisfactory to Lender.
(c) Construction Component Commitment; Determination of Construction
----------------------------------------------------------------
Work-Related Advance Amounts; Retainage. Lender hereby agrees
---------------------------------------
that if the Loan has a Construction Component and Borrower has
Performed all the Obligations then due, Lender will make
Construction Work-Related Advances to Borrower for the purpose of
paying or reimbursing Borrower for costs of the Construction
Work, exclusive of interest on the Loan. The maximum amount of
each Construction Work-Related Advance shall be equal to the
costs of the Construction Work covered by the applicable
Construction Work-Related Advance Request and allocated within
the applicable Construction Budget for payment out of the
Construction Component and, unless otherwise waived by Lender in
writing or expressly provided for below in this paragraph, less
an amount equal to the sum of (a) ten percent (10%) of the costs
of such Construction Work until at least fifty percent (50%) of
the Construction Work to be performed under the applicable
Construction Contract has been completed and five percent (5%) of
such costs thereafter ("Basic Retainage") and (b) any additional
retainage
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("Additional Retainage") required under the Construction Work
Contract(s); provided, however, that Construction Work-Related
-------- -------
Advances shall not be made for stored or ordered materials not
yet incorporated into the Construction Improvements unless stored
at the Real Property in accordance with the terms of this
Agreement, except that Borrower shall be entitled to Construction
Work-Related Advances for the payment of deposits of up to fifty
percent (50%) of the purchase price of furniture and furnishings
consisting a part of the Construction Work; and provided,
--------
further, that Basic Retainage shall not be required with respect
-------
to work performed under a Construction Work Contract if there is
no general contractor (i.e., Borrower acts as its own "general
contractor") or an Affiliate of Borrower is the general
contractor and Borrower does not request progress payments or
reimbursement for work to be performed under a Construction
Contract unless the work has been substantially completed to the
extent of the requested reimbursement or progress payment. The
Basic Retainage, if applicable, shall apply to all "hard" costs
of the Construction Work and to such soft costs as Lender, in the
exercise of its reasonable discretion, deems necessary until
Lender has reviewed and approved the Construction Budget. The
Additional Retainage shall be disbursed as part of the next
Advance occurring after Lender and Borrower have reasonably
determined that a Construction Work Contractor is entitled to it
under the applicable Construction Work Contract. The Basic
Retainage from Construction Work-Related Advances for a
Construction Work Phase shall be disbursed at the time of
Substantial Completion of the Construction Work Phase to the
extent Construction Work Contractor(s) are then entitled to it
under the Construction Work Contract(s) between Borrower and such
Construction Work Contractor(s) prior to final payment, subject
to Lender's right to keep such additional portion of the Basic
Retainage as it may determine to be necessary to ensure
Completion of the Construction Work, with such retained portion
to be disbursed promptly after Completion of the Construction
Work. Lender shall have no obligation to make any Construction
Work-Related Advance with respect to a Construction Work Phase
if, after giving effect to such Advance, the cost of Completion
of the Construction Work Phase exceeds the sum of (i) remaining
undisbursed balance of the Construction Component allocated to
the Construction Work Phase and (ii) all Required Assurance
Deposits (Construction) held with respect to such Construction
Work Phase. Borrower shall not be entitled to obtain Constructed
Work-Related Advances after the expiration of the Construction
Component Borrowing Term unless Lender, in its discretion, agrees
in writing with Borrower to make such Advances thereafter on
terms and conditions satisfactory to Lender.
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(d) Renovation Component Commitment; Determination of Renovation
------------------------------------------------------------
Work-Related Advance Amounts. Lender hereby agrees that if the
----------------------------
Loan has a Renovation Component and Borrower has Performed all
the Obligations then due, Lender will make Renovation Work-
Related Advances to Borrower for the purpose of paying or
reimbursing Borrower for costs of the Renovation Work, exclusive
of interest on the Loan. The maximum amount of each Renovation
Work-Related Advance shall be equal to the costs of the
Renovation Work covered by the applicable Renovation Work-Related
Advance Request and allocated within the applicable Renovation
Budget for payment out of the Loan; provided, however, that
-------- -------
Renovation Work-Related Advances shall not be made for stored or
ordered materials not yet incorporated into the improvements
being renovated (other than goods stored at the Real Property in
accordance with the terms of this Agreement), except that
Borrower shall be entitled to Renovation Work-Related Advances
for the payment of deposits of up to fifty percent (50%) of the
purchase price of furniture and furnishings constituting a part
of the Renovation Work. Lender shall have no obligation to make
any Renovation Work-Related Advance with respect to a Renovation
Work Phase if, after giving effect to such Advance, the cost of
Completion of the Renovation Work Phase exceeds the sum of (i)
remaining undisbursed balance of the Renovation Component
allocated to the Renovation Work Phase and (ii) all Required
Assurance Deposits (Renovation) held with respect to such
Renovation Work Phase. Borrower shall not be entitled to obtain
Renovation Work-Related Advances after the expiration of the
Renovation Component Borrowing Term unless Lender, in its
discretion, agrees in writing with Borrower to make such Advances
thereafter on terms and conditions satisfactory to Lender.
(e) Limitations on Total Advances of Loan. Lender shall have no
-------------------------------------
obligation to make any Advance if after giving effect to such
Advance the aggregate amount of all Advances exceeds the Maximum
Loan Amount. If the Loan has a Construction Component or a
Renovation Component, Lender shall have no obligation to make any
Advance if, after giving effect to such Advance, the sum of (i)
the aggregate amount of all Advances, (ii) the committed and
undisbursed portion of the Loan, and (iii) the Uncovered Cost of
the Work exceeds the Maximum Loan Amount. Furthermore, Lender
shall have no obligation to make an Advance if, after giving
effect to such Advance, the sum of (i) the unpaid principal
balance of the Loan and the Other Loans and (ii) the Remaining
Cost of the Credit Facilities Work (as defined in the Master
Credit Facilities Agreement) exceeds the Maximum Credit Facility
Amount.
2.2 Loan Non-Revolving. The Loan shall be non-revolving. All Advances
------------------
shall be viewed as a single loan.
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2.3 Use of Advances.
---------------
(a) Acquisition Advances. If the Loan includes an Acquisition
--------------------
Component, Borrower will use the proceeds of the Acquisition
Advance(s) only to pay or reimburse Borrower for Acquisition
Costs.
(b) Interest Reserve Advances. If the Loan includes an Interest
-------------------------
Reserve Component, Borrower will use the proceeds of Interest
Reserve Advances only to pay interest due on the Note.
(c) Construction Work-Related Advances. If a Loan includes a
----------------------------------
Construction Component, Borrower will use proceeds of
Construction Work-Related Advances only to pay or reimburse
Borrower for applicable line-item expenses in the Construction
Budget. If no Event of Default exists and the re-allocation will
not result in any Uncovered Cost of the Construction Work,
Borrower may re-allocate line items in a Construction Budget
without first obtaining Lender's consent. If no Event of Default
exists and Lender's consent to re-allocation is required, such
consent shall not be unreasonably withheld. Borrower will notify
Lender of all line item re-allocations within the Construction
Budget within a reasonable period of time.
(d) Renovation Work-Related Advances. If the Loan includes a
--------------------------------
Renovation Component, Borrower will use proceeds of Renovation
Work-Related Advances only to pay or reimburse Borrower for
applicable line-item expenses shown in the Renovation Budget.
Unless no Event of Default exists and the re-allocation will not
result in any Uncovered Cost of the Renovation Work, Borrower may
not re-allocate line items in the Renovation Budget without first
obtaining Lender's consent, which consent shall not be
unreasonably withheld or delayed. Borrower will notify Lender of
all line item re-allocations within the Renovation Budget within
a reasonable period of time.
3. SECURITY
--------
3.1 Delivery and Maintenance of Security. Borrower will deliver or cause
------------------------------------
to be delivered to Lender and will maintain or cause to be maintained
in full force and effect throughout the Term (except as otherwise
expressly provided in any Document), the Security Documents and all
other security required to be given to Lender pursuant to the terms of
this Agreement. Lender reserves the right, at its option, to require
that this Loan and all Related Other Loans be cross-collateralized.
However, if neither an Event of Default nor an Incipient Default then
exists, Collateral shall be released when the Obligations (other than
those arising from a cross-collateralization provision) have been
performed.
-21-
3.2 Sale and Partial Release of Time-Share Interests. Notwithstanding
------------------------------------------------
anything in any of the Documents to the contrary, Borrower may enter
into Purchase Contracts providing for the sale of Time-Share Interests
to Purchasers upon the terms and conditions set forth in this
paragraph. The sale shall be made in the ordinary course of Borrower's
business in a bona fide transaction when no Event of Default exists
---- ----
and the sale shall comply with all applicable Legal Requirements.
Borrower shall be entitled to close a Purchase Contract and have the
Time-Share Interest(s) covered by such Purchase Contract released from
the Mortgage only upon satisfaction of the following conditions: (a)
the sale in connection with which the Purchase Contract was executed
satisfies the criteria set forth in the preceding sentence; (b)
Borrower has paid all recording and escrow fees incurred in connection
with the partial releases; and (c) Lender has received (i) a written
request from Borrower certifying to Lender that the sale and partial
release satisfy the criteria set forth in this paragraph at least five
(5) Business Days prior to the date of the requested release, (ii) a
completed partial release document in recordable form and otherwise
satisfactory to Lender, and (iii) the appropriate Partial Release Fee
and all its reasonable out-of-pocket expenses incurred in connection
with the partial release. Borrower shall also be entitled to the
partial release of a Time-Share Interest when the condition satisfied
in clause (a) of the preceding sentence has not been satisfied so long
as (x) no Event of Default then exists, (y) the conditions set forth
in clauses (b) and (c) of the preceding sentence have been satisfied
with respect to such Time-Share Interest and (z) the Partial Release
Fee results from a prepayment permitted pursuant to paragraph 5.3(a);
provided, however, that the Time-Share Interest being released shall
-------- -------
be determined by Lender in its discretion. Borrower and Lender will
cooperate in developing a system for processing the partial release
requests and Partial Release Fees that is as administratively
efficient and cost effective as possible.
3.3 Other Developmental Matters Affecting Security. If a Borrower desires
----------------------------------------------
Lender to give its consent to or take any other action concerning a
matter affecting the zoning, platting, development or sale of or title
to any of its Real Property encumbered by a Mortgage, it shall comply
with the procedures set forth in EXHIBIT D. The provisions of the
preceding sentence shall not apply to Borrower's desire to obtain
Partial Releases or to obtain Advances, the procedures for which are
set forth elsewhere in this Agreement.
4. ADVANCES
--------
4.1 General Conditions Precedent to Initial Advance. Lender's obligation
-----------------------------------------------
to make the initial Advance shall be subject to and conditioned upon
the terms and conditions set forth in the following subparagraphs and
elsewhere in this Agreement having been satisfied:
-22-
(a) Documents. Borrower shall have delivered to Lender the following
---------
Documents duly executed, delivered, recorded/filed, if
applicable, and otherwise in form and substance satisfactory to
Lender: (i) this Agreement; (ii) the Note; (iii) the Mortgage;
(iv) the Assignments; (v) the Environmental Certificate; (vi) the
Subordination Agreement; (vii) if Borrower is not VI, the
Guaranty; (viii) UCC-1 financing statements for filing and/or
recording, as appropriate, where necessary to perfect the
Security Interest in the Collateral; (ix) the Title Policy (or an
unconditional commitment to issue the Title Policy promptly); (x)
the Third Party Consents; (xi) a favorable opinion from
independent counsel for Borrower and, if Borrower is not VI, for
VI, with respect to the matters set forth in EXHIBIT E; (xii) a
request for the Advance in the form required by Lender (EXHIBIT
G-1, EXHIBIT I-1 and EXHIBIT K-1, as applicable); and (xiii) such
other documents as are identified in the SCHEDULE as Additional
Loan Documents.
(b) Organizational, Time-Share Project and Other Due Diligence
----------------------------------------------------------
Documents. Borrower shall have delivered to Lender at least five
---------
(5) Business Days (unless a longer period is expressly specified
in the Master Credit Agreement) prior to the date of the Advance,
the following items and such other items as are identified in the
SCHEDULE as Additional Due Diligence Documents, all in form and
substance satisfactory to Lender:
(i) the Resolutions of Borrower, any Manager/General Partner
of Borrower; any other member or partner of Borrower or
any Manager/General Partner of Borrower whose approval or
acknowledgment of the Loan is required under the Articles
of Organization of Borrower or any General Partner/Manager
of Borrower or by Lender; and the Resolutions of each
surety for the Loan (including, without limitation, VI if
Borrower is not VI);
(ii) if they have not been previously delivered to Lender in
connection with the Articles of Organization of Borrower,
any Manager/General Partner of Borrower, any other member
or general partner of Borrower or of any Manager/General
Partner of Borrower whose approval or acknowledgment of
the Loan is required by the Articles of Organization of
Borrower of any General Partner/Manager of Borrower or by
Lender; and the Articles of Organization of each surety
for the Loan (including, without limitation, VI if
Borrower is not VI);
(iii) current certificates of good standing for Borrower and any
Manager/General Partner of Borrower, and, if Borrower is
not VI, for VI, from the state identified in the SCHEDULE
as State of
-23-
Organization for such person, and, in the case of such
Borrower and any Manager/General Partner of Borrower, in
the state where the Real Property is located;
(iv) a Level I environmental assessment of the Real Property
and a "Haz Map Report" for the Real Property;
(v) evidence that taxes and assessments on the Real Property
and the Personal Property have been paid;
(vi) evidence that Borrower has good and marketable title to an
undivided fee simple interest in the Real Property,
together with a title commitment or preliminary title
report for the issuance of the Title Policy and legible
copies of all documents referred to therein;
(vii) a 1992 ALTA/ACSM survey of the Real Property certified to
Lender and prepared by a licensed land surveyor acceptable
to Lender, showing the Real Property, all easements
necessary to the operation and use of the Real Property
and such other details as Lender may reasonably require;
(viii) a written summary description of Borrower's plan for the
sale of Time-Share Interests into which the Real Property
has been or will be subdivided and, unless the Real
Property is fully improved for time-share and Borrower
plans no further improvements, for the improvements
reasonably satisfactory Lender;
(ix) evidence that Borrower has received Minimum Required Time-
Share Approvals from the state where the Real Property is
located or that Borrower will be able to obtain them by
the date identified in the SCHEDULE as the Minimum
Required Time-Share Approvals Delivery Date and all other
licenses and certificates (exclusive of licenses and
certificates which are dependent upon the construction or
making of any Construction Improvements or Renovation
Improvements), for the time-share intended use of the Real
Property, including environmental permits;
(x) evidence that the Real Property is zoned for time-share
and other intended uses and that all approvals under
applicable Legal Requirements, exclusive of approvals
which are dependent upon the construction or making of any
Construction Improvements or Renovation Improvements, have
been obtained for such uses or that Borrower will be able
to obtain all such approvals for the Construction
Improvements or Renovation Improvements, as
-24-
applicable, prior to commencement of construction of such
improvements;
(xi) the Insurance Policies;
(xii) evidence that the Real Property is not located within a
flood prone area, except for such portion thereof which
does not materially adversely affect the development,
intended use or value of the Real Property (taken as a
whole) or evidence that flood insurance is available and
has been obtained;
(xiii) evidence of the current and expected continued
availability of adequate utilities to serve the Real
Property for time-share and other intended uses;
(xiv) evidence of legal access to the Real Property, which is
adequate to serve the Real Property for time-share and
other intended uses;
(xv) if such Loan includes an Acquisition Advance, a copy of
the purchase contract pursuant to which such Borrower
purchased or is to purchase the Real Property which is
the subject of such Loan, and closing settlement
statements reasonably satisfactory to Lender to verify
the Acquisition Cost of the Real Property;
(xvi) to the extent the same have been entered into, a copy of
all marketing contracts, management contracts, and other
material agreements which have been entered into with
respect to the Real Property and the sale of Time-Share
Interests created or to be created from the Real Property
not otherwise expressly required with respect to the
terms of this Agreement;
(xvii) market data with respect to the Real Property, including
data or the price and absorption of time-share interests
in competing projects within such market;
(xviii) if the Loan includes an Acquisition Component, the
applicable items listed in EXHIBITS F and G;
(xix) if the Loan includes a Construction Component, the
applicable items listed in EXHIBITS H and I;
(xx) if the Loan includes a Renovation Component, the
applicable items listed in EXHIBITS J and K; and
-25-
(xxi) such other items as Lender requests which are reasonably
necessary to evaluate the Collateral, the request for the
Advance and the satisfaction of the conditions precedent
to the Advance.
(c) Financial Statements; Litigation and Judgment Searches. Lender shall
------------------------------------------------------
have received the following in form and substance satisfactory to
Lender:
(i) good standing certificates for Borrower and, if Borrower is not
VI, for, VI; and the results of current UCC, lien, litigation,
judgment and bankruptcy searches for Borrower, any
Manager/General Partner of Borrower and, if Borrower is not VI,
for VI, conducted in such jurisdictions as Lender deems
appropriate;
(ii) current financial statements and credit reports for Borrower
and, if Borrower is not VI, for VI, including, without
limitation, if Borrower has few or no assets prior to closing of
the Loan, a pro-forma balance sheet as of the closing of the
Loan; and
(iii) the results of a site inspection of the Real Property which is
made by Lender's employees.
4.2 Conditions Precedent to Subsequent Acquisition Advances. If the Loan
-------------------------------------------------------
includes an Acquisition Component and the Acquisition Component is
entitled to be disbursed in more than one Acquisition Advance,
Lender's obligation to make an Acquisition Advance after the initial
Acquisition Advance shall be subject to the terms and conditions
identified in EXHIBIT G as Subsequent Acquisition Advance Conditions.
4.3 Conditions Precedent to Interest Reserve Advances. Notwithstanding
-------------------------------------------------
anything herein to the contrary, if the Loan includes an Interest
Reserve Component and neither an Event of Default nor an Incipient
Default exists, then during the Borrowing Term and, in Lender's
discretion, after expiration of the Borrowing Term to the extent that
the Interest Reserve Component has not been exhausted, if Borrower
fails to make a payment of interest on the Note when due, Lender will
charge the Interest Reserve Component for monthly interest xxxxxxxx on
the Loan until it has been exhausted. If the Interest Reserve
Component is exhausted, Borrower will pay to Lender the monthly
installments of interest on the Note in accordance with the terms of
the Note.
4.4 Conditions Precedent to Subsequent Construction Work-Related Advances.
---------------------------------------------------------------------
If the Loan includes a Construction Component, Lender's obligation
to make Construction Work-Related Advances shall be subject to
Borrower's satisfaction of the terms and conditions set forth in
EXHIBIT I, including delivery to Lender of the items called for
therein at least three (3) Business Days prior to the date of such
-26-
Construction Work-Related Advance or such longer period as may be
described in EXHIBIT I.
4.5 Conditions Precedent to Subsequent Renovation Work-Related Advances.
--------------------------------------------------------------------
If the Loan has a Renovation Component, Lender's obligation to make
Renovation Work-Related Advances shall be subject to Borrower's
satisfaction of the terms and conditions set forth in EXHIBIT K,
including delivery to Lender of the items called for therein at least
three (3) Business Days prior to the date of such Renovation Work-
Related Advance or such longer period as may be described in EXHIBIT
K.
4.6 General Conditions Precedent to All Advances. Lender's obligation to
--------------------------------------------
fund any Advance is subject to and conditioned upon the additional
terms and conditions set forth in the following subparagraphs
remaining satisfied at the time of such Advance:
(a) No material adverse change shall have occurred in the Time-Share
Project or in the business or financial condition of Borrower
and, if Borrower is not VI, of VI since the date of the latest
financial and operating statements given to Lender by or on
behalf of Borrower or VI, as the case may be.
(b) There shall have been no material adverse change in the
warranties and representations made in the Documents by Borrower
or any surety (including, without limitation, VI if Borrower is
not VI) for the performance of the Obligations.
(c) Neither an Event of Default nor Incipient Default shall have
occurred and be continuing.
(d) The interest rate applicable to the Advance (before giving effect
to any savings clause) will not exceed the maximum rate permitted
by the Applicable Usury Law.
(e) Lender shall have received all fees (or installments thereof)
required to be paid to Lender on or before the time of the
Advance pursuant to this Agreement or the Master Credit
Facilities Agreement.
4.7 Conditions Satisfied at Borrower's Expense. The conditions to each
------------------------------------------
and every Advance shall be satisfied by Borrower at its expense.
4.8 Minimum Amount and Maximum Frequency of Advances. Advances other than
------------------------------------------------
Interest Reserve Advances shall be made in amounts not less than One
Hundred Thousand Dollars ($100,000), except for the final Work-Related
Advance under any Loan Component and the final Work-Related Advance
under the portion of a Construction Component or a Renovation
Component allocated to a Work Phase.
-27-
Advances shall be made no more frequently than twice per calendar
month; provided, however, that three such Advances may be made in a
-------- -------
calendar month, so long as one such Advance is an Interest Reserve
Advance.
4.9 Disbursement of Advances. Advances shall be payable to Borrower; or
------------------------
if either requested by Borrower and approved in writing by Lender or
required by Lender in connection with Work-Related Advances, to
others, either severally or jointly with Borrower, for the credit or
benefit of Borrower. Unless otherwise directed by Borrower to be
disbursed by check or draft, advances shall be disbursed by wire
transfer or, at Borrower's option exercised by written request to
Lender, by wire transfer. Borrower will pay Lender's reasonable charge
in connection with any wire transfer, which is currently the amount
identified in the SCHEDULE as the Current Wire Transfer Fee. Lender
may, at its option, withhold from any Advance any fees then due Lender
under the Documents or the Master Credit Facilities Agreement and any
other sum (including costs and expenses) then due Lender under the
terms of the Documents or for which Borrower would be obligated to
reimburse Lender pursuant to the Documents if first paid directly by
Lender.
4.10 No Waiver. Although Lender shall have no obligation to make an
---------
Advance unless and until all of the conditions precedent to the
Advance have been satisfied, Lender may, at its discretion, make
Advances prior to that time without waiving or releasing any of the
Obligations.
5. NOTE; PRE-PAYMENTS
------------------
5.1 Repayment of Loan. The Loan shall be evidenced by the Note and shall
-----------------
be repaid in immediately available funds according to the terms of the
Note and the Documents.
5.2 Minimum Required Principal Payments Prior to Maturity Date. Until the
----------------------------------------------------------
principal of the Loan has been paid in full, Borrower will make to
Lender at the time of each partial release of a Time-Share Interest
from the Mortgage a principal payment on the Loan equal to the Partial
Release Fee required to be paid in connection with such partial
release.
5.3 (a) Prepayment. Borrower shall have the option to repay the Loan in
----------
full or in part on any Interest Adjustment Date (as defined in
the Note) upon thirty (30) days prior written notice, provided,
--------
however, Borrower may not prepay the Loan pursuant to this
-------
paragraph if after giving effect to such prepayment, the
aggregate advances of the Loan and the Other Loans would be less
than Fifteen Million Dollars ($15,000,000) unless the aggregate
unpaid principal balances of the Loan and the Other Loans
exceeded Fifteen Million Dollars ($15,000,000) for a period of
least one hundred eighty (180) days at any time prior to the
repayment.
-28-
(b) Exceptions to Prepayment Prohibitions. Notwithstanding anything
-------------------------------------
in paragraph 5.3(a) to the contrary, principal payments required
pursuant to paragraph 5.2 shall not be deemed to be prepayments
prohibited pursuant to paragraph 5.3(a) and such principal
payments shall not be taken into account when determining
compliance with the provisions of Section 5.3(a).
(c) Prepayment Premium Payable for Involuntary Prepayments. If a
------------------------------------------------------
prepayment of the Loan occurs which is not permitted pursuant to
paragraph 5.3(a), then Borrower will pay to Lender a prepayment
premium in an amount identified in the SCHEDULE as the Prepayment
Premium; provided, however, that such requirement is not intended
-------- -------
to imply or infer a right on the part of Borrower to make a
prepayment if it pays such prepayment premium. Such prepayment
premium shall be payable regardless of whether the prepayment of
the Loan is voluntary or is required because repayment of such
Loan has been accelerated pursuant to any of Lender's rights
under the Documents (including, without limitation, any right to
accelerate following an Event of Default).
(d) Return of Prepayment. If Borrower makes a partial prepayment of
--------------------
principal on the Loan and such prepayment is not permitted under
this Agreement, such prepayment may, at Lender's option, be
returned to Borrower within three (3) Business Days after receipt
by Lender; and if such payment is so returned, basic interest
shall accrue on the full principal balance of Loan which from
time to time is outstanding and shall be calculated as if such
prepayment had never been made.
5.4 General Provisions Pertaining to Application of Payments. Partial
--------------------------------------------------------
Release Fees shall be applied first to the principal balance of the
Loan, next to accrued and unpaid interest under the Loan, and then to
all other sums owing in connection with the Loan in such order and
manner as Lender may determine. Notwithstanding anything in the
Documents to the contrary other than the provisions of the preceding
sentence, the amount of all payments or amounts received by Lender
with respect to the Loan shall be applied to the extent applicable
under the Documents: (i) first, to any past due payments of interest
on the Loan and to accrued interest on the Loan through the date of
such payment, including any default interest; (ii) then, to any
interest on delinquent interest, late fees, overdue risk assessments,
examination fees and expenses, collection fees and expenses and any
other fees and expenses due to Lender under the Documents; and (iii)
then, to the unpaid principal balance of such Loan; provided, however,
-------- -------
while an Event of Default or Incipient Default exists, each payment
shall be applied to such amounts owed to Lender by Borrower as Lender
in its discretion may determine. In calculating interest and applying
payments as set forth above: (i) interest on the outstanding balance
of the Loan shall be calculated and collected through the date payment
is actually received by Lender; (ii) interest on the outstanding
balance of
-29-
the Loan shall be charged during any grace period permitted under the
Documents; (iii) on each annual anniversary of the closing date of the
Loan, all past due interest and other past due charges provided for
under the Documents shall be added to the principal balance of the
Loan; and (v) to the extent that Borrower makes a payment or Lender
receives any payment or proceeds of the Collateral for Borrower's
benefit that is subsequently invalidated, set aside or required to be
repaid to any other person or entity, then, to such extent, the
Obligations in connection with such Loan intended to be satisfied
shall be revived and continue as if such payment or proceeds had not
been received by Lender and Lender may adjust such Loan balance as
Lender, in its discretion, deems appropriate under the circumstances.
5.5 Borrower's Unconditional Obligation to Make Payments. Whether or not
----------------------------------------------------
the proceeds from the Collateral shall be sufficient for that purpose,
Borrower will pay when due all payments required to be made pursuant
to any of the Documents, Borrower's Obligation to make such payments
being absolute and unconditional.
6. BORROWER'S GENERAL REPRESENTATIONS, WARRANTIES AND COVENANTS
------------------------------------------------------------
6.1 (a) Good Standing. Each of Borrower and, if Borrower is a limited
-------------
liability company or partnership, each Manager/General Partner,
as the case may be, is, and will remain at all times, duly
organized, validly existing and in good standing as a business
organization of the type identified in the SCHEDULE as Type of
Business Organization for such person under the laws of the state
identified in the SCHEDULE as the State of Organization for such
person; and in the case of Borrower, in each jurisdiction in
which it is selling Time-Share Interests or where the location or
nature of its properties or its business makes such qualification
necessary. Borrower has full authority to Perform the Obligations
and to carry on its business and own its property.
(b) Power and Authority; Enforceability. Borrower has full power and
-----------------------------------
authority to grant the Security Interest and to execute and
deliver the Documents and to Perform the Obligations. All action
necessary and required by the Articles of Organization of
Borrower and, if Borrower is a limited liability company or
partnership, of each Manager/General Partner and all other Legal
Requirements for the obtaining of the Loan and for the execution
and delivery of the Documents executed and delivered in
connection with the Loan has been duly and effectively taken; and
the Documents are and shall be, legal, valid, binding and
enforceable against Borrower and do not violate the Applicable
Usury Law, or constitute a default or result in the imposition of
any lien under the terms or provisions of any other agreement to
which Borrower is a party. Except for the Third Party Consents
delivered pursuant to Article 4 and the consents evidenced by the
Resolutions delivered pursuant to Article 4, no consent of any
-30-
governmental agency or any other person not a party to this
Agreement is or will be required as a condition to the execution,
delivery or enforceability of the Documents.
(c) Borrower's Principal Place of Business. Borrower's principal
--------------------------------------
place of business and chief executive office are located at the
address identified in the SCHEDULE as Borrower's Principal Place
of Business and Chief Executive Office. Borrower will not move its
principal place of business or chief executive office to another
location except upon not less than sixty (60) days prior written
notice to Lender.
6.2 No Litigation. There is no action, litigation or other proceeding
-------------
pending or, to Borrower's knowledge, threatened before any arbitration
tribunal, court, governmental agency or administrative body against
Borrower or any Manager/General Partner, or, if Borrower is not VI,
against VI, which might materially adversely affect the Performance of
the Obligations, any of the Collateral, the business or financial
condition of Borrower or (if Borrower is not VI) Guarantor, or the
ability of Borrower to Perform the Obligations. Borrower will promptly
notify Lender if any such action, litigation or proceeding is pending
or threatened.
6.3 (a) Applicability of Paragraphs 6.3(b)-(c). The representations,
--------------------------------------
warranties and covenants in paragraphs 6.3(b)-(c), inclusive,
shall be applicable only if the Loan includes a Construction
Component.
(b) Adequacy of Principal Construction Work-Related Items. At the
-----------------------------------------------------
time of the initial Advance for a Work Phase and at all times
thereafter until Completion of the Construction Work for the Work
Phase: (i) the Principal Construction Work-Related Items
applicable to the Construction Work Phase shall be adequate for
Completion of the Construction Work Phase; (ii) unless no Event
of Default exists and the third party's default will not result
in any Uncovered Cost of the Construction Work Phase the
Principal Construction Work-Related Items will be in full force
and effect; (iii) unless no Event of Default exists and the
third-party's default will not result in any Uncovered Cost of
the Construction Work Phase, no third party bound by the
Principal Construction Work-Related Items applicable to the
Construction Work Phase shall be in default of its obligations
thereunder or shall have threatened to terminate Borrower's
rights thereunder; (iv) unless no Event of Default exists and
failure to do so will not result in any Uncovered Cost of the
Construction Work Phase, Borrower shall have paid all sums and
performed all other obligations it has under the Principal
Construction Work-Related Items applicable to the Construction
Work Phase to the extent then due; and (v) unless no Event of
Default then exists and the third-party's defense will not result
in any Uncovered Cost of the
-31-
Construction Work Phase, no third party bound by the Principal
Construction Work-Related Items shall have any defense to the
enforcement of Borrower's rights thereunder. No moratorium or
other legal impediment exists or, to the knowledge of Borrower,
is threatened with respect to the issuance of any permit or
approval necessary to use the Real Property for intended time-
share purposes upon Completion of the Construction Work.
(c) Adequacy of Construction Budget. At the time of the initial
-------------------------------
Work-Related Advance for a Construction Work Phase and at all
times thereafter until Completion of the Construction Work Phase,
the Construction Budget for the Construction Work Phase will
accurately and completely set forth the types and estimated
maximum amounts of all costs which must be incurred for
Completion of the Construction Work Phase to occur.
(d) Adequacy of Streets and Utilities. Either all streets, drainage
---------------------------------
systems, easements, and utilities (including potable water, storm
and sanitary sewer, gas, electric, telephone and cable television
facilities and garbage removal) necessary for the Completion of
the Construction Work (if the Loan includes a Construction
Component) and use of the Real Property for time-share and other
intended purposes have been completed, paid for in full and are
available at the boundaries of the Real Property; or if the Loan
includes a Construction Component, (i) all necessary easements
(including, without limitation, easements for streets and
utilities) have been obtained and paid for, (ii) commitments to
extend and provide all necessary utilities and rights to hook-up
such utilities have been obtained, (iii) all necessary utilities
will be available to the Real Property and Construction
Improvements for a Work Phase and will be adequate for time-share
and other intended purposes upon Completion of the Construction
Work Phase, and (iv) the Construction Component as allocated to
each Construction Work Phase is adequate for the final
completion, lien free, of such portion of the Construction Work.
All water and sewer treatment plants and power generation
facilities intended to serve the Real Property have been
constructed and are operational and have adequate capacity and
size to serve the time-share and other intended uses of the Real
Property; and, to Borrower's knowledge, will continue to have
upon Completion of the Construction Work, adequate capacity and
size to serve the time-share and other intended uses of the Real
Property.
(e) Commencement of Work or Break in Priority. No work, equipment,
-----------------------------------------
materials or services of any kind that may give rise to any
mechanics or similar statutory lien (whether for work performed
prior to or after recordation of the Mortgage) which will have
priority over the lien of the Mortgage, including, without
limitation, the destruction or removal of existing improvements,
site work, cleaning, curbing, draining or fencing
-32-
of the Real Property, has been or will be performed or commenced
on the Real Property prior to recordation of the Mortgage, except
for work, equipment, materials and services fully disclosed in
writing to Lender and Title Insurer prior to recordation of the
Mortgage.
6.4 Construction Work-Related Covenants. If the Loan includes a
-----------------------------------
Construction Component, Borrower will:
(a) once commenced, cause the progress of each Construction Work Phase
to occur in substantial compliance with the applicable
Construction Work Phase Progress Schedule, subject to Force
Majeure Events, all in accordance with the applicable Plans and
Specifications, the applicable Construction Work Contracts, the
applicable Legal Requirements, the Documents, sound construction
engineering and architectural principles and commonly accepted
safety standards, lien free and free from defective materials and
workmanship; and cause Completion of the Construction Work Phase
to occur on or before the applicable Required Completion Date
(Construction); provided, however, that Borrower shall have no
-------- -------
obligation to commence any particular Construction Work Phase;
(b) (i) pay when due all costs, expenses and claims pertaining to the
Construction Work; (ii) make available to Lender and Lender's
Inspector for inspection during the course of the Construction
Work in order to monitor and/or provide assurance that the
Construction Work is proceeding lien free, subject to Permitted
Encumbrances, in accordance with the Plans and Specifications, the
Construction Work Contracts, applicable Legal Requirements, the
Documents, sound construction, engineering and architectural
principles and commonly accepted safety standards: the
Construction Work Contracts; the Plans and Specifications; bills
of sale, conveyances and paid invoices pertaining to the
Construction Work; all waivers and releases of lien or claims on
the Real Property and/or the Construction Improvements in
connection with the Construction Work which Lender may determine
to be necessary or may otherwise reasonably request for its
protection; from persons acceptable to Lender, additional
engineering or architectural studies and reports as Lender or
Lender's Inspector may reasonably require in connection with the
Construction Work, provided, however, that Borrower will deliver
-------- -------
to Lender such items upon request if an Event of Default exists
and provided further that Borrower will deliver lien waivers and
-------- -------
other items to Lender to the extent required under EXHIBIT I; and
(iii) record all notices of commencement/completion and similar
notices permitted by applicable laws and regulations which have
the effect of shortening periods within which mechanics and
similar liens may be filed in connection with the Construction
Work;
-33-
(c) allow Lender, Lender's Inspector and/or its agents and employees
to inspect the Construction Work at all reasonable times to the
extent Lender has a right to require such inspections pursuant to
the last sentence of paragraph 8.1, upon reasonable prior notice,
with the reasonable costs of such inspections to be borne by
Borrower;
(d) enter into such Construction Work Contracts and
Architect/Engineer Agreements as Borrower shall determine are
necessary or desirable with respect to the Construction Work;
provided, however, that if (i) an Event of Default exists or (ii)
any such Architect/Engineer Agreement or Construction Work
Contract would result in any Uncovered Cost of the Construction
Work Phase, then Lender's consent shall be required with respect
to such Architect/Engineer Agreement or Construction Work
Contract, such consent not to be unreasonably withheld or delayed
when no Event of Default exists;
(e) not amend any of the Principal Construction Work-Related Items,
except for amendments which (i) are made when no Event of Default
exists and do not for any Construction Work Phase result in any
Uncovered Cost of the Construction Work Phase and (ii) do not
materially affect the design, structural integrity or quality of
the Construction Improvements;
(f) unless no Event of Default exists and the failure to do so will
not result in any Uncovered Cost of the Construction Work Phase,
perform all its obligations and preserve its rights under the
Principal Construction Work-Related Items and use commercially
reasonable efforts to obtain performance of the other parties to
the Principal Construction Work-Related Items;
(g) deliver to Lender promptly after substantial completion of each
Construction Work Phase, a survey certified to Lender by a
licensed engineer or surveyor acceptable to Lender and Title
Insurer, showing (A) the Construction Improvements and that the
location thereof is entirely within the property lines of the
Real Property and does not encroach upon, breach, or violate any
set-back line easement or similar restriction and (B) meeting
ALTA standards and other reasonable requirements of Lender and
Title Insurer;
(h) deliver to Lender: prior to each Construction Work-Related
Advance, at Lender's option, an endorsement ("date down
endorsement") issued by the Title Insurer insuring Lender against
any loss by reason of defects in, mechanic's or similar statutory
liens upon or unmarketability of the title to the Real Property,
as well as insuring that the Mortgage, at the time of each
Construction Work-Related Advance, constitutes a valid first and
exclusive
-34-
lien upon the Real Property, subject only to the Permitted
Encumbrances; promptly after the construction of the foundation
for any building forming part of the Construction Improvements,
an endorsement insuring that such foundation is located on the
Real Property within all set-back lines and does not encroach
upon any easements, rights-of-way (public or private) or upon any
adjoining landowner's property; and promptly after substantial
completion of a Construction Work Phase has occurred,
"comprehensive" and "location of improvements" endorsements (to
the extent available in the state where the Real Property is
located); and upon Completion of the Construction Work Phases,
"date down" endorsements;
(i) after obtaining knowledge or receiving notice thereof, correct or
cause to be corrected (i) any material defect in the Construction
Work, (ii) any material departure in the completion of the
Construction Work from the Plans and Specifications or the
Construction Work Contract(s) (unless expressly permitted in this
Agreement or consented to in writing by Lender), any applicable
Legal Requirements, the Documents, sound, construction,
engineering or architectural principles or commonly accepted
safety standards or (iii) any encroachment of any part of the
Construction Improvements on any building line, easement line or
restricted area, or any adjacent landowner's property;
(j) promptly deliver to Lender any and all written notices received
by Borrower that it is not complying with applicable Legal
Requirements pertaining to the Construction Work or that the
Construction Work is not being completed in accordance with the
Plans and Specifications, the Construction Work Contract(s),
sound construction, engineering and architectural principles and
commonly accepted safety standards;
(k) with respect to each Construction Work Phase for which Lender has
made an Advance, if at any time there exists or appears likely to
exist any Uncovered Cost of the Construction Work Phase, Borrower
will notify Lender within ten (10) Business Days (and in any
event prior to the next Advance) after obtaining knowledge
thereof; within the earlier of such ten (10) Business Day period
or ten (10) Business Days after Lender's demand that it do so,
except to the extent Lender has agreed in writing after the date
of this Agreement to increase the portion of the Construction
Component allocated to the Construction Work Phase in order to
cover the Uncovered Cost of the Construction Work Phase, Borrower
will either pay all costs of the Construction Work Phase to the
extent necessary to eliminate the Uncovered Cost of the
Construction Work Phase or will deliver to Lender a cash deposit
["Required Completion Assurance Deposit (Construction)"] equal to
the Uncovered Cost of the Construction Work Phase, provided,
--------
however, that the Required Completion Assurance Deposit
-------
(Construction)
-35-
may consist of a letter of credit or other credit enhancement
instrument satisfactory to Lender in an amount not less than the
Uncovered Cost of the Construction Work Phase; in the event of
any dispute, the necessity for and amount of the Required
Completion Assurance Deposit (Construction) for such Construction
Work Phase shall be determined by Lender; any cost delivered to
Lender as the Required Completion Assurance Deposit
(Construction) shall be deposited in an interest bearing account
(Lender has not and, by this Agreement, does not represent that
any specific or minimum amount of interest will be earned from
such account) and shall be segregated from any of Lender's other
funds; and Lender will disburse the Required Completion Assurance
Deposit (Construction) for such Construction Work Phase and any
accrued interest to pay and/or reimburse Borrower for the costs
of the Construction Work Phase prior to any further disbursement
of the Construction Work-Related Advance for such purpose, but
subject to the terms and conditions of this Agreement pertaining
to the disbursement of Construction Work-Related Advances; and
Lender is hereby granted a security interest in all Required
Completion Assurance Deposits (Construction) from time to time
held by Lender;
(l) with respect to each Construction Work Phase for which Lender has
made an Advance, cause all materials supplied for or intended to
be utilized in the Completion of the Construction Work Phase, but
previously not affixed to or incorporated into the applicable
Construction Improvements, to be stored on the Real Property with
adequate safeguards, as reasonably required by Lender, to prevent
loss, theft, damage or commingling with other materials; and
(m) promptly after receipt by Borrower (but in no event later than
the Required Completion Date), deliver to Lender copies of all
certificates of acceptance and/or occupancy relating to the
Construction Work.
