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FOURTH AMENDMENT TO CONSOLIDATED AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT

Security Agreement

FOURTH AMENDMENT TO CONSOLIDATED AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT | Document Parties: ULTIMATE ESCAPES, INC. | CABO INVESTMENTS I, LLC | CANDLEWOOD INVESTMENTS I, LLC | CapitalSource Bahamas LLC | CapitalSource Finance LLC | MAHOGANY RUN INVESTMENTS I, LLC | PJ PARTNERS, LLC | SNOWFLAKE INVESTMENTS I, LLC | SUNNY ISLES INVESTMENTS I, LLC | TAHOE INVESTMENTS I, LLC | ULTIMATE BEAVER CREEK, LLC | ULTIMATE ESCAPES HOLDINGS, LLC | ULTIMATE INDIAN ROCKS BEACH, LLC | ULTIMATE KEY WEST, LLC | ULTIMATE LAKE LAS VEGAS, LLC | ULTIMATE SCOTTSDALE ROCKS, LLC | ULTIMATE SCOTTSDALE, LLC You are currently viewing:
This Security Agreement involves

ULTIMATE ESCAPES, INC. | CABO INVESTMENTS I, LLC | CANDLEWOOD INVESTMENTS I, LLC | CapitalSource Bahamas LLC | CapitalSource Finance LLC | MAHOGANY RUN INVESTMENTS I, LLC | PJ PARTNERS, LLC | SNOWFLAKE INVESTMENTS I, LLC | SUNNY ISLES INVESTMENTS I, LLC | TAHOE INVESTMENTS I, LLC | ULTIMATE BEAVER CREEK, LLC | ULTIMATE ESCAPES HOLDINGS, LLC | ULTIMATE INDIAN ROCKS BEACH, LLC | ULTIMATE KEY WEST, LLC | ULTIMATE LAKE LAS VEGAS, LLC | ULTIMATE SCOTTSDALE ROCKS, LLC | ULTIMATE SCOTTSDALE, LLC

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Title: FOURTH AMENDMENT TO CONSOLIDATED AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
Governing Law: Maryland     Date: 6/4/2010
Industry: Hotels and Motels     Sector: Services

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FOURTH AMENDMENT TO CONSOLIDATED AMENDED AND RESTATED

LOAN AND SECURITY AGREEMENT

 

THIS FOURTH AMENDMENT TO CONSOLIDATED AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT (this “ Agreement ”), is made as of April 19, 2010, by each of the entities listed on Schedule A attached hereto   (each individually a “ Borrower ” and collectively the “ Borrowers ”) in favor of CapitalSource Finance LLC, as administrative, payment and collateral agent for the benefit of itself and the other Lenders (as hereinafter defined) (in such capacities, “ Agent ”), CapitalSource Bahamas LLC, a Delaware limited liability company, as collateral agent for the benefit of itself, Agent and the other Lenders (as hereinafter defined) (in such capacity, “ Bahamian Collateral   Agent ”), and the other Lenders (as hereinafter defined) in respect of, and pursuant to, the terms of that certain Consolidated Amended and Restated Loan and Security Agreement, dated as of September 15, 2009, among each Borrower, Agent, Bahamian Collateral Agent and the lenders party thereto (individually and collectively, “ Lenders ”), as modified by this Agreement (as it may be modified or amended to date or hereafter, the “ Loan Agreement ”).  Capitalized terms used herein, but not expressly defined herein, shall have the meanings given to such terms in the Loan Agreement.

 

A.           Amendments to Loan Agreement

 

1.            Amendment to Section 1.1 .  Effective as of the Effective Date, the definitions of “Borrowing Base,” “Maximum Loan Amount” and “Net Income (Loss)” set forth in Section 1.1 are each hereby amended and restated in their entirety as follows:

 

Borrowing Base — means (a) at all times from the Fourth Amendment Effective Date through January 31, 2011, an amount equal to the lesser of (i) the result of (A) the Maximum Loan Amount less (B) the aggregate outstanding amount of Protective Advances or (ii) seventy-five percent (75%) of the Appraised Value of all owned Property encumbered by a Mortgage from a Borrower in favor of Agent or Bahamas Collateral Agent, (b) at all times from February 1, 2011 through April 30, 2011, an amount equal to the lesser of (i) the result of (A) the Maximum Loan Amount less (B) the aggregate outstanding amount of Protective Advances or (ii) seventy percent (70%) of the Appraised Value of all owned Property encumbered by a Mortgage from a Borrower in favor of Agent or Bahamas Collateral Agent, and (c) to the extent the Maturity Date has been extended pursuant to Section 2.9 , at all times from and after May 1, 2011, an amount equal to the lesser of (i) the result of (A) the Maximum Loan Amount less (B) the aggregate outstanding amount of Protective Advances or (ii) sixty-five percent (65%) of the Appraised Value of all owned Property encumbered by a Mortgage from a Borrower in favor of Agent or Bahamas Collateral Agent; provided, however, that on any date on which a mandatory prepayment of the Loan is required to be made pursuant to Section 2.3(f) hereof, the percentage figures in clauses (a) and (b) of this definition shall be automatically reduced to sixty-five percent (65%) or such greater percentage (in no event to exceed the percentage figures set forth in clauses (a) and (b)) yielded after application to the Loan of amounts required to be paid under Section 2.3(f) .”

