EXHIBIT 99.2
SUNTERRA CORPORATION
AND CERTAIN OF ITS SUBSIDIARIES
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THIRD AMENDMENT TO
FINANCING AGREEMENT
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Dated as of June 6, 2002
THIRD AMENDMENT TO
FINANCING AGREEMENT
This Third Amendment to Financing Agreement (this "Amendment") is entered
into as of this 6th day of June, 2002 by and among Sunterra Corporation, as a
debtor and a debtor-in-possession, a Maryland corporation (together with its
successors and assigns, the "Company"), and the subsidiaries of the Company
listed on the signature pages hereto, each as a debtor and a
debtor-in-possession (together with the Company, the "Borrowers") or a guarantor
(the "Guarantors"), the financial institutions from time to time party hereto
(individually a "Lender" and collectively, the "Lenders") and Greenwich Capital
Markets, Inc., a Delaware corporation, as agent for the Lenders (in such
capacity, the "Agent").
Recitals
Whereas, the Borrowers and the Agent, for itself and as a Lender, have
entered into that certain Financing Agreement, dated as of April 20, 2001 (as
amended by the First Amendment to Financing Agreement dated as of January 3,
2002 and Second Amendment to Financing Agreement dated as of May 9, 2002 and in
effect immediately prior to giving effect to the amendment provided for by this
Agreement, the "Existing Financing Agreement" and, as amended pursuant to this
Amendment and as may be further amended, restated or otherwise modified from
time to time, the "Amended Financing Agreement");
Whereas, pursuant to Section 10.02 of the Existing Financing Agreement, the
parties hereto desire to amend the Existing Financing Agreement as more
specifically set forth herein; and
Whereas, the Existing Financing Agreement shall remain in full force and
effect except as modified herein to effectuate the purposes of this Amendment.
Now, Therefore, in consideration of the mutual benefits and promises
contained herein, and for other good and valuable consideration, the receipt and
sufficiency of which are acknowledged by each party hereto, the parties hereto
agree as follows:
1. INCORPORATION OF RECITALS.
The recitals set forth above are true, correct and accurate and are hereby
incorporated herein by this reference and made a part hereof.
2. DEFINED TERMS.
Initial capitalized terms used herein and not otherwise defined have the
meanings ascribed to such terms in the Existing Financing Agreement.
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3. REPRESENTATIONS AND WARRANTIES OF THE BORROWERS.
Each Borrower represents and warrants to the Agent and the Lenders as
follows:
3.1 Organization and Existence.
Each Borrower (i) is a corporation, limited liability company or limited
partnership duly organized, validly existing and in good standing under the laws
of the state or jurisdiction of its organization, and (ii) subject to any
necessary authorization of the Bankruptcy Court, has all requisite corporate,
limited liability company or partnership, as the case may be, power and
authority to conduct its business as now conducted and as presently contemplated
and to make the borrowings under the Amended Financing Agreement, and to execute
and deliver this Amendment, and to consummate the transactions contemplated
thereby.
3.2 Amendment Authorized; Obligations Enforceable.
(a) Amendment is Legal and Authorized. The execution, delivery and
performance by each Borrower and Guarantor of this Amendment, upon entry of
the Bankruptcy Court Order approving this Amendment (the "Bankruptcy Court
Order"), have been duly authorized by all necessary action on the part of
the Borrowers and Guarantors.
(b) Borrowers Obligations are Enforceable. This Amendment has been
duly and validly executed and delivered by each Borrower and each of this
Amendment and the Amended Financing Agreement constitute legal, valid and
binding obligations of each Borrower and Guarantor enforceable in
accordance with the terms hereof or thereof.
3.3 No Conflicts.
The execution and delivery of this Amendment by each Borrower and
Guarantor, and fulfillment of and compliance with the terms and provisions of
the Amended Financing Agreement (i) do not and will not contravene its charter
or by-laws, its limited liability company or operating agreement or its
certificate of partnership or partnership agreement, as applicable, or any
applicable law or any contractual restriction binding on or otherwise affecting
it or any of its properties (other than conflicts, breaches and defaults the
enforcement of which is stayed by virtue of the filing of the Chapter 11 Cases),
(ii) do not and will not result in or require the creation of any Lien (other
than pursuant to any Loan Document) upon or with respect to any of its
properties, and (iii) do not and will not result in any suspension, revocation,
impairment, forfeiture or nonrenewal of any permit, license, authorization or
approval applicable to its operations or any of its properties.