6.5 Renovation Work-Related Covenants. If the Loan includes a Renovation
---------------------------------
Component, Borrower: (a) will cause the progress of the Renovation
Work to occur in substantial compliance with the Renovation Work
Progress Schedule, subject to Force Majeure Events, all in accordance
with the Renovation Work Contract(s), applicable Legal Requirements,
the Documents, and otherwise in a good and workmanlike manner, lien
free and free from defective materials and workmanship; (b) will cause
Completion of the Renovation Work to occur on or before the Required
Completion Date (Renovation); (c) will enter into such Renovation Work
Contracts and Architect/Engineer Agreements as Borrower shall
determine are necessary or desirable with respect to the Renovation
Work, provided, however, that if (i) an Event of Default exists or
-------- -------
(ii) any such Architect/Engineer Agreement or Renovation Work Contract
would result in any Uncovered Cost of the Renovation Work Phase, then
Lender's consent shall be required with respect to
-36-
such Architect/Engineer Agreement or Renovation Work Contract, such
consent not to be unreasonably withheld or delayed when no Event of
Default exists; (d) unless no Event of Default exists and the
amendment will not result in any Uncovered Cost of the Renovation
Work, will not amend any Renovation Work Contract; (e) will make
available to Lender and Lender's Inspector during the course of the
Renovation Work, the Renovation Work Contracts; bills of sale,
conveyances and paid invoices pertaining to the Renovation Work; all
waivers and releases of lien or claims on the Real Property and/or the
Renovation Improvements in connection with the Renovation Work,
provided, however, that Borrower will deliver to Lender such items
-------- -------
upon request if an Event of Default exists and provided further, that
-------- -------
Borrower will deliver lien waivers and other items to Lender to the
extent required under EXHIBIT K; and (f) with respect to each
Renovation Work Phase, if at any time there exists or appears likely
to exist any Uncovered Cost of the Renovation Work Phase, Borrower
will notify Lender within ten (10) Business Days (and in any event
prior to the next Advance) after obtaining knowledge thereof; within
the earlier of such ten (10) Business Day period or ten (10) Business
Days after Lender's demand that it do so, except to the extent Lender
has agreed in writing after the date of this Agreement to increase the
portion of the Renovation Component in order to cover the Uncovered
Cost of the Renovation Work Phase, Borrower will either pay all costs
of the Renovation Work Phase to the extent necessary to eliminate the
Uncovered Cost of the Renovation Work Phase or will deliver to Lender
a cash deposit ["Required Completion Assurance Deposit (Renovation)"]
equal to the Uncovered Cost of the Renovation Work Phase, provided,
--------
however, that the Required Completion Assurance Deposit (Renovation)
-------
may consist of a letter of credit or other credit enhancement
instrument satisfactory to Lender in an amount not less than the
Uncovered Cost of the Renovation Work Phase; in the event of any
dispute, the necessity for and amount of the Required Completion
Assurance Deposit (Renovation) for such Renovation Work Phase shall be
determined by Lender; any cost delivered to Lender as the Required
Completion Assurance Deposit (Renovation) shall be deposited in an
interest bearing account (Lender has not and, by this Agreement, does
not represent that any specific or minimum amount of interest will be
earned from such account) and shall be segregated from any of Lender's
other funds; and Lender will disburse the Required Completion
Assurance Deposit (Renovation) and any accrued interest to pay and/or
reimburse Borrower for the costs of the Renovation Work Phase prior to
any further disbursement of the Renovation Work-Related Advance for
such purpose, but subject to the terms and conditions of this
Agreement pertaining to the disbursement of Renovation Work-Related
Advances; and Lender is hereby granted a security interest in all
Required Completion Assurance Deposits (Renovation) from time to time
held by Lender;
6.6 (a) Compliance with Laws. Borrower has complied, and will comply, in
--------------------
all material respects with all applicable Legal Requirements,
including, without limitation, Legal Requirements applicable to
the Completion of the
-37-
Construction Work, the operation of the Time-Share Project, and
the sale of Time-Share Interests.
(b) Sales Activities. Prior to the date of this Agreement, Borrower
----------------
has sold Time-Share Interests and offered Time-Share Interests
for sale only in the jurisdictions identified in the SCHEDULE as
the Jurisdictions Where Sales And/Or Offers To Sell Have
Occurred. Borrower will not sell any Time-Share Interest or offer
any Time-Share Interest created or to be created from the Real
Property for sale in any jurisdiction, unless: (i) Borrower has
delivered to Lender true and complete copies of all approvals
required to be obtained by Borrower in such jurisdiction prior to
engaging in its proposed conduct and all other evidence required
by Lender that Borrower has complied with all laws of such
jurisdiction governing its proposed conduct; and (ii) Borrower
has delivered to Lender the Time-Share Program Consumer Documents
and the Time-Share Program Governing Documents which Borrower
will be using in connection with the Real Property and the sale
or offering for sale of such Time-Share Interests and such
documents have been approved by Lender, which approval shall not
be unreasonably withheld, and which shall be given or denied by
Lender within thirty (30) days of the receipt of the Time-Share
Program Consumer Documents and the Time-Share Program Governing
Documents. Not later than the date identified in the SCHEDULE as
the Minimum Required Time-Share Approvals Application Date,
Borrower will submit to the state in which the Time-Share Project
is located, an application for the issuance by such state of the
Minimum Required Time-Share Approvals and complying with
applicable Legal Requirements and will diligently pursue approval
of such application and the issuance of the Minimum Required Time
Share Approvals. Not later than the date identified in the
SCHEDULE as the Minimum Required Time-Share Approvals Delivery
Date, Borrower will deliver to Lender the Minimum Required Time-
Share Approvals from the state where the Time-Share Project is
located, the Time-Share Program Governing Documents and Time-
Share Program Consumer Documents (which have, to the extent
required, been approved for use in the state where the Time-Share
Project is located) and will take all steps necessary to commence
the sale of Time-Share Interests created or to be created from
the Real Property in the state where the Time-Share Project is
located; and not later than the date identified in the SCHEDULE
as the Minimum Required Time-Share Approvals Delivery Date,
Borrower will maintain an active marketing program for the sale
of such Time-Share Interests in conformance with all applicable
Legal Requirements and consistent with the provisions of this
paragraph and the other terms and conditions of the Documents
pertaining to the sale of Time-Share Interests.
-38-
(c) Time-Share Interest Not a Security. Unless otherwise expressly
----------------------------------
approved in writing by Lender, Borrower has not sold or offered
for sale, and will not sell or offer for sale, any Time-Share
Interest as an investment. Unless otherwise expressly approved in
writing by Lender, neither the sale nor the offering for sale of
any Time-Share Interest will constitute the sale or the offering
of a security for sale under any applicable law.
(d) Zoning Compliance. Neither time-share use nor other intended use
-----------------
of the Real Property violates or constitutes a non-conforming use
or requires a variance under any Legal Requirement affecting the
use or occupancy of the Real Property.
6.7 (a) Fulfillment of Obligations to Purchasers. Borrower at all times
----------------------------------------
will fulfill and will cause its Affiliates, agents and
independent contractors at all times to fulfill all obligations
to Purchasers. Borrower will perform all of its obligations under
the Time-Share Program Consumer Documents and the Time-Share
Program Governing Documents.
(b) No Modification of Time-Share Documents. Except as required by
---------------------------------------
law, Borrower, without the prior written consent of Lender not to
be unreasonably withheld, will not cancel or materially modify,
or consent to or suffer to exist any cancellation or material
modification of, any of the Time-Share Program Consumer Documents
or the Time-Share Program Governing Documents.
(c) Title and Condition of Amenities. Except as otherwise permitted
--------------------------------
and disclosed by the Time-Share Program Governing Documents, from
and after the first closing for the sale of any Time-Share
Interest created or to be created from the Real Property: (i) the
Time-Share Association or the owners of Time-Share Interests in
common will at all times own all furnishings in the Units and
common areas, all common areas in the Time-Share Project and an
easement or right to use other amenities which have been promised
or represented as being available to Purchasers, free and clear
of liens and security interests except for the Permitted
Encumbrances; (ii) no part of the Time-Share Project is or will
be subject to partition by the owners of Time-Share Interests;
and (iii) prior to the closing of any sale of any Time-Share
Interest created or to be created from the Real Property, all
access roads and utilities and off-site improvements necessary to
the use of the Time-Share Project will be dedicated to and/or
accepted by the responsible governmental authority or utility
company or will be owned by an association of owners of property
in a larger planned development or developments of which the Time
Share Project is a part ("Planned Development Association"),
unless the access roads, utilities and off-site improvements
which are not so dedicated, accepted and owned are being
-39-
constructed as part of the Construction Improvements, there
exists no Uncovered Cost of Construction Work and the non-
completion of such roads, utilities and improvements have been
disclosed to the Purchaser. Borrower will maintain or cause to be
maintained in good condition and repair all amenities and common
areas which have been promised or represented as being available
to Purchasers and all roads and off-site improvements which are
not the responsibility of the Time-Share Association or the
Planned Development Association to maintain and repair and have
not been dedicated to or accepted by the responsible governmental
authority or utility; and, to the extent owned by Borrower or an
Affiliate of Borrower, all portions of improvements in which
Units are located and are not part of the Time-Share Project.
Borrower will cause the Time-Share Association to maintain a
reasonable reserve to assure compliance with the terms of the
foregoing sentence.
(d) Maintenance of Larger Tract. Without limiting the generality of
---------------------------
the provisions of paragraph 6.7(c), to the extent either the Time
Share Project is part of a larger common ownership regime or
planned development or buildings in which Units are located are
not part of the Time-Share Project, Borrower will use
commercially reasonable efforts to prevent common expenses of
such common ownership regime, planned development and buildings
from being allocated to the Time-Share Project in a manner which
is not commercially reasonable; and will cause all such property
which is not part of the Time-Share Project to be professionally
managed and maintained in a manner consistent with management and
maintenance standards at least as high as those employed on July
9, 1998, at other resorts developed by Affiliates of VI.
6.8 (a) Additional Indebtedness. Without the prior written consent of
-----------------------
Lender not to be unreasonably withheld, Borrower will not incur
any indebtedness which is secured by the Collateral except for an
Approved Pre-Sales Receivables Financing. The term "Approved Pre-
Sales Receivables Financing" means a Pre-Sales Receivables
Facility in which Borrower, Lender and the lender under the Pre-
Sales Receivables Facility ("PSR Lender") have entered (at
Borrower's expense) into an agreement with provisions to the
following effect and other provisions mutually satisfactory to
the parties: (i) the PSR Lender may have a junior lien on that
portion of the Real Property ("Pre-Sale Real Property") from
which Time-Share Interests which are the subject of the pre-sales
will be created and a junior security interest on and assignment
of related Mortgage Property (as defined in the Mortgage),
provided that the priority of Lender's lien on security interest
in and assignment of the Collateral is expressly recognized; (ii)
Purchase Contracts shall be closed through an escrow established
with an escrow agent reasonably satisfactory to Lender and in
which subject to
-40-
applicable laws and regulations, the escrow agent holds the Purchase
Contracts pertaining to the Pre-Sale Real Property and deposits,
payments and documents related thereto (including, without limitation,
purchase money promissory notes and security documents) (collectively,
"Escrowed Sales Documents and Proceeds"); (iii) a Time-Share Interest
(together with the related Purchase Contract and any instruments,
chattel paper and general intangibles evidencing or representing
purchase money indebtedness owing to Borrower in connection with the
sale, the proceeds thereof and any other property required to be
released pursuant to the terms of the Documents) shall be released
from the Mortgage and the other Security Documents if the conditions
specified in paragraph 3.2 have been satisfied; and (iv) upon the
release of a Time-Share Interest pursuant to item (iii) above, Lender
shall receive from escrow agent the payments required pursuant to
paragraph 3.2, and the PSR Lender or Borrower, as applicable, shall
receive the balance of the Escrowed Sales Documents and Proceeds
pertaining to such Time-Share Interest. The term "Pre-Sales
Receivables Facility" means indebtedness advanced as a percentage of
and secured by Purchase Contracts prior to the time that the
Declaration for the building(s) in which the related Units are located
has been recorded.
(b) Restrictions on Liens or Transfers. Unless expressly permitted in
----------------------------------
this Agreement or in any of the Security Documents, Borrower, without
the prior written consent of Lender, will not: (i) sell, convey,
pledge, hypothecate, encumber or otherwise transfer any Collateral;
(ii) subject to any right under the Documents to contest such matters,
permit or suffer to exist any liens, security interests or other
encumbrances on any Collateral, except for the Permitted Encumbrances
and liens and security interests expressly granted to Lender; (iii)
permit or suffer the sale, lease, transfer or disposal of all or
substantially all of the assets of Borrower to another person; or (iv)
if Borrower is an organization, permit or suffer to exist any Change
in Control of Borrower or any person controlling Borrower (whether
directly or through one or more intermediaries); provided, however,
-------- -------
that so long as (x) Xxxxxxx X. Xxxxxxx, Xx., Xxxxxxx X. Xxxxx or
another person reasonably acceptable to Lender is the chief executive
officer of VI, and (y) Borrower is a Vistana Entity (as defined in the
Master Credit Facilities Agreement), a Change in Control of Borrower
or any person controlling Borrower will not result in a violation of
the foregoing covenant. For purposes hereof, a "Change in Control"
shall have occurred if a person or entity not an Affiliate of VI
acquired through one or more series of transactions more than fifty
percent (50%) of any class of issued and outstanding capital stock of
Borrower or any person controlling Borrower and such person or entity
has the ability to elect a majority of the directors of Borrower or
any person controlling Borrower.
-41-
6.9 Insurance. Borrower will pay the cost of, will maintain and will
---------
deliver to Lender evidence of insurance policies required by, and
written by insurers and in amounts and on forms satisfactory to
Lender, as evidenced in the letter from Lender to Borrower identified
in the SCHEDULE as the Insurance Letter; or Borrower will cause the
same to be done.
6.10 (a) No Misrepresentations. The Documents and all certificates,
---------------------
financial statements and written materials furnished to Lender by
or on behalf of Borrower in connection with the Loan do not
contain any untrue statement of a material fact or omit to state
a fact which materially adversely affects or in the future may
materially adversely affect the Collateral or the financial
condition of Borrower.
(b) Reliance. Lender's examination, inspection, or receipt of
--------
information pertaining to the Collateral shall not in any way be
deemed to reduce the full scope and protection of the warranties,
representations and Obligations contained in this Document.
6.11 (a) Sales Reports. From and after the commencement of sales by
-------------
Borrower of Time-Share Interests created or to be created from
the Real Property, within thirty (30) days after the end of each
quarter, Borrower will cause to be furnished to Lender a sales
report for such quarter showing the number of sales of such Time-
Share Interests at any time encumbered by the Mortgage during
such quarter, and the aggregate dollar amount thereof, including
down payments.
(b) Financial Information. Borrower will furnish or cause to be
---------------------
furnished to Lender, within one hundred twenty (120) days after
the end of each fiscal year of Borrower, a copy of the current
financial statements of Borrower for such fiscal year. Borrower
will furnish to Lender within forty-five (45) days after the end
of each of its fiscal quarters a copy of its current financial
statements covering the period beginning the first day of that
fiscal year and ending on the last day of such fiscal quarter.
Such financial statements shall contain a balance sheet as of the
end of the relevant fiscal period and statements of income and of
cash flow for such fiscal period (together, in each case, with
the comparable figures for the corresponding period of the
previous fiscal year), all in reasonable detail. All financial
statements shall be prepared in accordance with generally
accepted accounting principles, consistently applied. All
financial statements required pursuant to this paragraph from a
person which is not a natural person shall be certified by the
chief financial officer or chief accounting officer of such
person and all other financial statements shall be certified by
the person who is the subject thereof. If any audited financial
statement is prepared for Borrower, Borrower will deliver to
Lender a copy of such financial statement to
-42-
Lender. Together with Borrower's financial statements, Borrower
will deliver to Lender a certificate signed Borrower's chief
executive officer or chief operating officer Lender stating that
there exists no Event of Default or Incipient Default or, if any
such Event of Default or Incipient Default exists, specifying the
nature and period of its existence and what action Borrower
proposes to take with respect to it.
(c) Time-Share Project and Sales Information. Borrower will deliver
----------------------------------------
price lists for Time-Share Interests created or to be created
from the Real Property to Lender from to time to time within ten
(10) Business Days after receipt of a written request from Lender
to do so. Borrower will deliver to Lender from time to time, as
available, and promptly upon amendment or effective date, sales
literature, registrations/consents to sell, and final subdivision
public reports/public offering statements/prospectuses. Borrower
will deliver to Lender any changes which Borrower proposes or any
other person having the power to do so proposes be made to the
Time-Share Program Consumer Documents and/or the Time-Share
Program Governing Documents last delivered to Lender, together
with a description and explanation of the changes; and other
items reasonably requested by Lender which relate to the Time-
Share Interests created or to be created from the Real Property.
(d) Time-Share Association Budgets. Borrower will deliver to Lender,
------------------------------
a pro-forma maintenance and operating budget for the Time-Share
Association's first twelve-month period of operation not later
than the date identified in the SCHEDULE as the Time-Share
Association Budget Delivery Date, and thereafter will use
commercially reasonable efforts to deliver to Lender within ten
(10) days after each is available annual maintenance and
operating budgets of the Time-Share Association, certified to be
adequate by the Time-Share Manager (or if there is not a Time-
Share Manager, by an authorized officer of the Time-Share
Association) and a statement of the annual assessment to be
levied upon the owners of Time-Share Interests; and will use
commercially reasonable efforts to cause to be made available to
Lender for inspection, auditing and copying, upon Lender's
request, the books and records of the Time-Share Association.
(e) Right to Inspect. Borrower will at its expense permit Lender and
----------------
its representatives at all reasonable times, upon reasonable
prior notice, to inspect the Time-Share Project, and to inspect,
audit and copy, as appropriate, the Time-Share Project, and
Borrower's records related thereto.
(f) Additional Information. Borrower will make available such further
----------------------
information as Lender may from time to time reasonably request.
-43-
6.12 Subordination of Indebtedness Owing to Affiliates. Borrower will
-------------------------------------------------
cause any and all indebtedness owing by it to its shareholders,
directors, officers, partners, members or managers, as the case may
be, to VI (if Borrower is not VI) or to the relatives or Affiliates of
Borrower or any of the foregoing to be subordinated in all aspects to
the Obligations pursuant to written agreements satisfactory to Lender;
provided, however, that such subordination shall not extend to
-------- -------
reasonable salaries and fees at normal and customary rates for
services actually rendered.
6.13 Payment of Taxes. VI has filed (or has requested extensions of the
----------------
time within which to file) returns for all federal, state, local and
other taxes which are required to be filed and taxes shown to be due
and payable on such filed returns have been paid or have been reserved
against as required by generally accepted accounting principles.
6.14 Fees, Costs and Expenses. Borrower will pay on demand any and all
------------------------
costs and expenses incurred by Lender (exclusive of Lender's
employee's expenses, but inclusive of travel expenses) in connection
with the initiation, documentation and closing of the Loan, the making
of Advances, the protection of the Collateral, or the enforcement of
the Obligations against Borrower, including, without limitation, all
attorneys' and other professionals' fees (including without limitation
normal charges for photocopy, telecopy and computer services, and
staff overtime), consumer credit reports, and revenue, documentary
stamp, documentary transaction and intangible taxes. Without limiting
the generality of the foregoing, if a bankruptcy proceeding is
commenced by or against Borrower or otherwise involving any
Collateral, Lender shall, to the extent not already provided for
herein, be entitled to recover, and Borrower shall be obligated to
pay, Lender's reasonable attorneys' fees incurred in connection with:
(i) any determination of the applicability of the bankruptcy laws to
the terms of this Agreement and the other Documents or to Lender's
rights thereunder; (ii) any attempt by Lender to enforce or preserve
its rights under the bankruptcy laws or to prevent Borrower or any
other person from seeking to deny Lender its rights thereunder; (iii)
any effort by Lender to protect, preserve or enforce its rights
against any Collateral or seeking authority to modify the automatic
stay of 11 U.S.C. Section 362 or otherwise seeking to engage in such
protection, preservation or enforcement; or (iv) any proceeding(s)
arising under the bankruptcy laws or arising in or related to a case
under bankruptcy laws.
6.15 Indemnification. Borrower will INDEMNIFY, PROTECT, HOLD HARMLESS, and
---------------
defend Lender, its successors, assigns and shareholders (including
corporate shareholders), and the directors, officers, employees,
agents and servants of the foregoing, for, from and against, except to
the extent arising from the indemnitee's gross negligence or willful
misconduct, any and all losses, costs, expenses (including, without
limitation, any attorneys' fees), demands, claims, suits, proceedings
(whether civil or criminal), orders, judgments, penalties, fines and
-44-
other sanctions arising from or brought in connection with (a) any of
the Collateral, the terms of the Documents or the transactions related
thereto, or any act or omission of Borrower or its employees or
agents, whether actual or alleged, and (b) any and all brokers'
commissions or finders' fees or other costs of similar type by any
party, engaged by Borrower or any Affiliate of Borrower in connection
with the Loan. On written request by a person or other entity covered
by the above agreement of indemnity, Borrower will undertake, at its
own cost and expense, on behalf of such indemnitee, using counsel
satisfactory to the indemnitee, the defense of any legal action or
proceeding to which such person or entity shall be a party and for
which such indemnitee is entitled to be indemnified pursuant to this
paragraph. At Lender's option, Lender may at Borrower's expense
prosecute or defend any action involving the priority, validity or
enforceability of the Security Interests.
6.16 Perfection of Security Interests. Borrower will execute or cause to
--------------------------------
be executed all documents and do or cause to be done all acts
reasonably necessary for Lender to perfect or evidence and to continue
the perfection of the Security Interest of Lender in the Collateral or
otherwise to effect the intent and purposes of the Documents.
6.17 Survival and Additional Representations, Warranties and Covenants. The
-----------------------------------------------------------------
representations, warranties and covenants contained in this
Article VI are in addition to, and not in derogation of, the
representations and warranties contained elsewhere in the Documents
and shall be deemed to be made and reaffirmed prior to the making of
each Advance.
7. DEFAULT
-------
7.1 Events of Default. The occurrence of any of the following events or
-----------------
conditions shall constitute an Event of Default:
(a) failure of Lender to receive from Borrower within five (5)
Business Days of the date when due and payable (i) any amount
payable under the Note or (ii) any other payment due under the
Documents, except for the payment due at the Maturity Date for
which no grace period is allowed;
(b) any representation or warranty which is made by or on behalf of
Borrower and is contained in the Documents or in any certificate
furnished to Lender under the Documents by or on behalf of
Borrower proves to be, in any material adverse respect, false or
misleading as of the date deemed made; provided that if such
representation or warranty was not intentionally made falsely or
with the intent to mislead or was not made recklessly, such
occurrence shall not constitute an Event of Default unless the
actual condition might adversely affect any of the Collateral,
any part of the Time-Share Project, the business or financial
condition of Borrower or, if
-45-
VI is not Borrower, of VI, or the ability of Borrower to Perform
the Obligations;
(c) a default in the Performance of the Obligations set forth in
paragraph 6.8(b)(i), 6.8(b)(iii), 6.8(b)(iv), 6.9 or 6.12;
(d) a default in the Performance of the Obligations or a violation of
any term, covenant or provision of the Documents (other than a
default or violation referred to elsewhere in this paragraph 7.1)
which continues unremedied (i) for a period of five (5) Business
Days after notice of such default or violation to Borrower in the
case of a default under or violation of paragraph 6.8(b) (ii) or
any other default or violation which can be cured by the payment
of money alone or (ii) for a period of thirty (30) days after
notice to Borrower in the case of any other default or violation
plus only if such default or violation cannot be cured by
Borrower proceeding diligently and Borrower has been diligent in
attempting to effect cure, such additional period not to exceed
thirty (30) Business Days, as may be required by Borrower
proceeding diligently to effect cure;
(e) a payment default exists beyond any applicable cure period under
an Other Loan and, if VI is not the borrower under such Other
Loan, VI has failed to correct the default within any applicable
period allowed under the guaranty given in connection with such
Other Loan after notice thereof is given to VI in accordance with
such guaranty; or any default or defaults by Borrower under any
agreement or agreements with a third party (other than Lender)
evidencing, guaranteeing, or securing borrowed money or a
receivables purchase financing ("Third Party Obligation") which
has resulted in the acceleration of repayment or repurchase
obligations in excess of Two Million Five Hundred Thousand
Dollars ($2,500,000) in the aggregate, although Borrower agrees
that, to the extent such acceleration would cause a violation
this paragraph, it will give to Lender a notice of each default
permitting acceleration of a Third Party Obligation within a
reasonable period of time after Borrower acquires actual
knowledge of the occurrence of such default;
(f) any final, non-appealable judgment or decree for money damages or
for a fine or penalty against Borrower except in connection with
one of the Other Loans or a Third Party Obligation which is not
paid and discharged or stayed within thirty (30) days thereafter,
and when aggregated with all other judgment(s) or decree(s) that
have remained unpaid and undischarged or stayed for such period,
is in excess of One Hundred Thousand Dollars ($100,000);
-46-
(g) subject to any provisions of the Security Documents permitting
the contest of such liens or security interests, any party
holding a lien or security interest in any Collateral commences
foreclosure or similar sale thereof;
(h) Borrower shall (i) generally not be paying its debts as they
become due, (ii) file, or consent by answer or otherwise to the
filing against it of a petition for relief or reorganization,
arrangement or liquidation or any other petition in bankruptcy or
insolvency under the laws of any jurisdiction, (iii) make an
assignment for the benefit of its creditors, (iv) consent to the
appointment of a custodian, receiver, trustee or other officer
with similar powers for itself or any substantial part of its
property, (v) be adjudicated insolvent, (vi) dissolve or commence
to wind-up its affairs or (vii) take any action for purposes of
the foregoing; or a petition for relief or reorganization,
arrangement or liquidation or any other petition in bankruptcy or
insolvency or the appointment of a custodian under the laws of
any jurisdiction is filed against it or a custodian is appointed
for Borrower, the Collateral or any material part of its
properties and such proceeding is not dismissed and appointment
vacated within ninety (90) days thereafter;
(i) a material adverse change in the Collateral, the Time-Share
Project or in the business or financial condition of Borrower,
which change is not enumerated in this paragraph 7.1, as the
result of which Lender in good xxxxx xxxxx the prospect of
Performance of the Obligations impaired or the Collateral
imperiled;
(j) any of the events enumerated in paragraphs 7.1(b), (f), (g), (h)
or (i) occurs with respect to any surety (including, without
limitation, VI, if Borrower is not VI) for the Performance of the
Obligations;
(k) an "Event of Default", as defined elsewhere in any of the
Documents;
(l) an order or decree has been entered by any court of competent
jurisdiction enjoining the intended use of the Real Property for
time-share purposes and judgment is not vacated within ninety
(90) days after Borrower has obtained knowledge or notice
thereof;
(m) if the Loan includes a Construction Component, at any time prior
to Completion of the Construction Work, Borrower (i) abandons the
Construction Work or (ii) delays construction or suffers
construction to be delayed for any period of time, for any reason
whatsoever not covered by item (i) above so that Completion of
the Construction Work cannot be accomplished in the ordinary
course of construction, in the reasonable
-47-
judgment of Lender, on or before the Required Completion Date
(Construction);
(n) if the Loan includes a Renovation Component, at any time prior to
Completion of the Renovation Work, Borrower (i) abandons the
Renovation Work or (ii) delays renovation or suffers renovation
to be delayed for any period of time, for any reason whatsoever
not covered by item (i) above so that Completion of the
Renovation Work cannot be accomplished in the ordinary course of
construction, in the reasonable judgment of Lender, on or before
the Required Completion Date (Renovation);
(o) failure of Lender to receive from Borrower, within twenty (20)
days of the date Borrower knows or should have known of such
change, notice of any material change in any representations or
warranties in the Documents or otherwise made in connection with
the Loan; or
(p) a default in the Performance of the obligations of VI under the
Credit Facilities Agreement or a violation of any term, covenant
or provision of the Credit Facilities Agreement (other than a
default or violation referred to elsewhere in this paragraph 7.1)
which continues unremedied (i) for a period of five (5) Business
Days after notice of such default or violation to VI in the case
of a default or violation which can be cured by the payment of
money alone or (ii) for a period of thirty (30) days after notice
to VI in the case of any other default or violation plus only if
such default or violation cannot be cured by VI proceeding
diligently and VI has been diligent in attempting to effect cure,
such additional period not to exceed thirty (30) Business Days,
as may be required by VI proceeding diligently to effect cure;
however, no non-payment default under any guaranty given by VI in
connection with any Other Loan shall constitute an Event of
Default with respect to the Loan.
7.2 Remedies. At any time after an Event of Default has occurred and
--------
while it is continuing, Lender may but without obligation, in addition
to the rights and powers granted elsewhere in the Documents and not in
limitation thereof, do any one or more of the following:
(a) cease to make further Advances;
(b) declare the Note, together with any applicable prepayment
premiums, and all other sums owing by Borrower to Lender in
connection with the Documents, immediately due and payable
without notice, presentment, demand or protest, which are hereby
waived by Borrower;
-48-
(c) if the Loan includes a Construction Component or a Renovation
Component, apply the Required Completion Assurance Deposits then
held by Lender to the satisfaction of the Obligations in such
order and manner as Lender may determine;
(d) if the Loan includes a Construction Component for any
Construction Work Phase, but only for which Lender has made an
Advance: (i) continue and/or cause Completion of the
Construction Work Phase; (ii) take exclusive possession of the
Property or any part thereof; (iii) expend such funds as Lender
may deem appropriate, including the Required Completion Assurance
Deposit(s) (Construction) (if any), any other funds of Borrower
held by Lender and any sums which may remain unadvanced
hereunder, to continue and/or cause Completion of the
Construction Work; (iv) demand and receive performances due under
the Principal Construction Work-Related Items; (v) make such
changes to the scope of the Construction Work and to the
Principal Construction Work-Related Items as may be necessary or
desirable in Lender's judgment; (vi) file claims, institute
enforcement actions and otherwise prosecute and defend all
actions or proceedings relating to the Construction Work and/or
the Principal Construction Work-Related Items as Lender may
determine to be necessary or desirable in Lender's judgment;
(vii) pay, settle or compromise all existing bills and claims
which Lender deems to be necessary or desirable for the
continuance or Completion of the Construction Work related
thereto, after notice to Borrower; (viii) execute in Borrower's
name all applications, certificates, notices and other
instruments and give all instructions and communications which
may be required or permitted by the Principal Construction Work-
Related Items as determined by Lender; (ix) cancel or surrender
any of the Principal Construction Work-Related Items and enter
into new contracts for the Completion of the Construction Work
and any changes to the scope of the Construction Work; (x) do any
and every act with respect to the Completion of the Construction
Work and the Principal Construction Work-Related Items which
Borrower may do in its behalf; (xi) employ such contractors,
subcontractors, suppliers, agents, attorneys, architects,
accountants, appraisers, security guards and inspectors as Lender
may in its judgment deem necessary or desirable to accomplish any
of the above purposes; and (xii) receive, collect, open and read
all mail of Borrower for the purpose of obtaining all items
pertaining to the Construction Work and the Principal
Construction Work-Related Items (provided, as to the remedies
listed in subparts vii-xii, above, such remedies are limited if
and to the extent that any other Document imposes a procedural or
other limitation on the implementation of such remedy); and
(e) if the Loan includes a Renovation Component, but only for any
Renovation Work Phase for which Lender has made an Advance: (i)
continue and/or
-49-
cause Completion of the Renovation Work; (ii) take exclusive
possession of the Property or any part thereof; (iii) expend such
funds as Lender may deem appropriate, including the Required
Completion Assurance Deposit(s) (Renovation) (if any), any other
funds of Borrower held by Lender and any sums which may remain
unadvanced hereunder, to continue and/or cause Completion of the
Renovation Work; (iv) demand and receive performances due under
the Contracts, Licenses, Permits and other Intangibles pertaining
to the Renovation Work; (v) make such changes to the scope of the
Renovation Work and to the Contracts, Licenses, Permits and other
Intangibles pertaining to the Renovation Work as may be necessary
or desirable in Lender's judgment; (vi) file claims, institute
enforcement actions and otherwise prosecute and defend all
actions or proceedings relating to the Renovation Work and the
Contracts, Licenses, Permits and other Intangibles pertaining to
the Renovation Work as Lender may determine to be necessary or
desirable in Lender's judgment; (vii) pay, settle or compromise
all existing bills and claims which Lender may deem to be
necessary or desirable for the continuance or Completion of the
Renovation Work related thereto, after notice to Borrower; (viii)
execute in Borrower's name all applications, certificates,
notices and other instruments and give all instructions and
communications which may be required or permitted by the
Contracts, Licenses, Permits, and other Intangibles pertaining to
the Renovation Work as determined by Lender; (ix) cancel or
surrender any of the Principal Renovation Work-Related Items and
the other Contracts, Licenses, Permits and other Intangibles
pertaining to the Renovation Work and enter into new contracts
for the Completion of the Renovation Work and any changes to the
scope of the Renovation Work; (x) do any and every act with
respect to the Completion of the Renovation Work and the
Contracts, Licenses, Permits and other Intangibles pertaining to
the Renovation Work which Borrower may do in its behalf; (xi)
employ such contractors, subcontractors, suppliers, agents,
attorneys, architects, accountants, appraisers, security guards
and inspectors as Lender may in its judgment deem necessary or
desirable to accomplish any of the above purposes; and (xii)
receive, collect, open and read all mail of Borrower for the
purpose of obtaining all items pertaining to the Renovation Work
and the Contracts, Licenses, Permits and other Intangibles
pertaining to the Renovation Work (provided, as to the remedies
listed in subparts vii-xii, above, such remedies are limited if
and to the extent that any other Document imposes a procedural or
other limitation on the implementation of such remedy); and
(f) proceed to protect and enforce its rights and remedies under the
Documents and to foreclose or otherwise realize upon the
Collateral, or to exercise any other rights and remedies
available to it at law, in equity or by statute.
-50-
7.3 Uniform Commercial Remedies; Sale; Assembly of Collateral.
---------------------------------------------------------
(a) UCC Remedies; Sale of Collateral. Lender shall have all of the
--------------------------------
rights and remedies of a secured party under the Uniform
Commercial Code of the State of Arizona and all other rights and
remedies accorded at equity or law. Any notice of sale or other
disposition of the Collateral given not less than ten (10)
Business Days prior to such proposed action in connection with
the exercise of Lender's rights and remedies shall constitute
reasonable and fair notice of such action. Lender may postpone or
adjourn any such sale from time to time by announcement at the
time and place of sale stated on the notice of sale or by
announcement of any adjourned sale, without being required to
give a further notice of sale. Any such sale may be for cash or,
unless prohibited by applicable law, upon such credit or
installment as Lender may determine. Borrower shall be credited
with the net proceeds of such sale only when such proceeds are
actually received by Lender in good current funds. Despite the
consummation of any such sale, Borrower shall remain liable for
any deficiency on the Obligations which remains outstanding
following such sale. All net proceeds recovered pursuant to a
sale shall be applied in accordance with the provisions of
paragraph 7.4.
(b) Lender's Right to Execute Conveyances. Lender may, in the name
-------------------------------------
of Borrower or in its own name, make and execute all conveyances,
assignments and transfers of the Collateral sold in connection
with the exercise of Lender's rights and remedies.
(c) Obligation to Assemble Collateral. Upon request of Lender when
---------------------------------
an Event of Default exists, Borrower shall assemble the Personal
Property, Collateral not already in Lender's possession and make
it available to Lender at a time and place within county where
the Real Property is located as designated by Lender.
7.4 Application of Proceeds. Except as may be otherwise required by
-----------------------
applicable law or by the terms of another Security Document, the
proceeds of any sale of all or any part of the Collateral made in
connection with the exercise of Lender's rights and remedies shall be
applied in the following order of priorities: first, to the payment of
all costs and expenses of such sale, including without limitation,
reimbursement to Lender and its agents for attorneys' fees, and all
other expenses, liabilities and advances incurred or made by Lender,
its agents and attorneys, in connection with such sale, and any other
unreimbursed expenses for which Lender may be reimbursed pursuant to
the Documents; second, to the payment of all late charges required by
the Documents to be paid by Borrower, in such order and manner as
Lender shall in its discretion determine; third, to the payment of the
other Obligations, in such order and manner as Lender shall determine,
with no amounts applied to payment of principal until all interest has
been paid; and third,
-51-
to the payment to Borrower, its successors or assigns, or to whosoever
may be lawfully entitled to receive the same, or as a court of
competent jurisdiction may direct, of any surplus then remaining from
such proceeds.
7.5 Lender's Right to Perform. Lender may, at its option, and without any
-------------------------
obligation to do so, pay, perform and discharge any and all
obligations (including, without limitation, the Obligations under
paragraph 6.9) agreed to be paid or performed in the Documents by
Borrower or any surety for the Performance of the Obligations if (a)
such person fails to do so and (b) (i) an Event of Default exists or
(ii) in the opinion of Lender, such action must be taken because an
emergency exists or to preserve any of the Collateral or its value.
For such purposes Lender may use the proceeds of the Collateral. All
amounts expended by Lender in so doing or in exercising its remedies
under the Documents following an Event of Default shall become part of
the Obligations, shall be immediately due and payable by Borrower to
Lender upon demand, and shall bear interest at the Default Rate from
the dates of such expenditures until paid.
7.6 Non-Exclusive Remedies. No remedy in any Document conferred on or
----------------------
reserved to Lender is intended to be exclusive of any other remedy or
remedies, but each and every such remedy shall be cumulative and shall
be in addition to every other remedy given under any Document or now
or hereafter existing at law or in equity. No delay or omission to
exercise any right or power shall be construed to be a waiver of or
acquiescence to any default or a waiver of any right or power; and
every such right and power may be exercised from time to time and as
often as may be deemed expedient.