 

 

 


 

 

Maximum Loan Amount —means $95,093,695.23, as such amount may be permanently reduced from time to time in accordance with Section 2.3 .”

 

Net Income (Loss) —means, with respect to any period, the difference between revenues and expenses as determined in accordance with GAAP, plus the non-refundable portion of all Deposits to the extent such amounts are not included as revenue pursuant to GAAP; provided , however , notwithstanding anything to the contrary in this Agreement or otherwise, Net Income (Loss) for all purposes of this Agreement shall not include (i) any adjustment relating to the conversion of PE DC Members (as defined in the Contribution Agreement) and/or PE Resigning Members (as defined in the Contribution Agreement) to the Club Membership Plan or (ii) one time expenses not to exceed $5,200,000 in the aggregate relating solely to the Borrowers’ recognition of non-cash equity compensation expenses in accordance with GAAP in connection with the deemed full vesting of equity grants to employees of Borrowers upon consummation of the SAAC Purchase Transaction.”

 

2.            Amendment to Section 1.1 .  Effective as of the Effective Date, Section 1.1 of the Loan Agreement is hereby amended to add the following definitions thereto in correct alphabetical order:

 

Cash Coverage Amount —means, at any date of determination, (i) the sum of the Cash Balance for each of the immediately preceding three (3) calendar months as of the end of each such month, divided by (ii) three (3).”

 

Fourth Amendment Effective Date —means April __, 2010.”

 

One-Month Debt Service —means, as of the last day of any calendar month, an amount equal to one (1) month’s interest on the then-outstanding Indebtedness of Borrowers to Agent and Lenders under the Loan pursuant to the terms hereof.”

 

Three-Month Debt Service —means, as of the last day of any calendar month, an amount equal to three (3) months’ interest on the then-outstanding Indebtedness of Borrowers to Agent and Lenders under the Loan pursuant to the terms hereof.”

 

Two-Month Debt Service —means, as of the last day of any calendar month, an amount equal to two (2) month’s interest on the then-outstanding Indebtedness of Borrowers to Agent and Lenders under the Loan pursuant to the terms hereof.”

 

 

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3.            Amendment to Section 2.3(a)(i) .  Effective as of the Effective Date, Section 2.3(a)(i) of the Loan Agreement is hereby amended and restated in its entirety as follows:

 

“(i)           All payments delivered to Agent, other than (A) as set forth in Section 2.3(a)(ii)(A ), Section 2.3(d) , Section 2.3(e) , Section 2.3(f) , Section 2.3(g) and Section 2.3(h) hereof and (B) proceeds arising from the sale of Collateral more particularly set forth in Section 8.2(c) hereof, in good, immediately available funds in legal tender of the United States of America, shall be applied to the Obligations by Agent and Lenders as follows:

 

first , towards the payment of fees due Agent or any Lender pursuant to the terms of this Agreement and any other fees, costs and expenses due Agent or any Lender pursuant to Section 10.2 of this Agreement,

 

second , to pay the outstanding amount of any Protective Advances,

 

third , towards the payment of accrued and unpaid interest under this Agreement in respect of the Loan,

 

fourth , to the payment of the principal of the Loan (which payment shall immediately result in a corresponding permanent reduction in the Maximum Loan Amount), and

 

fifth, towards the payment of all other Obligations in any manner determined by Agent in its discretion.

 

Interest accrued on the Loan in respect of any month shall be due and payable on, and shall be paid by Borrowers no later than, the first Business Day of the following calendar month.”