3.4 Governmental Consent.
Except for the entry of the Bankruptcy Court Order and such filings as may
be required under the Exchange Act, no authorization or approval or other action
by, and
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no notice to or filing with, any Governmental Authority is required in
connection with the due execution and delivery of this Amendment or the
performance by each Borrower and Guarantor of its obligations under this
Amendment.
3.5 No Defaults.
No event has occurred and no condition exists that, upon the execution and
delivery of this Amendment and the effectiveness of the Amendment, would
constitute a material Default or an Event of Default that would not be remedied
by execution of this Amendment and approval thereof pursuant to the Bankruptcy
Court Order.
3.6 Amount Outstanding.
The total amount due and outstanding under the Amended Financing Agreement
as of June 5, 2002 is not less than $160,009,864.25 in principal amount and
$1,880,367.71 in accrued and unpaid interest and fees, exclusive of Lenders'
costs and expenses subject to reimbursement pursuant to Section 10.04 of the
Amended Financing Agreement.
4. AMENDMENT.
4.1 Amendment to Existing Financing Agreement.
Subject to paragraph 4.2 below, the Existing Financing Agreement is hereby
amended as follows:
(a) A new definition is added to Section 1.01 as follows:
""Amendment No. 3" means the Third Amendment to Financing Agreement dated
as of June 6, 2002."
(b) The defined term "Exit Financing" is hereby deleted in its
entirety.
(c) The defined term "July Extension Conditions" is hereby deleted
in its entirety.
(d) Clause (ii) of the definition of "Final Maturity Date" in
Section 1.01 of the Existing Financing Agreement is hereby amended by
deleting "(a) June 30, 2002, or (b) if the July Extension Conditions are
satisfied by June 30, 2002, July 31, 2002" and replacing it with "July 31,
2002".
(e) A new clause (iv) is added to Section 2.11(e) of the Existing
Financing Agreement as follows:
"(iv) On the Amendment No. 3 Effective Date (as defined in Amendment
No. 3), the Borrowers shall pay to the Agent a supplemental fee
of $1,000,000."
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(f) Section 2.14 to the Existing Financing Agreement is hereby
deleted in its entirety.
(g) Section 7.02(p) is hereby amended by adding the following to the
end of the first sentence:
";provided, however, that for the months of May 2002, June 2002
and July 2002 only, the Borrowers shall not permit the aggregate
amount of actual Time Share Interests sales contracts written,
net of ordinary course rescissions, to be less than 80% of the
aggregate amount of actual Time Share Interests sales contracts
written, net of ordinary course rescissions, for the prior
calendar month."
(h) Section 7.02(q) is hereby amended by adding the following to the
end of the first sentence:
"provided, however, that this Section 7.02(q) shall not be
applicable for the period May 1, 2002 through July 31, 2002."
4.2 Effectiveness of Amendment.
The amendment of the Existing Financing Agreement contemplated by paragraph
4.1 above, shall become effective only upon the satisfaction in full of the
following conditions precedent (which date shall be referred to as the
"Amendment No. 3 Effective Date"):
(a) the Borrowers and Agent shall have executed and delivered a
counterpart of this Amendment;
(b) the representations and warranties set forth in Section 3 above
shall be true and correct as of the Amendment No. 3 Effective Date; and
(c) the Bankruptcy Court Order shall have been entered.
5. MISCELLANEOUS.
5.1 Part of Existing Financing Agreement, Future References, etc.
Except as expressly amended by this Amendment, all terms, conditions and
covenants contained in the Existing Financing Agreement and the other Loan
Documents are hereby ratified and shall be and remain in full force and effect.