7.7 Waiver of Marshaling. Borrower, for itself and for all who may claim
--------------------
through or under it, hereby expressly waives and releases all right to
have the Collateral, or any part of the Collateral, marshaled on any
foreclosure, sale or other enforcement of Lender's rights and
remedies.
7.8 Attorney-in-Fact. For the purpose of exercising its rights and
----------------
remedies under paragraphs 7.2(c), 7.2 (d), 7.3(b) and 7.5, Lender may
do so in Borrower's name or its name and is hereby appointed as
Borrower's attorney-in-fact to take any and all actions in Borrower's
name and/or on Borrower's behalf as Lender may deem necessary or
appropriate in its discretion in the accomplishment of such purposes.
8. LENDER'S INSPECTOR; DISCLAIMER OF LENDER'S DUTIES REGARDING WORK
----------------------------------------------------------------
8.1 Retention of Lender's Inspector. If the Loan includes a Construction
-------------------------------
Component, Lender may retain an architectural/engineering firm
("Lender's Inspector") to do the following: (a) until Completion of
the Construction Work and the making of the last Construction Work-
Related Advance (including the disbursement of the
-00-
Xxxxx Xxxxxxxxx and Additional Retainage), review the Principal
Construction Work-Related Items, and the budget proposed to be the
Construction Budget and any changes to such items; (b) inspect the
Real Property prior to commencement of the Construction Work for
purposes of determining the condition of the Real Property and any
existing improvements; (c) until Completion of the Construction Work
and the making of the last Construction Work-Related Advance
(including the disbursement of the Basic Retainage and Additional
Retainage), make monthly inspections of the Real Property and
Construction Work and Borrower's records pertaining to the same
[whether or not Loan proceeds are to be used to pay or reimburse
Borrower for the costs of such Construction Work] and provide to
Lender reports of such inspections so that Lender may monitor whether
Borrower is in compliance with the terms and conditions of this
Agreement; and (d) provide evidence satisfactory to Lender prior to
the funding of the first Work-Related Advance regarding the matters
which are the subject of Borrower's representations and warranties in
paragraph 6.3(c). Furthermore, Lender may require an inspection of the
Construction Work by Lender's Inspector (a) at least once each month
during the course of completion of the Construction Work; (b) upon
Completion; and (c) until Completion of the Construction Work and the
making of the last Construction Work-Related Advances (including the
disbursement of the Basic Retainage and Additional Retainage), at such
other time as Lender may, in its judgment, deem necessary due to
actual or suspected non-compliance with the Plans and Specifications,
Construction Work Contract(s), applicable Legal Requirements, the
Documents, sound architectural, engineering or construction principles
or commonly accepted safety standards, or Borrower's failure to
satisfy the requirements of the Documents. Lender will use
commercially reasonable efforts to minimize the costs of Lender's
Inspector.
8.2 No Duty of Lender to Supervise, Etc. Lender shall have no duty to
------------------------------------
supervise or to review and inspect the Principal Construction Work-
Related Items, the other Contracts, Licenses, Permits and other
Intangibles, any budget proposed to be the Construction Budget, any
budget proposed to be the Renovation Budget, any books and records
pertaining thereto or any changes to such items or the construction/
making of the Construction Work or the Renovation Work. Any inspection
made by Lender shall be for the sole purpose of determining whether
the Obligations are being Performed and preserving Lender's rights
under these Documents. If Lender, or Lender's Inspector acting on
behalf of Lender, should review or inspect the Principal Construction
Work-Related Items, the other Contracts, Licenses, Permits and other
Intangibles, the Construction Budget, the Renovation Budget, any books
and records pertaining thereto or any changes to such items or the
construction/making of the Construction Work or the Renovation Work,
Lender and Lender's Inspector shall have no liability or obligation to
Borrower or any third person arising out of such inspection; and
neither Borrower nor any third person shall be entitled to rely upon
any such inspection or review. Inspection not followed by notice of an
Event of Default shall not constitute (a) waiver of any
-53-
Event of Default then existing; (b) an acknowledgment or
representation by Lender or Lender's Inspector that there has been or
will be compliance with the Principal Construction Work-Related Items,
the other Contracts, Licenses, Permits and other Intangibles, the
Construction Budget, or the Renovation Budget, applicable Legal
Requirements, the Documents, sound construction, engineering or
architectural principles or commonly accepted safety standards, or
that the construction is lien free or free from defective materials or
workmanship; or (c) a waiver of Lender's right thereafter to insist
that Completion of the Construction Work or Construction of the
Renovation Work occur in accordance with (as applicable) the Principal
Construction Work-Related Items, the other Contracts, Licenses,
Permits and other Intangibles, the Construction Budget, applicable
Legal Requirements, the Documents, sound construction, engineering or
architectural principles or commonly safety standards and free from
defective materials and workmanship. Lender and Lender's Inspector owe
no duty of care to Borrower or any third person to protect against, or
inform Borrower or any third person of, the existence of negligence,
faulty, inadequate or defective design or construction of the
Construction Work or Renovation Work.
9. CONSTRUCTION AND GENERAL TERMS
------------------------------
9.1 Payment Location. All monies payable under the Documents shall be
----------------
paid to Lender at its address furnished pursuant to paragraph 9.5 of
this Agreement in lawful monies of the United States of America,
unless otherwise designated in the Documents or by Lender by notice.
9.2 Entire Agreement. The Documents exclusively and completely state the
----------------
rights and obligations of Lender and Borrower with respect to the
Loan. No modification, variation, termination, discharge, abandonment,
or waiver of any of the provisions or conditions of the Documents
shall be valid unless in writing and signed by duly authorized
representatives of the party sought to be bound by such action. The
Documents supersede any and all prior representations, warranties
and/or inducements, written or oral, heretofore made by Lender
concerning this transaction, including any commitment for financing.
Without limiting the generality of the foregoing, the Documents shall
control over the Credit Facility Agreement to the extent of any
apparent conflict.
9.3 Powers Coupled with an Interest. The powers and agency hereby granted
-------------------------------
by Borrower are coupled with an interest and are irrevocable until the
Obligations have been paid in full and Lender has no further
obligation to make Advances and are granted as cumulative to Lender's
other remedies for collection and enforcement of the Obligations.
-54-
9.4 Counterparts. Any Document may be executed in counterpart, and any
------------
number of copies of such Document which have been executed by all
parties shall constitute one original.
9.5 Notices. Except as may be expressly otherwise provided in any of the
-------
Documents, all notices, requests or demands required or permitted to
be given under any Document shall be in writing, and shall be deemed
effective (a) upon hand delivery, if hand delivered; (b) one (1)
Business Day (as defined below) after such are deposited for delivery
via Federal Express or other nationally recognized overnight courier
service; or (c) three (3) Business Days after such are deposited in
the United States mails, certified or registered mail, all with
delivery charges and/or postage prepaid, and addressed as shown below,
or to such other address as the party being notified may have
designated in a notice given to the other party. Written notice may be
given by telecopy to the telecopier number as the party being notified
may have designated in a notice given to the other party, which notice
shall be effective on the day of receipt if received prior to the
expiration of the recipient's normal business hours on the day of
receipt or otherwise on the next Business Day; provided that such
notice shall not be deemed effective unless not later than the next
Business Day, a copy of such notice is hand delivered or deposited for
delivery via courier or in the United States mails in accordance with
the requirements set forth above.
If to Lender: FINOVA Capital Corporation
0000 Xxxx Xxxxxx Xxxxxx Xxxx
Xxxxx 000
Xxxxxxxxxx, Xxxxxxx 00000
Attn: Vice President - Resort Finance
Telecopy No.: (000) 000-0000
with a copy to: FINOVA Capital Corporation
0000 Xxxx Xxxxxx Xxxxxx Xxxx
Xxxxx 000
Xxxxxxxxxx, Xxxxxxx 00000
Attn: Vice President - Associate General Counsel
Telecopy No.: (000) 000-0000
If to Borrower: [Name of Borrower]
--------------------------------
0000 Xxxxxxx Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxx 00000
Attn: Chief Financial Officer
Telecopy No.: (000) 000-0000
With copy to: Xxxxx Xxxxx, Esq.
Vistana, Inc.
-55-
000 Xxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxx, Xxxxxxx 00000
Telecopy No.: (000) 000-0000
9.6 Successors and Assigns. All the covenants of Borrower and all the
----------------------
rights and remedies of the Lender contained in the Documents shall
bind Borrower, and, subject to the restrictions on merger,
consolidation and assignment contained in the Documents, its
successors and assigns, and shall inure to the benefit of Lender, its
successors and assigns, whether so expressed or not. Borrower may not
assign its rights in the Documents in whole or in part. Except as may
be expressly provided in a Document, no person or other entity shall
be deemed a third party beneficiary of any provision of the Documents.
9.7 Severability. If any provision of any Document is held to be invalid,
------------
illegal or unenforceable under present or future laws, the legality,
validity and enforceability of the remaining provisions of the
Documents shall not in any way be affected or impaired thereby. In
lieu of each such illegal, invalid or unenforceable provision, there
shall be added to the Document affected, a provision that is legal,
valid and enforceable and as similar in terms to such illegal, invalid
and unenforceable provision as may be possible.
9.8 Time of Essence. Time is of the essence in the Performance of the
---------------
Obligations.
9.9 Miscellaneous. All headings are inserted for convenience only and
-------------
shall not affect any construction or interpretation of the Documents.
Unless otherwise indicated, all references in a Document to clauses
and other subdivisions refer to the corresponding paragraphs, clauses
and other subdivisions of the Document; the words "herein," "hereof,"
"hereto," hereunder" and words of similar import refer to the Document
as a whole and not to any particular paragraph, clause or other
subdivision; and reference to a numbered or lettered subdivision of an
Article or paragraph shall include relevant matter within the Article
or paragraph which is applicable to but not within such numbered or
lettered subdivision. All Schedules and Exhibits referred to in this
Agreement are incorporated in this Agreement by reference.
9.10 (A) CHOICE OF LAW. EXCEPT AS OTHERWISE EXPRESSLY PROVIDED THEREIN,
-------------
THE DOCUMENTS AND THE RIGHTS, DUTIES AND OBLIGATIONS OF THE PARTIES
THERETO SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
INTERNAL LAWS OF THE STATE OF ARIZONA AND TO THE EXTENT THEY PREEMPT
THE LAWS OF SUCH STATE, THE LAWS OF THE UNITED STATES.
-56-
(B) CHOICE OF JURISDICTION; WAIVER OF VENUE. EACH OF LENDER AND
---------------------------------------
BORROWER: (A) HEREBY IRREVOCABLY SUBMITS ITSELF TO THE PROCESS,
JURISDICTION AND VENUE OF THE COURTS OF THE STATE OF ARIZONA, MARICOPA
COUNTY, AND TO THE PROCESS, JURISDICTION, AND VENUE OF THE UNITED
STATES DISTRICT COURT FOR THE DISTRICT OF ARIZONA, FOR THE PURPOSES OF
SUIT, ACTION OR OTHER PROCEEDINGS ARISING OUT OF OR RELATING TO ANY
DOCUMENT OR THE SUBJECT MATTER HEREOF, OR, IF LENDER INITIATES SUCH
ACTION, ANY COURT IN WHICH LENDER SHALL INITIATE SUCH ACTION AND THE
CHOICE OF SUCH VENUE SHALL IN ALL INSTANCES BE AT LENDER'S ELECTION;
AND (B) WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, HEREBY
WAIVES AND AGREES NOT TO ASSERT BY WAY OF MOTION, DEFENSE OR OTHERWISE
IN ANY SUCH SUIT, ACTION OR PROCEEDING ANY CLAIM THAT SUCH PERSON IS
NOT PERSONALLY SUBJECT TO THE JURISDICTION OF THE ABOVE-NAMED COURTS,
THAT SUCH SUIT, ACTION OR PROCEEDING IS BROUGHT IN AN INCONVENIENT
FORUM OR THAT THE VENUE OF SUCH SUIT, ACTION OR PROCEEDING IS
IMPROPER. EACH OF LENDER AND BORROWER HEREBY WAIVES THE RIGHT TO
COLLATERALLY ATTACK ANY JUDGMENT OR ACTION IN ANY OTHER FORUM.
(C) WAIVER OF JURY TRIAL. LENDER AND BORROWER ACKNOWLEDGE AND AGREE
--------------------
THAT ANY CONTROVERSY WHICH MAY ARISE UNDER ANY OF THE DOCUMENTS WOULD
BE BASED UPON DIFFICULT AND COMPLEX ISSUES; AND THEREFORE, THE PARTIES
AGREE THAT ANY LAWSUIT ARISING OUT OF ANY SUCH CONTROVERSY SHALL BE
TRIED BY A JUDGE SITTING WITHOUT A JURY, AND BORROWER HEREBY KNOWINGLY
AND VOLUNTARILY WAIVES TRIAL BY JURY IN ANY SUCH PROCEEDING.
(D) INDUCEMENT TO LENDER. ALL OF THE PROVISIONS SET FORTH IN THIS
--------------------
PARAGRAPH ARE A MATERIAL INDUCEMENT FOR LENDER'S MAKING THE LOAN TO
BORROWER.
(________ BORROWER'S INITIALS)
9.11 Compliance With Applicable Usury Law. It is the intent of the parties
------------------------------------
hereto to comply with the Applicable Usury Law. Accordingly,
notwithstanding any provisions to the contrary in the Documents, in no
event shall this Agreement or the Documents require the payment or
permit the collection of interest in excess of the maximum contract
rate permitted by the Applicable Usury Law.
-57-
9.12 NO RELATIONSHIP WITH PURCHASERS. LENDER DOES NOT HEREBY ASSUME AND
-------------------------------
SHALL HAVE NO RESPONSIBILITY, OBLIGATION OR LIABILITY TO PURCHASERS,
LENDER'S RELATIONSHIP BEING THAT ONLY OF A CREDITOR WHO HAS TAKEN, AS
SECURITY FOR INDEBTEDNESS OWED TO IT, A COLLATERAL ASSIGNMENT FROM
BORROWER OF THE INSTRUMENTS. EXCEPT AS REQUIRED BY LAW AND FOR FILINGS
MADE WITH THE SECURITIES & EXCHANGE COMMISSION OR ANY STOCK EXCHANGE
ON WHICH BORROWER'S STOCK IS TRADED, BORROWER WILL NOT, AT ANY TIME,
USE THE NAME OF OR MAKE REFERENCE TO LENDER WITH RESPECT TO THE TIME-
SHARE PROJECT, THE SALE OF TIME-SHARE INTERESTS OR OTHERWISE, WITHOUT
THE EXPRESS WRITTEN CONSENT OF LENDER.
9.13 NO JOINT VENTURE. THE RELATIONSHIP OF BORROWER AND LENDER IS THAT OF
----------------
DEBTOR AND CREDITOR, AND IT IS NOT THE INTENTION OF EITHER OF SUCH
PARTIES BY THIS OR ANY OTHER INSTRUMENT BEING EXECUTED IN CONNECTION
WITH THE LOANS TO ESTABLISH A PARTNERSHIP, AND THE PARTIES HERETO
SHALL NOT UNDER ANY CIRCUMSTANCES BE CONSTRUED TO BE PARTNERS OR JOINT
VENTURERS.
9.14 Standards Applied to Lender's Actions. Unless otherwise specifically
-------------------------------------
stipulated elsewhere in the Documents, if a matter is left in the
Documents to the decision, requirement, request, determination,
judgment, opinion, approval, consent, waiver, satisfaction,
acceptance, agreement, option or discretion of Lender, its employees,
Lender's counsel or any agent for or contractor of Lender, then such
action shall be deemed to be exercisable by Lender or such other
person in its sole and absolute discretion and according to standards
established in its sole and absolute discretion. Without limiting the
generality of the foregoing, "option" and "discretion" shall be
implied by use of the words "if" or "may."
9.15 Meaning of Subordination. Any subordinations required to be given
------------------------
under the Documents by third parties to Lender shall include the
subordination of and the deferral of the right to receive payments on
the subordinated obligations except to the extent expressly permitted
in this Agreement; the remittances to Lender of all prohibited
payments received by the third party; the subordination of all liens,
security interests, assignments and other encumbrances and claims held
by the third party on or against any of Borrower's property to
Lender's interest (whenever acquired) in such property; and an
agreement on the part of the third party not to exercise any remedies
against Borrower so long as all obligations under the Documents have
not been fully satisfied.
9.16 Scope of Reimbursable Attorney's Fees. As used in the Documents, the
-------------------------------------
term "attorneys' fees" includes the fees of attorneys licensed to
practice law in any
-58-
jurisdiction, the fees of law clerks, paralegals, investigators and
others not admitted to the bar but performing services under the
supervision of a licensed attorney, and the expenses incurred by them
in the performance of their services. As used in the Documents,
attorneys' fees incurred by Lender in the enforcement of any remedy or
covenant include, without limitation, attorneys' fees incurred in any
foreclosure of Borrower's Security Documents, in protecting or
sustaining the lien or priority of the collateral, or in any
proceeding arising from or connected with any such matter, including
any bankruptcy, receivership, injunction or other similar proceeding,
or any appeal from or petition for review of any such matter, and with
or without litigation.
9.17 Publicity. Lender routinely advertises the transactions to which it is
---------
a party in newspapers, industry periodicals, and other miscellaneous
print and electronic literature. Without the prior written consent of
VI, not to be unreasonably withheld, Lender will not use Borrower's
name, logo, insignia, descriptive art work, trade name, trademark or
other similar material, whether or not protected by copyright (or
otherwise), in any such advertisement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed in their respective name, personally or by their duly authorized
representatives as of the date above written.
LENDER FINOVA CAPITAL CORPORATION, a
Delaware corporation
By:______________________________________
Type/Print Name:_________________________
Title:___________________________________
BORROWER __________________________________, a(n)
__________________________________
By:______________________________________
Type/Print Name:_________________________
Title:___________________________________
-59-
LIST OF SCHEDULES AND EXHIBITS
Schedule
Exhibit A Note
Exhibit B Permitted Encumbrances
Exhibit C Real Property
Exhibit D Standard Procedures Pertaining to Developmental Matters
Requests
Exhibit E Opinion Requirements
Exhibit F Additional Due Diligence Items for Each Loan with an
Acquisition Component
Exhibit G Additional Conditions for any Subsequent Advances of
Acquisition Component
Exhibit G-1 Borrower's Affidavit for Acquisition Component Advance
Exhibit H Additional Due Diligence Items for Each Loan with a
Construction Component
Exhibit I Construction Work-Related Advance Request Administrative
Procedures
Exhibit I-1 Borrower's Affidavit for Construction Work-Related
Advance
Exhibit J Additional Due Diligence Items for Each Loan with a
Renovation Component
Exhibit K Renovation Work-Related Advance Request Administrative
Procedures
Exhibit K-1 Borrower's Affidavit for Renovation Work-Related Advance
SCHEDULE OF ADDITIONAL TERMS
----------------------------
S.1 This SCHEDULE has been incorporated by reference into and form a part of
that Loan Agreement dated as of ___________, ______, between FINOVA Capital
Corporation and __________________.
S.2 To the extent of any inconsistency between this SCHEDULE and the other
provisions of the Loan Agreement, the provisions of this SCHEDULE shall
control.
S.3 The provisions of the Loan Agreement are supplemented as follows (paragraph
references are references to paragraphs of the Loan Agreement) which are
intended to be supplemented by the following provisions :
(a) Intro., (P)1.5.1 Loan Components: ----------------------------------------------------------------.
(b) (P)1.26 Construction Improvements: ------------------------------------------------------.
(c) (P)1.30 Construction Work Phases: -------------------------------------------------------.
(d) (P)1.57 Maximum Acquisition Component Amount: ----------------------- Dollars ($________).
(e) (P)1.58 Maximum Construction Component Amount: ---------------------- Dollars ($________).
(f) (P)1.60 Maximum Interest Reserve Amount: ---------------------------- Dollars ($________).
(g) (P)1.61 Maximum Loan Amount: ---------------------------------------- Dollars ($________).
(h) (P)1.62 Maximum Per Unit Cost: -------------------------------------- Dollars ($________).
(i) (P)1.63 Maximum Renovation Component Amount: ------------------------ Dollars ($________).
(j) (P)1.64 Minimum Initial Equity Contribution: ------------------------ Dollars ($________).
(k) (P)1.71 Partial Release Fee: ---------------------------------------- Dollars ($________).
(l) (P)1.85 Renovation Improvements: --------------------------------------------------------.
(m) (P)1.89 Renovation Work Phase: ----------------------------------------------------------.
(n) (P)1.96 Required Completion Period (Construction): --------------------------------------.
(o) (P)1.97 Required Completion Period (Renovation): ---------------------------------------.
(p) (P)1.109 Time-Share Declaration: ---------------------------------------------------------.
(q) (P)1.116 Time-Share Project: -------------------------------------------------------------.
(r) (P)2.1(a) Acquisition Advance(s): ---------------------------------------------------------.
(s) (P)4.1(a) Additional Loan Documents: ------------------------------------------------------.
(t) (P)4.1(b) Additional Due Diligence Items: -------------------------------------------------.
(u) (P)(P)4.1(b), 6.1(a) State of Organization: ---------------------------------------------------------.
(v) (P)(P)4.1(b), 6.6(b) Minimum Required Time-Share Approvals Delivery Date with respect to any
Construction Work Phase or Renovation Work Phase, not later than: -------------.
(x) (P)4.9 Current Wire Transfer Fee: ------------------------------ Dollars ($__________).
(y) (P)5.3(c) Prepayment Premium: ------------------------------------------------------------.
(z) (P)6.1(a) Type of Business Organization: ------------------------------------------------.
(aa) (P)6.1(c) Borrower's Principal Place of Business and Chief Executive Office: -------------.
(bb) (P)6.6(b) Jurisdictions Where Sales And/Or Offers To Sell Have Occurred: -----------------.
(cc) (P)6.6(b) Minimum Required Time-Share Approvals Application Date with respect to any
Construction Work Phase or Renovation Work Phase, not later than: --------------.
(dd) (P)6.9 Insurance Letter: --------------------------------------------------------------.
(ee) (P)6.11(d) Time-Share Association Budget Delivery Date: ----------------------------------.
S.4 The representations, warranties and covenants of Borrower and the other
terms and conditions set forth in the Loan Agreement are modified as
follows:
(a)
(b)
S.5 In addition to the other representations, warranties and covenants of
Borrower set forth in the Loan Agreement, Borrower represents, warrants and
covenants as follows:
(a)
(b)
EXHIBIT A
---------
NOTE
EXHIBIT B
---------
PERMITTED ENCUMBRANCES
EXHIBIT C
---------
REAL PROPERTY
EXHIBIT D
PROCEDURES PERTAINING TO
DEVELOPMENTAL MATTERS REQUESTS
A. If Borrower desires Lender to give its consent to or to take any other
action concerning a matter affecting the zoning, platting, development or sale
of or title to the Real Property, then Borrower will endeavor to deliver to
Lender a written request ("Developmental Matters Request") at least ten (10)
Business Days prior to the date such Borrower desires Lender to take such
action.
B. The Developmental Matters Request shall contain in reasonable detail the
following: (1) a description of the action which Borrower desires Lender to
take; (2) the date by which Borrower desires that Lender take the action and any
special factors affecting Borrower's desire that Lender take the requested
action by such date (such as the desire to present an amended plat to a
governmental entity on a scheduled hearing date and the length of time before
another hearing date can be scheduled); (3) the reason that Borrower desires the
action to be taken by Lender, a description as to how the matter which is the
subject of the request for Lender's action alters the plan required to be given
by the Borrower to Lender pursuant to paragraph 4.1(b) of this Agreement
regarding the use, development or sale of the Real Property; and (4) a
description of any amendments or waivers required with respect to the Documents.
At the same time, it delivers the Developmental Matters Request to Lender,
Borrower will also endeavor to deliver to Lender at least two (2) copies of all
items as would be reasonably required by a reasonable and prudent lender in
order to evaluate the request. Borrower will in any event promptly deliver to
Lender any information which Lender may reasonably request concerning the
Developmental Matters Request.
C. To the extent Lender's consent is requested to a plat, a plat amendment
or covenants, conditions and restrictions affecting the Real Property, such
consent shall specifically state, in addition to such other matters as Lender
may require, that nothing contained in the consent shall otherwise affect,
alter, or modify in any manner whatsoever the terms of the Mortgage, that except
as otherwise required by law and subject to the provisions of the Time-Share
Declaration the lien of the Mortgage shall be prior to the lien for all
assessments, and that execution of the consent by Lender is not intended to and
shall not diminish the obligations of Borrower under the Mortgage, excuse the
Borrower from any liability for failure to perform any such obligation, or
impair any of Lender's rights against Borrower under the Mortgage.
D. Notwithstanding the provisions of paragraph 9.5, a Developmental Matters
Request and all items delivered to Lender in connection therewith shall be
addressed to :
FINOVA CAPITAL CORPORATION
0000 Xxxx Xxxxxx Xxxxxx Xxxx, Xxxxx 000
Xxxxxxxxxx, Xxxxxxx 00000
Attn: Xxxxx Xxxxx-Xxxxxx
Telecopy No.: (000) 000-0000
E. The provisions of paragraph 3.3 of the Agreement shall be applicable to
each Developmental Matters Request.
F. The procedures set forth in this Exhibit shall not apply to a request
for a Partial Release of a Time-Share Interest or to obtain Advances, the
procedures for which are set forth elsewhere in this Agreement.
EXHIBIT E
OPINION MATTERS OF THE BORROWER'S AND
GUARANTOR'S COUNSEL OPINIONS
Lender will require legal opinions from the Borrower's and Guarantor's
counsel [which, for purposes of the opinions required pursuant to items (7)-(10)
of the following sentence must be counsel licensed to practice in the
jurisdiction where the Real Property is located] as to such matters as Lender
reasonably deems appropriate. Without limiting the generality of the preceding
sentence, opinions will be required as to (1) due organization, good standing
and structure of the Borrower, Guarantor and (if any) other sureties for the
Performance of the Obligations who are not natural persons; (2) due
authorization, execution and delivery of the Documents executed by the Borrower,
Guarantor and (if any) other sureties for the Performance of the Obligations who
are not natural persons in connection with the Loan; (3) enforceability of such
Documents (including choice of law provisions); (4) the absence of conflict
between such Documents and Legal Requirements; (5) non-materiality of pending
and threatened litigation; (6) compliance by the Borrower with applicable laws;
(7) enforceability of the Agreement and other Documents executed in connection
with Loan (including choice of law provisions); (8) compliance of the Loan with
usury laws; (9) zoning of such Real Property; (10) compliance of the project
governing documents and project consumer documents with applicable laws; and
(11) proper perfection of the required liens and security interests.
EXHIBIT F
ADDITIONAL DUE DILIGENCE ITEMS FOR EACH
LOAN WITH AN ACQUISITION COMPONENT AND OTHER CONDITIONS PERTAINING TO
ACQUISITION ADVANCES
1. a tentative budget for the construction and/or renovation work which
Borrower intends to be done with respect to the Real Property; and
2. if required by Lender in writing, a report prepared by an engineer engaged
by Lender with respect to the physical condition of any improvements
existing on the Real Property.
EXHIBIT G
ADDITIONAL CONDITIONS FOR SUBSEQUENT ADVANCES
OF ACQUISITION COMPONENT
With each Acquisition Advance request, Borrower must complete, execute and
deliver to Lender:
1. Borrower's Affidavit for Advance (Exhibit G-1 hereof)
EXHIBIT G-1
-----------
BORROWER'S AFFIDAVIT FOR ACQUISITION ADVANCE
Borrower: ______________________
Date: ________________
Loan No.: __________________
Amount: _______________________________
In connection with and in order to induce FINOVA Capital Corporation
("Lender") to make an Acquisition Advance in the amount requested above,
Borrower hereby represents, warrants and stipulates as follows:
1. The sum of (a) amount of the requested Acquisition Advance and (b) the
amount of any Acquisition Advances previously made does not exceed the
Acquisition Cost.
2. No material adverse change has occurred since __________________, ___, the
date of the latest financial statements given by or on behalf of such
person to Lender, in the financial condition or the business and operations
of Borrower.
3. All representations and warranties contained in the Agreement are true and
correct in all material respects as of the date hereof.
4. Neither an Event of Default nor an Incipient Default exists.
5. Borrower has performed and complied with all other agreements or conditions
required by the Agreement to be performed or complied with prior to or at
the date of the requested Advance.
6. Capitalized terms not otherwise defined herein shall have the meaning given
to them in the Agreement.
7. Borrower hereby requests that the requested Advance be disbursed through
the following method (check one): _____ wire transfer or ____ check. If
Borrower has requested disbursement via wire transfer, Borrower requests
that wire transfer be made in accordance with the following instructions:
Bank Name:_____________________________________
Bank Address:__________________________________
Bank ABA No.:__________________________________
Account Name:__________________________________
Account No.:___________________________________
Special Instructions:__________________________
_______________________________________________
_______________________________________________
Very truly yours,
____________________________________, a(n)
____________________________________
By:____________________________________________
Type/Print Name:_______________________________
Title:_________________________________________
State of _______ )
) ss:
County of _________ )
Subscribed and sworn to before me on
this _____ day of _____________, _____.
______________________________________
Notary Public
My commission expires:
______________________
(Notary Seal)
EXHIBIT H
ADDITIONAL DUE DILIGENCE ITEMS FOR EACH LOAN
WITH A CONSTRUCTION COMPONENT
1. all grading permits, foundation permits, building permits, environmental
permits, and other permits, licenses, approvals and certificates for the
construction of the Construction Improvements, excluding, however, items
which cannot be issued until after construction has been completed or
otherwise reached a required stage;
2. a soils and geotechnical test report with respect to the suitability of the
soils on the Real Property to construct the Construction Improvements;
3. unless a building permit has been issued for the Construction Improvements,
a flood and drainage study with respect to the Real Property and the
Construction Improvements;
4. the Architect/Engineer Agreement for each Architect/Engineer;
5. Plans and Specifications for the Construction Improvements complete in all
respects (subject only to Lender's approval prior to the initial Advance);
6. the Construction Budget complete in all respects (subject only to Lender's
approval prior to the initial Advance);
7. a detailed draw schedule for the Construction Component;
8. the Construction Work Progress Schedule (subject only to Lender's approval
prior to the initial Advance);
9. a list of all Construction Work Contractors with whom Borrower has
contracted and all subcontractors and materialmen responsible for major
portions of the such Construction Work, all of whom must be satisfactory to
Lender;
10. if Borrower is not acting as its own general contractor and a VI Entity is
not the general contractor, copies of the general construction contract and
copies of subcontracts for materials portions of the Construction Work; the
consent of the Construction Work Contractors under Material Construction
Work Contracts to the assignment of their respective contracts to Lender;
provided, however, the express consent of a Contractor to an assignment by
-------- -------
Borrower of a Construction Contract with such Contractor will not be
required so long as the required agreement between the Borrower and such
Contractor contains provisions acceptable to Lender reflecting the
Contractor's (i) consent to such assignment and (ii) agreement with respect
to performance under its contract after a default by the Borrower; all
information as Lender may reasonably require regarding all Construction
Work Contractors under Material Construction Work Contracts, and, if
required by Lender, the subcontractors and materialmen responsible for
major portions of such Construction Work (which, among other things, may
consist of financial statements for the last two years, federal employer
tax identification numbers, a Dun & Bradstreet report, credit references
and a Better Business Bureau report);
11. if Borrower is not acting as its own general contractor and a VI Entity is
not the general contractor, if required by Lender and available under the
laws of the state where the Real Property is located, a payment bond which
complies with all Legal Requirements of the state where the Real Property
is located, is issued by a surety satisfactory to Lender and is adequate to
cause all persons providing labor, materials, equipment
or services with respect to the Construction Work to look solely to such
bond, rather than the Real Property and other Collateral, in the event of
non-payment;
12. if Borrower is not acting as its own general contractor and a VI Entity is
not the general contractor, if required by Lender and available under the
laws of the state where the Real Property is located, a performance bond or
bonds which complies/comply with all Legal Requirements of the state where
the Real Property is located, is/are issued by a surety satisfactory to
Lender, covering Construction Work Contracts for at least the major
portions of the related Construction Work and naming Lender as a co-
obligee;
13. the report of Lender's Inspector with respect to any completed work and the
Construction Budget, Plans and Specifications, the Construction Work
Contracts, the Construction Work Progress Schedule, and other construction-
related items to the extent provided in paragraph 8.1.
EXHIBIT I
---------
LENDER'S
CONSTRUCTION WORK-RELATED ADVANCE REQUEST
ADMINISTRATIVE PROCEDURES
A. With each Construction Work-Related Advance Request, Borrower must
complete, execute and deliver to Lender:
1. Borrower's Affidavit for Advance (Exhibit I-1 hereof);
2. lien waivers for Material Construction Work Contracts on such form as is
required by law or is otherwise reasonably satisfactory to Lender for
previous application payments no later than sixty (60) days after the
Construction Work-Related Advance to which they relate; and
3. any surveys required pursuant to paragraph 6.4(g) of the Agreement.
B. The following events must take place prior to each Construction Work-
Related Advance:
1. At Lender's option, Lender will request Title Insurer to review public
records, advise Lender of same, and forward to Lender endorsement(s) as
required pursuant to paragraph 6.4(h) of the Agreement.
2. Lender must have received the report of Lender's Inspector for the
inspection made by Lender's Inspector during the prior month.
3. Lender will review the Construction Work-Related Advance Request, the
Title Insurer's input and most recent report of Lender's Inspector. The
Construction Work-Related Advance Request must be appropriate, complete
and in proper order. The order of the Construction Work-Related Advance
Request package will determine the processing time needed.
EXHIBIT I-1
-----------
BORROWER'S AFFIDAVIT FOR CONSTRUCTION WORK-RELATED ADVANCE
Borrower: ______________________
Date: ________________
Construction Work: __________________________________________________
Request No.: __________________
Loan No.: __________________
Period: _________________ to ____________________
Amount: _______________________________
In connection with and in order to induce FINOVA Capital Corporation
("Lender") to make a Construction Work-Related Advance in the amount requested
above, Borrower hereby represents, warrants and stipulates as follows:
1. The work listed in this Construction Work-Related Advance Request Package
("Request") has been completed in accordance with the Loan Agreement dated
_______________, _____ between the undersigned and Lender (with any
amendments, "Agreement"); all obligations for work submitted and received
on previous Borrower's Construction Work-Related Advance Request have now
been paid in full (except for retainage); the funds requested at this time
shall be applied only to the obligations for work set forth in this
Request; and all Insurance Policies (including without limitation,
Builder's Risk and General Liability Coverage policies) as required by the
Agreement are in full force and effect.
2. The following is a description of the completed Construction Work (by Work
Phase) for which Borrower is requesting a Construction Work-Related Advance
in this application: ______________________________________________________
___________________________________________________________________________
__________________________________________________________________________.
3. No material adverse change has occurred in the Construction Improvements
or, since __________________, _____, the date of the latest financial
statements given by or on behalf of such person to Lender, in the financial
condition or the business and operations of Borrower.
4. All representations and warranties contained in the Agreement are true and
correct in all material respects as of the date hereof.
5. Neither an Event of Default nor an Incipient Default exists.
6. Borrower has performed and complied with all other agreements or conditions
required by the Agreement to be performed or complied with prior to or at
the date of the requested Construction Work-Related Advance.
7. Capitalized terms not otherwise defined herein shall have the meaning given
to them in the Agreement.
8. Borrower hereby requests that the requested Advance be disbursed through
the following method (check one): _____ wire transfer or ____ check. If
Borrower has requested disbursement via wire transfer, Borrower requests
that wire transfer be made in accordance with the following instructions:
Bank Name:____________________________________________
Bank Address:_________________________________________
Bank ABA No.:_________________________________________
Account Name:_________________________________________
Account No.:__________________________________________
Special Instructions:_________________________________
______________________________________________________
______________________________________________________
Very truly yours,
____________________________________, a(n)
____________________________________
By:____________________________________
Type/Print Name:_______________________
Title:_________________________________
State of _________ )
) ss:
County of _________ )
Subscribed and sworn to before me on
this _____ day of _____________, _____.
__________________________________
Notary Public
My commission expires:
______________________
(Notary Seal)
EXHIBIT J
ADDITIONAL DUE DILIGENCE ITEMS FOR EACH
LOAN WITH A RENOVATION COMPONENT
1. the Renovation Budget complete in all respects (subject only to Lender's
approval prior to the initial Renovation Work-Related Advance);
2. a detailed draw schedule for the Renovation Component;
3. the Renovation Work Progress Schedule (subject only to Lender's approval
prior to the initial Renovation Work-Related Advance); and
4. if not previously received by Lender, a report prepared by an engineer
engaged by Lender with respect to the physical condition of any
improvements existing on the Real Property.
EXHIBIT K
LENDER'S RENOVATION WORK-RELATED ADVANCE
REQUEST ADMINISTRATIVE PROCEDURES
A. With each Renovation Work-Related Advance Request, Borrower must complete
and deliver to Lender:
1. Borrower's Affidavit for Renovation Work-Related Advance Request
(Exhibit K-1 hereof); and
2. lien waivers in connection with all Material Renovation Work Contracts
on such form as is required by law or is otherwise reasonably
satisfactory to Lender for previous application payments no later than
sixty (60) days after the Renovation Work-Related Advance to which they
relate is made; and
3. such other items as Lender requests which are reasonably necessary to
evaluate the requests of the Work-Related Advance and the satisfaction
of Conditions Precedent thereto.
B. The following events must take place prior to each Renovation Work-Related
Advance:
4. At Lender's option, Lender will request Title Insurer to review public
records, advise Lender of same, and forward to Lender endorsement(s) as
required pursuant to paragraph 6.4(h) of the Agreement.
5. Lender must have received the report of Lender's Inspector with respect
to the inspection made by Lender's Inspector during the prior month.
6. Lender will review the Renovation Work-Related Advance Request, the
Title Insurer's input and most recent report of Lender's Inspector. The
Renovation Work-Related Advance Request must be appropriate, complete
and in proper order. The order of the Renovation Work-Related Advance
Request package will determine the processing time needed.
EXHIBIT K-1
-----------
BORROWER'S AFFIDAVIT FOR RENOVATION WORK-RELATED ADVANCE
Borrower: ______________________
Date: ________________
Construction Work: __________________________________________________
Request No.: __________________
Loan No.: __________________
Period: _________________ to ____________________
Amount: _______________________________
In connection with and in order to induce FINOVA Capital Corporation
("Lender") to make a Renovation Work-Related Advance in the amount requested
above, Borrower hereby represents, warrants and stipulates as follows:
1. The work listed in this Renovation Work-Related Advance Request Package
("Request") has been completed in accordance with the Loan Agreement dated
_______________, _____ between the undersigned and Lender (with any
amendments, "Agreement"); all obligations for work submitted and received
on previous Borrower's Renovation Work-Related Advance Request have now
been paid in full (except for retainage); the funds requested at this time
shall be applied only to the obligations for work set forth in this
Request; and all Insurance Policies (including without limitation,
Builder's Risk and General Liability Coverage policies) as required by the
Agreement are in full force and effect.
2. The following is a description of the completed Renovation Work (by Work
Phase) for which Borrower is requesting a Renovation Work-Related Advance
in this application:_______________________________________________________
___________________________________________________________________________
__________________________________________________________________________.
3. No material adverse change has occurred in the Renovation Improvements or,
since __________________, _____, the date of the latest financial
statements given by or on behalf of such person to Lender, in the financial
condition or the business and operations of Borrower.
4. All representations and warranties contained in the Agreement are true and
correct in all material respects as of the date hereof.