 

4.            Amendment to Section 2.3(a)(ii)(A) .  Effective as of the Effective Date, Section 2.3(a)(ii)(A) of the Loan Agreement is hereby amended and restated in its entirety as follows:

 

“(A)           In the event any Borrower sells or otherwise disposes of any owned Property, such Borrower shall pay to Agent the applicable Repayment Amount for such Property; plus the amount, if any, owed by Borrowers pursuant to Section 2.3(d) after giving effect to the removal of such Property from the Borrowing Base (if applicable), and Agent shall apply such payments in accordance with the provisions set forth in clause fourth of Section 2.3(a)(i) hereof; provided , further, that if a Default or an Event of Default exists, such Borrower shall repay the Loan in an amount equal to the sum of (y) one hundred percent (100%) of the net proceeds from the disposition of such Property plus (z) the amount, if any, owed by Borrowers pursuant to Section 2.3(d) after giving effect to such sale.  Any such payment shall immediately result in a corresponding permanent reduction in the Maximum Loan Amount.”

 

 

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5.            Amendment to Section 2.3(c) .  Effective as of the Effective Date, Section 2.3(c) of the Loan Agreement is hereby amended to add the phrase “(which such prepayment shall immediately result in a corresponding permanent reduction in the Maximum Loan Amount)” immediately to the end of the last sentence therein.

 

6.            Amendment to Section 2.3(d) .  Effective as of the Effective Date, Section 2.3(d) of the Loan Agreement is hereby amended and restated in its entirety as follows:

 

“(d)            Borrowing Base.   If on any date the aggregate original principal amount of the Loan shall exceed the Borrowing Base on such date, Borrowers shall promptly pay the amount of such excess to Agent together with interest accrued thereon to (but not including) the date of such payment, and such amounts shall be applied by Agent when received in good, collected funds as set forth in clause fourth of Section 2.3(a)(i) hereof.  Any such payment shall immediately result in a corresponding permanent reduction in the Maximum Loan Amount.  If the outstanding principal amount of the Loan shall at any time exceed the Maximum Loan Amount, Borrowers shall promptly pay the amount of such excess to Agent together with interest accrued thereon to (but not including) the date of such payment and such amounts shall be applied by Agent when received in good, collected funds as set forth in clause fourth of Section 2.3(a)(i) hereof.”

 

7.            Amendment to Section 2.3(e) .  Effective as of the Effective Date, Section 2.3(e) of the Loan Agreement is hereby amended and restated in its entirety as follows:

 

“(e)            Minimum Amortization .          Notwithstanding anything to the contrary in this Agreement, Borrowers shall repay the Loan to the extent necessary for Borrower to comply with the required mandatory principal paydowns on the dates and in the cumulative principal amounts set forth in Schedule 19 attached hereto.  Agent and Lenders shall have no obligation to release any Liens on any Collateral in connection with such payments (other than in connection with a payment in full in cash of the Obligations).  Each such payment shall immediately result in a corresponding permanent reduction in the Maximum Loan Amount.  Upon receipt of payment of any Repayment Amount, insurance proceeds, Condemnation Compensation or mandatory prepayment pursuant to Section 2.3(f) , Section 2.3(g) or Section 2.3(h) to be credited toward payment of principal of the Loan pursuant to Section 2.3(a)(i) hereof or pursuant to Section 2.3(f) , Section 2.3(g) or Section 2.3(h) hereof, as applicable, Agent shall credit the amount actually received to the next scheduled required amortization payment(s) set forth in Schedule 19 .  In the event that, as of the end of each such amortization period set forth in Schedule 19 , the Repayment Amount(s), insurance proceeds, Condemnation Compensation and/or mandatory prepayments pursuant to Section 2.3(f) , Section 2.3(g) and Section 2.3(h) actually collected by Agent through the end of such amortization period is not sufficient to satisfy the amount of principal reduction payable by Borrower to Agent and Lenders through the end of such amortization period, Borrower shall pay to Agent such difference.  In the event that, as of the end of each such amortization period, the Repayment Amounts, insurance proceeds, Condemnation Compensation and mandatory prepayments pursuant to Section 2.3(f) , Section 2.3(g) and Section 2.3(h) collected by Agent during such amortization period are in excess of the amount necessary to satisfy the required principal reduction payments to be made by Borrower through such amortization period, the excess amount of such payments shall be applied to the next succeeding principal payment required pursuant to Schedule 19 .”