Any and all notices, requests, certificates and other instruments executed and
delivered after the execution and delivery of this Amendment may refer to the
Existing Financing Agreement without making specific reference to this
Amendment, but nevertheless all such references shall include this Amendment
unless the context otherwise requires.
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5.2 Counterparts; Effectiveness.
This Amendment may be executed in any number of counterparts, each of which
shall be an original but all of which together shall constitute one instrument.
Delivery of an executed signature page by facsimile transmission shall be
effective as delivery of a manually signed counterpart of this Amendment.
5.3 Successors and Assigns.
This Amendment, the Existing Financing Agreement and the Loan Documents
shall be binding upon and inure to the benefit of the Borrowers and the other
Loan Parties and the Agent and each Lender and their respective successors and
assigns (including, except for the right to request Loans, any trustee
succeeding to the rights of the Borrowers pursuant to Chapter 11 of the
Bankruptcy Code or pursuant to any conversion to a case under Chapter 7 of the
Bankruptcy Code); provided, however, that each of the Borrowers and the other
Loan Parties may not assign or transfer any of their rights hereunder, or under
the Existing Financing Agreement and the Loan Documents, without the prior
written consent of each Lender and any such assignment without the Lenders'
prior written consent shall be null and void.
5.4 Resolution of Disputes.
Any disputes between the parties hereto relating to or arising from this
Amendment shall be resolved by the Bankruptcy Court.
5.5 Governing Law.
THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED
IN STATE OF NEW YORK EXCEPT AS GOVERNED BY THE BANKRUPTCY CODE.
5.6 Release of Agent and Lender.
Except for the covenants and obligations of Agent and Lender under this
Amendment, the Existing Financing Agreement and the other Loan Documents, the
Borrowers and Guarantors, for themselves and their successors and assigns,
hereby unconditional waive and release Agent and Lender from any and all causes
of action, suits, damages, injuries, claims, liabilities and demands whatsoever,
which they may have against Agent and Lender, known or unknown, from the
beginning of the world to the date hereof, and, particularly, but not by way of
limitation, all lawsuits, damages, injuries, claims, demands and liabilities
arising out of or related to the Existing Financing Agreement, the Loan
Documents and this Amendment, including, but not limited to, their negotiation,
execution, enforcement and any other matters related thereto.
5.7 Entire Agreement
This Amendment and the Amended Financing Agreement contains the entire
agreement between the parties relating to the transactions contemplated thereby
and
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supersedes all prior or contemporaneous agreements, understandings,
representations and statements, oral or written.
[Remainder of page intentionally left blank. Next page is signature page.]
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BORROWERS:
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SUNTERRA CORPORATION
By: /s/ Xxxxxxxx X. Xxxxx
------------------------------------------
Xxxxxxxx X. Xxxxx
Vice President and Chief Financial Officer
AKGI LAKE TAHOE INVESTMENTS, INC.
By: /s/ Xxxxxxxx X. Xxxxx
------------------------------------------
Xxxxxxxx X. Xxxxx
Vice President
AKGI ST. MAARTEN, N.V.
By: /s/ Xxxxxxxx X. Xxxxx
------------------------------------------
Xxxxxxxx X. Xxxxx
Vice President
ALL SEASONS PROPERTIES, INC.
By: /s/ Xxxxxxxx X. Xxxxx
------------------------------------------
Xxxxxxxx X. Xxxxx
Vice President
ALL SEASONS REALTY, INC.
By: /s/ Xxxxxxxx X. Xxxxx
------------------------------------------
Xxxxxxxx X. Xxxxx
Vice President
ALL SEASONS RESORTS, INC. (AZ)
By: /s/ Xxxxxxxx X. Xxxxx
------------------------------------------
Xxxxxxxx X. Xxxxx
Vice President
ALL SEASONS RESORTS, INC. (TX)
By: /s/ Xxxxxxxx X. Xxxxx
-----------------------------------
Xxxxxxxx X. Xxxxx
Vice President
ARGOSY GRAND BEACH, INC.
By: /s/ Xxxxxxxx X. Xxxxx
-----------------------------------
Xxxxxxxx X. Xxxxx
Vice President
ARGOSY HILTON HEAD, INC.