5. Neither an Event of Default nor an Incipient Default exists.
6. Borrower has performed and complied with all other agreements or conditions
required by the Agreement to be performed or complied with prior to or at
the date of the requested Renovation Work-Related Advance.
7. Capitalized terms not otherwise defined herein shall have the meaning given
to them in the Agreement.
8. Borrower hereby requests that the requested Advance be disbursed through
the following method (check one): _____ wire transfer or __________ check.
If Borrower has requested disbursement via wire transfer, Borrower requests
that wire transfer be made in accordance with the following instructions:
Bank Name:_______________________________________
Bank Address:____________________________________
Bank ABA No.:____________________________________
Account Name:____________________________________
Account No.:_____________________________________
Special Instructions:____________________________
_________________________________________________
_________________________________________________
Very truly yours,
____________________________________, a(n)
____________________________________
By:________________________________________
Type/Print Name:___________________________
Title:_____________________________________
State of ___________ )
) ss:
County of _________ )
Subscribed and sworn to before me on
this _____ day of _____________, _____.
__________________________________
Notary Public
My commission expires:
______________________
(Notary Seal)
EXHIBIT 2
FORM OF PROMISSORY NOTE
-2-
PROMISSORY NOTE
$___________ _________, _____
FOR VALUE RECEIVED, the undersigned _________________________________, a(n)
____________________ ("Borrower"), promises to pay to FINOVA CAPITAL
CORPORATION, a Delaware corporation, or order, at its office at 0000 Xxxx Xxxxxx
Xxxxxx Xxxx, Xxxxxxxxxx, Xxxxxxx 00000, or at such other place as the holder of
this Note ("Holder") may from time to time designate in writing, in lawful money
of the United States of America, the principal sum of
________________________________________ DOLLARS ($___________), or so much
thereof as has been disbursed and not repaid, together with interest on the
unpaid principal balance from time to time outstanding, as more fully provided
below. All payments in respect of this Note shall be made in immediately
available funds.
SECTION 1. DEFINITIONS
1.1 When used in this Note, the following terms shall have the meanings
set forth below:
"Agreement" shall mean that Loan Agreement dated as of even date
herewith and executed by Borrower and Lender (which has been executed
pursuant to that Revolving Credit Facility Agreement dated as of July 9,
1998, between Vistana, Inc. and Lender), as it may be from time to time
further renewed, amended, supplemented, replaced or restated.
"Applicable Usury Law" shall have the meaning given to it in Section
3.9.
"Business Day" shall mean any day other than a Saturday, a Sunday, a
national holiday or a day on which banks in Phoenix, Arizona, are required
to be closed.
"Dollars" shall mean U.S. Dollars.
"Lender" shall mean FINOVA Capital Corporation and its successors and
assigns.
"Loan" shall mean the loan made to Borrower under the Agreement and
evidenced by this Note.
"Maturity Date" shall mean July 9, 2006.
SECTION 2. INTEREST AND PAYMENT TERMS OF NOTE
-2-
2.1 Interest on the principal amount outstanding ("Basic Interest") shall
accrue daily on the basis of the actual number of days in the computation period
using a three hundred sixty (360) day year.
2.2 Basic Interest shall be payable monthly, in arrears, on the last
Business Day of each month, commencing on the last Business Day of the calendar
month in which the initial advance of the Loan is made and continuing on the
last Business Day of each month thereafter to and including the Maturity Date.
2.3 Borrower will make to Holder principal payments in the amounts and at
the times required by paragraph 5.2 of the Agreement.
2.4 Unless payment of the amounts due hereunder have been accelerated or
unless a payment is mandated pursuant to paragraph 5.2 of the Agreement, all
sums of principal then outstanding, all accrued and unpaid interest and all
other sums due under this Note shall be due and payable on the Maturity Date.
2.5 Except as otherwise provided herein, interest ("Basic Interest") shall
accrue on the unpaid principal balance of this Note from time to time
outstanding at a variable interest rate per annum ("Basic Interest Rate") equal
to (i) the LIBOR Rate plus (ii) two and eighty-five hundredths percent (2.85%)
("LIBOR Based Rate"), which rate shall be adjusted on each LIBOR Interest Rate
Change Date (as hereinafter defined). The term "LIBOR Rate" means the rate of
interest determined by Holder, based on Bloomberg Service reports, to be the
rate at which deposits in United States dollars are offered by major banks in
London, England, to other major banks in the London interbank market at 11:00
a.m. (London, England, local time) on the date two (2) London business days
preceding the initial advance of the Loan or the LIBOR Interest Rate Change
Date, as the case may be, in the London interbank market equal to one (1) month
[or if a one (1) month period is not quoted or the period between the Interest
Rate Change Date and the Maturity Date is less than one (1) month, then the
period quoted or the period which is next greater than one (1) month or the
remaining term to maturity, as the case may be]. The term "LIBOR Interest Rate
Change Date" means the first Business Day of each month following the initial
advance of the Loan. If prior to the commencement of any interest period,
Holder determines by reason of circumstances affecting the London interbank
market, adequate and reasonable means do not exist for ascertaining the LIBOR
Rate in the manner provided in the definition of such term, the LIBOR Rate shall
be determined from such source as Holder shall reasonably determine.
2.6 Any payment due hereunder, whether of principal or interest, shall, if
not made when due, earn Basic Interest thereafter at a rate per annum ("Default
Rate") equal to (a) the greater of two percent (2%) above the rate otherwise
payable hereunder or (b) the maximum contract rate permitted under the
Applicable Usury Law, whichever of (a) or (b) is lesser. At the option of
Holder, Basic Interest shall accrue at the Default Rate on the unpaid principal
balance of this Note while an Event of Default exists.
-3-
2.7 If any installment of principal and/or interest required to be made in
connection with the indebtedness evidenced hereby is not actually received by
Holder from Borrower by the date it is due and, except in the case of the final
installment for which no grace period is allowed, such failure continues for
five (5) Business Days after notice of such failure to Borrower or an Event of
Default occurs, Holder may at its option, without notice or demand, declare this
Note immediately due and payable, whereupon this Note shall become immediately
due and payable and Borrower will pay to Holder the entire unpaid principal
balance hereof, all accrued and unpaid interest thereon, and all other sums
owing in connection with the Loan.
2.8 Except as expressly provided in this Note or in the Agreement,
prepayment of this Note will not be permitted in whole or in part without
premium.
2.9 This Note is secured by, among other things, that [CONSTRUCTION]
[MORTGAGE] [DEED OF TRUST] and Financing Statement (With Security Agreement and
Assignment of Leases, Rents, Sales Documents, Sales Proceeds and Developer's
Rights) dated as of ___________________, ______, encumbering real property in
__________ County, _________, and related personal property, as such security
document may from time to time be renewed, amended, restated or replaced.
2.10 Payment received in respect of this Note shall be applied in
accordance with the provisions of the Agreement.
SECTION 3. MISCELLANEOUS
3.1 The contracted for rate of interest of the Loan, without limitation,
shall consist of the following: (i) the Basic Interest Rate, calculated and
applied to the principal balance of this Note in accordance with the provisions
hereof; (ii) the Default Rate, calculated and applied to the principal balance
of this Note in accordance with the provisions hereof; (iii) the Credit Facility
Fee (as defined in the Agreement) attributable to the Loan; and (iv) all
Additional Sums (as hereinafter defined), if any. Borrower agrees to pay an
effective contracted for rate of interest which is the sum of the above-
referenced elements but in no event to exceed the maximum contract rate
permitted under the Applicable Usury Law. All fees, charges, goods, things in
action or any other sums or things of value [other than amounts described in
(i), (ii) and (iii) of the preceding sentence], to be paid by or on behalf of
Borrower or received by Holder pursuant to this Note, the Agreement, the other
Documents (as defined in the Agreement) or any other documents or instruments in
any way pertaining to this lending transaction, or otherwise with respect to
this lending transaction, that under any applicable law may be deemed to be
interest with respect to this lending transaction, for the purpose of any
applicable law that may limit the maximum amount of interest to be charged with
respect to this lending transaction ("Additional Sums"), shall be payable by
Borrower as, and shall be deemed to be, additional interest; and for such
purposes only, the agreed upon and "contracted for rate of interest" of this
lending transaction shall be deemed to be increased by the rate of interest
resulting from the Additional Sums.
-4-
3.2 If Holder undertakes to collect this Note, Borrower will pay to Holder
in addition to any indebtedness due and unpaid, all costs and expenses of
collection, including, without limitation, attorneys' fees, whether or not legal
proceedings shall be instituted.
3.3 Borrower and every person or entity at any time liable for the payment
of the indebtedness evidenced by this Note waives: presentment for payment,
protest and demand; notice of protest, demand, dishonor and nonpayment of this
Note; and each and every other notice of any kind respecting this Note except as
provided in this Note or in any of the other Documents. Borrower and every such
person or entity further consents that at any time and from time to time, Holder
may renew or extend the time of payment of any sums to be paid under this Note
without limit as to the number or aggregate period of such renewals or
extensions, at the request of any other person or entity liable for them. Any
such renewals or extensions may be made without notice to any person or entity
liable for the payment of the indebtedness evidenced by this Note.
3.4 This Note is given and accepted as evidence of indebtedness only and
not in payment or satisfaction of any indebtedness or obligation.
3.5 Time is of the essence with respect to all of Borrower's obligations
and agreements under this Note.
3.6 This Note and all the provisions, conditions, promises and covenants
contained herein shall be binding in accordance with its terms upon Borrower,
its successors, transferees, and assigns; and shall inure to the benefit of
Holder, its successors and assigns. No modification, variation, termination,
discharge or abandonment of this Note and no waiver of any of the provisions or
conditions of this Note shall be valid unless in writing and signed by duly
authorized representatives of Borrower and Holder or their successors,
transferees or assigns, as the case may be; and a waiver on one occasion shall
not be construed as continuing or as a bar to or waiver of such right or remedy
on any other occasion. All remedies conferred upon Holder by this Note or any
other document securing repayment of this Note or otherwise related to this Note
shall be cumulative and none is exclusive, and such remedies may be exercised
concurrently or consecutively at Holder's option. Nothing in this Note shall be
deemed a consent to any assignment, merger or consolidation, restricted or
prohibited by the terms of any of the other Documents.
3.7 If any one or more of the provisions contained in this Note shall be
held invalid, illegal or unenforceable in any respect, the validity, legality
and enforceability of the remaining provisions shall not in any way be affected
or impaired thereby; provided that where the provisions of any invalidating law
may be waived, they are waived by Borrower to the fullest extent possible.
3.8 THIS NOTE HAS BEEN DELIVERED AND WILL BE SERVICED AND RETAINED IN
PHOENIX, ARIZONA. THIS NOTE AND THE RIGHTS, DUTIES AND OBLIGATIONS OF THE
BORROWER AND HOLDER SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
INTERNAL LAWS OF THE STATE OF
-5-
ARIZONA WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES AND TO THE EXTENT THEY
PREEMPT THE LAWS OF SUCH STATE, THE LAWS OF THE UNITED STATES.
EACH OF BORROWER AND (BY ACCEPTANCE HEREOF) HOLDER: (A) HEREBY IRREVOCABLY
SUBMITS ITSELF TO THE PROCESS, JURISDICTION AND VENUE OF THE COURTS OF THE STATE
OF ARIZONA, MARICOPA COUNTY, AND TO THE PROCESS, JURISDICTION, AND VENUE OF THE
UNITED STATES DISTRICT COURT FOR THE DISTRICT OF ARIZONA, FOR THE PURPOSES OF
SUIT, ACTION OR OTHER PROCEEDINGS ARISING OUT OF OR RELATING TO THIS NOTE OR THE
SUBJECT MATTER HEREOF, AND, IF HOLDER INITIATES SUCH ACTION, ANY COURT IN WHICH
HOLDER SHALL INITIATE SUCH ACTION, AND THE CHOICE OF SUCH VENUE SHALL IN ALL
INSTANCES BE AT HOLDER'S ELECTION; AND (B) WITHOUT LIMITING THE GENERALITY OF
THE FOREGOING, HEREBY WAIVES AND AGREES NOT TO ASSERT BY WAY OF MOTION, DEFENSE
OR OTHERWISE IN ANY SUCH SUIT, ACTION OR PROCEEDING ANY CLAIM THAT SUCH PERSON
IS NOT PERSONALLY SUBJECT TO THE JURISDICTION OF THE ABOVE-NAMED COURTS, THAT
SUCH SUIT, ACTION OR PROCEEDING IS BROUGHT IN AN INCONVENIENT FORUM OR THAT THE
VENUE OF SUCH SUIT, ACTION OR PROCEEDING IS IMPROPER. EACH OF BORROWER AND (BY
ACCEPTANCE HEREOF) HOLDER HEREBY WAIVES THE RIGHT TO COLLATERALLY ATTACK ANY
JUDGMENT OR ACTION IN ANY OTHER FORUM.
BORROWER AND (BY ACCEPTANCE HEREOF) HOLDER ACKNOWLEDGE AND AGREE THAT ANY
CONTROVERSY WHICH MAY ARISE UNDER THIS NOTE WOULD BE BASED UPON DIFFICULT AND
COMPLEX ISSUES; AND THEREFORE, THE PARTIES AGREE THAT ANY LAWSUIT ARISING OUT OF
ANY SUCH CONTROVERSY SHALL BE TRIED BY A JUDGE SITTING WITHOUT A JURY, AND
KNOWINGLY AND VOLUNTARILY WAIVES TRIAL BY JURY IN ANY SUCH PROCEEDING.
ALL OF THE PROVISIONS SET FORTH ABOVE ARE MATERIAL INDUCEMENTS FOR LENDER'S
MAKING THE LOAN TO BORROWER.
_____ BORROWER'S INITIALS
3.9 It is the intent of the parties to comply with the usury law
("Applicable Usury Law") applicable pursuant to the terms of the preceding
paragraph or such other usury law which is applicable if the law chosen by
parties is not. Accordingly, it is agreed that notwithstanding any provisions
to the contrary in this Note or in any of the other Documents, in no event shall
this Note or such other Documents require the payment or permit the collection
of interest in excess of the maximum contract rate permitted by the Applicable
Usury Law. If (a) any such excess of interest otherwise would be contracted
for, charged or received from Borrower or otherwise in connection with the Loan,
or (b) the maturity of the indebtedness evidenced by this Note is
-6-
accelerated in whole or in part, or (c) all or part of the principal or interest
of this Note shall be prepaid, so that under any of such circumstances the
amount of interest contracted for, charged or received in connection with the
Loan, would exceed the maximum contract rate permitted by the Applicable Usury
Law, then in any such event (1) the provisions of this paragraph shall govern
and control, (2) neither Borrower nor any other person or entity now or
hereafter liable for the payment hereof will be obligated to pay the amount of
such interest to the extent that it is in excess of the maximum contract rate
permitted by the Applicable Usury Law, (3) any such excess which may have been
collected shall be either applied as a credit against the then unpaid principal
amount of this Note or refunded to Borrower, at the Holder's option, and (4) the
effective rate of interest will be automatically reduced to the maximum amount
of interest permitted by the Applicable Usury Law. It is further agreed, without
limiting the generality of the foregoing, that to the extent permitted by the
Applicable Usury Law: (x) all calculations of the rate of interest which are
made for the purpose of determining whether such rate would exceed the maximum
contract rate permitted by the Applicable Usury Law shall be made by amortizing,
prorating, allocating and spreading during the period of the full stated term of
the Loan, all interest at any time contracted for, charged or received from
Borrower or otherwise in connection with the Loan; and (y) in the event that the
effective rate of interest on the Loan should at any time exceed the maximum
contract rate allowed under the Applicable Usury Law, such excess interest that
would otherwise have been collected to such date of calculation had there been
no ceiling imposed by the Applicable Usury Law shall be paid to Holder from time
to time, if and when the effective interest rate on the Loan otherwise falls
below the maximum amount permitted by the Applicable Usury Law, to the extent
that interest paid to the date of calculation does not exceed the maximum
contract rate permitted by the Applicable Usury Law, until the entire amount of
interest which would have otherwise been collected to such date of calculation
had there been no ceiling imposed by the Applicable Usury Law has been paid in
full. Borrower further agrees that should the maximum contract rate permitted by
the Applicable Usury Law be increased at any time hereafter because of a change
in the law, then to the extent not prohibited by the Applicable Usury Law, such
increases shall apply to all indebtedness evidenced by this Note regardless of
when incurred; but, again to the extent not prohibited by Applicable Usury Law,
should the maximum contract rate permitted by the Applicable Usury Law be
decreased because of a change in the law, such decreases shall not apply to the
indebtedness evidenced by this Note regardless of when incurred.
3.10 Any notice, demand, document or other writing required or permitted to
be given by Borrower or Holder under this Note shall be given and deemed
received as provided in the Agreement.
-7-
3.11 Borrower warrants and represents that the Loan is for business or
investment purposes.
BORROWER _________________________________,
a(n) _________________________
By: _______________________________________
Type/Print Name: __________________________
Title:_____________________________________
Maker's Federal EIN: ____________
-8-
STATE OF __________________ )
) ss.
County Of ________________ )
This instrument was acknowledged before me this _____ day of ____, ____, by
_________________________, the _______________________ of
_______________________, on behalf of ___________________________. He/She is
known to me or produced __________________ as identification.
GIVEN UNDER MY HAND AND SEAL OF OFFICE, this the ____ day of ______, ____.
_____________________________________________
Notary Public in and for the State and County
aforesaid
My commission expires:
_________________________
-9-
EXHIBIT 3
FORM OF MORTGAGE
-3-
ATTENTION COUNTY RECORDER:
Prepared by:
Xxxxxx X. Xxxxx
Xxxxxxx, Xxxx
Renaissance Xxx
Xxx Xxxxx Xxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000-0000 For use by Recorder's Office
--------------------------------------------------------------------------------
[THIS MORTGAGE SECURES A NOTE IN THE STATED PRINCIPAL AMOUNT OF $_________
TOGETHER WITH OTHER INDEBTEDNESS OWED BY BORROWER TO LENDER UP TO A TOTAL
MAXIMUM PRINCIPAL AMOUNT SECURED HEREBY (EXCLUSIVE OF FUTURE ADVANCES) OF
$_________. ACCORDINGLY, DOCUMENTARY STAMP AND INTANGIBLES TAXES ARE BEING PAID
BASED ON $_________.]
[CONSTRUCTION] MORTGAGE
(With Security Agreement and Assignment of Leases, Rents, Sales
Documents, Sales Proceeds and Developer's Rights)
THIS [CONSTRUCTION] MORTGAGE (With Security Agreement and Assignment of
Leases, Rents, Sales Documents and Sales Proceeds) is granted by
_________________________________________, a(n) _______________ ("Borrower"),
whose address is c/o __________________________, 0000 Xxxxxxx Xxxxxx Xxxxx,
Xxxxxxx, Xxxxxxx 00000, to FINOVA CAPITAL CORPORATION, a Delaware corporation
("Lender"), whose address is 0000 Xxxx Xxxxxx Xxxxxx Xxxx, Xxxxx 000, Xxxxxxx,
Xxxxxxx 00000, dated as of ______________, __________.
W I T N E S S E T H:
- - - - - - - - - -
ARTICLE 1 - GRANT
-----------------
To secure the full and timely payment and performance of the Obligations
(hereinafter defined), Borrower, for good and valuable consideration, has
MORTGAGED, GRANTED, BARGAINED, SOLD, CONVEYED, ASSIGNED AND TRANSFERRED, and by
these presents does MORTGAGE, GRANT, BARGAIN, SELL, CONVEY, ASSIGN AND TRANSFER
TO
1
Lender, the Mortgaged Property (hereinafter defined), and any greater estate
which Borrower may hereafter acquire therein, subject, however, to the Permitted
Encumbrances.
ARTICLE 2 - DEFINITIONS
-----------------------
Unless the context clearly otherwise requires, the capitalized terms used
in this Mortgage shall have the meaning given to them in this Article 2 or
elsewhere in this Mortgage:
2.1 Affiliate: with respect to any person or entity, another person or
---------
entity that directly or indirectly, through one or more intermediaries,
controls, is controlled by or is under common control with such person or
entity.
2.2 Approved Time-Share Declaration: the meaning given to it in Paragraph
-------------------------------
11.5.
2.3 Approved Use: rental, time-share and resort condominium use (as
------------
"resort condominium use" is defined in paragraph 8.3) and the development of the
Property for such use; and uses ancillary to rental, time-share and resort
condominium use.
2.4 Business Day: any day other than a Saturday, a Sunday or a day on
------------
which banks in Phoenix, Arizona are required to close.
2.5 Default Rate: the meaning given to it in the Loan Agreement.
------------
2.6 Developer's Rights: all rights and privileges of Borrower under
------------------
Property Governing Documents.
2.7 Documents: the Loan Agreement, the Note, this Mortgage, and all other
---------
documents now or hereafter evidencing, securing or pertaining to the Loan, as
they may be from time to time renewed, amended, restated or replaced.
2.8 Event of Default: the meaning given to it in Article 6.
----------------
2.9 Fixtures: all materials, supplies, equipment, apparatus and other
--------
goods now or hereafter attached to, or installed in (temporarily or permanently)
the Improvements or the Real Property.
2.10 Impositions: all real estate and personal property taxes, charges,
-----------
assessments, excises and levies (including non-governmental assessments and
levies such as maintenance charges, association dues, assessments, and subsidy
payments under private covenants, conditions and restrictions) and any interest,
costs or penalties with respect thereto, general and special, ordinary and
extraordinary, foreseen and unforeseen, of any kind and nature whatsoever which
at any time prior to or after the execution hereof may be assessed, levied or
imposed upon any
2
portion of the Property or the ownership, use, occupancy or enjoyment of any
portion of the Property.
2.11 Impounds: the deposits held by Lender pursuant to Paragraph 4.10.
--------
2.12 Improvements: all improvements of any kind now or hereafter affixed
------------
to or erected, constructed or developed on the Real Property and which are a
part of the Real Property or in which any interest is part of the Real Property.
2.13 Indebtedness: (a) the Loan; (b) all sums now or hereafter due to
------------
Lender under the terms of this Mortgage or any other Document with respect to
the Loan; and (c) all modifications, extensions, renewals, replacements,
increases or reinstatements of the above-described indebtedness.
2.14 Incipient Default: an event which after notice and/or lapse of time
-----------------
would constitute an Event of Default.
2.15 Leases: all leases, subleases, licenses, concessions or other
------
agreements (whether written or oral, or now or hereafter in effect) which grant
a possessory interest in and to, or the right to use, any portion of the
Property, as they may be from time to time renewed, amended, restated or
replaced.
2.16 Legal Requirements: (a) all present and future judicial decisions,
------------------
statutes, regulations, permits or certificates of any governmental authority in
any way applicable to Borrower or the Property; (b) all covenants, conditions
and restrictions now or hereafter contained in any instrument that is applicable
to the Property or, as permitted by the terms of any Document or with Lender's
prior written consent, hereafter becomes applicable to the Property; (c) all
organizational documents forming, or granting and/or limiting the powers of,
Borrower; and (d) all contracts or agreements (written or oral) by which
Borrower or any portion of the Property is bound or, as permitted by the terms
of any Document or with Lender's prior written consent, by which Borrower or any
portion of the Property becomes bound.
2.17 Loan: a non-revolving loan in a principal amount not to exceed
----
________________________________ Dollars ($__________)
2.18 Loan Agreement: that Loan Agreement dated as of even date herewith,
--------------
between Lender, as lender, and Borrower, as borrower, and providing for the
Loan, as it may be from time to time renewed, amended, restated or replaced.
3
2.19 Mortgage: this Mortgage (With Security Agreement and Assignment of
--------
Leases, Rents, Sales Documents, Sales Proceeds and Developer's Rights), as it
may be from time to time renewed, spread, amended, restated or replaced.
2.20 Mortgaged Property: the Real Property, Personal Property, Leases,
------------------
Rents, Water and Utility Rights and Proceeds, together with all additions,
accessions, replacements or betterments thereto.
2.21 Lender: the person or entity named above as being the person or
------
entity for whose benefit Lender is acting and any other lawful owner, holder,
pledgee or assignee of the Indebtedness.
2.22 Note: the Promissory Note in the stated principal amount of
----
_____________________________ Dollars ($_______________), dated as of even date
herewith, executed by Borrower pursuant to the Loan Agreement (and similarly
defined in the Loan Agreement) and made payable to Lender to evidence the
advances of the Loan, as it may be from time to time renewed, amended, restated
or replaced.
2.23 Obligations: the Indebtedness and all other obligations, covenants
-----------
and conditions that Borrower or any other person or entity is now or hereafter
obligated to perform to Lender under the Documents related to the Loan.
2.24 Permitted Encumbrances: the matters set forth in EXHIBIT B.
----------------------
2.25 Personal Property: all fixtures and tangible and intangible personal
-----------------
property in which Borrower now or hereafter has an interest and which either (a)
is now or hereafter located on the Real Property or (b) is necessary for or
arises from or pertains to the ownership, development, construction,
improvement, repair, use, operation, sale or lease of any of the Real Property
or any business of Borrower conducted thereon or with respect thereto [subject
to the terms of any Approved Time-Share Declaration (as defined in Paragraph
11.5) to which this Mortgage becomes subordinate], including, without
limitation, the following:
(a) furniture, furnishings, equipment, inventory and other
goods and other items of tangible personal property, including,
without limitation: all building and other materials; vehicles;
machinery; engines; boilers, furnaces, oil burners, coolers,
refrigeration plants, water and sewer treatment equipment,
incinerators, appliances and equipment for generating, regulating
or distributing air, water, heat, electricity, light and fuel,
for ventilating, cooling or sanitary purposes, for the exclusion
of vermin or insects, or for the removal of dust, refuse or
garbage; sprinkling and irrigation systems; alarm systems;
reservation systems; telephone, communication, computer,
surveillance and other electronic systems; audio-visual
4
equipment; wall safes; cabinets, shelving, lockers, partitions,
doors, vaults, elevators, awnings, window shades, venetian
blinds, drapes, drapery rods, brackets, screens, floor tile,
linoleum, carpets, art work, appliances, built-in furniture and
bars, sofas, beds, lamps, tables, chairs and linens; walk-in
refrigerator boxes, deep freeze cabinets, steam tables,
dishwashers, bake ovens, set-up tables, kitchen ranges and any
and all other heavy kitchen equipment; and cleaning equipment;
and
(b) (i) deposits made by third parties (including tenants' security
deposits and escrow deposits under contracts of sale, to the extent
permitted by applicable Legal Requirements); (ii) bank accounts, impound
accounts for the payment of taxes and insurance and deposits held by Lender
with respect to the Property; (iii) causes of action (including, without
limitation, causes of action and claims of Borrower relating to any
casualty to or taking of the Real Property or the Personal Property or any
rights, appurtenant hereto), documents, insurance policies, loan
commitments, accounts, chattel paper, contract rights, general intangibles
and instruments, including Sales Documents, which arise from or relate to
the Property, or any transaction with respect thereto or any business of
Borrower conducted thereon or with respect thereto; (iv) tax refunds with
respect to any Impositions and all other refundable or reimbursable fees,
deposits or other funds or evidences of credit or indebtedness pertaining
to any portion of the Property or any business of Borrower conducted
thereon or with respect thereto and now or hereafter deposited with any
governmental authority or other person or entity, including, without
limitation, tap fees, utility deposits, deposits on construction and
materials contracts, commitment fees and development costs; (v) books and
records, computer software, plans and specifications, shop drawings, bonds,
construction contracts, architect/engineer agreements, utility (including,
without limitation cable television) contracts, option rights, management
agreements, marketing agreements, franchise agreements, equipment leases,
maintenance contracts, service contracts, warranties and Water and Utility
Rights which relate to the ownership, development, construction,
improvement, repair, use, operation, sale or lease of the Property or any
business of Borrower conducted thereon or with respect thereto, but
expressly excluding exchange affiliation agreements; (vi) trade names,
trademarks, service marks, customer lists and copyrights used in connection
with the Property or any business of Borrower conducted thereon or with
respect thereto, except the name "Vistana" in any form; (vii) rights and
privileges of Borrower under any declaration of covenants, conditions and
restrictions and/or other documents governing the Real Property; and (viii)
permits (including, without limitation, building and environmental
permits), licenses, franchises, certificates and other rights and
privileges obtained in connection with ownership, development,
construction, improvement, repair, use, operation, sale or lease of the
Property or any business of Borrower conducted thereon or with respect
thereto.
5
2.26 Proceeds: all cash and non-cash proceeds (including, without
--------
limitation, accounts, chattel paper, contract rights, documents, instruments,
general intangibles, and equipment, inventory and other goods) from the
Property, conversion of the Property, including hazard and title insurance
proceeds and awards and compensation for any taking (voluntary or involuntary),
including the change of grade of streets, curb cuts and other rights of access.
2.27 Property Governing Documents: development agreements, declarations,
----------------------------
restrictive covenants or other documents benefitting or burdening the Property.
2.28 Real Property: the land described in EXHIBIT A, together with the
-------------
Improvements, the Fixtures and all rights, titles, hereditaments, strips, gores
and other interests now or hereafter appurtenant thereto, including, without
limitation, all rights in streets, roads, public places, easements and rights of
way (existing or proposed, and public or private), which are adjacent to or used
in connection with such land.
2.29 Rents: all rents, revenues, royalties, bonuses, delay rentals,
-----
issues, income, proceeds, profits, security and other types of deposits, and
other benefits now or hereafter paid or payable for using, leasing, licensing,
possessing, operating, residing in, mining, or otherwise enjoying any portion of
the Property or arising exclusively from the operation of any business of
Borrower conducted on or with respect to the Property, including, without
limitation, income from the rental or license of the use of rooms for lodging,
meeting or banquet purposes.
2.30 Sales Documents: all contracts for the sale of any portion of the
---------------
Property (including, without limitation, contracts for the sale of Time-Share
Interests), instruments, chattel paper and general intangibles evidencing or
representing purchase money indebtedness owing to Borrower in connection with
such contracts and related sales (except sales as to which the related portion
of the Property has been released from the lien of this Mortgage when no Event
of Default exists), and all escrow agreements and deposits (to the extent
permitted by applicable Legal Requirements) and security related to such
contracts, instruments, chattel paper and general intangibles and sales, whether
now or hereafter existing; provided, however, nothing herein shall be deemed to
-------- -------
require Lender to release Sales Documents and Sales Proceeds from the lien,
assignment and security interest granted hereby when an Event of Default exists.
2.31 Sales Proceeds: all proceeds now or hereafter paid or payable to
--------------
Borrower as the result of the sale of any portion of the Property except in
connection with sales as to which the related portion of the Property has been
released from the lien of this Mortgage, including, without limitation, all
proceeds paid or payable under the Sales Documents; provided, however, nothing
herein shall be deemed to require Lender to release Sales Documents and Sales
Proceeds from the lien, assignment and security interest granted hereby when an
Event of Default exists.
2.32 Time-Share Interest: the property interest described in Exhibit C.
-------------------
6
2.33 Time-Share Program: the meaning given to it in Paragraph 11.5.
------------------
2.34 Water and Utility Rights: (a) all water stock and other water rights
------------------------
now or hereafter associated with the Property, including, without limitation,
all rights to water located on, or adjacent to, the Real Property, and (b) all
rights to receive or install utility services, including, sewer, water,
electricity, gas, telephone and cable television.
ARTICLE 3 - WARRANTIES AND REPRESENTATIONS
------------------------------------------
Borrower hereby warrants and represents the matters contained in this
Article 3 to be true.
3.1 Title to Mortgaged Property and Lien of this Instrument. Subject
-------------------------------------------------------
only to the Permitted Encumbrances, Borrower is seized of, and hereby WARRANTS
AND WILL FOREVER DEFEND unto Lender against the claims of all other persons,
good and marketable title to a fee simple estate in the Real Property other than
any portion thereof described as an "easement" or "easement parcel" and good
title to the remainder of the Property. There are no liens, security interests
or other rights or encumbrances existing or claimed to exist against the
Property, except for the Permitted Encumbrances. This Mortgage creates a valid
and subsisting mortgage lien on that portion of the Property consisting of real
property and a valid and subsisting security interest in and to that portion of
the Property covered by the Uniform Commercial Code adopted by the state in
which the Property is located.
3.2 Zoning and Subdivision. The Property and the use thereof for the
----------------------
Approved Use does not and will not violate any Legal Requirement. The Property
is zoned to permit the use thereof for the Approved Use. The Property is capable
of being conveyed in its entirety without reference to any other parcel and
without need to comply at the time of any such conveyance with any subdivision
law or to obtain the approval of any governmental authority. Except as may be
otherwise expressly disclosed in and/or permitted pursuant to the terms of the
Loan Agreement: (a) all streets, easements and utilities necessary for the full
utilization of the Property for the Approved Use have been completed and paid
for in full; (b) all such streets have been dedicated to public use or are the
subject of rights-of-way agreements and accepted by the appropriate governmental
authority and/or are subject to private access easements; and (c) all such
utilities are available to the Property in adequate size and with adequate
capacity.
3.3 Approvals and Reports. Except as may be otherwise expressly disclosed
---------------------
in and/or permitted pursuant to the terms of the Loan Agreement: (a) Borrower
has hereby obtained or caused to be obtained all necessary consents, licenses,
permits, franchises, approvals and certificates and has made or caused to be
made all registrations or declarations with governmental authorities that are
required in connection with the Property and the Approved Use thereof; (b) the
same are in full force and effect; and (c) true and complete copies of such
consents, licenses, permits, franchises, approvals, certificates, registrations
and declarations have been delivered to Lender.
7
3.4 Condition of Property. Upon completion of the construction of the
---------------------
Improvements contemplated by the Loan Agreement, all Improvements will be in
good condition and repair.
3.5 Taxes and Assessments; Condemnation. Borrower does not know of any
-----------------------------------
basis for any additional assessment in respect of any taxes or assessments on
the Real Property, except that which may result from increased valuation
resulting from the construction of any additional Improvements or Fixtures on
the Real Property or from the subdivision of the Property into Time-Share
Interests pursuant to Paragraph 4.3. No condemnation or similar proceedings are
pending or, to the knowledge of Borrower, threatened with respect to any portion
of the Real Property.
3.6 Disclaimer of Homestead. No part of the Property constitutes any part
-----------------------
of the homestead of Borrower. To the extent not prohibited by applicable law,
Borrower disclaims, releases and waives any right of homestead in the Property.
ARTICLE 4 - COVENANTS
---------------------
Borrower hereby unconditionally covenants with Lender as follows:
4.1 Payment and Performance. Borrower will fully and timely pay and
-----------------------
perform all the Obligations.
4.2 Compliance with Legal Requirements. Except as permitted in Paragraph
----------------------------------
10.6, Borrower will fully and timely comply with all applicable Legal
Requirements.
4.3 Approved Use; Easements, Plats, Restrictive Covenants and Zoning.
-----------------------------------------------------------------
Borrower will use the Real Property solely for the Approved Use and will not
engage in or suffer to exist any conduct on the Real Property that would
constitute a public or private nuisance or adversely affect the insurance
required hereby. Except as expressly provided in the Loan Agreement or this
Mortgage regarding the creation of the Time-Share Interests and easements
necessary therefor, without the prior written consent of Lender, Borrower will
not (a) grant any easement over any portion of the Real Property; (b) subdivide
the Real Property or its interest in the Real Property, execute or record any
subdivision or parcel map or plat covering any portion of the Real Property; (c)
initiate, join in or consent to the imposition or amendment of any private
restrictive covenant or other public or private restriction as to the use of any
portion of the Real Property or any zoning reclassification of any portion of
the Real Property; or (d) seek any variance under (or deviation from) any
existing zoning laws or ordinances applicable to the Real Property.
4.4 Repair, Waste, Alterations, Etc. Borrower (a) will keep the Real
-------------------------------
Property and tangible Personal Property in good condition and repair and
restore, replace and repair any damaged, worn out or obsolete portions of such
property so as to maintain the Real Property and tangible Personal Property in
at least as good a condition as it is on the date of this Mortgage and, with
respect to any future Improvements, Fixtures or tangible Personal Property, in
at least as
8
good a condition as they are at the time of their completion; and (b) will not
commit or permit any waste, deterioration or impairment of the Real Property and
tangible Personal Property. Without the prior written consent of Lender,
Borrower will not make any alterations to or remove any portion of the
Improvements, Fixtures or tangible Personal Property except (x) to comply with
the terms of the preceding sentence, (y) to satisfy Legal Requirements or (z)
when necessary on an emergency basis to preserve and protect the Real Property
and tangible Personal Property. Borrower will perform and complete all work done
to the Real Property and the tangible Personal Property in a prompt and good and
workmanlike manner and in accordance with the requirements (if any) of the other
Documents.
4.5 Maintenance of Existence and Rights. Borrower will preserve and keep
-----------------------------------
in full force and effect and renew all easements, grants, privileges, licenses,
governmental approvals and franchises and other rights reasonably necessary for
the Approved Use of the Property and the performance of the Obligations and pay
all charges associated therewith when due.
4.6 Lien Status. If a claim of title, possession, lien, security interest
-----------
or other encumbrance (excluding any statutory preliminary notice of a
mechanic's, materialman's or similar lien claim), which is not a Permitted
Encumbrance or has not been consented to by Lender in writing, arises or is
asserted against the Property, then Borrower will notify Lender of the claim
and, except as permitted in Paragraph 10.6, promptly pay such claim in full or
take such other action to cause such claim to be released. At any time after the
assertion of such a claim, if Lender has not received proof that the claim has
been satisfied or is being contested as permitted in Paragraph 10.6, then Lender
may take whatever action it determines to be necessary for the defense of its
lien and security interest in the Property, including, without limitation, the
employment of counsel, the prosecution and defense of litigation and the
payment, compromise or discharge of such claim. Upon demand therefor, Borrower
will reimburse Lender for the costs incurred in connection with such action,
together with interest thereon at the Default Rate from the date of occurrence
until the date reimbursed by Borrower. In taking any such action, Lender shall
not be bound to inquire into the validity of any apparent or threatened claim of
title, possession, lien, security interest or other encumbrance.
4.7 Payment of Utilities and Impositions. Except as permitted in
------------------------------------
Paragraph 10.6, Borrower will pay when due all charges for utility services to
the Real Property and will pay and discharge Impositions against the Property
prior to the date such Impositions become delinquent. However, Borrower may pay
Impositions in installments, whether or not interest shall accrue on the unpaid
balance of such amounts, if payment in installments is permitted by law. If
Borrower fails to furnish Lender with proof that the Impositions have been paid
in full or in timely installments or that Borrower is contesting such
Impositions as permitted in Paragraph 10.6, then Lender may pay such Impositions
and all penalties, interest and legal costs associated therewith; and Borrower
will pay to Lender, upon demand, all such amounts plus interest thereon at the
Default Rate from the date payment of such Impositions is made by Lender until
the date reimbursed by Borrower. If Lender elects to pay any Imposition as set
forth above, Lender may
9
do so in reliance on any xxxx, statement or assessment procured from the
appropriate governmental authority or other issuer without inquiring into its
accuracy or validity. Borrower will furnish Lender with proof of payment of all
Impositions within thirty (30) days after they would become delinquent.