By: /s/ Xxxxxxxx X. Xxxxx
-----------------------------------
Xxxxxxxx X. Xxxxx
Vice President
ARGOSY PARTNERS, INC.
By: /s/ Xxxxxxxx X. Xxxxx
-----------------------------------
Xxxxxxxx X. Xxxxx
Vice President
ARGOSY/KGI GRAND BEACH
INVESTMENT PARTNERSHIP
By: Argosy Grand Beach, Inc.,
its General Partner
By: /s/ Xxxxxxxx X. Xxxxx
----------------------------
Xxxxxxxx X. Xxxxx
Vice President
By: Argosy Partners, Inc.,
its General Partner
By: /s/ Xxxxxxxx X. Xxxxx
----------------------------
Xxxxxxxx X. Xxxxx
Vice President
By: KGI Grand Beach, Inc.,
its Managing General Partner
By: /s/ Xxxxxxxx X. Xxxxx
----------------------------
Xxxxxxxx X. Xxxxx
Vice President
ARGOSY/KGI PORT ROYAL PARTNERS
By: Argosy Hilton Head, Inc.
its General Partner
By: /s/ Xxxxxxxx X. Xxxxx
----------------------------
Xxxxxxxx X. Xxxxx
Vice President
By: KGI Port Royal, Inc.,
its Managing General Partner
By: /s/ Xxxxxxxx X. Xxxxx
----------------------------
Xxxxxxxx X. Xxxxx
Vice President
AVCOM INTERNATIONAL, INC.
By: /s/ Xxxxxxxx X. Xxxxx
----------------------------
Xxxxxxxx X. Xxxxx
Vice President
DESIGN INTERNATIONALE-RMI, INC.
By: /s/ Xxxxxxxx X. Xxxxx
----------------------------
Xxxxxxxx X. Xxxxx
Vice President
GRAND BEACH PARTNERS, LP
By: Argosy/KGI Grand Beach Investment
Partnership, its General Partner
By: Argosy Partners, Inc.,
its General partner
By: /s/ Xxxxxxxx X. Xxxxx
------------------------
Xxxxxxxx X. Xxxxx
Vice President
By: Argosy Grand Beach, Inc.,
its General Partner
By: /s/ Xxxxxxxx X. Xxxxx
------------------------
Xxxxxxxx X. Xxxxx
Vice President
By: KGI Grand Beach Investments,
its Managing General Partner
By: /s/ Xxxxxxxx X. Xxxxx
------------------------
Xxxxxxxx X. Xxxxx
Vice President
GRAND BEACH RESORT, LIMITED PARTNERSHIP
By: Grand Beach Partners, LP,
its General Partner
By: Argosy/KGI Grand Beach
Investment Partnership, its
General Partner
By: KGI Grand Beach
Investments, Inc.,
its Managing General
Partner
By: /s/ Xxxxxxxx X. Xxxxx
---------------------
Xxxxxxxx X. Xxxxx
Vice President
By: Argosy Partners, Inc.,
Its General Partner
By: /s/ Xxxxxxxx X. Xxxxx
---------------------
Xxxxxxxx X. Xxxxx
Vice President
By: Argosy Grand Beach, Inc.,
its General Partner
By: /s/ Xxxxxxxx X. Xxxxx
---------------------
Xxxxxxxx X. Xxxxx
Vice President
GREENSPRINGS ASSOCIATES
By: Plantation Resorts Group, Inc.,
its Joint Venturer
By: /s/ Xxxxxxxx X. Xxxxx
-----------------------------
Xxxxxxxx X. Xxxxx
Vice President
By: Greensprings Plantation Resorts, Inc.,
its Joint Venturer
By: /s/ Xxxxxxxx X. Xxxxx
-----------------------------
Xxxxxxxx X. Xxxxx
Vice President
GREENSPRINGS PLANTATION RESORTS, INC.
By: /s/ Xxxxxxxx X. Xxxxx
-----------------------------
Xxxxxxxx X. Xxxxx
Vice President
XXXXXX TAHOE DEVELOPMENT
By: Lakewood Development, Inc.,
its Managing General Partner
By: /s/ Xxxxxxxx X. Xxxxx
-----------------------------
Xxxxxxxx X. Xxxxx
Vice President
By: Ridgewood Development, Inc.,
its General Partner
By: /s/ Xxxxxxxx X. Xxxxx
----------------------------
Xxxxxxxx X. Xxxxx
Vice President
KGI GRAND BEACH INVESTMENTS, INC.
By: /s/ Xxxxxxxx X. Xxxxx
----------------------------
Xxxxxxxx X. Xxxxx
Vice President
KGI PORT ROYAL, INC.
By: /s/ Xxxxxxxx X. Xxxxx
----------------------------
Xxxxxxxx X. Xxxxx
Vice President
KGK LAKE TAHOE DEVELOPMENT, INC.
By: /s/ Xxxxxxxx X. Xxxxx
-----------------------------
Xxxxxxxx X. Xxxxx
Vice President
LAKE TAHOE RESORT PARTNERS, LLC
By: AKGI Lake Tahoe Investments, Inc.,
its Managing Member
By: /s/ Xxxxxxxx X. Xxxxx
-----------------------------
Xxxxxxxx X. Xxxxx
Vice President
By: KGK Lake Tahoe Development, Inc.,
its Member
By: /s/ Xxxxxxxx X. Xxxxx
-----------------------------
Xxxxxxxx X. Xxxxx
Vice President
LAKEWOOD DEVELOPMENT, INC.
By: /s/ Xxxxxxxx X. Xxxxx
-----------------------------
Xxxxxxxx X. Xxxxx
Vice President
MMG DEVELOPMENT CORP.
By: /s/ Xxxxxxxx X. Xxxxx
-----------------------------
Xxxxxxxx X. Xxxxx
Vice President
PLANTATION RESORTS GROUP, INC.
By: /s/ Xxxxxxxx X. Xxxxx
-----------------------------
Xxxxxxxx X. Xxxxx
Vice President
POINTE PARTNERS, LIMITED PARTNERSHIP
By: Xxxxxx Tahoe Developments,
its Managing General Partner
By: Lakewood Development, Inc.,
its Managing General Partner
By: /s/ Xxxxxxxx X. Xxxxx
---------------------
Xxxxxxxx X. Xxxxx
Vice President
By: Ridgewood Development, Inc.,
its General Partner
By: /s/ Xxxxxxxx X. Xxxxx
---------------------
Xxxxxxxx X. Xxxxx
Vice President
PORT ROYAL RESORT LP
By: Argosy/KGI Port Royal Partners,
its General Partner
By: KGI Port Royal, Inc.,
its Managing General Partner
By: /s/ Xxxxxxxx X. Xxxxx
---------------------
Xxxxxxxx X. Xxxxx
Vice President
By: Argosy Hilton Head, Inc.
its General Partner
By: /s/ Xxxxxxxx X. Xxxxx
---------------------
Xxxxxxxx X. Xxxxx
Vice President
POWHATAN ASSOCIATES
By: Plantation Resorts Group, Inc.,
its Joint Venturer
By: /s/ Xxxxxxxx X. Xxxxx
-----------------------------
Xxxxxxxx X. Xxxxx
Vice President
By: Williamsburg Vacations, Inc.,
its Joint Venturer
By: /s/ Xxxxxxxx X. Xxxxx
-----------------------------
Xxxxxxxx X. Xxxxx
Vice President
PREMIER VACATIONS, INC.
By: /s/ Xxxxxxxx X. Xxxxx
-----------------------------
Xxxxxxxx X. Xxxxx
Vice President
RESORT CONNECTIONS, INC.
By: /s/ Xxxxxxxx X. Xxxxx
-----------------------------
Xxxxxxxx X. Xxxxx
Vice President
RESORT MARKETING INTERNATIONAL, INC.
By: /s/ Xxxxxxxx X. Xxxxx
-----------------------------
Xxxxxxxx X. Xxxxx
Vice President
RESORTS DEVELOPMENT
INTERNATIONAL, INC.