4.8 Insurance. Borrower will pay the cost of, or cause such costs to be
---------
paid, and will maintain and deliver, or cause to be maintained and delivered to
Lender evidence of insurance policies required by Lender pursuant to the terms
of the Loan Agreement. All insurance policies maintained by Borrower relating to
the Property and the proceeds thereof are hereby assigned to Lender. Except to
the extent prohibited by applicable Legal Requirements, and except in the case
of any minor loss [one which does not materially affect the continuing use of
the Improvements for the Approved Use and which in no event involves a loss of
more than Fifty Thousand Dollars ($50,000)], in case of loss, Lender shall be
entitled to receive all insurance proceeds from policies required to be
maintained hereunder. Lender may apply such proceeds to the payment of the
Indebtedness in such order and manner as it may elect or, at its option, apply
such proceeds to restoration and repair of the Property upon such conditions as
Lender may reasonably impose. Application of insurance proceeds by Lender,
regardless of the manner or order, shall not waive full and timely performance
of any Obligation, cure or waive any default by Borrower in the full and timely
performance of the Obligations, or invalidate or affect any act done hereunder
because of any such default; provided, however, that if the insurance proceeds
have been received by Lender, Borrower will be obligated to repair or restore
the Property only to the extent of the proceeds made available by Lender for the
same. Lender shall not be obligated to see to the proper application of any
insurance proceeds paid over to Borrower. Borrower will promptly notify Lender
of substantial loss or damage to the Property and make proof of loss if loss or
damage occurs that is covered by insurance. Borrower hereby appoints Lender as
its attorney-in-fact to do any of the following at Lender's option: make proof
of loss, adjust or compromise in the name of Borrower any loss covered by an
insurance policy on the Property and collect and give receipt for the proceeds
from such policies. If Lender acquires title to the Property or the Property is
sold pursuant to Article 7, then Lender or the purchaser at foreclosure, as the
case may be, shall become the owner of the insurance policies required pursuant
to this Paragraph, the unearned premiums on the policies and insurance proceeds
relating to prior damage to the Property.
4.9 Condemnation. All judgments, decrees and awards for injury or damage
------------
to the Property and all awards pursuant to proceedings for condemnation thereof
are hereby assigned in their entirety to Lender, which may apply the proceeds
thereof in the manner (with the same effect and subject to the same limitations)
in which it is entitled in this Mortgage to apply insurance proceeds. Lender is
hereby authorized, in the name of Borrower to execute and deliver valid
acquittances for, and to appeal from, any such award, judgment or decree.
Immediately upon obtaining knowledge of the institution or the threatened
institution of any proceedings for the condemnation of any portion of the
Property, Borrower will notify Lender. Borrower will then, if requested by
Lender, file or defend its claims thereunder and prosecute such claims with due
10
diligence to their final disposition and will cause any awards or settlements to
be paid over to Lender for application as set forth above. Lender shall be
entitled to participate in and to control such proceedings and to be represented
in such proceedings by counsel of its own choice, and Borrower will deliver, or
cause to be delivered, to Lender such instruments as Lender may request to
permit such participation.
4.10 Taxes, Insurance and Other Impositions. At all times required by
--------------------------------------
Lender after an Event of Default has occurred, Borrower will make monthly
deposits to Lender as a reserve for the payment of all Impositions and the cost
of all insurance policies required to be maintained by Borrower under this
Mortgage. Such installments shall be equal to the estimated Impositions and
premium(s) for such insurance next due (as reasonably estimated by Lender giving
due consideration to the previous year's Impositions and premiums), less all
amounts already paid therefor, and divided by the number of months that are to
elapse before one (1) month prior to the date when such Impositions or
premium(s) will become delinquent. If legal title to the Property is transferred
without being released by Lender from this Mortgage, Lender shall be entitled,
at its option, to treat the new holder of legal title as the owner of the
Impounds, and any transferee shall be deemed to have assumed Lender's
obligations hereunder with respect to the assigned Impounds. The Impounds may be
held by Lender in non-interest bearing accounts (unless interest is required by
applicable law, in which case Lender shall pay Borrower the minimum amount of
interest required by such law to be paid) and (unless otherwise required by law)
commingled with Lender's other funds. Upon assignment of any portion of the
Indebtedness and the lien of this Mortgage, Lender shall have the right to pay
any portion of the Impounds then in its possession to the assignee, whereupon
Lender shall become completely released from all liability with respect to the
assigned Impounds. Upon release of this Mortgage or at such earlier time as
Lender may elect, the Impounds may be paid over to Borrower or the then owner of
the Property, as Lender shall elect; and no other party shall have any right or
claim to the assigned Impounds. If the Impounds are in an amount sufficient for
that purpose, the Impounds shall be used (or, at Lender's option, given to
Borrower to use) to pay the Impositions and insurance premiums then due; but
otherwise, Lender shall have the option of crediting the full amount of the
Impounds against the Indebtedness.
4.11 Taxes on Note or this Instrument. If at any time a change in the law
--------------------------------
results in any tax or tax increase upon any Document or upon any rights, titles,
liens or security interests created by the Documents, Borrower will immediately
pay all such taxes and thereafter will continue to pay such taxes as they become
due. If it is unlawful for Borrower to pay such taxes, Borrower shall not be
required to pay such taxes, but Lender may demand payment of the Obligations in
full and Borrower will pay the Obligations in full within sixty (60) days after
such demand.
4.12 Further Assurances. Borrower will execute, acknowledge, deliver and
------------------
record such further instruments and do such further acts as Lender determines to
be necessary, desirable or proper to carry out the purposes of the Documents and
to subject to the liens and security interests
11
created by the Documents any property intended to be covered by them or any
other property which is essential to the Approved Use of the Property.
ARTICLE 5 - TRANSFERS
---------------------
5.1 Restrictions on Transfer, Encumbrance, Merger and Consolidation.
---------------------------------------------------------------
Except as expressly permitted pursuant to the terms of the Loan Agreement and
for transfers made with the prior written consent of Lender, Lender, at its
option, may at any time declare the Indebtedness immediately due and payable if
any of the following events occur: (a) Borrower shall sell, convey, lease (other
than for "resort condominium uses"), mortgage, pledge, encumber or otherwise
transfer any portion of the Property or interest therein; (b) Borrower shall
further assign or hypothecate any Rents, Sales Proceeds or other proceeds from
any portion of the Property; (c) Borrower shall permit or suffer to exist any
change in the legal or beneficial ownership of it or the power to control it; or
(d) Borrower shall approve any managing agent for any portion of the Property or
enter into any management agreement for any portion of the Property, other than
(i) the appointment of, or a management agreement with, an Affiliate of Borrower
or another entity approved by Lender and (ii) for the appointment of a managing
agent for the Association (as defined in Paragraph 11.5) in accordance with the
Approved Time-Share Declaration (as defined in Paragraph 11.5). Any such act
shall be expressly subject to this Mortgage and the prior lien created by this
Mortgage, and written consent of Lender to any one such act shall not be
construed to be a waiver of this provision with respect to any subsequent act.
5.2 Compliance. Borrower will not take any action which would entitle
----------
Lender to accelerate the Indebtedness pursuant to this Article.
ARTICLE 6 - EVENTS OF DEFAULT
-----------------------------
6.1 Events of Default. The occurrence of any of the following events
-----------------
shall, at Lender's election, be an "Event of Default":
(a) failure of Lender to receive from Borrower within five
(5) Business Days of the date when due and payable (i) any amount
payable under the Note or (ii) any other payment due under the
Documents, except for the payments due at the maturity date of
the Note for which no grace period is allowed;
(b) any representation or warranty of a person other than
Lender or its agent contained in the Documents or in any
certificate furnished to Lender under the Documents by or on
behalf of Borrower proves to be, in any material respect, false
or misleading as of the date deemed made; provided that if such
representation or warranty was not intentionally made falsely or
with the intent to mislead or was not made recklessly, such
occurrence shall not constitute an Event of Default unless the
actual condition might adversely affect performance of the
Obligations, the
12
Property, the business or financial condition of Borrower or any
guarantor of the Obligations ("Guarantor"), or the ability of
Borrower or any Guarantor to perform the Obligations;
(c) a default in the performance of the Obligations or a
violation of any term, covenant or provision of the Documents
(other than a default or violation referred to elsewhere in this
paragraph 6.1) which continues unremedied (i) for a period of
five (5) Business Days after notice of such default or violation
to Borrower in the case of a default under or violation of
Paragraph 4.6 arising from a lien to which Borrower has not
consented or (ii) in the case of any other default or violation,
for a period of thirty (30) days after notice to Borrower of such
default or violation plus only if such default or violation
cannot be cured by Borrower proceeding diligently and Borrower
has been diligent in attempting to effect cure, such additional
period not to exceed thirty (30) days as may be required by
Borrower proceeding diligently to effect cure;
(d) an "Event of Default," as defined elsewhere in any of
the Documents;
(e) Borrower abandons any portion of the Property if such
portion is material to the operation of the Real Property and
Improvements for the Approved Use;
(f) unless Borrower is proceeding in accordance with the
provisions of Paragraph 10.6, the holder of any lien or security
interest on any part of the Property (without implying Lender's
consent to the creation or existence of any such lien or security
interest) institutes foreclosure, receivership or other
proceedings for the enforcement of its remedies under any
instrument creating such lien or security interest;
(g) any failure to maintain insurance as required pursuant
to Paragraph 4.8; or
(h) any act or event which permits the acceleration of the
Indebtedness pursuant to Paragraph 5.1.
ARTICLE 7 - REMEDIES AND FORECLOSURE
------------------------------------
7.1 Remedies. If an Event of Default occurs, Lender may, at Lender's
--------
election and by or through Lender or otherwise, exercise any or all of the
following rights, remedies and recourses without notice:
13
(a) Acceleration. Lender may declare the entire accrued but
------------
unpaid portion of the Indebtedness or any portion thereof to be
immediately due and payable, without notice, grace, presentment,
protest, demand for payment or any other action whatsoever (each
of which hereby is expressly waived by Borrower), whereupon the
same shall become immediately due and payable.
(b) Entry Upon and Operation of the Mortgaged Property. To
--------------------------------------------------
the extent allowed by applicable law, Lender may enter upon and
into the Property and take exclusive possession thereof and of
all books, records and accounts relating thereto. If Borrower
remains in possession of any portion of the Property while an
Event of Default exists, Lender may (without implying any
requirement therefor) invoke any and all legal remedies to
dispossess Borrower. Lender may hold, sell, lease, manage,
operate, subdivide, or otherwise use or permit the use of the
Property, either by itself or by other persons, firms or
entities, in such manner, for such time and upon such other terms
as Lender, in its judgment, determines to be appropriate under
the circumstances (making such repairs, alterations, additions
and improvements thereto and taking any and all other actions
with reference thereto, from time to time, as Lender determines
to be appropriate and consistent with applicable Legal
Requirements). Lender may apply all amounts collected from such
activities in the same manner as Rents and Sales Proceeds may be
applied by it according to the terms of this Mortgage. In the
exercise of the foregoing rights and powers, Lender shall not be
liable to Borrower for any loss or damage thereby sustained
unless due solely to the gross negligence or willful misconduct
of Lender.
(c) Receiver. Lender may make application to a court of
--------
competent jurisdiction, as a matter of strict right and without
notice to Borrower or regard to the adequacy of the security for
the payment and performance of the Obligations, for appointment
of a receiver of the Property; and Borrower does hereby
irrevocably consent to such appointment upon ex parte
application. Any such receiver shall have all the usual powers of
receivers in similar cases; and, without limiting the generality
of the foregoing and to the extent not prohibited by law, shall
have all the powers of Lender set forth in the preceding
subparagraph (b), including the full power to sell, rent,
maintain, manage, subdivide, and otherwise operate the Property
upon such terms as may be approved by the court. All sums
received therefrom may be applied in the same manner as Lender is
entitled to apply Rents and Sales Proceeds in accordance with the
terms hereof. The expenses, including receiver's fees, attorneys'
fees and court costs, incurred pursuant to the powers herein
contained shall be secured by this Mortgage. Lender shall be
liable to account only for such rents, issues and profits as are
actually received by Lender, whether received pursuant to this
subparagraph or subparagraph 7.1(b) above. Notwithstanding the
appointment of any receiver or other custodian, Lender
14
shall be entitled as secured party hereunder to the possession
and control of any cash, deposits, or instruments at the time
held by, or payable or deliverable under the terms of this
Mortgage to, Lender.
(d) Foreclosure. Upon the occurrence of an Event of
-----------
Default, then, and in every such case, Lender shall have the
right to foreclose the lien hereof in accordance with applicable
Florida law and to exercise any other remedies of Lender provided
in any one or more of the Documents, or which Lender may have at
law, at equity or otherwise. In any suit to foreclose the lien
hereof, there shall be allowed and included as additional
Obligations in the decree of sale, all expenditures and expenses
which may be paid or incurred by or on behalf of Lender in
connection with such suit, including, without limitation, all
attorneys' fees, receivers' fee, environmental consultants' fees,
appraisers fees, outlays for documentary and expert evidence,
stenographer's charges, publication costs, costs (which may be
estimated as to items to be expended after entry of the decree)
of procuring all such abstracts of title, title searches and
examination, title insurance policies, and similar data and
assurance with respect to title as Lender may deem reasonably
necessary either to prosecute such suit or to evidence to bidders
at sales which may be had pursuant to such decree the true
conditions of the title to or the value of the Property, and any
other expenses and expenditures which may be paid or incurred by
or on behalf of Lender. All expenses of the nature mentioned in
this Paragraph, and such other expenses and fees as may be
incurred in the protection of the Property and rents and income
therefrom and the maintenance of the lien of this Mortgage,
including, without limitation, attorneys' fees shall be part of
the Obligations and shall be immediately due and payable by
Borrower with interest thereon at the Default Rate from the date
of expenditure until paid.
(e) Right of Set Off. Lender may set off and apply any and
----------------
all deposits held and other indebtedness owing by Lender to or
for the credit or account of Borrower, against any and all
Obligations, even though such obligations of Lender may be
unmatured.
(f) Other. Lender may exercise any and all other rights,
-----
remedies and recourses granted under the Documents or now or
hereafter existing at law or in equity, including, without
limitation, the Uniform Commercial Code.
7.2 Foreclosure. In addition to Lender's other rights, Borrower agrees
-----------
that Lender shall have the following rights in connection with foreclosure of
the lien and security interest of this Mortgage to the extent not otherwise
prohibited by applicable law:
(a) Partial Sales and Sales in Separate Lots; Foreclosure
-----------------------------------------------------
for Installments. At any foreclosure sale, all or a portion of
----------------
the Property may be sold
15
or the Property being sold may be sold together or in separate
lots or parcels in such order and manner as Lender may determine
to be in Lender's best interests. Lender may also require the
foreclosure of the lien and security interest of this Mortgage to
satisfy any unpaid installment or portion of the Indebtedness
without declaring the entire Indebtedness due and payable, and
such foreclosure shall not in any manner affect the remaining
Obligations as to which this Mortgage shall remain in full force
and effect. However, Borrower shall have no right to require that
the foreclosure of this Mortgage or the sale of the Property be
made in any particular manner. If the proceeds of such sale(s) of
less than the whole of the Property are not sufficient to pay the
entire Indebtedness and the expenses thereof, this Mortgage shall
remain in full force and effect as to the unsold portion of the
Property. Any number of foreclosure sales may be had until the
whole of the Property is sold.
(b) Lender May Bid. Any person or entity (including Lender)
--------------
may bid and become the purchaser of all or any part of the
Property at any foreclosure sale. The Indebtedness, or any
portion thereof, may be credited on the purchase price in lieu of
any cash payments.
(c) Personal Property. The Personal Property may be sold
-----------------
separately from that portion of the Property consisting of real
property and may be sold in the same or separate proceedings;
and, at Lender's option, all Property may be sold in one unit as
a going business.
7.3 Application of Proceeds. The proceeds of sales of the Property and
-----------------------
any Rents and Sales Proceeds and other amounts generated by the holding,
leasing, sale, operation or other use of the Property shall be applied, to the
extent not prohibited by law, by Lender and any receiver (if one is appointed)
as follows:
(a) first, together with interest thereon at the Default
Rate, to the payment of any costs and expenses incurred by
Lender, or any receiver (if one is appointed) from the
foreclosure of the Property and the protecting, taking of
possession, holding, using, leasing, repairing, improving and
selling of the Property, including, without limitation, (i)
receiver's fees, (ii) court costs, (iii) attorneys' or
accountants' fees (to the extent not prohibited by law), (iv)
costs of advertisement, (v) Impositions, (vi) title search costs
and title insurance premiums, (vii) costs of environmental
investigations, (viii) any other expenses of the type mentioned
in Paragraph 7.1(d), and (ix) without in any way implying
Lender's prior consent to the creation of such rights, titles or
interests, costs incurred to remove or cure any liens, security
interests or other rights, titles or interests superior to the
lien and security interest of this Mortgage;
16
(b) second, to the payment of all late charges, costs,
fees, expenses and prepayment premiums required by the Documents
to be paid by Borrower, then to accrued and unpaid interest due
on the Notes in such order and manner as Lender may determine;
and then to the unpaid principal balance of the Notes in such
order and manner as Lender may determine;
(c) third, to the payment of the other Indebtedness in such
order and manner as Lender may determine; and
(d) last, the excess, if any, to the person or persons
legally entitled thereto. If any dispute arises with respect to
the person or entity entitled to the excess proceeds, Lender may,
at its option, tender the excess proceeds into the registry or
custody of any court of competent jurisdiction, together with
such legal pleadings as it determines to be appropriate and
thereupon be discharged from any liability hereunder.
Notwithstanding anything herein to the contrary, neither Lender nor any receiver
(if one is appointed) shall have any obligation to incur any cost or expense in
connection with the holding, using, leasing, repairing, improving or selling of
the Property or to remove or cure any lien, security interest, or other right,
title or interest superior to the lien and security interest of this. Mortgage.
7.4 Tenancy at Will. If, at the time of foreclosure sale, Borrower or any
---------------
other person occupies any portion of the Property so sold, such occupant shall
immediately become the tenant at will of the purchaser at such sale, at a
reasonable rental per day established by such purchaser and based upon the value
of the portion of the Property so occupied. Such rental shall be due and
payable daily to the purchaser.
7.5 Lender's Right to Perform. Without limiting Lender's rights under any
-------------------------
other Paragraph, if Borrower fails or refuses to pay or perform any Obligation
and either (i) an Event of Default exists, (ii) Lender deems such action
necessary to protect the Collateral or its value, or (iii) such failure
constitutes a failure to maintain in force the insurance required under
Paragraph 4.8, then at any time thereafter, and without notice to or demand upon
Borrower and without waiving or releasing any other right, remedy or recourse
Lender may have, Lender may (but shall not be obligated to) pay or perform such
Obligation for the account of and at the expense of Borrower. For such purpose,
to the extent allowed by law, Lender shall have the right to enter upon the Real
Property and into the Improvements and to take all action thereon and with
respect thereto as it determines to be necessary or appropriate. Upon demand
therefor, Borrower will reimburse Lender for all sums paid by Lender pursuant to
this Paragraph, together with interest thereon at the Default Rate from the date
paid until reimbursed to Lender.
17
7.6 Discontinuance of Proceedings. Lender shall have the unqualified
-----------------------------
right to invoke any right, remedy or recourse permitted under the Documents and
thereafter to elect to discontinue or abandon it for any reason. In such an
event, Borrower and Lender shall be restored to their former positions with
respect to the Obligations, the Documents, the Property and otherwise, and all
of the rights, remedies and recourses of Lender shall continue as if never
invoked.
7.7 Remedies Cumulative, Concurrent and Nonexclusive. All rights,
------------------------------------------------
remedies and recourses of Lender (a) may, in the discretion of Lender, be
pursued separately, successively or concurrently and (b) may be exercised as
often as occasion therefor shall arise. To the extent not prohibited by
applicable law, (x) Lender may xxx and recover judgment on all or less than all
of the Indebtedness, either before, during or after foreclosure of the lien and
security interest of this Mortgage or any of the other Documents; (y) the right
of Lender to recover such judgment shall not be affected by the exercise of any
other right, remedy or recourse of Lender; and (z) after a sale of the Property
or other security for the payment and performance of the Obligations and the
application of the proceeds of sale as provided in any of the Documents, Lender
shall be entitled to enforce payment of the unpaid Obligations and to recover
judgment for the unpaid Obligations, together with interest on the deficiency at
the Default Rate from the date of sale to the date that payment is actually
received by Lender. Without limiting the generality of the foregoing, obtaining
of a judgment or decree on any portion of the Indebtedness, whether in the State
of Arizona, the state in which the Real Property is located, or elsewhere, shall
not in any manner affect the lien of this Security Document upon the Property,
and any judgment or decree so obtained shall be secured hereby to the same
extent such Indebtedness is now secured. Lender may resort to any security for
the payment and performance of the Obligations in such order and manner as
Lender may elect without affecting the lien and security interest of this
Mortgage. No exercise of any right, remedy or recourse of Lender shall have the
effect of curing any default of Borrower.
7.8 No Release Implied. Neither Borrower nor any other person or entity
------------------
primarily or secondarily liable for any of the Obligations shall be relieved of
any such Obligation by reason of any of the following, even if done without
consideration or notice to such person or entity: (a) the failure of Lender to
comply with any request of Borrower or any other person to foreclose the lien of
this Mortgage or to enforce any provision of the Documents; (b) any agreement or
stipulation between Borrower or any subsequent owner of the Property and Lender
extending, renewing, rearranging or in any other way modifying the terms of the
Indebtedness or the Documents (in which event Borrower and all such other
persons shall continue to be liable to pay and perform the Obligations according
to the terms of such agreement unless expressly released and discharged in
writing by ) Lender); (c) the release of any person or entity from liability to
perform any Obligations or the release or subordination or taking of any
security (including any portion of the Property) for the performance of the
Obligations; or (d) any other act or occurrence, save and except the complete
release of this Mortgage. Furthermore, no such act or occurrence shall, except
as expressly provided in writing signed by Lender at the time, in any way
affect, impair, subordinate or release the liens or security interests, created
by the Documents.
18
7.9 Waiver of Redemption; Notice and Marshalling of Assets. To the
------------------------------------------------------
fullest extent permitted by law, Borrower hereby irrevocably and unconditionally
waives and releases (a) all benefit that might accrue to Borrower by virtue of
any present or future law or judicial decision exempting the Property from
attachment, levy or sale on execution or providing for any appraisement,
valuation, stay of execution, exemption from civil process, right of redemption
(equitable or legal) or extension of time for payment; (b) all right to receive
notices of an election by Lender to exercise, or its actual exercise of, any
right, remedy or recourse provided for under the Documents; (c) all right to a
marshalling of assets or sale in inverse order of alienation or rights
pertaining to the administration of the estates of decedents; and (d) all other
rights and matters which would defeat the right of Lender to sell the Property
for the collection of the Indebtedness (without any prior or different resort
for collection).
ARTICLE 8 - ASSIGNMENT OF LEASES, RENTS,
----------------------------------------
SALES DOCUMENTS, SALES PROCEEDS AND DEVELOPER'S RIGHTS
------------------------------------------------------
8.1 Assignment. For other good and valuable consideration, including the
----------
Indebtedness evidenced by the Note, the receipt and sufficiency of which are
hereby acknowledged, Borrower has GRANTED, BARGAINED, SOLD, CONVEYED, ASSIGNED
AND TRANSFERRED, and by these presents does GRANT, BARGAIN, SELL, CONVEY, ASSIGN
AND TRANSFER absolutely unto Lender, its successors and assigns all of
Borrower's rights, title and interest in, to, under and with respect to the
Leases, Rents, Sales Documents, Sales Proceeds and Developer's Rights subject
only to the Permitted Encumbrances. Borrower hereby warrants and will forever
defend unto Lender the title to the Leases, Rents, Sales Documents, Sales
Proceeds and Developer's Rights arising from any disposition of its interests in
the Property against every person whomsoever lawfully claiming or to claim the
same or any part thereof, subject to the Permitted Encumbrances. Borrower hereby
authorizes and directs any lessee or purchaser of the Property to deliver any
such payment to, and otherwise to attorn all other obligations under the Leases
and Sales Documents directly to, Lender. Borrower will perform all its
obligations under the Leases, Sales Documents and Property Governing Documents.
Borrower authorizes and appoints Lender as its attorney-in-fact to perform the
obligations of such Borrower in connection with the Leases, Sales Documents and
Property Governing Documents and/or to preserve its rights thereunder. All sums
expended by Lender in so doing shall be payable by Borrower upon demand and
accrue interest at the Default Rate from the date incurred until paid; and shall
be secured hereby and by all other security for the payment and performance of
the Obligations. No lessee or purchaser shall be required to inquire into the
authority of Lender to collect any Rent or Sales Proceeds, and any such person's
obligation to Borrower shall be absolutely discharged to the extent of its
payment to Lender. Notwithstanding anything in this Mortgage to the contrary,
but subject to the provisions of the other Documents, Lender hereby grants to
Borrower a license ("License"): (a) to exercise all Developer's Rights; (b) to
collect and receive all Rents and otherwise to exercise all rights and benefits
of the Leases; and (c) to collect and receive all Sales Proceeds to the extent
arising from the sale of Time-Share Interests expressly permitted pursuant to
the terms of the Loan Agreement. Upon the occurrence of an Event of Default, the
License
19
shall be immediately revoked and Lender may collect the Rents and all Sales
Proceeds; provided, however, that such License shall continue as to Developer's
Rights until Lender records the acceptance of appointment described in Paragraph
8.2. All Rents and Sales Proceeds collected by Lender shall be applied to the
following: (a) the payment of all taxes and lien assessments levied and due and
payable against the Property, where provision for paying them is not otherwise
made to the satisfaction of Lender; (b) to the payment of the Obligations due
and owing to Lender; (c) to the payment of current operating costs and expenses
(including, without limitation, repairs, maintenance and necessary acquisition
of property and expenditures for capital improvements) arising in connection
with the Property; and (d) to the extent Borrower has any interest therein, to
such Borrower or its designee. All Rents and Sales Proceeds collected by Lender
may be applied to the items listed in the preceding sentence in any order and
manner that Lender determines to be advisable without regard to any order of
priority. Without limiting the generality of any other provision of this
Mortgage: (a) Lender may take any and all actions it determines to be necessary
or appropriate to preserve all of Borrower's rights with respect to the Leases
and Sales Documents and the Developer's Rights; and (b) if an Event of Default
exists, Lender may, with respect to the Leases and the Sales Documents, (i)
institute enforcement actions against obligors thereunder, (ii) enter into
modification agreements and make extension agreements with respect to payments
and other performances, (iii) release persons liable for performance, (iv)
settle and compromise disputes with respect to payments and performances claimed
due, all without notice to, or without being called to account therefor by
Borrower and without relieving Borrower from Performance of the Obligations, and
(v) receive, collect, open and read all mail of Borrower for the purpose of
obtaining all items pertaining to the Leases and Sales Documents.
8.2 Developer's Rights. Notwithstanding anything in this Article 8 to the
------------------
contrary, Borrower hereby appoints and designates Lender as the successor to
Borrower's interest in the Developer's Rights; provided, however, that such
appointment shall not take effect until Lender accepts such appointment in a
writing which is recorded in the public records of the county in which the Real
Property is located.
8.3 Resort Condominium and Other Revenues. The Real Property may be
-------------------------------------
operated as a resort condominium (any such use shall be considered to be "resort
condominium use"), Borrower hereby stipulates and agrees that the Real Property
consists, in part, of a finite number, or inventory, of rooms and related
amenities available for sale, license and/or lease for resort condominium use,
and that all room rate revenues generated from the sale, license or lease of
room "nights" (exclusive of food, beverage and other service-related revenues)
("Realty Proceeds") constitute rent or proceeds of the Real Property under
Section 552(b) of the United States Bankruptcy Code ("Code"). If at any time
prior to full repayment of the Indebtedness, Borrower becomes the subject of any
bankruptcy proceedings under the Code (whether voluntary or involuntary),
Borrower intends for Lender to have a continuing, valid, first priority security
interest in all post-petition Realty Proceeds pursuant to Section 552(b) of the
Code. In connection therewith, Borrower acknowledges and agrees that the sale,
license and/or lease of each room "night" occurring after the commencement of
any such bankruptcy proceeding shall constitute
20
payment for the use and occupancy of the Property, and/or a conversion of the
Lender's pre-petition real property security and/or a conversion of Lender's
pre-petition inventory security into cash or accounts, and in all cases
constitutes proceeds of Lender's pre-petition secured collateral, and
constitutes the "cash collateral" of Lender as that term is defined in Section
363(a) of the Code. Borrower further acknowledges and agrees that, in order for
Lender's security interest in the Real Property to be adequately protected upon
the filing of any bankruptcy proceeding by or against Borrower, (i) all Realty
Proceeds must and will be immediately segregated upon receipt, and (ii) cash
payment must and will be made to Lender in an amount equal to all post-petition
Realty Proceeds less such amounts as may be agreed to by Lender as necessary for
the continued operation of the Real Property for resort condominium or similar
purposes. In the event such post-petition Realty Proceeds are not timely paid to
Lender, Lender shall be entitled to, and that Borrower will not oppose any
request for, immediate relief from the stay pursuant to Section 362 of the Code
or other Code provisions, whereupon Lender shall be entitled to pursue the full
extent of its remedies hereunder.
8.4 Relationship. Except as expressly set forth in Paragraph 11.5,
------------
nothing in this Mortgage shall be construed to obligate Lender to discharge or
perform the duties of Borrower under the Leases, Sales Documents, Property
Governing Documents or any other instrument or of a landlord to a tenant or of a
seller to a purchaser or to impose any liability as a result of the exercise of
the right to collect Rents or Sales Proceeds under a Lease or Sales Document or
the exercise of any of Developer's Rights; and Lender shall not be responsible
or liable in any manner with respect to the Property or the use, occupancy or
enjoyment of all or any part thereof.
8.5 Termination of Assignment. The assignment set forth in this Article 8
-------------------------
will terminate at such time as this Mortgage is entitled to be released pursuant
to Paragraph 10.7.
8.6 SECTION 697.07. THE PARTIES ACKNOWLEDGE AND CONFIRM THE APPLICATION
--------------
OF SECTION 697.07 OF THE FLORIDA STATUTES ENTITLED "ASSIGNMENT OF RENTS," AS
AMENDED, TO THIS TRANSACTION AND THIS MORTGAGE AND AGREE THAT SUCH SECTION
697.07 SHALL GOVERN THE RIGHTS OF LENDER AND LIABILITIES OF BORROWER, AND THE
PARTIES FURTHER AGREE TO BE BOUND THEREBY.
ARTICLE 9 - SECURITY AGREEMENT
------------------------------
9.1 Security Interest. This Mortgage (a) shall be construed as a mortgage
-----------------
on real property and (b) shall also constitute and serve as a "security
agreement" within the meaning of the applicable Uniform Commercial Code with
respect to all portions of the Property for which the granting of security
interests therein is governed by such Uniform Commercial Code. To this end,
Borrower has GRANTED, and by these presents does GRANT, unto Lender, a security
interest in and to all their rights, title and interest in, to and under the
Property subject to the Uniform Commercial Code (including, without limitation,
the Personal Property, all income from the rental or license of the use of rooms
for lodging, meeting or banquet purposes and/or from any other business of
Borrower conducted with respect to the Property, Sales Documents and Sales
21
Proceeds), subject only to the Permitted Encumbrances, to secure the full and
timely payment and performance of the Obligations.
9.2 Fixture Filing. Some items of the Property are goods that are, or are
--------------
intended to become, fixtures related to the Real Property. It is intended that,
as to those goods, this instrument shall be effective as a financing statement
and fixture filing from the date of its filing for record in the real estate
records of the county in which the Real Property is located. Information
concerning the security interest created hereby may be obtained from Lender, as
the secured party, at the address of Lender stated above. The mailing address
of Borrower as debtor shall be the address stated above for Borrower. The
principal place of business or chief executive office of Borrower is 0000
Xxxxxxx Xxxxxx Xxxxx, Xxxxxxx, Xxxxxxx 00000.
9.3 Notice of Changes. Borrower will give advance notice in writing to
-----------------
Lender of any proposed change in Borrower's name, identity, structure, principal
place of business or chief executive office, or change in location of the
Property and shall execute and deliver to Lender, prior to or concurrently with
the occurrence of any such change, all additional financing statements that are
necessary or Lender may require to establish and maintain the validity and
priority of Lender's security interest with respect to any of the Property.
9.4 Uniform Commercial Code Remedies. If Lender disposes of any of the
--------------------------------
Property pursuant to the Uniform Commercial Code, twenty (20) Business Days
written notice by to Lender to Borrower shall be deemed to be reasonable
notice.
ARTICLE 10 - MISCELLANEOUS
--------------------------
10.1 Notices. Except as may be expressly otherwise provided in this
-------
Mortgage, all notices, requests or demands required or permitted to be given
under this Mortgage shall be in writing, and shall be deemed effective (a) upon
hand delivery, if hand delivered; (b) one (1) Business Day (as defined below)
after such are deposited for delivery via Federal Express or other nationally
recognized overnight courier service; or (c) three (3) Business Days after such
are deposited in the United States mails, certified or registered mail, all with
delivery charges and/or postage prepaid, and addressed as shown below, or to
such other address as the party being notified may have designated in a notice
given to the other party. Written notice may be given by telecopy to the
telecopier number as the party being notified may have designated in a notice
given to the other party, which notice shall be effective on the day of receipt
if received prior to the expiration of the recipient's normal business hours on
the day of receipt or otherwise on the next Business Day; provided that such
notice shall not be deemed effective unless not later than the next Business
Day, a copy of such notice is hand -delivered or deposited for delivery via
courier or in the United States mails in accordance with the requirements set
forth above. The addresses and telecopy numbers for Lender and Borrower are:
22
If to Lender: FINOVA Capital Corporation
0000 Xxxx Xxxxxx Xxxxxx Xxxx
Xxxxx 000
Xxxxxxxxxx, Xxxxxxx 00000
Attn: Vice President - Resort Finance
Telecopy No.: (000) 000-0000
with a copy to: FINOVA Capital Corporation
0000 Xxxx Xxxxxx Xxxxxx Xxxx
Xxxxx 000
Xxxxxxxxxx, Xxxxxxx 00000
Attn: Vice President - Group Counsel
Telecopy No.: (000) 000-0000
If to Borrower: ___________________________
0000 Xxxxxxx Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxx 00000
Attn: Chief Financial Officer
Telecopy No.: (000) 000-0000
with a copy to: Xxxxx Xxxxx, Esq.
Vistana, Inc.
000 Xxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxx, Xxxxxxx 00000
Telecopy No.: (000) 000-0000
Notwithstanding anything in this Mortgage to the contrary, notice of foreclosure
of this Mortgage and sale of the Property may be given in any manner which meets
the requirements of the applicable laws of the state where the Real Property is
located with respect to foreclosure of real and personal property in effect at
the time of such sale; and such alternative notices shall constitute sufficient
notice under this Mortgage.
10.2 CHOICE OF LAW; JURISDICTION; VENUE; AND WAIVER OF JURY TRIAL.
------------------------------------------------------------
(A) THIS MORTGAGE AND THE RIGHTS, DUTIES AND OBLIGATIONS OF THE
PARTIES HERETO SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
INTERNAL LAWS OF THE STATE OF ARIZONA AND TO THE EXTENT THEY PREEMPT THE
LAWS OF SUCH STATE, THE LAWS OF THE UNITED STATES, PROVIDED, HOWEVER, THAT
THE CREATION, PERFECTION AND
23
FORECLOSURE THE LIEN, SECURITY INTEREST, ASSIGNMENT AND OTHER CHARGES
CREATED BY THIS MORTGAGE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE INTERNAL LAWS (WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS)
OF THE STATE WHERE THE REAL PROPERTY IS LOCATED.
(B) EACH OF BORROWER AND (BY ITS ACCEPTANCE HEREOF) LENDER: (I)
HEREBY IRREVOCABLY SUBMITS ITSELF TO THE PROCESS, JURISDICTION AND VENUE OF
THE COURTS OF THE STATE OF ARIZONA, MARICOPA COUNTY, AND TO THE PROCESS,
JURISDICTION, AND VENUE OF THE UNITED STATES DISTRICT COURT FOR THE
DISTRICT OF ARIZONA, FOR THE PURPOSES OF SUIT, ACTION OR OTHER PROCEEDINGS
ARISING OUT OF OR RELATING TO THIS MORTGAGE OR THE SUBJECT MATTER HEREOF,
AND, IF LENDER INITIATES SUCH ACTION, ANY IN WHICH LENDER SHALL INITIATE
SUCH ACTION, AND THE CHOICE OF SUCH VENUE SHALL IN ALL INSTANCES BE AT
LENDER'S ELECTION; AND (II) WITHOUT LIMITING THE GENERALITY OF THE
FOREGOING, HEREBY WAIVES AND AGREES NOT TO ASSERT BY WAY OF MOTION, DEFENSE
OR OTHERWISE IN ANY SUCH SUIT, ACTION OR PROCEEDING ANY CLAIM THAT BORROWER
IS NOT PERSONALLY SUBJECT TO THE JURISDICTION OF THE ABOVE-NAMED COURTS,
THAT SUCH SUIT, ACTION OR PROCEEDING IS BROUGHT IN AN INCONVENIENT FORUM OR
THAT THE VENUE OF SUCH SUIT, ACTION OR PROCEEDING IS IMPROPER. EACH OF
BORROWER AND (BY ITS ACCEPTANCE HEREOF) LENDER HEREBY WAIVES THE RIGHT TO
COLLATERALLY ATTACK ANY JUDGMENT OR ACTION IN ANY OTHER FORUM.
(C) LENDER (BY ACCEPTING THIS MORTGAGE) AND BORROWER ACKNOWLEDGE AND
AGREE THAT ANY CONTROVERSY WHICH MAY ARISE UNDER ANY OF THE DOCUMENTS WOULD
BE BASED UPON DIFFICULT AND COMPLEX ISSUES AND THEREFORE, THE PARTIES AGREE
THAT ANY LAWSUIT ARISING OUT OF ANY SUCH CONTROVERSY SHALL BE TRIED BY A
JUDGE SITTING WITHOUT A JURY, AND BORROWER HEREBY KNOWINGLY AND VOLUNTARILY
WAIVES TRIAL BY JURY IN ANY SUCH PROCEEDING.
24
(D) ALL OF THE PROVISIONS SET FORTH IN THIS PARAGRAPH ARE A MATERIAL
INDUCEMENT FOR LENDER'S MAKING THE LOAN TO BORROWER.
(______ BORROWER INITIALS)
10.3 Interpretation. The Article, Paragraph and Subparagraph headings
--------------
hereof are inserted for convenience of reference only and shall not alter,
define or be used in construing the text of such Articles, Paragraphs or
Subparagraphs. All Schedules and Exhibits referred to herein are herein
incorporated by this reference. Whenever used, the singular number shall
include the plural and the plural the singular, and the use of any gender shall
be applicable to all genders. If more than one person or entity collectively
comprise Borrower, the term "Borrower" shall include each such person or entity
in their individual capacities and jointly and each such person shall be jointly
and severally liable for the performance of the Obligations under this Mortgage.
Each Borrower who executes this instrument and each subsequent owner of the
Property, or any part thereof (other than Lender or any purchaser at
foreclosure), agrees that it will perform and be bound by each term of this
Mortgage as if such person were the named Borrower. The provisions of this
Mortgage shall not be construed to limit the obligations of Borrower, or the
rights of Lender, under the other Documents. Time is of the essence for each
provision herein.
10.4 Subordination. The rights of any person or entity to be subrogated
-------------
to the lien and security interest and assignment granted hereby hereof by virtue
of the payment or satisfaction of any portion of the Indebtedness shall be
subordinated and remain inferior to the rights of Lender under this Mortgage
until all the Indebtedness has been paid in full. Any such person or entity
shall be regarded as a junior lienholder at any foreclosure proceeding and shall
not be entitled to notice thereof (unless otherwise required by law) and, until
Lender is fully paid, shall not be entitled to participate in any proceeds
therefrom.
10.5 Subrogation. To the extent funds are at any time following the date
-----------
hereof advanced by Lender under any of the Documents for the purpose of paying
any indebtedness now or hereafter secured by any liens or security interests or
assignments on the Property other than the liens, security interests and
assignments created by this Mortgage, Lender shall be subrogated to any and all
rights, liens, security interests and equities owned or claimed by the holder of
such other liens, security interests and assignments.
10.6 Permitted Contests. After prior written notice to Lender, Borrower
------------------
at its expense may contest, by appropriate legal or other proceedings conducted
in good faith and with due diligence, the amount or validity of any Imposition,
Legal Requirement or any monetary lien, so long as: (a) in the case of an unpaid
Imposition or lien, such proceedings shall suspend the collection thereof from
Borrower and foreclosure of such lien upon the Property and any Rents, Sales
Proceeds or other Proceeds therefrom and shall not interfere with the payment of
any such Rents, Sales Proceeds or other Proceeds to Lender; (b) none of the
Property is, in the judgment of Lender, in any imminent danger of being sold,
forfeited or lost; (c) in the case of a Legal
25
Requirement, neither Borrower nor Lender is in any danger of any civil or
criminal liability for failure to comply therewith; and (d) Borrower has
furnished such security, if any, as may be required in the proceedings or as
Lender reasonably requests up to one hundred fifty percent (150%) of the amount
in controversy.
10.7 Defeasance. This Mortgage shall be released when all the Obligations
----------
are paid and performed in full or at such time as the Mortgage is required to be
released pursuant to Paragraph 11.6; and Lender will execute at that time such
defeasements of release and satisfaction as are necessary for that purpose.
10.8 Power of Attorney. While an Event of Default exists, Lender shall
-----------------
have the right, but not the obligation: (a) to demand and receive payment and
performance and to enforce and/or preserve any and all of Borrower's rights with
respect to the Leases, the Sales Documents and the personal property covered
hereby; (b) to exercise any right and to perform any obligation of Borrower
under or in connection with the Leases, the Sales Documents and any other
instrument covered hereby, at Borrower's expense; (c) with respect to rights to
payment and performance assigned hereunder, to make extension agreements,
release persons liable thereon or securities for payment or other performance,
and settle and compromise disputes in connection with those rights; (d) to
modify, cancel, or accept the surrender of the terms of any Lease or Sales
Document; (e) to take any action Lender may deem necessary or desirable to
perfect the liens, assignments and the security interest made and granted to
Lender under this Mortgage; and (f) to perform all these acts in the name of
Borrower or in the name of Lender. For all of the foregoing purposes, Borrower
irrevocably appoints Lender, until performance of its Obligations in full, as
its attorney-in-fact.
10.9 Standard Applied to Lender's Discretion. Unless otherwise
---------------------------------------
specifically stipulated elsewhere in this Mortgage, if a matter is left in this
Mortgage to the decision, determination, judgment, opinion, approval, consent,
satisfaction, acceptance, agreement, request, requirement, option, election or
discretion of Lender, its employees, Lender's counsel or any agent for or
contractor of Lender, such action shall be deemed to be exercisable by Lender or
such other person in its sole and absolute discretion and according to standards
established in its sole and absolute discretion. Without limiting the
generality of the foregoing, "option" and "discretion" shall be implied by use
of the words "if" or "may.".
10.10 Scope of Reimbursable Attorney's Fees. As used in this Mortgage, the
-------------------------------------
term "attorneys' fees" includes the fees of attorneys licensed to practice law
in any jurisdiction, the fees of law clerks, paralegals, investigators and
others not admitted to the bar but performing services under the supervision of
a licensed attorney, and the expenses incurred by them in the performance of
their services. As used in this Mortgage, attorneys' fees incurred by Lender in
the enforcement of any remedy or covenant include, without limitation,
attorneys' fees incurred in any foreclosure of this Mortgage, in protecting or
sustaining the lien or priority of the security, or in any proceeding arising
from or connected with any such matter, including any bankruptcy,
26
receivership, injunction or other similar proceeding, or any appeal from or
petition for review of any such matter, and with or without litigation.
ARTICLE 11 - ADDITIONAL PROVISIONS
----------------------------------
11.1 Future Advances. This Mortgage secures such future or additional
---------------
advances (in addition to the Indebtedness described in Paragraph 2.13) as may be
made by Lender or the holder hereof, at its exclusive option, to Borrower or its
successors or assigns in title, for any purpose and are stated to be secured by
this Mortgage in any document evidencing or providing for such indebtedness,
provided that all such advances are made within twenty (20) years from the date
of this Mortgage or within such lesser period of time as may be provided by law
as a prerequisite for the sufficiency of actual notice or record notice of such
optional future or additional advances as against the rights of creditors or
subsequent purchasers for valuable consideration to the same extent as if such
future or additional advances were made on the date of the execution of this
Mortgage. The total amount of Indebtedness secured by this Mortgage may be
increased or decreased from time to time, but the total unpaid balance so
secured at any one time shall not exceed the maximum principal amount of
$60,000,000 plus interest thereon and any disbursements made under the Mortgage
for the payment of impositions, taxes, assessments, levies, insurance, or
otherwise, with interest on such disbursements. Subject to the foregoing
provisions of this Paragraph, it is the intent of the parties that this Mortgage
shall secure the payment of the Indebtedness described in Paragraph 2.13 and any
additional advances made from time to time pursuant to any additional notes or
otherwise, all of such future advances being equally secured hereby, having the
same priority as the original Indebtedness, and being subject to all of the
terms, provisions and conditions of this Mortgage.
11.2 Variable Interest Rate. Interest may accrue on advances evidenced by
----------------------
the Note at a variable interest rate, which is adjusted monthly.
11.3 Sales Contracts; Statutory Cancellation Rights. Notwithstanding
----------------------------------------------
anything herein to the contrary, all Sales Proceeds from the sale of Time-Share
Interests consisting of payments made by owners of such Time-Share Interests for
insurance, taxes or other assessments shall be applied only for such purposes to
the extent required by the Sales Documents or applicable Legal Requirements. By
acceptance of this Mortgage, Lender acknowledges that contracts for the sale of
Time-Share Interests may be subject to certain statutory cancellation rights.
Borrower will take all actions to cause such cancellation rights to expire at
the earliest possible time but this shall not prevent Borrower from amending the
Sales Documents in a commercially reasonable manner.
11.4 Future Property Governing Documents. The use of the Real Property
-----------------------------------
and surrounding Real Properties for time-share purposes may from time to time
require the execution, filing and/or recording of plats, replats, maps,
declarations of condominium, declarations of covenants and/or restrictions,
easements, reciprocal use and access agreements, registration
27
documents with regulatory agencies, amendments to any of the foregoing, and
other similar documents and agreements with respect to the Property
(collectively, the "Future Property Governing Documents"). Without the prior
written consent of Lender, Borrower will not execute, file and/or record any
Future Property Governing Document. However, Lender will use reasonable efforts
to review all such Future Property Governing Documents on a timely basis and
agrees (a) not to unreasonably withhold or delay granting its consent to such
Future Property Governing Documents or its joinder in or to any such Future
Property Governing Documents (to the extent required by any Legal Requirement)
and (b) to provide on a timely basis such certificates, affidavits or other
verifying statements relating to the foregoing, this Mortgage or the use of the
Property as may be required by or in connection with such Future Property
Governing Documents to which it has given its consent. All expenses of Lender in
reviewing Future Property Governing Documents, including, without limitation,
reasonable attorneys' fees, shall be paid by Borrower to Lender promptly upon
demand, together with interest on the unpaid balance at the Default Rate from
the date of demand until paid by Lender. Without limiting the generality of any
other provision contained herein, Lender may, in addition to other conditions,
require that Borrower deliver to it a specific assignment (which shall terminate
when this Mortgage is entitled to be released pursuant to Paragraph 10.7) of
Borrower's rights, title and interest under a Future Property Governing Document
as a condition to its consent thereto, which assignment shall contain such terms
as a prudent institutional investor would require.
11.5 Time-Share Program. If Borrower records a Future Property Governing
------------------
Document to which Lender has given its prior written consent and which
establishes a program ("Time-Share Program") by which purchasers of Time-Share
Interests may own such Time-Share Interests, enjoy such Time-Share Interests on
a recurring basis not less often than seven (7) days every year or every other
year, and share the expenses associated with the management of such program
("Approved Time-Share Declaration"), then notwithstanding anything in this
Mortgage to the contrary, from and after recordation of the Approved Time-Share
Declaration and the release of the first Time-Share Interest in accordance with
the express provisions of the Loan Agreement:
(a) in the event of conflict with respect to the use and application
of insurance and condemnation proceeds, the terms and conditions of the
Approved Time-Share Declaration shall prevail over the terms of this
Mortgage;
(b) if an association of owners of Time-Share Interests ("Time-Share
Association") is formed and is obligated to Borrower under the Approved
Time-Share Declaration to perform duties which, if performed, will satisfy
any of the Obligations of Borrower under this Mortgage, Borrower will use
its best efforts to cause the Association to perform such duties,
including, without limitation, exercising all of Borrower's rights in the
Time-Share Association and under the Approved Time-Share Declaration to
enforce the performance of such duties by the Time-Share Association;
provided, however, that Borrower shall not be released of any of the
Obligations by virtue of any Approved Time-Share Declaration; and
28
(c) Lender shall not be entitled to exercise any rights it has under
this Mortgage or any rights it may hereafter acquire in the Property to
diminish or disturb the quiet and peaceful enjoyment by a Purchaser of its
purchased Time-Share Interest which has been or under the express terms of
the Loan Agreement is entitled to be released from this Mortgage, so long
as the Purchaser is not in default of its obligations under any Sales
Document or under the Approved Time-Share Declaration or any other document
governing the Time-Share Program.
11.6 Partial Release of Time-Share Interest. Time-Share Interests shall be
--------------------------------------
entitled to be released from this Mortgage only in accordance with the express
terms of the Loan Agreement. The partial release of a Time-Share Interest from
this Mortgage when no Event of Default exists shall ipso facto cause the partial
---- -----
release from this Mortgage of Lender's interest in the tangible Personal
Property, Leases, Rents, Sales Documents and Sales Proceeds appurtenant to such
Time-Share Interest and of Lender's interest in Sales Documents and Sales
Proceeds arising solely from the sale of such Time-Share Interest.
11.7 Other Provisions Pertaining to Property Governing Documents. (a)
-----------------------------------------------------------
Unless required to do so by the terms thereof or by applicable Legal
Requirements, Borrower will not, without the prior written consent of Lender,
modify, waive, terminate or alter in any material way any of the terms of the
Property Governing Documents with respect to the Developer's Rights or surrender
any of the same and without limiting the generality of the foregoing, will not
consent to any modification which would result in the loss of any material
benefit or the incurrence of any material detriment to Borrower or Lender under
the Property Governing Documents; (b) Borrower will take all acts reasonably
necessary to prevent the forfeiture, rescission or termination of any of the
Property Governing Documents or any of the Developer's Rights, the loss of any
material benefit to Borrower or Lender under any of the Property Governing
Documents, or the incurrence of any material detriment to Borrower or Lender
under any of the Property Governing Documents, and will require, demand, and
enforce, by all available, lawful and reasonable means, the prompt and faithful
payment, performance, observance and satisfaction of all of the material
provisions, covenants, conditions, and agreements in the Property Governing
Documents to be performed and/or complied with for the benefit of Borrower under
the Property Governing Documents with respect to the Developer's Rights; and (c)
Borrower will exercise all of its rights under Property Governing Documents so
that at all times, unless Borrower's compliance will conflict with applicable
Legal Requirements or the exercise by others of the rights held by them under
the Property Governing Documents:
(i) Borrower shall be in compliance with all terms and conditions of
the Documents, including, without limitation, provisions with respect to
the maintenance and use of insurance and condemnation proceeds and
maintenance, repair and restoration of the Property; and no Event of
Default or Incipient Default (as defined in the Loan Agreement) will be
created;
29
(ii) the exercise of the rights and remedies of Lender under the
Documents shall not be limited by any decision made pursuant to the
Property Governing Documents to take or not to take any action with respect
to the Property;
(iii) except as Lender might otherwise reasonably require pursuant to
the terms of the Documents following damage to all or substantially all of
the Property, neither the Property Governing Documents, nor the Time-Share
Program is terminated as to any part of the Property, no property is
withdrawn from the Time-Share Program, and the use of recreational
facilities on the Property by owner of the Time-Share Program interest; and
(iv) the Time-Share Program will be, and the Property is,
professionally managed.
[11.8 CONSTRUCTION MORTGAGE. THIS SECURITY DOCUMENT IS A "CONSTRUCTION
---------------------
MORTGAGE" AS THAT TERM IS DEFINED IN THE UNIFORM COMMERCIAL CODE. ONLY A PORTION
OF THE LOAN WILL BE AVAILABLE FOR PAYMENT OF CONSTRUCTION COSTS, AS PROVIDED IN
THE LOAN AGREEMENT.]
EXECUTED as of the date first written above.
[SEPARATE SIGNATURE PAGE FOLLOWS]
30
Witnesses as to Borrower "BORROWER"
______________________________ ______________________________
Print Name:___________________ a(n)__________________________
______________________________ By:___________________________
Print Name:___________________ Type/Print Name:______________
Title:________________________
31
STATE OF ______________ )
) ss.
County of _____________ )
The foregoing was acknowledged before me this ___ day of _____, _____, by
____________________________________________, the _______________________ of
_______ ___________________, a ___________________, on behalf of such
_________________________. He/She is personally known to me or has produced
______________________ as identification.
GIVEN UNDER MY HAND AND SEAL OF OFFICE, this the _____ day of _____, _____.
__________________________________________
Notary Public in and for the State
and County aforesaid
My commission expires:
_____________________________________
32
EXHIBIT A
---------
DESCRIPTION OF THE REAL PROPERTY
--------------------------------
EXHIBIT B
---------
PERMITTED ENCUMBRANCES
----------------------
EXHIBIT C
---------
TIME-SHARE INTEREST
-------------------
An undivided fractional fee simple interest as tenant-in-common (or an estate
for years with a remainder over in fractional fee simple as tenant-in-common)
either (a) in a dwelling unit which is part of the Real Property ("Unit")
coupled with an undivided fractional fee simple interest as tenant-in-common in
the common areas of the time-share project of which such Unit is a part ("Time-
Share Project")] or (b) in the entire Time-Share Project, in both cases together
with the exclusive right to occupy and use a specific Unit (or an equivalent
Unit) for a period of at least seven (7) consecutive days every calendar year
(i.e., an annual Time-Share Interest) or every other calendar year (i.e., a
biennial Time-Share Interest) (on a fixed or floating basis) and the non-
exclusive right to use such common elements during the same occupancy period, as
more specifically described in the Approved Time-Share Declaration.
EXHIBIT 4
FORM OF ENVIRONMENTAL CERTIFICATE
-4-
ENVIRONMENTAL CERTIFICATE WITH REPRESENTATIONS
COVENANTS AND WARRANTIES
The undersigned, ________________________________, a(n)__________________
purpose of inducing FINOVA CAPITAL CORPORATION, a Delaware corporation
("Lender"), to make available to Borrower under a Loan Agreement dated as of
even date herewith ("Loan Agreement") a loan ("Loan") in a principal amount not
to exceed _____________________________________________ DOLLARS
($__________________). The Loan is to be secured by, among other things, a lien
dated as of even date herewith and encumbering the real property more
particularly described in EXHIBIT A attached hereto and made a part hereof
(collectively, the "Property"). This certificate is dated and effective as of
_______________, ______.
1. Representations, Covenants and Warranties. Except as may be otherwise
-----------------------------------------
expressly stated in the Disclosure Schedule attached hereto as EXHIBIT B
and made a part hereof, Indemnitor(s) hereby represent(s), covenant(s) and
warrant(s) to Lender and its successors and assigns, as follows:
a. Except for or with respect to products which, to the best knowledge and
belief of Indemnitor(s), have been purchased "over the counter," have
been used in connection with the use, operation or maintenance of the
Property in a manner consistent with their intended purposes and in
accordance with the manufacturer's specifications regarding amounts,
frequency and disposal or in accordance with generally accepted use
(i.e., gasoline and petroleum) and have otherwise been used, disposed of
----
and cleaned-up in accordance with Applicable Environmental Laws, (i) to
the best of Indemnitor's knowledge no solid wastes or other substances
known or suspected to pose a threat to health or the environment
("Hazards") or "hazardous substances" as defined below have been
disposed of or otherwise released or present on, over, beneath, in, or
upon the Property or, to the best knowledge of Indemnitor (s), any
adjacent parcels of real estate; (ii) Indemnitor(s) will not cause or
permit any Hazards or "hazardous substances" (A) to be disposed of or
released or present on, over, beneath, in or upon the Property or, with
the knowledge of Indemnitor(s), on any adjacent parcels of real estate;
or (B) to be used in the construction or installation of any buildings,
facilities or improvements of any nature on the Property. No prior use,
either by Indemnitor(s) or, to the best knowledge and belief of
Indemnitor(s), the prior owners of the Property or any other person or
entity, has occurred which violates any "Applicable Environmental Laws"
as defined below. The terms "hazardous substance", "release", "solid
waste" and "disposal" (or "disposed") shall each have the broadest
meanings specified in the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended ("CERCLA"), the
Resource Conservation and Recovery Act of 1987, as amended ("RCRA"), the
Toxic Substance Control Act,
the Clean Air Act, the Clean Water Act and any other federal, state or
local law, ordinance, code, rule, regulation, order or decree relating
to or imposing liability or standards of conduct concerning any
hazardous, toxic or dangerous waste or material, as now or at any time
hereafter in effect ("Applicable Environmental Laws").
b. To the best knowledge and belief of Indemnitor(s), there are no on-site
or off-site locations where hazardous substances, including such
substances as asbestos and polychlorinated biphenyls, solid wastes, or
Hazards from the Property, have been stored, treated, recycled or
disposed of, except for products which, to the best knowledge and belief
of Indemnitor(s), have been purchased "over the counter," have been used
in connection with the use, operation or maintenance of the Property in
a manner consistent with their intended purposes and in accordance with
the manufacturer's specifications regarding amounts, frequency and
disposal or in accordance with generally accepted use (i.e., gasoline
----
and petroleum), and have otherwise been used, disposed of and cleaned-up
in accordance with Applicable Environmental Laws.
c. To the best knowledge and belief of Indemnitor(s), there has been no
litigation brought or threatened nor any settlement reached by or with
any parties alleging the presence, disposal, release, or threatened
release, of any hazardous substance, solid wastes or Hazard from the use
or operation of the Property.
d. To the best knowledge and belief of Indemnitor(s) after diligent
investigation and inquiry, the Property is not on any federal or state
"Superfund" list, and not on EPA's Comprehensive Response, Compensation
& Liability System (CERCLIS) list or on any state environmental agency
list of sites under consideration for CERCLIS or sites on which leaking
underground storage tanks have existed, or subject to any
environmentally related liens.
2. Covenant to Clean Up and Notify. Indemnitor(s) shall promptly clean up and
-------------------------------
remove hazardous substances, solid wastes or Hazards on, in, from or
affecting any portion of the Property in accordance with all Applicable
Environmental Laws, to the reasonable satisfaction of Lender and shall
provide Lender, within thirty (30) days after written demand by Lender,
with a bond, letter of credit or similar financial assurance evidencing to
Lender's satisfaction that sufficient funds are available to pay the cost
of removing, treating and disposing of such hazardous substances, solid
wastes or Hazards and discharging any assessments that may be established
on the Property as a result thereof.
3. Site Assessment. If Lender shall have reason to believe that there are
---------------
hazardous substances, solid wastes or Hazards affecting any of the
Property, except for products which, to the best knowledge and belief of
Indemnitor(s), have been purchased "over the counter," have been used in
connection with the use, operation or maintenance of the Property in a
manner consistent with their intended purposes and in accordance with the
-2-
manufacturer's specifications regarding amounts, frequency and disposal or
in accordance with generally accepted use (i.e., gasoline and petroleum),
----
and have otherwise been used, disposed of and cleaned-up in accordance with
Applicable Environmental Laws, Lender (by its officers, employees and
agents) at any time and from time to time, either prior to or after the
occurrence of an Event of Default (as defined in the Loan Agreement), may
(after a written request to Indemnitor(s) and Indemnitor's(s') failure to
commence such work [the scope of which shall be mutually acceptable to
Lender and Indemnitor(s)] within 30 days from its receipt of such notice)
contract at Indemnitor's(s') cost for the services of persons (the "Site
Reviewers") to enter upon the Property and perform environmental site
assessments ("Site Assessments") for the purpose of determining whether
there exists any environmental condition that could result in any
liability, cost or expense to the owner, occupier or operator of such
Property arising under any Applicable Environmental Laws. The Site
Reviewers shall perform such tests on the property as may be necessary to
conduct the Site Assessments in the reasonable opinion of the Site
Reviewers. Indemnitor(s) will supply such information and make available
appropriate personnel as requested by the Site Reviewers. On request,
Lender shall make the results of such Site Assessments fully available to
Indemnitor(s).
4. Indemnification. Indemnitor(s) covenant(s) that Indemnitor(s) will
---------------
indemnify, defend and hold harmless Lender and any current or former
officer, director, employee, shareholder or agent of Lender (collectively,
the "Indemnitees") for, from and against any and all claims, losses,
damages, response costs, clean-up costs and expenses, other than those
resulting from the gross negligence or willful misconduct of Lender, which
arise out of or in any way relate to the existence of hazardous substances,
solid waste or Hazards over, beneath, in or upon the Property or a breach
of the representations, warranties, covenants and agreements set forth in
paragraph 1 and paragraph 2 hereof, including, but not limited to: (a)
claims of third parties (including governmental agencies) for damages,
penalties, response costs, clean-up costs, injunctive or other relief; (b)
costs and expenses of removal and restoration, including fees of attorneys
and experts, and costs of reporting the existence of hazardous substances,
solid waste or Hazards to any governmental agency; and (c) any and all out-
of-pocket expenses or obligations, including reasonable attorneys' fees,
incurred at, before and after any trial or appeal therefrom whether or not
taxable as costs, including, without limitation, reasonable attorneys'
fees, witness fees, deposition costs, copying and telephone charges and
other expenses, all of which shall be paid by Indemnitor(s) upon demand.
5. Lender's Right to Remove Hazardous Materials. (a) If Indemnitor(s), within
--------------------------------------------
a reasonable period of time following Indemnitor(s) receipt of an order or
judgment by a regulatory agency or other competent authority or other
notice ("Other Notice") asserting the existence of any hazardous
substances, solid wastes or Hazards pertaining to the Property, fail(s) to
clean up, remove, resolve minimize the impact of or otherwise deal with
such existing hazardous substances, solid wastes or Hazards and (b) such
failure could jeopardize Lender's security under the Documents (as defined
in the Loan Agreement) as determined in Lender's reasonable judgment, then
Lender shall have the right, but not the
-3-
obligation, without in any way limiting Lender's other rights and remedies
under the Documents, to enter onto the Property or to take such other
actions as it deems necessary or advisable to clean up, remove, resolve or
minimize the impact of, or otherwise deal with, any such existing hazardous
substances, solid wastes or Hazards in accordance with such order, judgment
or Other Notice. All reasonable costs and expenses paid or incurred by
Lender in the exercise of any such rights shall be payable by Indemnitor(s)
upon demand, except to the extent Lender is not entitled to indemnification
for such costs and expenses pursuant to paragraph 4 hereof. Notwithstanding
anything in this paragraph to the contrary, Lender shall not take any
action otherwise permitted pursuant to this paragraph on the basis of an
assertion contained in an Other Notice unless: (a) Borrower admits the
existence of the asserted environmental condition; (b) Lender has obtained
a Site Assessment confirming the existence of the asserted environmental
condition; or (c) Lender has failed to obtain a Site Assessment because of
Borrower's failure to cooperate with Lender.
6. Reliance and Binding Nature. Indemnitor(s) acknowledge(s) that Lender has
---------------------------
and will rely upon the representations, covenants, warranties and
agreements set forth in closing and funding the Loan and that the execution
and delivery of this Certificate is an essential condition but for which
Lender would not close or fund the Loan. The representations, warranties
and covenants contained in this Certificate shall survive any acquisition
by Lender of title to the Property by foreclosure or deed in lieu of
foreclosure and shall continue for as long as Lender or any other
Indemnitee may be subject to any claim for which it is entitled to be
indemnified pursuant to paragraph 4 hereof. The representations,
covenants, warranties and agreements herein contained shall be binding upon
Indemnitor(s), its/their successors, assigns and legal representatives and
shall inure to the benefit of Lender, its successors, assigns and legal
representatives.
7. Choice of Law, Choice of Jurisdiction and Venue; and Waiver of Jury Trial.
-------------------------------------------------------------------------
Choice of law, jurisdiction and venue and waiver of jury trial provisions
set forth in the Loan Agreement are incorporated herein by reference.
8. Obligations Joint and Several. The obligations and liability of
-----------------------------
Indemnitor(s) under this Certificate shall be joint and several and shall
be binding upon and enforceable against Indemnitor(s) and shall be secured
by the security for the repayment of the Loan.
-4-
8. Notice of Change in Representations and Warranties. Indemnitor(s) will
--------------------------------------------------
notify Lender within twenty (20) days after the date Indemnitor(s) know or
should have known of any material adverse change in the representations or
warranties set forth in this Agreement.
Dated and Effective as of the date first above written.
Indemnitor(s)
________________________________________,
a(n) _____________________
By:______________________________________
Type/Print Name:_________________________
Title:___________________________________
STATE OF ___________ )
) ss.
County of ____________ )
The foregoing instrument was acknowledged before me this ____ day of
_______________, ___, by ___________________________________, the
________________ of _______________________________________, a(n)
__________________________, on behalf of such ___________________. He/She is
personally known to me or has produced _________________________ as
identification.
GIVEN UNDER MY HAND AND SEAL OF OFFICE, this the _____ day of ______,
_____.
_____________________________________________
Notary Public in and for the State and County
aforesaid
My commission expires:
____________________________
EXHIBIT A - DESCRIPTION OF PROPERTY
EXHIBIT B - DISCLOSURE SCHEDULE
-5-
EXHIBIT A
REAL PROPERTY DESCRIPTION
-------------------------
-6-
EXHIBIT B
DISCLOSURE SCHEDULE
-------------------
-7-
EXHIBIT 5
FORM OF SUBORDINATION AGREEMENT
-5-
SUBORDINATION
This SUBORDINATION ("Agreement") is made as of ____________, _____, by
VISTANA, INC., a Florida corporation ("Subordinator"), in favor of FINOVA
CAPITAL CORPORATION, a Delaware corporation ("Lender").
R E C I T A L S:
---------------
A. Lender desires to make to ______________________________________, a(n)
______________________________ ("Borrower"), pursuant to a Loan Agreement dated
as of _________, ____, between Lender and Borrower (as from time to time
renewed, amended, restated or replaced, the "Loan Agreement") a loan in an
aggregate principal amount not to exceed ____________________________________
Dollars ($_________) ("Loan"). The Loan will be evidenced by a promissory note
in the original face amount of ____________________________________ Dollars
($_________) (as from time to time renewed, amended, restated or replaced,
"Note").
B. The Loan Agreement, the Note and all other documents executed in
connection with the Loan are hereinafter referred to as the "Documents." The
obligations, covenants, agreements and conditions to be performed, paid,
observed and fulfilled by Borrower under the Documents are hereinafter referred
to as the "Obligations."
C. In order to induce Lender to enter into the Loan Agreement and to make
the Loan, Subordinator has offered to execute and deliver this Agreement.
Subordinator's principal place of business is at 0000 Xxxxxxx Xxxxxx Xxxxx, Xxxx
Xxxxx Xxxxx, Xxxxxxx 00000. Subordinator is an affiliate of Borrower; and
Lender has agreed to acquire, renew, amend and make the Loan only if this
Agreement is executed by Subordinator and delivered to Lender.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Subordinator hereby
unconditionally covenants and agrees as follows:
ARTICLE 1
SUBORDINATION
-------------
1.1 Subordinator subordinates to the Obligations (a) all present and
future indebtedness, excluding any indebtedness not expressly required to be
subordinated to the Obligations pursuant to paragraph 6.12 of the Loan
Agreement, of Borrower to Subordinator (including, without limitation, any
indebtedness arising from any right of subrogation, indemnification,
reimbursement or contribution) ("Subordinated Indebtedness") and (b) all liens,
security interests, claims and right of any kind that Subordinator may now have
or hereafter acquire against Borrower and/or the property of Borrower
("Borrower's Property") which secure, result from or otherwise pertain to
the Subordinated Indebtedness. Subordinator agrees that all liens, security
interests, claims and rights of any kind that Subordinator may now have or
hereafter acquire against Borrower and Borrower's Property which secure, result
from or otherwise pertain to the Subordinated Indebtedness shall be subordinate,
inferior and subject to the liens, security interests, claims and rights of
Lender against Borrower and/or Borrower's Property under the terms of any of the
Documents or at law, whether direct or contingent or whether now or hereafter
created, including but not limited to, any renewals, extensions or modifications
thereof. Subordinator agrees that it may accept payments on the Subordinated
Indebtedness, if and only if, at the time of making such payment and immediately
-- -------
upon giving effect thereto, neither an Event of Default nor an Incipient Default
(as defined in the Documents) exists, and the payments are expressly permitted
to be made under the terms of the Documents. Subordinator will not demand or
accept any payment(s) on the Subordinated Indebtedness from Borrower when there
exists an Event of Default or an Incipient Default, even if no written notice of
such an event has been provided, or under any other circumstances in which such
payments are expressly prohibited under the terms of the Loan Agreement. Any
payment received by Subordinator under such circumstances shall be deemed
received in trust for Lender and shall be immediately remitted to Lender.
1.2 Subordinator will not take any action which will either (a) force the
sale of Borrower's Property in order to satisfy the Subordinated Indebtedness or
(b) affect in any manner any or all of Lender's liens, security interests,
claims or rights of any kind that Lender may now have or hereafter acquire
against Borrower and/or Borrower's Property. Subordinator will refrain from
taking any action which is in any way inconsistent with or in derogation of this
subordination or of the rights of Lender hereunder and covenants to perform such
further acts as necessary or appropriate to giving effect to this subordination.
Without limiting the generality of the foregoing, Subordinator will not assign
any portion of the Subordinated Indebtedness, except expressly subject to the
terms of this Agreement; and Subordinator shall cause all evidence of the
Subordinated Indebtedness to set forth the provisions hereof and shall cause any
instrument representing the Subordinated Indebtedness to be endorsed with the
following legend: "The indebtedness evidenced by this instrument is
subordinated, pursuant to a Subordination ("Agreement") dated as of
________________, ____, by Vistana, Inc. in favor of FINOVA Capital Corporation,
to the prior payment in full of the Obligations (as defined in the Agreement)."
ARTICLE 2
GENERAL COVENANTS AND WAIVERS OF
--------------------------------
SUBORDINATOR; REMEDIES AND RIGHTS OF LENDER
-------------------------------------------
2.1 Neither failure to give, nor defect in, any notice to Borrower or
Subordinator and/or any other surety of the Obligations (any surety, including
Subordinator, of the Obligations being hereinafter referred to as an "Obligor")
concerning a default in the performance of the Obligations, an Event of Default
or any event which might mature into an Event of Default shall extinguish or in
any way affect the obligations of Subordinator hereunder. Neither demand on,
nor the pursuit of any remedies against, Borrower or any other Obligor shall be
required as a condition precedent to, and neither the pendency nor the prior
termination of any action, suit or
-2-
proceeding against Borrower or any other Obligor (whether for the same or a
different remedy) shall bear on or prejudice the making of a demand on
Subordinator by Lender and commencement against Subordinator after such demand,
of any action, suit or proceeding, at law or in equity, for the specific
performance of any covenant or agreement contained herein or for the enforcement
of any other appropriate legal or equitable remedy.
2.2 Neither (a) the exercise or the failure to exercise by Lender of any
rights or remedies conferred on it under the Documents, hereunder or existing at
law or otherwise, or against any security for performance of the Obligations,
(b) the commencement of an action at law or the recovery of a judgment at law
against Borrower or any other Obligor and the enforcement thereof through levy
or execution or otherwise, (c) the taking or institution of any other action or
proceeding against Borrower or any other Obligor nor (d) any delay in taking,
pursuing or exercising any of the foregoing actions, rights, powers or remedies
(even though requested by Subordinator) by Lender or anyone acting for Lender,
shall extinguish or affect the obligations of Subordinator hereunder.
2.3 Subordinator hereby expressly waives: (a) notice of acceptance by
Lender of this Agreement; (b) notice of the existence, creation or non-payment
of all or any of the Obligations except as otherwise provided herein; (c)
presentment, protest, demand, dishonor, notice of dishonor, protest and all
notices whatsoever except as otherwise expressly provided herein; (d) all
diligence in collection or protection of or realization on the Obligations or
any part thereof, any obligation hereunder, or any security for or guarantee of
any of the foregoing; (e) any defense based upon an election of remedies by
Lender or marshaling of assets; (f) any defense arising because of Lender's
election under Section 1111(b)(2) of the United States Bankruptcy Code
("Bankruptcy Code") in any proceeding instituted under the Bankruptcy Code; (g)
any defense based on post-petition borrowing or the grant of a security interest
by Borrower under Section 364 of the Bankruptcy Code; (h) any duty on the part
of Lender to disclose to Subordinator any facts Lender may now or hereafter know
about Borrower, regardless of whether Lender has reason to believe that any such
facts materially increase the risk beyond that which Subordinator intends to
assume or has reason to believe that such facts are known to Subordinator or has
a reasonable opportunity to communicate such facts to Subordinator, because
Subordinator represents and warrants that it is fully responsible for being and
keeping informed of the financial condition of Borrower and of all circumstances
bearing on the risk of non-payment of any Obligation; (i) any and all suretyship
defenses and defenses in the nature thereof under Arizona and/or any other
applicable law, including, without limitation, the benefits of the provisions of
ARS Sections 12-1641 through 12-1646, A.R.C.P. Sections 17 and 21, and all other
laws of similar import; and (j) all rights and defenses arising out of an
election of remedies by Lender, even though that election of remedies, such as a
nonjudicial foreclosure with respect to security for an Obligation, has
destroyed Subordinator's rights of subrogation and reimbursement against the
principal. Without limiting the generality of the foregoing, Subordinator waives
all right and defenses that Subordinator may have because Borrower's debt is at
any time secured by real property. This means, among other things: (a) Lender
may enforce it rights against Subordinator without first foreclosing on any real
or personal property collateral pledged by Borrower; and (b) if Lender
forecloses on any real property collateral pledged by Borrower, Lender may
collect from Subordinator even if Lender, by foreclosing on the real property
collateral, has destroyed any right
-3-
Subordinator may have to collect from Borrower. This is an unconditional and
irrevocable waiver of any rights and defenses Subordinator may have because
Borrower's debt is secured by real property.
2.4 Without limiting the generality of the foregoing, Subordinator will
not assert against Lender any defense of waiver, release, discharge in
bankruptcy, statute of limitations, res judicata, statute of frauds, anti-
deficiency statute, fraud, usury, illegality or unenforceability which may be
available to Borrower with respect to the Obligations, or any set off available
to Borrower against Lender, whether or not on account of a related transaction.
2.5 The benefits, remedies and rights provided or intended to be provided
hereby for Lender are in addition to and without prejudice to any rights,
benefits, remedies or security to which Lender might otherwise be entitled.
2.6 Anything else contained herein to the contrary notwithstanding,
Lender, from time to time, without notice to Subordinator, may take all or any
of the following actions without in any manner affecting or impairing the
obligations of Subordinator hereunder: (a) obtain a lien on or a security
interest in any property to secure any of the Obligations; (b) retain or obtain
the primary or secondary liability of any party or parties with respect to any
of the Obligations; (c) renew, extend or otherwise change the time for payment
or performance of any of the Obligations for any period; (d) release or
compromise any liability of Subordinator hereunder or any liability of any
nature of any other party or parties with respect to the Obligations; (e)
exchange, enforce, waive, release and apply any security for the performance of
the Obligations and direct the order or manner of sale thereof as Lender may
determine; (f) enforce the obligations hereunder of Subordinator, whether or not
Lender shall proceed against any other party primarily or secondarily liable on
any of the Obligations; (g) agree to any amendment (including, without
limitation, any amendment which changes the amount of interest to be paid under
the Documents or extends the period of time during which Borrower may borrow
under the Documents), any alteration of the Documents or any waiver of any
provisions of the Documents and/or exercise Lender's rights to consent to any
action or non-action of Lender which may violate the covenants and agreements
contained in the Documents with or without consideration, on such terms and
conditions as may be acceptable to Lender in Lender's discretion; or (h)
exercise any of Lender's rights conferred by the Documents or by law.
2.7 No delay on the part of Lender in the exercise of any right or remedy
under this Agreement shall operate as a waiver thereof, and no single or partial
exercise by Lender of any right or remedy shall preclude other or further
exercise thereof or the exercise of any other right or remedy. No action of
Lender permitted hereunder shall in any way affect or impair the rights of
Lender or the obligations of Subordinator under this Agreement.
2.8 If at any time all or any part of any payment theretofore applied by
Lender to any of the Obligations is or must be rescinded or returned by Lender
for any reason whatsoever (including, without limitation, the insolvency,
bankruptcy or reorganization of Borrower), such Obligation(s), for purposes of
this Agreement, to the extent that such payment is or must be rescinded or
returned, shall be deemed to have never been performed; and this Agreement shall
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continue to be effective or be reinstated, as the case may be, as to such
Obligations, all as though such application by Lender had not been made.
2.9 To the extent not prohibited by law, until the Obligations have been
paid and performed in full and Lender has no further obligation to extend credit
to Borrower under the Documents, Subordinator shall have no right of subrogation
with respect to the Obligations or any right of indemnification, reimbursement
or contribution from Borrower or from any other Obligor with respect to the
Obligations regardless of any payment made by Subordinator or received by Lender
pursuant to the provisions of this Agreement or any payment of the Subordinated
Indebtedness received by Lender in respect of this Agreement; and Subordinator
hereby unconditionally waives any such right of subrogation, indemnification,
reimbursement or contribution for such period. To the extent any such right
cannot be waived, such right is subordinated to the Obligations and to the
obligations of other Obligors to Lender in accordance with the provisions of
Article 1; and in the case of Obligors other than Borrower, references to
Borrower and to Borrower's Property shall be deemed to be references to the
other Obligor and its property.
2.10 It is not necessary for Lender to inquire into the powers of Borrower
or Borrower's officers, directors, partners or agents purporting to act on its
behalf and the Obligations are hereby guaranteed, and the Subordinated
Indebtedness is hereby subordinated, notwithstanding the lack of power or
authority on the part of Borrower or anyone acting on the Borrower's behalf to
incur the Obligations.
2.11 If Subordinator shall fail to pay any amount or perform any
obligations due Lender hereunder, Lender may institute and pursue any action or
proceeding to judgment or final decree and may enforce any such judgment or
final decree against Subordinator and collect in the manner provided by law out
of its property, wherever situated, the monies adjudged or decreed to be
payable.