By: /s/ Xxxxxxxx X. Xxxxx
-----------------------------
Xxxxxxxx X. Xxxxx
Vice President
RIDGE POINTE LIMITED PARTNERSHIP
By: Pointe Partners, Limited Partnership,
its Managing General Partner
By: Xxxxxx Tahoe Developments,
its Managing General Partner
By: Lakewood Development,
Inc.,
its Managing General
Partner
By: /s/ Xxxxxxxx X. Xxxxx
---------------------
Xxxxxxxx X. Xxxxx
Vice President
By: Ridgewood Development,
Inc.,
its General Partner
By: /s/ Xxxxxxxx X. Xxxxx
---------------------
Xxxxxxxx X. Xxxxx
Vice President
RIDGEWOOD DEVELOPMENT, INC.
By: /s/ Xxxxxxxx X. Xxxxx
---------------------------
Xxxxxxxx X. Xxxxx
Vice President
RKG, CORP.
By: /s/ Xxxxxxxx X. Xxxxx
---------------------------
Xxxxxxxx X. Xxxxx
Vice President
SUNTERRA FINANCIAL SERVICES, INC.
By: /s/ Xxxxxxxx X. Xxxxx
---------------------------
Xxxxxxxx X. Xxxxx
Vice President
SUNTERRA ST. CROIX, INC.
By: /s/ Xxxxxxxx X. Xxxxx
---------------------------
Xxxxxxxx X. Xxxxx
Vice President
WILLIAMSBURG VACATIONS, INC.
By: /s/ Xxxxxxxx X. Xxxxx
---------------------------
Xxxxxxxx X. Xxxxx
Vice President
GUARANTORS:
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CLUB SUNTERRA, INC.
By: /s/ Xxxxxxxx X. Xxxxx
---------------------------------
Xxxxxxxx X. Xxxxx
Vice President
INTERNATIONAL TIMESHARES, INC.
By: /s/ Xxxxxxxx X. Xxxxx
---------------------------------
Xxxxxxxx X. Xxxxx
Vice President
SUNTERRA TRAVEL, INC.
By: /s/ Xxxxxxxx X. Xxxxx
---------------------------------
Xxxxxxxx X. Xxxxx
Vice President
SUNTERRA COMMUNICATIONS CORPORATION
By: /s/ Xxxxxxxx X. Xxxxx
---------------------------------
Xxxxxxxx X. Xxxxx
Vice President
KABUSHIKI GAISHA KEI LLC
By: KGK INVESTORS, INC,
Its: Member
By: /s/ Xxxxxxxx X. Xxxxx
-------------------------
Xxxxxxxx X. Xxxxx
Its: Vice President
By: KGK PARTNERS, INC.,
Its Member
By: /s/ Xxxxxxxx X. Xxxxx
-------------------------
Xxxxxxxx X. Xxxxx
Its: Vice President
MARC HOTEL AND RESORTS, INC.
By: /s/ Xxxxxxxx X. Xxxxx
-----------------------------
Xxxxxxxx X. Xxxxx
Vice President
RPM MANAGEMENT, INC.
By: /s/ Xxxxxxxx X. Xxxxx
-----------------------------
Xxxxxxxx X. Xxxxx
Vice President
SUNTERRA PACIFIC, INC.
By: /s/ Xxxxxxxx X. Xxxxx
-----------------------------
Xxxxxxxx X. Xxxxx
Vice President
XXXXXX ACQUISITION SUBSIDIARY, INC.
By: /s/ Xxxxxxxx X. Xxxxx
-----------------------------
Xxxxxxxx X. Xxxxx
Vice President
S.V.L.H., INC.
By: /s/ Xxxxxxxx X. Xxxxx
-----------------------------
Xxxxxxxx X. Xxxxx
Vice President
AGENT AND LENDER:
----------------
GREENWICH CAPITAL MARKETS, INC.
By: /s/ Xxxx X. Xxxxxxxx
-------------------------------
Name: Xxxx X. Xxxxxxxx
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Title: Managing Director
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