ARTICLE 3
SUBORDINATOR'S WARRANTIES
-------------------------
3.1 Subordinator represents, warrants and covenants to Lender that:
(a) Subordinator is an affiliate of Borrower and will benefit from the
Loan and the execution and delivery of the Documents;
(b) Subordinator is a corporation duly organized and now existing in
good standing under the laws of the State of Florida and is duly qualified
and in good standing and authorized to do business in all jurisdictions
wherein the location and nature of the properties used or its business, as
the same is presently or proposed to be conducted, makes such qualification
necessary; and will maintain its corporate existence and right to carry on
operations and acquire, maintain and
-5-
renew all rights, contracts, powers, privileges, leases, lands, sanctions
and franchises necessary or useful in the conduct of Subordinator's
business operations;
(c) Subordinator has the requisite power and authority to carry on its
business as presently conducted; and the execution, delivery and
performance by Subordinator of this Agreement has been duly authorized by
all necessary corporate action and do not and will not conflict with or
contravene any law, rule, regulation, judgment, order or decree of any
government, governmental instrumentality or court having jurisdiction over
Subordinator or its activities, or conflict with or result in any default
under the governance documents of Subordinator, or any agreement or
instrument of any kind unto which Subordinator is a party or by which
Subordinator or its properties may be bound or affected, except for those
as to which consents have been obtained by Subordinator and delivered to
Lender and are in full force and effect;
(d) neither the execution and delivery by Subordinator of this
Agreement nor the performance by Subordinator hereunder requires the
consent, approval, order or authorization of, or registration with, or the
giving of notice to any governmental authority, domestic or foreign, or any
other person or entity, except such consents as have been obtained by
Subordinator and delivered to Lender and are in full force and effect;
(e) this Agreement has been duly executed and delivered by
Subordinator and constitutes a legal, valid and binding obligation of
Subordinator enforceable against Subordinator in accordance with its terms;
(f) there is no action, litigation or other proceeding pending or
threatened against Subordinator before any court, arbitrator or
administrative agency which in Subordinator's reasonable opinion will have
a materially adverse effect on its assets, business or financial condition
or which would prevent, hinder or jeopardize its performance under this
Agreement;
(g) Subordinator is fully familiar with all of the covenants, terms
and conditions of the Documents;
(h) except for the agreement(s) disclosed on financial statements
previously submitted to Lender, Subordinator is not a party to any
contract, agreement, indenture or instrument or subject to any restriction
which individually or in the aggregate might have a material adverse effect
on its financial condition or businesses or which would in any way
jeopardize the ability of Subordinator to perform hereunder;
(i) all financial information delivered to Lender with respect to
Subordinator fairly and accurately represents the financial condition of
Subordinator;
-6-
(j) the execution and delivery of this Agreement will not (based on
the reasonable likelihood any contingent obligations shall become actual
obligations) (i) render Subordinator insolvent under generally accepted
accounting principles, (ii) leave Subordinator with remaining assets which
constitute unreasonably small capital given the nature of its business, or
(iii) result in the incurrence of debts (whether matured or unmatured,
liquidated or unliquidated, absolute, fixed or contingent) beyond
Subordinator's ability to pay them when and as they become due; and as used
in this subparagraph, "insolvent" means the present fair saleable value of
assets is less than the probable amount required to be paid on existing
debts when and as they mature; and
(k) there are no oral or written conditions precedent to the
effectiveness of this Agreement.
ARTICLE 4
MISCELLANEOUS PROVISIONS
------------------------
4.1 All the covenants, stipulations, promises and agreements contained in
this Agreement by or on behalf of Subordinator are for the benefit of Lender,
its successors or assigns and shall bind Subordinator, and Subordinator's heirs,
executors, personal representatives, successors and assigns. Lender, without
notice of any kind, may sell, assign or transfer the Documents, and in such
event each and every immediate and successive assignee or transferee thereof may
be given the right by Lender to enforce this Agreement in full, by suit or
otherwise, for Lender's own benefit. Subordinator agrees for the benefit of any
such assignee or transferee that Subordinator's obligations hereunder shall not
be subject to any reduction, abatement, defense, set off, counterclaim or
recoupment for any reason whatsoever.
4.2 All notices, requests or demands required or permitted to be given
hereunder shall be in writing, and shall be deemed effective (a) upon hand
delivery, if hand delivered; (b) one (1) Business Day after such are deposited
for delivery via Federal Express or other nationally recognized overnight
courier service; or (c) three (3) Business Days after such are deposited in the
United States mails, certified or registered mail, all with delivery charges
and/or postage prepaid, and addressed as shown below, or to such other address
as the person being notified may have designated in a notice given to the person
sought to be charged with the effect thereof. Written notice may be given by
telecopy to the telecopier number shown below or to such other telecopier number
as the person being notified may have designated in a notice given to the person
sought to be charged with the effect thereof, which notice shall be effective on
the day of receipt if received during the recipient's normal business hours on
the day of receipt or otherwise on the next Business Day; provided that such
notice shall not be deemed effective unless not later than the next Business
Day, a copy of such notice is hand-delivered or deposited for delivery via
courier or in the United States mails in accordance with the requirements set
forth above. As used herein the term "Business Day" means a day other than a
Saturday, a Sunday, a national holiday, or a day on which banks in Phoenix,
Arizona, are required to be closed. The notice addresses and telecopy numbers
for Subordinator and Lender are:
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If to Lender: FINOVA Capital Corporation
0000 Xxxx Xxxxxx Xxxxxx Xxxx, Xxxxx 000
Xxxxxxxxxx, Xxxxxxx 00000
Attn: Vice President - Resort Finance
Telecopy No.: (000) 000-0000
with a copy to: FINOVA Capital Corporation
0000 Xxxx Xxxxxx Xxxxxx Xxxx, Xxxxx 000
Xxxxxxxxxx, Xxxxxxx 00000
Attn: Vice President - Associate General Counsel
Telecopy No.: (000) 000-0000
If to Subordinator: Vistana, Inc.
0000 Xxxxxxx Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxx 00000
Attn: Chief Financial Officer
Telecopy: (000) 000-0000
with a copy to: Xxxxx Xxxxx, Esq.
Vistana, Inc.
000 Xxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxx, Xxxxxxx 00000
Telecopy No.: (000) 000-0000
4.3 Terms used and not otherwise defined herein shall have the same
meanings given thereto in the Documents. The recitals set forth above are
incorporated herein by this reference.
4.4 CHOICE OF LAW; JURISDICTION; VENUE; AND WAIVER OF JURY TRIAL.
------------------------------------------------------------
(A) THIS AGREEMENT HAS BEEN DELIVERED IN THE STATE OF ARIZONA. THIS
AGREEMENT AND THE RIGHTS, DUTIES AND OBLIGATIONS OF SUBORDINATOR AND LENDER
SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE
STATE OF ARIZONA (WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS) AND TO THE
EXTENT THEY PREEMPT THE LAWS OF SUCH STATE, THE LAWS OF THE UNITED STATES.
(B) EACH OF SUBORDINATOR AND (BY ITS ACCEPTANCE HEREOF) LENDER: (A)
HEREBY IRREVOCABLY SUBMITS ITSELF TO THE PROCESS, JURISDICTION AND VENUE OF THE
COURTS OF THE STATE OF ARIZONA, MARICOPA COUNTY, AND TO THE PROCESS,
JURISDICTION, AND VENUE OF THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF
ARIZONA, FOR THE PURPOSES OF SUIT, ACTION OR OTHER PROCEEDINGS ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR THE SUBJECT MATTER HEREOF, OR, IF
-8-
LENDER INITIATES SUCH ACTION, ANY COURT IN WHICH LENDER SHALL INITIATE SUCH
ACTION AND THE CHOICE OF SUCH VENUE SHALL IN ALL IN STANCES BE AT LENDER'S
ELECTION; AND (B) WITHOUT LIMITING THE GENER ALITY OF THE FOREGOING, HEREBY
WAIVES AND AGREES NOT TO ASSERT BY WAY OF MOTION, DEFENSE OR OTHERWISE IN ANY
SUCH SUIT, ACTION OR PROCEEDING ANY CLAIM THAT SUCH PERSON IS NOT PERSONALLY
SUBJECT TO THE JURISDICTION OF THE ABOVE-NAMED COURTS, THAT SUCH SUIT, ACTION OR
PROCEEDING IS BROUGHT IN AN INCONVENIENT FORUM OR THAT THE VENUE OF SUCH SUIT,
ACTION OR PROCEEDING IS IMPROPER. EACH OF SUBORDINATOR AND (BY ITS ACCEPTANCE
HEREOF) LENDER HEREBY WAIVES THE RIGHT TO COLLATERALLY ATTACK ANY JUDGMENT OR
ACTION IN ANY OTHER FORUM.
(C) SUBORDINATOR AND (BY ITS ACCEPTANCE HEREOF) LENDER ACKNOWLEDGE AND
AGREE THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT WOULD BE BASED
UPON DIFFICULT AND COMPLEX ISSUES; AND THEREFORE, THEY AGREE THAT ANY LAWSUIT
ARISING OUT OF ANY SUCH CONTROVERSY SHALL BE TRIED BY A JUDGE SITTING WITHOUT A
JURY AND KNOWINGLY AND VOLUNTARILY WAIVE TRIAL BY JURY IN ANY SUCH PROCEEDING.
(D) ALL OF THE PROVISIONS SET FORTH IN THIS PARAGRAPH ARE MATERIAL
INDUCEMENTS FOR LENDER'S ACQUIRING, RENEWING, AMENDING AND MAKING THE LOAN.
(SUBORDINATOR'S INITIALS ______)
4.5 If any provision of this Agreement is held to be illegal, invalid,
unenforceable under present or future laws (all of which invalidating laws are
waived to the fullest extent possible), the legality, validity and
enforceability of the remaining provisions of this Agreement shall not be
affected thereby. In lieu of each such illegal, invalid or unenforceable
provision, there shall be added to this Agreement a provision that is legal,
valid and enforceable and as similar in terms to such illegal, invalid and
unenforceable provision as may be possible.
4.6 Time is of the essence in the performance of this Agreement.
4.7 Subordinator, at its sole cost and expense, agrees to deliver and
supply Lender with a favorable opinion of its independent legal counsel, which
counsel must be acceptable to Lender, with respect to such matters as may be
required pursuant to the Loan Agreement.
4.8 If Lender undertakes to enforce this Agreement, Subordinator will pay
to Lender in addition to any other amounts due hereunder, all costs and expenses
of collection, including, without limitation, attorneys' fees and legal
expenses, together with interest thereon at the Default Rate, whether or not
legal proceedings shall be instituted. If legal proceedings are instituted by
either party to enforce or interpret this Agreement, to recover damages for
breach of this
-9-
Agreement, to obtain declaratory relief in connection with this Agreement, or
otherwise to obtain judicial relief in connection herewith, the prevailing party
shall be entitled to recover attorneys' fees as awarded by the court (and not by
a jury) and all of the costs and expenses of that litigation or proceeding, and
any and all appeals therefrom, including, but not limited to, taxable and
nontaxable costs and expert witness fees, together with interest on those
attorneys' fees, costs and expenses at the Default Rate. Without limiting the
generality of the foregoing, in the event of the commencement of a bankruptcy
proceeding by or against Subordinator or otherwise involving any collateral for
the Obligations, Lender shall, to the extent not already provided for herein, be
entitled to recover, and Subordinator shall be obligated to pay, Lender's
attorneys' fees and costs incurred in connection with: (i) any determination of
the applicability of the Bankruptcy Code to the terms of this Agreement or
Lender's rights hereunder; (ii) any attempt by Lender to enforce or preserve its
rights under the Bankruptcy Code, or to prevent Subordinator from seeking to
deny Lender its rights thereunder; (iii) any effort by Lender to protect,
preserve or enforce its rights against any collateral for the Obligations, or
seeking authority to modify the automatic stay of Section 362 of the Bankruptcy
Code or otherwise seeking to engage in such protection, preservation or
enforcement; or (iv) any proceeding(s) arising under the Bankruptcy Code, or
arising in or related to a case under the Bankruptcy Code.
4.9 This Agreement may be executed in counterparts, and any number of such
counterparts which have been executed by Subordinator and Lender shall
constitute one original.
4.10 This Agreement exclusively and completely states the rights and
obligations of Lender and Subordinator with respect to Subordinator's
subordination relative to the Obligations. No modification, variation,
termination, discharge, abandonment, or waiver of any of the provisions or
conditions of this Agreement shall be valid unless in writing and signed by duly
authorized representatives of the party sought to be bound by such action. This
Agreement supersedes any and all prior representations, warranties and/or
inducements, written or oral, heretofore made by Lender concerning
Subordinator's guaranty and subordination.
IN WITNESS WHEREOF, this Agreement is executed to be effective as of that
date first appearing above.
[SEE SEPARATE SIGNATURE PAGE ATTACHED]
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SUBORDINATOR:
VISTANA, INC., a Florida corporation
Witness as to Subordinator:
_______________________________ By:______________________________________
Type/Print Name:_______________ Type/Print Name:_________________________
Title:___________________________________
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STATE OF______________ )
) ss.
County of_____________ )
The foregoing instrument was acknowledged before me this _____ day of
_____________________, ____, by __________________________________________, the
_________________ of VISTANA, INC., a Florida corporation, on behalf of that
corporation.
GIVEN UNDER MY HAND AND SEAL OF OFFICE, this the _____ day of ______,
_____.
______________________________________
Notary Public in and for the State and County
aforesaid
My commission expires:
______________________
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Lender hereby accepts this Agreement of VISTANA, INC.
LENDER: FINOVA CAPITAL CORPORATION, a Delaware
corporation
By____________________________________
Its______________________________
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EXHIBIT 6
FORM OF GUARANTY
-6-
GUARANTY AND SUBORDINATION
This GUARANTY AND SUBORDINATION ("Guaranty") is made as of ____________,
_____, by VISTANA, INC., a Florida corporation ("Guarantor"), in favor of FINOVA
CAPITAL CORPORATION, a Delaware corporation ("Lender").
R E C I T A L S:
---------------
A. Lender desires to make to ______________________________________, a(n)
______________________________ ("Borrower"), pursuant to a Loan Agreement dated
as of _________, ____, between Lender and Borrower (as from time to time
renewed, amended, restated or replaced, the "Loan Agreement") a loan in an
aggregate principal amount not to exceed ____________________________________
Dollars ($_________) ("Loan"). The Loan will be evidenced by a promissory note
in the original face amount of ____________________________________ Dollars
($_________) (as from time to time renewed, amended, restated or replaced,
"Note").
B. The Loan Agreement, the Note and all other documents executed in
connection with the Loan are hereinafter referred to as the "Documents." The
obligations, covenants, agreements and conditions to be performed, paid,
observed and fulfilled by Borrower under the Documents are hereinafter referred
to as the "Obligations."
C. In order to induce Lender to enter into the Loan Agreement and to make
the Loan, Guarantor has offered to execute and deliver this Guaranty.
Guarantor's principal place of business is at 0000 Xxxxxxx Xxxxxx Xxxxx,
Xxxxxxx, Xxxxxxx 00000. Guarantor is an affiliate of Borrower; and Lender has
agreed to acquire, renew, amend and make the Loan only if this Guaranty is
executed by Guarantor and delivered to Lender.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Guarantor hereby unconditionally
covenants and agrees as follows:
ARTICLE 1
GUARANTY
--------
1.1 Guarantor absolutely, unconditionally, irrevocably, and jointly and
severally guarantees the full, prompt, complete and faithful performance,
payment, observance and fulfillment by Borrower of all Obligations, including,
without limitation, repayment of the Loan in accordance with the terms of the
Note.
1.2 Guarantor hereby covenants and agrees unconditionally that within (a)
five (5) days of the receipt of written notice from or on behalf of Lender to
the effect that there exists a breach
or default of the Obligations which Borrower has failed to pay or perform or (b)
such unexpired grace period, if any, as Borrower may then have under the
Documents to cure the breach or default before it becomes an Event of Default
(as defined in the Documents), whichever period is longer, subject to paragraph
1.3, Guarantor (x) will pay the entire unpaid amount thereof to Lender at its
offices at 0000 Xxxx Xxxxxx Xxxxxx Xxxx, Xxxxx 000, Xxxxxxxxxx, Xxxxxxx 00000 or
such other address as Lender may by notice direct or (y) will provide Lender
with evidence of the performance of the Obligations which Borrower has failed to
perform. If Guarantor fails to pay any sums properly due Lender hereunder within
the period applicable pursuant to terms of the preceding sentence, then, as to
Guarantor, such sums shall bear interest at the Default Rate (as defined in the
Loan Agreement) until paid.
[1.3 IF BORROWER (A) (I) COMMENCES VERTICAL CONSTRUCTION OR SUBSTANTIAL
REMODELING IN A WORK PHASE (AS DEFINED IN THE LOAN AGREEMENT) OR SELLS OR
CONTRACTS TO SELL TIME-SHARE INTERESTS (AS DEFINED IN THE LOAN AGREEMENT) TO BE
CREATED FROM IMPROVEMENTS BEING CONSTRUCTED OR RENOVATED IN A WORK PHASE AND
(II) THEREAFTER FOR ANY REASON FAILS TO PROSECUTE WITH DILIGENCE THE
CONSTRUCTION AND COMPLETION OF THE WORK PHASE (AS DEFINED IN THE LOAN AGREEMENT,
AND HEREINAFTER REFERRED TO AS "COMPLETION OF THE WORK") IN ACCORDANCE WITH THE
LOAN AGREEMENT, OR (B) COMMITS OR PERMITS TO EXIST AN EVENT OF DEFAULT (AS
DEFINED IN THE LOAN AGREEMENT), THEN LENDER, IN ADDITION TO LENDER'S OTHER
RIGHTS, REMEDIES AND RECOURSES, MAY PROCEED UNDER THIS PARAGRAPH 1.3. IN SUCH
EVENT, GUARANTOR WILL, UPON DEMAND BY LENDER, AT GUARANTOR'S SOLE COST AND
EXPENSE, DILIGENTLY PURSUE FINISHING THE WORK PHASE IN ORDER TO CAUSE COMPLETION
OF THE WORK TO OCCUR WITHIN THE TIME AND IN THE MANNER SPECIFIED IN THE LOAN
AGREEMENT. IF FOR ANY REASON BORROWER FAILS OR NEGLECTS TO CAUSE COMPLETION OF
THE WORK WITHIN THE TIME AND IN THE MANNER SPECIFIED IN THE LOAN AGREEMENT, THEN
GUARANTORS WILL, UPON DEMAND BY LENDER, AT GUARANTOR'S SOLE COST AND EXPENSE,
BEGIN TO PURSUE COMPLETION OF THE WORK WITHIN A REASONABLE TIME AFTER SUCH
DEMAND BY LENDER AND WILL THEREAFTER DILIGENTLY PURSUE COMPLETION OF THE WORK SO
THAT IT OCCURS WITHIN A REASONABLE PERIOD OF TIME. GUARANTOR WILL PAY ALL BILLS
IN CONNECTION WITH COMPLETION OF THE WORK AND SHALL INDEMNIFY AND HOLD LENDER
HARMLESS FROM ANY AND ALL LOSSES, COSTS, LIABILITY OR EXPENSES INCURRED IN
CONNECTION WITH COMPLETION OF THE WORK. ADDITIONALLY, LENDER, AT LENDER'S OPTION
SHALL HAVE THE RIGHT TO CAUSE COMPLETION OF THE WORK TO OCCUR IN THE MANNER
PERMITTED PURSUANT TO PARAGRAPH 7.2 OF THE LOAN AGREEMENT WITHOUT FIRST
DEMANDING THAT GUARANTOR DO SO OR RELEASING GUARANTOR FROM ITS OBLIGATIONS
HEREUNDER, AND GUARANTOR WILL IMMEDIATELY PAY TO LENDER, UPON DEMAND, THE AMOUNT
OF ANY AND ALL EXPENDITURES WHICH ARE MADE BY LENDER IN CONNECTION WITH
COMPLETION OF THE WORK, TOGETHER WITH INTEREST ON SUCH EXCESS AT THE DEFAULT
RATE ("LENDER'S DAMAGES"). THE OBLIGATION OF GUARANTOR UNDER THIS PARAGRAPH
SHALL BE JOINT AND SEVERAL WITH THE OBLIGATIONS OF BORROWER FOR COMPLETION OF
THE WORK AND OF ANY OTHER OBLIGOR (AS DEFINED IN PARAGRAPH 3.1). NOTWITHSTANDING
ANYTHING HEREIN TO THE CONTRARY, GUARANTOR SHALL HAVE NO OBLIGATION TO DO ANY
WORK ON A WORK PHASE IF BORROWER DID NOT PREVIOUSLY PERFORM ANY WORK ON SUCH
WORK PHASE INVOLVING VERTICAL CONSTRUCTION OR SUBSTANTIAL REMODELING.
1.4 LENDER NEED NOT COMMENCE CONSTRUCTION OR CAUSE COMPLETION OF THE WORK
BEFORE COMMENCING A LAWSUIT AGAINST GUARANTOR BASED UPON A DEFAULT UNDER
PARAGRAPH 1.3.
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LENDER SHALL HAVE NO OBLIGATION TO ACCEPT ANY OFFER MADE AT ANY TIME BY
GUARANTOR TO CAUSE COMPLETION OF THE WORK, AND NO SUCH OFFER SHALL CONSTITUTE A
DEFENSE TO LENDER'S CLAIMS FOR LENDER'S DAMAGES AGAINST GUARANTOR. GUARANTOR
EXPRESSLY ACKNOWLEDGES THAT IF LENDER PERFORMS ANY WORK, THE LENDER'S DAMAGES
SHALL NOT BE LIMITED TO THE VALUE OF SUCH WORK.
ARTICLE 2
SUBORDINATION
-------------
2.1 Guarantor subordinates to the Obligations (a) all present and future
indebtedness, excluding any indebtedness expressly not required to be
subordinated to the Obligations pursuant to paragraph 6.12 of the Loan
Agreement, of Borrower to Guarantor (including, without limitation, any
indebtedness arising from any right of subrogation, indemnification,
reimbursement or contribution) ("Subordinated Indebtedness") and (b) all liens,
security interests, claims and right of any kind that Guarantor may now have or
hereafter acquire against Borrower and/or the property of Borrower ("Borrower's
Property") which secure, result from or otherwise pertain to the Subordinated
Indebtedness. Guarantor agrees that all liens, security interests, claims and
rights of any kind that Guarantor may now have or hereafter acquire against
Borrower and Borrower's Property which secure, result from or otherwise pertain
to the Subordinated Indebtedness shall be subordinate, inferior and subject to
the liens, security interests, claims and rights of Lender against Borrower
and/or Borrower's Property under the terms of any of the Documents or at law,
whether direct or contingent or whether now or hereafter created, including but
not limited to, any renewals, extensions or modifications thereof. Guarantor
agrees that it may accept payments on the Subordinated Indebtedness, if and only
-- ----
if, at the time of making such payment and immediately upon giving effect
--
thereto, neither an Event of Default nor an Incipient Default (as defined in the
Documents) exists, and the payments are expressly permitted to be made under the
terms of the Documents. Guarantor will not demand or accept any payment(s) on
the Subordinated Indebtedness from Borrower when there exists an Event of
Default or an Incipient Default, even if no written notice of such an event has
been provided, or under any other circumstances in which such payments are
expressly prohibited under the terms of the Loan Agreement. Any payment
received by Guarantor under such circumstances shall be deemed received in trust
for Lender and shall be immediately remitted to Lender.
2.2 Guarantor will not take any action which will either (a) force the
sale of Borrower's Property in order to satisfy the Subordinated Indebtedness or
(b) affect in any manner any or all of Lender's liens, security interests,
claims or rights of any kind that Lender may now have or hereafter acquire
against Borrower and/or Borrower's Property. Guarantor will refrain from taking
any action which is in any way inconsistent with or in derogation of this
subordination or of the rights of Lender hereunder and covenants to perform such
further acts as necessary or appropriate to giving effect to this subordination.
Without limiting the generality of the foregoing, Guarantor will not assign any
portion of the Subordinated Indebtedness, except expressly subject to the terms
of this Guaranty; and Guarantor shall cause all evidence of the Subordinated
Indebtedness to set forth the provisions hereof and shall cause any instrument
representing the
-3-
Subordinated Indebtedness to be endorsed with the following legend: "The
indebtedness evidenced by this instrument is subordinated, pursuant to a
Guaranty and Subordination ("Guaranty") dated as of ________________, ____, by
Vistana, Inc. in favor of FINOVA Capital Corporation, to the prior payment in
full of the Obligations (as defined in the Guaranty)."
ARTICLE 3
GENERAL COVENANTS AND WAIVERS OF
--------------------------------
GUARANTOR; REMEDIES AND RIGHTS OF LENDER
----------------------------------------
3.1 Neither failure to give, nor defect in, any notice to Borrower or
Guarantor and/or any other guarantor or surety of the Obligations (any guarantor
or surety, including Guarantor, of the Obligations being hereinafter referred to
as an "Obligor") concerning a default in the performance of the Obligations, an
Event of Default or any event which might mature into an Event of Default shall
extinguish or in any way affect the obligations of Guarantor hereunder. Neither
demand on, nor the pursuit of any remedies against, Borrower or any other
Obligor shall be required as a condition precedent to, and neither the pendency
nor the prior termination of any action, suit or proceeding against Borrower or
any other Obligor (whether for the same or a different remedy) shall bear on or
prejudice the making of a demand on Guarantor by Lender and commencement against
Guarantor after such demand, of any action, suit or proceeding, at law or in
equity, for the specific performance of any covenant or agreement contained
herein or for the enforcement of any other appropriate legal or equitable
remedy.
3.2 Guarantor's liability hereunder is primary, direct, immediate, joint
and several with that of Borrower and each and every other Obligor. Neither (a)
the exercise or the failure to exercise by Lender of any rights or remedies
conferred on it under the Documents, hereunder or existing at law or otherwise,
or against any security for performance of the Obligations, (b) the commencement
of an action at law or the recovery of a judgment at law against Borrower or any
other Obligor and the enforcement thereof through levy or execution or
otherwise, (c) the taking or institution of any other action or proceeding
against Borrower or any other Obligor nor (d) any delay in taking, pursuing or
exercising any of the foregoing actions, rights, powers or remedies (even though
requested by Guarantor) by Lender or anyone acting for Lender, shall extinguish
or affect the obligations of Guarantor hereunder. Guarantor shall be and remain
liable for all the Obligations until fully paid and performed (and without
limiting Guarantor's obligations under paragraph 3.8), notwithstanding the
previous discharge (total or partial) from further liability of Borrower or any
other Obligor with respect thereto.
3.3 Guarantor hereby expressly waives: (a) notice of acceptance by Lender
of this Guaranty; (b) notice of the existence, creation or non-payment of all or
any of the Obligations except as otherwise provided herein; (c) presentment,
protest, demand, dishonor, notice of dishonor, protest and all notices
whatsoever except as otherwise expressly provided herein; (d) all diligence in
collection or protection of or realization on the Obligations or any part
thereof, any obligation hereunder, or any security for or guarantee of any of
the foregoing; (e) any defense based upon an election of remedies by Lender or
marshaling of assets; (f) any defense arising
-4-
because of Lender's election under Section 1111(b)(2) of the United States
Bankruptcy Code ("Bankruptcy Code") in any proceeding instituted under the
Bankruptcy Code; (g) any defense based on post-petition borrowing or the grant
of a security interest by Borrower under Section 364 of the Bankruptcy Code; (h)
any duty on the part of Lender to disclose to Guarantor any facts Lender may now
or hereafter know about Borrower, regardless of whether Lender has reason to
believe that any such facts materially increase the risk beyond that which
Guarantor intends to assume or has reason to believe that such facts are known
to Guarantor or has a reasonable opportunity to communicate such facts to
Guarantor, because Guarantor represents and warrants that it is fully
responsible for being and keeping informed of the financial condition of
Borrower and of all circumstances bearing on the risk of non-payment of any
Obligation; (i) any and all suretyship defenses and defenses in the nature
thereof under Arizona and/or any other applicable law, including, without
limitation, the benefits of the provisions of ARS Sections 12-1641 through 12-
1646, A.R.C.P. Sections 17 and 21, and all other laws of similar import; and (j)
all rights and defenses arising out of an election of remedies by Lender, even
though that election of remedies, such as a nonjudicial foreclosure with respect
to security for an Obligation, has destroyed Guarantor's rights of subrogation
and reimbursement against the principal. Without limiting the generality of the
foregoing, Guarantor waives all right and defenses that Guarantor may have
because Borrower's debt is at any time secured by real property. This means,
among other things: (a) Lender may collect from Guarantor without first
foreclosing on any real or personal property collateral pledged by Borrower; and
(b) if Lender forecloses on any real property collateral pledged by Borrower,
Lender may collect from Guarantor even if Lender, by foreclosing on the real
property collateral, has destroyed any right Guarantor may have to collect from
Borrower. This is an unconditional and irrevocable waiver of any rights and
defenses Guarantor may have because Borrower's debt is secured by real property.
3.4 Without limiting the generality of the foregoing, Guarantor will not
assert against Lender any defense of waiver, release, discharge in bankruptcy,
statute of limitations, res judicata, statute of frauds, anti-deficiency
statute, fraud, usury, illegality or unenforceability which may be available to
Borrower with respect to the Obligations, or any set off available to Borrower
against Lender, whether or not on account of a related transaction.
3.5 The benefits, remedies and rights provided or intended to be provided
hereby for Lender are in addition to and without prejudice to any rights,
benefits, remedies or security to which Lender might otherwise be entitled.
3.6 Anything else contained herein to the contrary notwithstanding,
Lender, from time to time, without notice to Guarantor, may take all or any of
the following actions without in any manner affecting or impairing the
obligations of Guarantor hereunder: (a) obtain a lien on or a security interest
in any property to secure any of the Obligations; (b) retain or obtain the
primary or secondary liability of any party or parties, in addition to
Guarantor, with respect to any of the Obligations; (c) renew, extend or
otherwise change the time for payment or performance of any of the Obligations
for any period; (d) release or compromise any liability of Guarantor hereunder
or any liability of any nature of any other party or parties with respect to the
Obligations; (e) exchange, enforce, waive, release and apply any security for
the performance of the Obligations
-5-
and direct the order or manner of sale thereof as Lender may determine; (f)
resort to Guarantor for payment of any the Obligations or otherwise enforce the
obligations hereunder of Guarantor, whether or not Lender shall proceed against
any other party primarily or secondarily liable on any of the Obligations; (g)
agree to any amendment (including, without limitation, any amendment which
changes the amount of interest to be paid under the Documents or extends the
period of time during which Borrower may borrow under the Documents), any
alteration of the Documents or any waiver of any provisions of the Documents
and/or exercise Lender's rights to consent to any action or non-action of Lender
which may violate the covenants and agreements contained in the Documents with
or without consideration, on such terms and conditions as may be acceptable to
Lender in Lender's discretion; or (h) exercise any of Lender's rights conferred
by the Documents or by law.
3.7 No delay on the part of Lender in the exercise of any right or remedy
under this Guaranty shall operate as a waiver thereof, and no single or partial
exercise by Lender of any right or remedy shall preclude other or further
exercise thereof or the exercise of any other right or remedy. No action of
Lender permitted hereunder shall in any way affect or impair the rights of
Lender or the obligations of Guarantor under this Guaranty.
3.8 If at any time all or any part of any payment theretofore applied by
Lender to any of the Obligations is or must be rescinded or returned by Lender
for any reason whatsoever (including, without limitation, the insolvency,
bankruptcy or reorganization of Borrower), such Obligation(s), for purposes of
this Guaranty, to the extent that such payment is or must be rescinded or
returned, shall be deemed to have never been performed; and this Guaranty shall
continue to be effective or be reinstated, as the case may be, as to such
Obligations, all as though such application by Lender had not been made.
3.9 To the extent not prohibited by law, until the Obligations have been
paid and performed in full and Lender has no further obligation to extend credit
to Borrower under the Documents, Guarantor shall have no right of subrogation
with respect to the Obligations or any right of indemnification, reimbursement
or contribution from Borrower or from any other Obligor with respect to the
Obligations regardless of any payment made by Guarantor or received by Lender
pursuant to the provisions of this Guaranty or any payment of the Subordinated
Indebtedness received by Lender in respect of this Guaranty; and Guarantor
hereby unconditionally waives any such right of subrogation, indemnification,
reimbursement or contribution for such period. To the extent any such right
cannot be waived, such right is subordinated to the Obligations and to the
obligations of other Obligors to Lender in accordance with the provisions of
Article 2; and in the case of Obligors other than Borrower, references to
Borrower and to Borrower's Property shall be deemed to be references to the
other Obligor and its property.
3.10 It is not necessary for Lender to inquire into the powers of Borrower
or Borrower's officers, directors, partners or agents purporting to act on its
behalf and the Obligations are hereby guaranteed, and the Subordinated
Indebtedness is hereby subordinated, notwithstanding the lack
-6-
of power or authority on the part of Borrower or anyone acting on the Borrower's
behalf to incur the Obligations.
3.11 If Guarantor shall (a) file or consent by answer or otherwise to the
filing against it of a petition for relief or reorganization, arrangement or any
other petition in bankruptcy or insolvency under the laws of any jurisdiction,
(b) make an assignment for the benefit of its creditors, (c) consent to the
appointment of a custodian, receiver, trustee or other officer with similar
powers for itself or any substantial part of its property, (d) be adjudicated
insolvent, or (e) dissolve or commence to wind-up its affairs, Guarantor will
pay to Lender forthwith the whole then unpaid amount of the Obligations ("Unpaid
Amount") as if such Unpaid Amount were then due and payable; and in any such
event Lender, irrespective of whether any demand shall have been made on
Guarantor, Borrower or any Obligor by intervention in or initiation of judicial
proceedings relative to Guarantor, its creditors or its property, may file and
prove a claim or claims for the whole or any portion of the Unpaid Amount or any
portion thereof and file such other papers or documents as may be necessary or
advisable in order to have such claim allowed in such judicial proceedings and
to collect and receive any monies or other property payable or deliverable on
any such claim, and to distribute the same; and any receiver, assignee or
trustee in bankruptcy or reorganization is hereby authorized to make such
payments to Lender.
3.12 If Guarantor shall fail to pay any amount or perform any obligations
due Lender hereunder, Lender may institute and pursue any action or proceeding
to judgment or final decree and may enforce any such judgment or final decree
against Guarantor and collect in the manner provided by law out of its property,
wherever situated, the monies adjudged or decreed to be payable.
ARTICLE 4
GUARANTOR'S WARRANTIES
----------------------
4.1 Guarantor represents, warrants and covenants to Lender that:
(a) Guarantor is an affiliate of Borrower and will benefit from the
Loan and the execution and delivery of the Documents;
(b) Guarantor is a corporation duly organized and now existing in
good standing under the laws of the State of Florida and is duly qualified
and in good standing and authorized to do business in all jurisdictions
wherein the location and nature of the properties used or its business, as
the same is presently or proposed to be conducted, makes such qualification
necessary; and will maintain its corporate existence and right to carry on
operations and acquire, maintain and renew all rights, contracts, powers,
privileges, leases, lands, sanctions and franchises necessary or useful in
the conduct of Guarantor's business operations;
-7-
(c) Guarantor has the requisite power and authority to carry on its
business as presently conducted; and the execution, delivery and
performance by Guarantor of this Guaranty has been duly authorized by all
necessary corporate action and does not and will not conflict with or
contravene any law, rule, regulation, judgment, order or decree of any
government, governmental instrumentality or court having jurisdiction over
Guarantor or its activities, or conflict with or result in any default
under the governance documents of Guarantor, or any agreement or instrument
of any kind unto which Guarantor is a party or by which Guarantor or its
properties may be bound or affected, except for those as to which consents
have been obtained by Guarantor and delivered to Lender and are in full
force and effect;
(d) neither the execution and delivery by Guarantor of this Guaranty
nor the performance by Guarantor hereunder requires the consent, approval,
order or authorization of, or registration with, or the giving of notice to
any governmental authority, domestic or foreign, or any other person or
entity, except such consents as have been obtained by Guarantor and
delivered to Lender and are in full force and effect;
(e) this Guaranty has been duly executed and delivered by Guarantor
and constitutes a legal, valid and binding obligation of Guarantor
enforceable against Guarantor in accordance with its terms;
(f) there is no action, litigation or other proceeding pending or
threatened against Guarantor before any court, arbitrator or administrative
agency which in Guarantor's reasonable opinion will have a materially
adverse affect on its assets, business or financial condition or which
would prevent, hinder or jeopardize its performance under this Guaranty;
(g) Guarantor is fully familiar with all of the covenants, terms and
conditions of the Documents;
(h) except for the agreement(s) disclosed on financial statements
previously submitted to Lender, Guarantor is not a party to any contract,
agreement, indenture or instrument or subject to any restriction which
individually or in the aggregate might have a material adverse effect on
its financial condition or businesses or which would in any way jeopardize
the ability of Guarantor to perform hereunder;
(i) all financial information delivered to Lender with respect to
Guarantor fairly and accurately represents the financial condition of
Guarantor;
(j) the execution and delivery of this Guaranty will not (based on
the reasonable likelihood any contingent obligations shall become actual
obligations)
-8-
(i) render Guarantor insolvent under generally accepted accounting
principles, (ii) leave Guarantor with remaining assets which constitute
unreasonably small capital given the nature of its business, or (iii)
result in the incurrence of debts (whether matured or unmatured, liquidated
or unliquidated, absolute, fixed or contingent) beyond Guarantor's ability
to pay them when and as they become due; and as used in this subparagraph,
"insolvent" means the present fair saleable value of assets is less than
the probable amount required to be paid on existing debts when and as they
mature; and
(k) there are no oral or written conditions precedent to the
effectiveness of this Guaranty.
ARTICLE 5
MISCELLANEOUS PROVISIONS
------------------------
5.1 All the covenants, stipulations, promises and agreements contained in
this Guaranty by or on behalf of Guarantor are for the benefit of Lender, its
successors or assigns and shall bind Guarantor, and Guarantor's heirs,
executors, personal representatives, successors and assigns. Lender, without
notice of any kind, may sell, assign or transfer the Documents, and in such
event each and every immediate and successive assignee or transferee thereof may
be given the right by Lender to enforce this Guaranty in full, by suit or
otherwise, for Lender's own benefit. Guarantor agrees for the benefit of any
such assignee or transferee that Guarantor's obligations hereunder shall not be
subject to any reduction, abatement, defense, set off, counterclaim or
recoupment for any reason whatsoever.
5.2 All notices, requests or demands required or permitted to be given
hereunder shall be in writing, and shall be deemed effective (a) upon hand
delivery, if hand delivered; (b) one (1) Business Day after such are deposited
for delivery via Federal Express or other nationally recognized overnight
courier service; or (c) three (3) Business Days after such are deposited in the
United States mails, certified or registered mail, all with delivery charges
and/or postage prepaid, and addressed as shown below, or to such other address
as the person being notified may have designated in a notice given to the person
sought to be charged with the effect thereof. Written notice may be given by
telecopy to the telecopier number shown below or to such other telecopier number
as the person being notified may have designated in a notice given to the person
sought to be charged with the effect thereof, which notice shall be effective on
the day of receipt if received during the recipient's normal business hours on
the day of receipt or otherwise on the next Business Day; provided that such
notice shall not be deemed effective unless not later than the next Business
Day, a copy of such notice is hand-delivered or deposited for delivery via
courier or in the United States mails in accordance with the requirements set
forth above. As used herein the term "Business Day" means a day other than a
Saturday, a Sunday, a national holiday, or a day on which banks in Phoenix,
Arizona, are required to be closed. The notice addresses and telecopy numbers
for Guarantor and Lender are:
-9-
If to Lender: FINOVA Capital Corporation
0000 Xxxx Xxxxxx Xxxxxx Xxxx, Xxxxx 000
Xxxxxxxxxx, Xxxxxxx 00000
Attn: Vice President - Resort Finance
Telecopy No.: (000) 000-0000
with a copy to: FINOVA Capital Corporation
0000 Xxxx Xxxxxx Xxxxxx Xxxx, Xxxxx 000
Xxxxxxxxxx, Xxxxxxx 00000
Attn: Vice President - Associate General Counsel
Telecopy No.: (000) 000-0000
If to Guarantor: Vistana, Inc.
0000 Xxxxxxx Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxx 00000
Attn: Chief Financial Officer
Telecopy: (000) 000-0000
with a copy to: Xxxxx Xxxxx, Esq.
Vistana, Inc.
000 Xxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxx, Xxxxxxx 00000
Telecopy No.: (000) 000-0000
5.3 Terms used and not otherwise defined herein shall have the same
meanings given thereto in the Documents. The recitals set forth above are
incorporated herein by this reference.
5.4 CHOICE OF LAW; JURISDICTION; VENUE; AND WAIVER OF JURY TRIAL.
------------------------------------------------------------
(A) THIS GUARANTY HAS BEEN DELIVERED IN THE STATE OF ARIZONA. THIS
GUARANTY AND THE RIGHTS, DUTIES AND OBLIGATIONS OF GUARANTOR AND LENDER SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF
ARIZONA (WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS) AND TO THE EXTENT
THEY PREEMPT THE LAWS OF SUCH STATE, THE LAWS OF THE UNITED STATES.
(B) EACH OF GUARANTOR AND (BY ITS ACCEPTANCE HEREOF) LENDER: (A)
HEREBY IRREVOCABLY SUBMITS ITSELF TO THE PROCESS, JURISDICTION AND VENUE OF THE
COURTS OF THE STATE OF ARIZONA, MARICOPA COUNTY, AND TO THE PROCESS,
JURISDICTION, AND VENUE OF THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF
ARIZONA, FOR THE PURPOSES OF SUIT, ACTION OR OTHER PROCEEDINGS ARISING OUT OF OR
-10-
RELATING TO THIS GUARANTY OR THE SUBJECT MATTER HEREOF, OR, IF LENDER INITIATES
SUCH ACTION, ANY COURT IN WHICH LENDER SHALL INITIATE SUCH ACTION AND THE CHOICE
OF SUCH VENUE SHALL IN ALL IN STANCES BE AT LENDER'S ELECTION; AND (B) WITHOUT
LIMITING THE GENERALITY OF THE FOREGOING, HEREBY WAIVES AND AGREES NOT TO
ASSERT BY WAY OF MOTION, DEFENSE OR OTHERWISE IN ANY SUCH SUIT, ACTION OR
PROCEEDING ANY CLAIM THAT SUCH PERSON IS NOT PERSONALLY SUBJECT TO THE
JURISDICTION OF THE ABOVE-NAMED COURTS, THAT SUCH SUIT, ACTION OR PROCEEDING IS
BROUGHT IN AN INCONVENIENT FORUM OR THAT THE VENUE OF SUCH SUIT, ACTION OR
PROCEEDING IS IMPROPER. EACH OF GUARANTOR AND (BY ITS ACCEPTANCE HEREOF) LENDER
HEREBY WAIVES THE RIGHT TO COLLATERALLY ATTACK ANY JUDGMENT OR ACTION IN ANY
OTHER FORUM.
(C) GUARANTOR AND (BY ITS ACCEPTANCE HEREOF) LENDER ACKNOWLEDGE AND
AGREE THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS GUARANTY WOULD BE BASED
UPON DIFFICULT AND COMPLEX ISSUES; AND THEREFORE, THEY AGREE THAT ANY LAWSUIT
ARISING OUT OF ANY SUCH CONTROVERSY SHALL BE TRIED BY A JUDGE SITTING WITHOUT A
JURY AND KNOWINGLY AND VOLUNTARILY WAIVE TRIAL BY JURY IN ANY SUCH PROCEEDING.
(D) ALL OF THE PROVISIONS SET FORTH IN THIS PARAGRAPH ARE MATERIAL
INDUCEMENTS FOR LENDER'S MAKING THE LOAN.
(GUARANTOR'S INITIALS ______)
5.5 If any provision of this Guaranty is held to be illegal, invalid,
unenforceable under present or future laws (all of which invalidating laws are
waived to the fullest extent possible), the legality, validity and
enforceability of the remaining provisions of this Guaranty shall not be
affected thereby. In lieu of each such illegal, invalid or unenforceable
provision, there shall be added to this Guaranty a provision that is legal,
valid and enforceable and as similar in terms to such illegal, invalid and
unenforceable provision as may be possible.
5.6 Time is of the essence in the performance of this Guaranty.
5.7 Guarantor, at its sole cost and expense, agrees to deliver and supply
Lender with a favorable opinion of its independent legal counsel, which counsel
must be acceptable to Lender, with respect to such matters as may be required
pursuant to the Loan Agreement.
5.8 If Lender undertakes to enforce this Guaranty, Guarantor will pay to
Lender in addition to any other amounts due hereunder, all costs and expenses of
collection, including, without limitation, attorneys' fees and legal expenses,
together with interest thereon at the Default
-11-
Rate, whether or not legal proceedings shall be instituted. If legal
proceedings are instituted by either party to enforce or interpret this
Guaranty, to recover damages for breach of this Guaranty, to obtain declaratory
relief in connection with this Guaranty, or otherwise to obtain judicial relief
in connection herewith, the prevailing party shall be entitled to recover
attorneys' fees as awarded by the court (and not by a jury) and all of the costs
and expenses of that litigation or proceeding, and any and all appeals
therefrom, including, but not limited to, taxable and nontaxable costs and
expert witness fees, together with interest on those attorneys' fees, costs and
expenses at the Default Rate. Without limiting the generality of the foregoing,
in the event of the commencement of a bankruptcy proceeding by or against
Guarantor or otherwise involving any collateral for the Obligations, Lender
shall, to the extent not already provided for herein, be entitled to recover,
and Guarantor shall be obligated to pay, Lender's attorneys' fees and costs
incurred in connection with: (i) any determination of the applicability of the
Bankruptcy Code to the terms of this Guaranty or Lender's rights hereunder; (ii)
any attempt by Lender to enforce or preserve its rights under the Bankruptcy
Code, or to prevent Guarantor from seeking to deny Lender its rights thereunder;
(iii) any effort by Lender to protect, preserve or enforce its rights against
any collateral for the Obligations, or seeking authority to modify the automatic
stay of Section 362 of the Bankruptcy Code or otherwise seeking to engage in
such protection, preservation or enforcement; or (iv) any proceeding(s) arising
under the Bankruptcy Code, or arising in or related to a case under the
Bankruptcy Code.
5.9 This Guaranty may be executed in counterparts, and any number of such
counterparts which have been executed by Guarantor and Lender shall constitute
one original.
5.10 This Guaranty exclusively and completely states the rights and
obligations of Lender and Guarantor with respect to Guarantor's guaranty and
subordination relative to the Obligations. No modification, variation,
termination, discharge, abandonment, or waiver of any of the provisions or
conditions of this Guaranty shall be valid unless in writing and signed by duly
authorized representatives of the party sought to be bound by such action. This
Guaranty supersedes any and all prior representations, warranties and/or
inducements, written or oral, heretofore made by Lender concerning Guarantor's
guaranty and subordination.
IN WITNESS WHEREOF, this Guaranty is executed to be effective as of that
date first appearing above.
[SEE SEPARATE SIGNATURE PAGE ATTACHED]
-12-
GUARANTOR:
VISTANA, INC., a Florida corporation
Witness as to Guarantor:
_____________________________ By:___________________________________
Type/Print Name:_____________ Type/Print Name:______________________
Title:________________________________
-13-
STATE OF ___________ )
) ss.
County of _____________ )
The foregoing instrument was acknowledged before me this _____ day of
_____________________, ____, by __________________________________________, the
_________________ of VISTANA, INC., a Florida corporation, on behalf of that
corporation.
GIVEN UNDER MY HAND AND SEAL OF OFFICE, this the _____ day of ______,
_____.
____________________________________
Notary Public in and for the State and County
aforesaid
My commission expires:
_______________________
-14-
Lender hereby accepts this Guaranty and Subordination of VISTANA, INC.
LENDER: FINOVA CAPITAL CORPORATION, a Delaware
corporation
By________________________________________
Its_________________________________
-15-
EXHIBIT 7
FORM OF ASSIGNMENT OF CONTRACTS, LICENSES, PERMITS AND OTHER INTANGIBLES
-7-
ASSIGNMENT OF CONTRACTS,
LICENSES, PERMITS, AND OTHER INTANGIBLES
THIS ASSIGNMENT OF CONTRACTS, LICENSES, PERMITS, AND OTHER INTANGIBLES
("Assignment") is entered into as of ____________, _______, by and between
______________, a(n)_______________ ("Assignor"), and FINOVA CAPITAL
CORPORATION, a Delaware corporation ("Assignee").
R E C I T A L S:
A. Assignor, as borrower, and Assignee, as lender, are parties to a Loan
Agreement dated as of even date herewith (as from time to time renewed, amended,
restated or replaced, "Loan Agreement"), pursuant to which Assignor has agreed
to make to Assignor a non-revolving loan in a principal amount not to exceed
_________________ Dollars ($_______________) ("Loan"). The Loan will be
evidenced by a Promissory Note made payable by Assignor to Assignee in the
original face amount of __________________________________________ DOLLARS
($_________________) and dated as of even date herewith (as from time to time
renewed, amended, restated or replaced, "Note").
B. The obligations of Assignor under the Loan Agreement and related
documents are secured, among other ways, by a [CONSTRUCTION] [MORTGAGE] [DEED OF
TRUST] and Financing Statement (With Security Agreement and Assignment of
Leases, Rents, Sales Documents, Sales Proceeds and Developer's Rights) (as from
time to time renewed, amended, restated or replaced, "Security Document") dated
as of even date herewith, and recorded or to be recorded in the real estate
records of ________ County, ________, and encumbering certain real property more
fully described in EXHIBIT A ("Real Property") and related personal property
(such property collectively, "Property"). All capitalized terms used but not
defined herein shall have the same meaning ascribed to such terms in the Loan
Agreement.
C. To facilitate payment and performance of Assignor's obligations under
the Loan Agreement, Assignor has agreed to assign to Assignee, inter alia, all
----- ----
of Assignor's right, title, and interest in and to the following property
(collectively, "Assigned Asset"): the contracts ("Contracts"), licenses
("Licenses"), permits ("Permits") and other intangibles ("Intangibles") now or
hereafter used in connection with the Property and/or the business of Assignor
conducted thereon or with respect thereto, including without limitation, the
Contracts, Licenses, Permits and other Intangibles if any, specifically
described in EXHIBIT B, and any benefits due and to become due thereunder, or
arising from the use or enjoyment of such items, and the proceeds thereof, but
specifically excluding any Leases, Rents, Sales Documents, Sales Proceeds and
Developer's Rights (as defined in the Security Document), any exchange
affiliation agreement and other property specifically excluded from the
definition of Personal Property (as defined in the Loan Agreement) and any
property expressly described in a release of any portion of the Real Property
from the Security Document as also being released from the Security Document or
this Assignment.
A G R E E M E N T:
NOW, THEREFORE, for and in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Assignor and Assignee agree as follows:
1. THE ASSIGNMENT. Assignor hereby absolutely, irrevocably and
--------------
unconditionally grants, assigns, and transfers to Assignee all of Assignor's
right, title, and interest in and to the Assigned Asset, including but not
limited to any and all benefits arising thereunder. The interest of the
Assignee by virtue of this Assignment is deemed to be vested as of the date
hereof, and shall extend to and cover any and all modifications of, and
substitutions for the Assigned Asset.
2. PURPOSE. This Assignment is made for the purpose of securing all
-------
obligations from Assignor to Assignee ("Obligations"), including, without
limitation, the following:
2.1 Payment of the Note, together with accrued interest, according to
the terms of the Note;
2.2 Payment, performance, observance and satisfaction of all
representations, warranties, covenants, and conditions contained in the
Loan Agreement, the Note, the Security Document and the other Documents (as
defined in the Loan Agreement), including, without limitation, this
Assignment;
2.3 The repayment of all monies expended by the Assignee pursuant to
the provisions of the Documents, together with interest thereon from the
date of expenditure at the Default Rate (as defined in the Loan Agreement);
and
2.4 Any and all other liabilities or obligations of Assignor to
Assignee, direct or indirect, absolute or contingent, due or to become due,
whether now existing or which may hereafter arise in any manner, to the
extent expressly so provided in any document evidencing or creating such
liabilities or obligations.
3. LICENSE. Subject to the terms and conditions of this Assignment,
-------
Assignee confers upon Assignor a license to utilize, collect and retain the
benefits of the Assigned Asset. Upon the occurrence of an Event of Default (as
defined in Paragraph 6.1), such license may be revoked by written notice of
revocation to Assignor and immediately upon such revocation, Assignee may
utilize, collect and retain the benefits of the Assigned Asset without further
notice.
4. PROTECTION OF SECURITY. Notwithstanding anything herein to the
----------------------
contrary, if an Event of Default exists or Assignee determines such action to be
necessary in order to prevent the termination of any Assigned Asset with regard
to which the action is taken, the loss of any material benefit to Assignor or
Assignee under any Assigned Asset with regard to which the action is taken, or
the incurrence of any material detriment to Assignor or Assignee under any
Assigned
-2-
Asset with regard to which the action is taken, or to be necessary in order to
protect and preserve the right, title and interest of Assignee hereunder in and
to any Assigned Asset with regard to which the action is taken, Assignee may,
but without obligation to do so:
4.1 EXECUTION OF DOCUMENTS. Execute, acknowledge, obtain and deliver
----------------------
all documents (including, without limitation, notices, requests and
instructions) or things necessary or required as a term, covenant or
condition of any Assigned Asset, or which may be necessary or proper under
any Assigned Asset;
4.2 PERFORMANCE OF ASSIGNOR'S OBLIGATIONS. Perform any obligation
-------------------------------------
which Assignor has failed to perform when due under any Assigned Asset or
satisfy any condition of any Assigned Asset;
4.3 ENFORCEMENT OF OTHER PARTY'S OBLIGATIONS. Demand and receive all
----------------------------------------
performances due under or with respect to any Assigned Asset, take all
lawful actions for the enforcement thereof (including, without limitation,
the filing of claims and the commencement of arbitration, litigation or
other lawful proceedings), compromise and settle any claim or cause of
action in favor of Assignor arising from any Assigned Asset and give
acquittances and other sufficient discharges relating thereto;
4.4 MAKE CONCESSIONS. Make concessions to other parties to any
----------------
Assigned Asset; and
4.5 EXERCISE ASSIGNOR'S RIGHTS UNDER CONTRACTS, ETC. Exercise any
------------------------------------------------
and all other rights and remedies to which Assignor may have under any
Assigned Asset and/or are otherwise available to Assignor at law, in equity
or by statute.
All sums expended by Assignee pursuant to this Paragraph 4 shall be payable by
Assignor to Assignee upon demand, together with interest thereon from the date
of expenditure until paid at the Default Rate, and shall constitute part of the
Obligations and be secured by this Assignment and all security for the
Obligations.
5. POWER OF ATTORNEY. Assignee is hereby appointed Assignor's true and
-----------------
lawful attorney-in-fact (coupled with an interest) for and on behalf of
Assignor, whether in the name of Assignor or Assignee or otherwise, to take any
of the actions permitted to it under Paragraph 4. The power of attorney given
herein is a power coupled with an interest and shall be irrevocable until all
the Obligations have been fully paid and performed. Assignee shall have the
option, but not any duty, to exercise any power given to it hereunder.
6. EVENT OF DEFAULT; REMEDIES; ASSIGNEE'S RIGHT TO PERFORM.
-------------------------------------------------------
6.1 EVENT OF DEFAULT. The occurrence of any of the following events
----------------
or conditions shall constitute an Event of Default:
-3-
6.1.1 A default under or violation of any of the provisions of
Paragraph 7.1 or 7.2;
6.1.2 A default or violation in the performance of Assignor's
Obligations under this Assignment (other than those referred to
elsewhere in this Paragraph 6.1) which continues unremedied (a) for a
period of five (5) Business Days (as defined in Paragraph 6.4) after
notice of such default or violation to Assignor in the case of any
default or violation which can be cured by the payment of money alone
or (b) for a period of thirty (30) days after notice to Assignor in
the case of any other default or violation, provided, an additional
--------
period for cure, not to exceed thirty (30) days, shall be permitted as
to this Paragraph 5.1.2, but only if such default or violation cannot
be cured by the Assignor's diligent procession, and such period shall
be allowed [up to thirty (30) days] only if and so long as Assignor
continues to exercise duly diligent cure efforts;
6.1.3 Any representation or warranty of Assignor contained
herein or in any certificate furnished to Assignee hereunder by or on
behalf of Assignor proves to be, in any material, adverse respect,
false or misleading as of the date deemed made, provided, if such
--------
representation or warranty was not intentionally made falsely, or with
the intent to mislead, or was not made recklessly, such occurrence
shall not constitute an Event of Default unless the actual condition
might adversely affect Assignor's performance of the Obligations, any
of the Assigned Asset, or the business or financial condition of
Assignor or the ability of Assignor to Perform Assignor's Obligations;
6.1.4 Any levy, execution or seizure of any portion of the
Assigned Asset or the institution of any legal action or proceeding
adversely affecting Assignor's or Assignee's interest in any of the
Assigned Asset; or
6.1.5 An "Event of Default" as defined elsewhere in any of the
Documents.
6.2 REMEDIES. At any time after an Event of Default has occurred and
--------
while it is continuing, Assignee may collect and retain all payments due
Assignor under the Assigned Asset and exercise any and all other rights and
remedies which Assignee may have under the Documents, including, without
limitation, this Assignment, and/or are otherwise available to it at law,
in equity or by statute.
6.3 ASSIGNEE'S RIGHT TO PERFORM. Without limiting Assignee's rights
---------------------------
under any other Paragraph, if Assignor fails or refuses to pay or perform
any Obligation hereunder, then at any time thereafter, and without notice
to or demand upon Assignor and without waiving or releasing any other
right, remedy or recourse Assignee may have, Assignee may (but shall not be
obligated to) pay or perform such Obligation in the manner Assignee
-4-
determines to be necessary or appropriate for the account of and at the
expense of Assignor. All sums expended by Assignee pursuant to this
Paragraph 6.3 shall be payable by Assignor to Assignee upon demand,
together with interest thereon from the date of expenditure until paid at
the Default Rate; and shall constitute part of the Obligations and be
secured by all security for the Obligations.
6.4 BUSINESS DAY. As used herein the term "Business Day" means any
------------
day other than a Saturday, a Sunday, national holiday, or a day on which
banks in Arizona are required to close.
7. REPRESENTATIONS, WARRANTIES AND COVENANTS OF ASSIGNOR. Assignor
-----------------------------------------------------
represents, warrants and covenants to Assignee as follows (all of such
representations, warranties and covenants to remain in full force and effect
until all of Obligations have been fully paid and performed):
7.1 NO ASSIGNMENTS OR ENCUMBRANCES. Assignor is the owner of good,
------------------------------
legal and beneficial title to the Assigned Asset free and clear of all
liens, security interests, encumbrances and claims of any kind, except
those in favor of Assignee and any Permitted Encumbrances (as defined in
the Loan Agreement). Assignor will not assign, pledge, encumber or
otherwise transfer in any way, so long as this Assignment shall remain in
effect, the whole or any part of the Assigned Asset to anyone other than
Assignee; and Assignor will not permit or suffer to exist any lien,
security interest, encumbrance or claim of any kind upon the Assigned
Asset, except those in favor of Assignee.
7.2 CONTRACTS, LICENSES, PERMITS AND OTHER INTANGIBLES IN FULL FORCE
----------------------------------------------------------------
AND EFFECT. The Contracts, Licenses, Permits and other Intangibles
----------
included in the Assigned Asset are in full force and effect, and Assignor
has not executed any other instrument and is not subject to any restriction
which might prevent or limit Assignee from operating under the terms of
this Assignment. Except as may be otherwise expressly permitted pursuant
to terms of the Loan Agreement or elsewhere in this Assignment, Assignor
will not, without prior written consent of Assignee, which consent will not
be unreasonably withheld, modify, waive, terminate or alter in any material
way any of the material terms of any of the Material (as hereinafter
defined) Contracts, Licenses, Permits and other Intangibles included in the
Assigned Asset; and without limiting the generality of the foregoing, will
not consent to any modification which would result in the loss of any
material benefit or the incurrence of any material detriment to Assignor or
Assignee under any Material Contract, License, Permit or other Intangible
included in the Assigned Asset.
7.3 PROMPT AND STRICT COMPLIANCE. Except with respect to
----------------------------
Construction Work Contracts and Renovation Work Contracts which Assignor
has a right to terminate pursuant to the Loan Agreement: Assignor will in
all respects promptly and faithfully pay, perform, observe and satisfy all
of the terms and conditions in or of the Material Contracts, Licenses,
Permits and other Intangibles included in the Assigned Asset to be paid,
-5-
performed, observed and/or satisfied by Assignor thereunder; will take all
acts reasonably necessary to prevent the forfeiture, rescission,
termination or suspension of the Material Contracts, Licenses, Permits and
other Intangibles included in the Assigned Asset, the loss of any material
benefit to Assignor or Assignee under the Material Contracts, Licenses,
Permits and other Intangibles included in the Assigned Asset, or the
incurrence of any material detriment to Assignor or Assignee under the
Material Contracts, Licenses, Permits and other Intangibles included in the
Assigned Asset; and will require, demand, and enforce, by all available,
lawful and reasonable means, the prompt and faithful payment, performance,
observance and satisfaction of all of the material terms and conditions in
the Material Contracts, Licenses, Permits and other Intangibles included in
the Assigned Asset, to be paid, performed, observed and/or satisfied for
the benefit of Assignor by third parties obligated to perform thereunder.
7.4 NO DEFAULTS. There is no material default by Assignor now
-----------
existing under any of the Material Contracts, Licenses, Permits or other
Intangibles included in the Assigned Asset; and except with respect to
Construction Work Contracts and Renovation Work Contracts which Assignor
has a right to terminate pursuant to the Loan Agreement, to Assignor's
knowledge, no third party obligated to perform thereunder is in default of
its obligations under any of the Material Contracts, Licenses, Permits or
other Intangibles included in the Assigned Asset.
7.5 NOTICE OF DEFAULT, BREACH OR VIOLATION. Assignor, not later than
--------------------------------------
three (3) Business Days after receipt thereof, will give notice to
Assignee of any written notice it receives from a third party of (i) any
default, breach or violation on the part of Assignor with respect to any of
the Material Contracts, Licenses, Permits or other Intangibles included in
the Assigned Asset, (ii) any claim that any of the Material Contracts,
Licenses, Permits or other Intangibles included in the Assigned Asset has
been forfeited, rescinded, surrendered, terminated or suspended, and (iii)
any threat by a third party to forfeit, rescind, surrender, terminate or
suspend any of the Material Contracts, Licenses, Permits or other
Intangibles included in the Assigned Asset, such notice to include, without
limitation, the delivery to Assignee of copies of the notices referred to
above. Assignor will give prompt notice to Assignee of any material
default by any third party obligated to perform under any of the Material
Contracts, Licenses, Permits or other Intangibles included in the Assigned
Asset.
7.6 PERFORMANCE AND BENEFITS. Assignor hereby authorizes all third
------------------------
parties obligated to perform under any Assigned Asset to accept this
Assignment. Assignor hereby authorizes and directs each third party
obligated to perform under any Assigned Asset that, upon written notice to
such third party from Assignee reciting the occurrence of an Event of
Default and the revocation of the license granted to Assignor under
Paragraph 3 to receive such benefits, all monies, performances or other
benefits due thereunder, or in any way respecting the same, shall be paid
or rendered directly to Assignee or its nominee as they become due.
Assignor hereby relieves all third parties
-6-
obligated to perform under any Assigned Asset from any liability to
Assignor by reason of such making of payments or rendering of performance
or other benefits to Assignee or its nominee. Nevertheless, subject to the
provisions of Paragraph 4, until Assignee notifies a third party obligated
to perform under any Assigned Asset in writing to render performance to
Assignee, Assignor shall be entitled to collect all payments and exercise
and receive all performances and other benefits pursuant to the license
granted to Assignor under Paragraph 3. Assignor hereby directs all third
parties to each Assigned Asset to accept from Assignee any tender of
performance of any of Assignor's obligations thereunder and any exercise of
Assignor's rights thereunder.
7.7 ADVERSE CLAIMS. If a claim of any kind which is not expressly
--------------
permitted herein arises or is asserted against Assignor or the Assigned
Asset which is adverse to Assignee's interest hereunder in and to any of
the Assigned Asset, then Assignor will notify Assignee of the claim and
promptly pay such claim in full or take such other action to cause such
claim to be released. At any time after the assertion of such a claim, if
Assignee has not received proof that the claim has been satisfied, then
Assignee may take whatever action it determines necessary for the defense
of its interest in the Assigned Asset, including, without limitation, the
employment of counsel, the prosecution and defense of litigation and the
payment, compromise or discharge of such claim. Upon demand therefor,
Assignor will reimburse Assignee for the costs incurred in connection with
such action, together with interest thereon at the Default Rate from the
date of incurrence until the date reimbursed by Assignor. In taking any
such action, Assignee shall not be bound to inquire into the accuracy or
validity of any apparent or threatened claim.
7.8 MATERIAL CONTRACTS, LICENSES, PERMITS OR OTHER INTANGIBLES. As
----------------------------------------------------------
used herein, the term "Material" when used to describe any of the
Contracts, Licenses, Permits or other Intangibles included in the Assigned
Asset shall mean a Contract, License, Permit or other Intangible included
in the Assigned Asset, which if forfeited, rescinded, surrendered,
terminated or suspended, would materially adversely affect the value or
intended use of the Property, the business of Assignee conducted thereon or
with respect thereto, or the ability of Assignor to perform its Obligations
under the Documents, including, without limitation, the Contracts (if any)
described in EXHIBIT C.
8. MUTUAL AGREEMENTS OF ASSIGNOR AND ASSIGNEE. Assignor and Assignee
------------------------------------------
mutually agree as follows:
8.1 EFFECT OF ASSIGNMENT. Assignee, by accepting this Assignment:
--------------------
8.1.1 Shall not be subject to any obligation or liability under
any Assigned Asset, as the case may be, arising prior to its
delivering to Assignor and the third party obligated to perform
thereunder its written election ("Assumption Election") that it
assumes Assignor's obligations and liabilities under such Assigned
Asset; but
-7-
any and all such obligations and liabilities arising prior to
Assignee's Assumption Election shall remain Assignor's as though this
Assignment had not been made; and
8.1.2 Shall not be under any obligation to exercise any of the
rights, remedies, or powers hereby granted to it, and no failure or
delay in exercising any of such rights, remedies, or powers shall
constitute a waiver thereof or of any default by Assignor.
8.2 NO LIMITATION OF ASSIGNEE'S RIGHTS. The rights, remedies, and
----------------------------------
powers granted herein shall not be limited or otherwise affected by the
value of the Assigned Asset as compared to amounts, if any, owed by
Assignor to Assignee and may be exercised by Assignee either independently
of or concurrently with any other right, remedy, or power contained herein
or in any of the other Documents or by law. The taking of this Assignment
by Assignee shall not effect the release of any collateral now or hereafter
held by Assignee as security for the Obligations, and the taking of
collateral for the performance of the Obligations shall not effect a
release or termination of this Assignment, or any terms or provisions
hereof.
8.3 ASSIGNEE MAY ASSIGN. All of Assignor's right, title, and
-------------------
interest assigned hereunder may be reassigned by Assignee and any
subsequent Assignee, and the term "Assignee," as used herein, includes any
subsequent Assignee. This Assignment and the power of attorney contained
herein are solely for the benefit and protection of Assignee, its
successors and assigns and are not intended to confer upon any person other
than the parties hereto and their successors and assigns any right or
remedies under or by reason of this Assignment.
8.4 INDEMNIFICATION AND REIMBURSEMENT. Assignee shall not be
---------------------------------
obligated to perform or discharge, and it does not hereby undertake to
perform or discharge, any obligation, duty, or liability under the Assigned
Asset, or under or by reason of this Assignment, and Assignor shall and
does hereby agree to indemnify, protect, hold harmless and defend Assignee
and its shareholders, directors, officers, employees, servants and agents
for, from and against (a) any and all liability, loss, damage, cost,
expense, penalties or fines which it may or might incur under or by reason
of this Assignment and (b) any and all claims and demands whatsoever which
may be asserted against it by reason of any alleged obligation or
undertaking on its part to perform or discharge any of the terms or
conditions contained in the Assigned Asset; provided, however, that the
foregoing shall apply only to acts and omissions occurring prior to the
Assumption Election and any acts of Assignor after such Assumption
Election, and the foregoing shall not apply to the gross negligence or
willful misconduct of the person seeking to be indemnified. Should
Assignee incur any such liability, loss, damage, cost, expense, penalty or
fine under the Assigned Asset, or under or by reason of this Assignment, or
in the defense against any such claims or demands, or in prosecuting any
claim under this Assignment, the amount thereof, including, without
limitation, reasonable court costs, reasonable attorneys' fees
-8-
and other reasonable expenses, shall be payable by Assignor to Assignee
immediately upon demand, together with interest thereon at the Default
Rate, until paid, and the same shall constitute part of the Obligations and
be secured by this Assignment and all security for the Obligations. On
written request by a person or other entity covered by the above agreement
of indemnity, Assignor will undertake, at its own cost and expense, on
behalf of such indemnitee, using counsel reasonably satisfactory to the
indemnitee, the defense of any claim or demand asserted against the
indemnitee.
8.5 TERMINATION OF ASSIGNMENT. This Assignment shall become and be
-------------------------
void and of no further effect except for the provisions of Paragraph 8.4,
and Assignee shall execute and deliver to Assignor a release of this
Assignment within a reasonable period of time after receipt of a written
request to do so ("Termination Condition") has been satisfied: (a) Assignor
has performed all the Obligations and (b) Assignee has no further
obligation to extend credit under the Documents. The affidavit of any
officer of Assignee the non-satisfaction of any of the elements of the
Termination Condition shall be and constitute prima facie evidence of the
validity, effectiveness and continuing force of this Assignment and any
person may and is hereby authorized to rely thereon. The partial release
of a Unit or Time-Share Interest from the lien of the Mortgage shall ipso
facto cause the release of all of the Assigned Asset exclusively related to
such Unit or Time-Share Interest from the terms of this Assignment.
9. NO WAIVER. No delay or omission on the part of Assignee to exercise
---------
any power, right, or remedy hereunder shall operate as a waiver of any such
power, right or remedy; and no single or partial exercise of any such power,
right or remedy shall preclude any other or further exercise thereof or the
exercise of any other power, right, or remedy of Assignee under this Assignment
or which may be provided by law. Any extension or indulgence at any time
allowed by Assignee to Assignor shall be in reliance upon the understanding that
such shall not affect or prejudice the rights, powers, and remedies of Assignee
except to the extent specifically set forth at the time in writing by Assignee;
and no waiver shall be construed as a waiver of any breach or default thereafter
occurring.
10. TIME OF THE ESSENCE. Time is of the essence in the performance of
-------------------
this Assignment.
11. BINDING EFFECT. This Assignment shall inure to the benefit of and be
--------------
binding upon the parties hereto and their respective heirs, personal
representatives, successors, and assigns.
12. NOTICES. All notices, demands, documents, or other writings as
-------
between Assignor and Assignee which are required or permitted to be given
hereunder shall be given and deemed delivered in accordance with the provisions
of the Loan Agreement.
13. OTHER DOCUMENTS. This Assignment is in addition to, and not in
---------------
limitation of, any rights in and to the Assigned Asset which Assignee may
acquire under any other Document; and
-9-
to the extent of any ambiguity or inconsistency between this Assignment and any
other Document, the provisions imposing the greatest obligation upon Assignor
and granting the most expansive rights to Assignee shall control.
14. CHOICE OF LAW, JURISDICTION, VENUE, AND WAIVER OF JURY TRIAL. THE
------------------------------------------------------------
CHOICE OF LAW, JURISDICTION, VENUE AND WAIVER OF JURY TRIAL PROVISIONS OF THE
LOAN AGREEMENT SHALL BE EQUALLY APPLICABLE TO THIS ASSIGNMENT AND ARE
INCORPORATED HEREIN BY THIS REFERENCE.
15. FURTHER ASSURANCES; SECURITY AGREEMENT; SALE OF ASSIGNED ASSET. To
--------------------------------------------------------------
further assure the security intended by this Assignment, upon receipt of a
written request of Assignee from time to time, Assignor will execute and deliver
all further instruments or assurances, which may be reasonably required or
appropriate to perfect or further evidence Assignor's interest in the Assigned
Asset or to otherwise effect the intent and purposes of this Assignment,
including, without limitation, notices of this Assignment to the third party
obligors under any Assigned Asset, and mortgages, deeds of trust and/or
memorandums of this Assignment in connection with Assignor's interest under any
assigned real property leases. If necessary for Assignee to acquire or perfect
a lien or security interest in any portion of the Assigned Asset, this
Assignment shall be deemed a security agreement under the Uniform Commercial
Code with respect to such portion of the Assigned Asset. If this Assignment
must be or is deemed to be a security interest under the Uniform Commercial
Code, Assignor hereby grants to Assignee a security interest in the Assigned
Asset; and Assignee shall be entitled to sell the Assigned Asset at public or
private sale and/or to the exercise of all other rights and remedies under the
Uniform Commercial Code if an Event of Default exists, in addition to all the
other rights and remedies available to it pursuant to Paragraph 6.2. Any notice
of sale or other disposition of the Assigned Asset given not less than ten (10)
Business Days prior to such proposed action in connection with the exercise of
Assignee's rights and remedies shall constitute reasonable and fair notice of
such action. Assignee may postpone or adjourn any such sale from time to time
by announcement at the time and place of sale stated on the notice of sale or by
announcement of any adjourned sale, without being required to give a further
notice of sale. Any such sale may be for cash or, unless prohibited by
applicable law, upon such credit or installments as Assignee may determine. The
net proceeds of such sale shall be credited to the Obligations only when such
proceeds are actually received by Assignee in good current funds. All proceeds
realized by Assignee from the Assigned Asset after termination of the license
granted under Paragraph 3 and through and including a sale of the Assigned
Asset, net of the costs of any such sale, shall be applied by Assignee to the
Obligations in such order and manner as Assignee may determine. Assignor shall
be liable for any deficiency remaining after application of such proceeds to the
Obligations.
16. TERMINATION OF CONTRACT FOR CAUSE; TERMINATION AND MODIFICATION OF
------------------------------------------------------------------
SALES CONTRACTS. Assignee agrees that if Assignee's consent to such termination
---------------
is required, it will notify Assignor that Assignee is giving or withholding its
consent to the termination for cause of any Material Contract included in the
Assigned Asset within ten (10) Business Days after Assignee
-10-
has actually received from Assignor a written request to allow Assignor to
terminate such Material Contract for cause which sets forth with reasonable
specificity the reasons for the action Assignor proposes to take and explaining
how the business of Assignor conducted on or with respect to the Property will
be affected after termination of such Material Contract. Assignee's failure to
deliver such notice within such time period shall be deemed to cause a consent
to the then-applicable request. Notwithstanding anything in this Assignment to
the contrary, Assignor may modify and terminate in good faith in the ordinary
course of its business contracts which have been entered into by it for sales of
portions of the Property and have not yet closed.
17. SEVERABILITY. If any provision of this Assignment is held to be
------------
illegal, invalid or unenforceable under present or future laws (all of which
invalidating laws are waived to the fullest extent possible), the legality,
validity and enforceability of the remaining provisions of this Assignment shall
not be affected thereby. In lieu of each such illegal, invalid or unenforceable
provision, there shall be added automatically as a part of this Assignment a
provision that is legal, valid and enforceable and as similar in terms to such
illegal, invalid or unenforceable provision as may be possible.
18. PERMITTED CONTESTS. After prior written notice to Assignee, Assignor
------------------
at its expense may contest, by appropriate legal or other proceedings conducted
in good faith and with due diligence, the amount or validity of (a) any, tax,
charge or assessment assessed, levied or imposed upon the Assigned Asset, (b)
any law or regulation or (c) any monetary lien, so long as: (i) in the case of
an unpaid tax, charge, assessment or lien, such proceedings suspend the
collection thereof from Assignee and the Material Contracts, Licenses, Permits
and other Intangibles included in the Assigned Asset; (ii) none of the Material
Contracts, Licenses, Permits and other Intangibles included in the Assigned
Asset is, in the judgment of Assignee, in any imminent danger of being sold,
forfeited or lost; (iii) in the case of any law or regulation, neither Assignor
or Assignee is in any danger of any civil or criminal liability for failure to
comply therewith; and (iv) Assignor has furnished such security, if any, as may
be required in the proceedings or as Assignee reasonably requests up to one
hundred fifty percent (150%) of the amount in controversy.
19. COUNTERPART EXECUTION. This Assignment may be executed in
---------------------
counterparts, each of such counterparts which have been executed by Assignor and
Assignee shall constitute one original.
IN WITNESS WHEREOF, Assignor and Assignee have executed this instrument as
of the day and year first hereinabove written.
[SEPARATE SIGNATURE PAGES FOLLOW]
-11-
WITNESS AS TO ASSIGNOR: ASSIGNOR:
______________________________,
a(n) __________________________
Witness:____________________
Type/Print Name:____________ By:___________________________________
Type/Print Name:______________________
Title:________________________________
ASSIGNEE:
FINOVA CAPITAL CORPORATION, a Delaware
corporation
By:___________________________________
Type/Print Name:______________________
Title:________________________________
-12-
STATE OF ___________ )
) ss.
County of __________ )
The foregoing instrument was acknowledged before me this _____ day of
_____________________, ____, by __________________________________________, the
_________________ of ________________________________________,
a(n)_______________, on behalf of such____________________. He/She is
personally known to me or has produced ________________ as identification.
GIVEN UNDER MY HAND AND SEAL OF OFFICE, this the ____ day of _______,
______.
_____________________________________________
Notary Public in and for the State and County
aforesaid
My commission expires:
_____________________
EXHIBIT A
LEGAL DESCRIPTION
-----------------
EXHIBIT B
LIST OF CERTAIN CONTRACTS, LICENSES, PERMITS AND OTHER INTANGIBLES
------------------------------------------------------------------
THE FAILURE TO COMPLETE THIS EXHIBIT OR TO LIST ANY CONTRACT, LICENSE,
PERMIT OR OTHER INTANGIBLE SHALL NOT BE INTERPRETED AS THE INTENTION OF ASSIGNOR
OR ASSIGNEE THAT SUCH ITEM NOT BE DEEMED TO BE ASSIGNED.
EXHIBIT C
THE FAILURE TO COMPLETE THIS EXHIBIT OR TO LIST ANY CONTRACT SHALL NOT BE
INTERPRETED AS THE INTENTION OF ASSIGNOR OR ASSIGNEE THAT SUCH CONTRACT NOT BE
DEEMED TO BE MATERIAL.
EXHIBIT 8
REAL PROPERTY
1. The real property is owned in fee simple by the Vistana Entity requesting
the Loan, and such Vistana Entity is the developer of the real property.
2. The Real Property is located in one of the states of the United States of
America.
-8-