 

 

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8.            Amendment to Section 2.3(f) .  Effective as of the Effective Date, Section 2.3(f) of the Loan Agreement is hereby amended and restated in its entirety as follows:

 

“(f)            SAAC Purchase Transaction; Other Equity Sales or Issuances .  Notwithstanding anything to the contrary in this Agreement, within one (1) Business Day following consummation of the SAAC Purchase Transaction, any other sale of equity interests of Holdings by Ultimate Holdings or SAAC to a third party, any sale of equity interests of Ultimate Holdings by Ultimate Resort to any third party or any issuance of equity interests of Holdings, Ultimate Holdings or SAAC to any third party, Borrowers shall prepay the Loan in an amount equal to twenty-five percent (25%) of the Net Proceeds of the SAAC Purchase Transaction or such other sale or issuance of equity interests of Holdings paid to Holdings, Ultimate Holdings and/or any Company Affiliate of Ultimate Holdings, as applicable; provided, that in no event shall the amount prepaid pursuant to this Section 2.3(f) exceed the amount required to be paid as of the date of such prepayment to reduce the principal balance of the Loan to an amount equal to sixty-five percent (65%) of the Appraised Value of all owned Property encumbered by a Mortgage from a Borrower in favor of Agent or Bahamas Collateral Agent.  Any amounts paid pursuant to this Section 2.3(f) shall be applied to the principal balance of the Loan notwithstanding the provisions of Section 2.3(a) above and shall immediately result in a corresponding permanent reduction in the Maximum Loan Amount.”

 

9.            Amendment to Section 2.3 .  Effective as of the Effective Date, Section 2.3 of the Loan Agreement is hereby amended to add the following subsection (g) to the end thereto:

 

 

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“(g)            Membership Sales and Upgrades .  Notwithstanding anything to the contrary in this Agreement, Borrowers shall prepay the Loan in an amount equal to the greater of (i) $500,000 per calendar quarter (which such amount shall be paid on or prior to the last day of each calendar quarter) and (ii) twenty-five percent (25%) of the aggregate amount of each Deposit received by Borrowers from a Member after the Fourth Amendment Effective Date (which amount shall be paid within one (1) Business Day of Borrowers’ receipt of each such Deposit); provided, that in no event shall the amount prepaid pursuant to this Section 2.3(g) exceed the amount required to be paid as of the date of such prepayment to reduce the principal balance of the Loan to an amount equal to sixty-five percent (65%) of the Appraised Value of all owned Property encumbered by a Mortgage from a Borrower in favor of Agent or Bahamas Collateral Agent.  Any amounts paid pursuant to this Section 2.3(g) shall be applied to the principal balance of the Loan notwithstanding the provisions of Section 2.3(a) above and shall immediately result in a corresponding permanent reduction in the Maximum Loan Amount.”

 

10.            Amendment to Section 2.3 .  Effective as of the Effective Date, Section 2.3 of the Loan Agreement is hereby amended to add the following subsection (h) to the end thereto:

 

“(h)            Deposit Account Amounts .  On the Fourth Amendment Effective Date, Borrowers shall pay to Agent the entire Cash Balance of Borrowers on deposit in any segregated account pursuant to Section 7.20 (as in effect immediately prior to the Fourth Amendment Effective Date).  Any amounts paid pursuant to this Section 2.3(h) shall be applied to the principal balance of the Loan notwithstanding the provisions of Section 2.3(a) above and shall immediately result in a corresponding permanent reduction in the Maximum Loan Amount.”

 

11.            Amendment to Section 2.9.   Effective as of the Effective Date, Section 2.9 of the Loan Agreement is hereby amended and restated in its entirety as follows:

 

2.9             Extension Term . Borrowers may request that Agent and Lenders extend the Maturity Date for two (2) additional twelve (12) calendar month periods in accordance with the requirements below.  Such extension requests shall be granted to Borrowers upon the satisfaction of the following conditions:  (a) Borrowers shall have delivered to Agent a written request to extend the Maturity Date at least sixty (60), but not more than ninety (90) calendar days, prior to the expiration of the then-effective Maturity Date; (b) Borrowers shall have delivered to Agent, for the benefit of the Lenders, on or before the effectiveness of such extension, an extension fee equal to one-quarter of one percent (0.25%) of the then Maximum Loan Amount; (c) at the time of (i) the making of such request and (ii) the expiration of the then-effective Maturity Date, the principal balance of the Loan shall be equal to or less than sixty-five percent (65%) of the Appraised Value of all owned Property encumbered by a Mortgage from a Borrower in favor of Agent or Bahamas Collateral Agent, (d) no Default or Event of Default shall have occurred at the time of making the extension request or the commencement of the extension term of the Loan; (e) Borrowers shall have executed any agreements, documents or amendments to this Agreement and the other Loan Documents reasonably requested by Agent in connection with such extension; (f) during the extended term of the Loan, all terms and conditions of the Loan Documents (other than the original Maturity Date or this extension option) shall continue to apply; and (g) Borrowers shall pay all out-of-pocket costs and expenses incurred by Agent in connection with such extension of the Loan including Agent’s reasonable attorneys’ fees.”

 

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12.            Amendment to Section 7.20.   Effective as of the Effective Date, Section 7.20 of the Loan Agreement is hereby amended and restated in its entirety as follows:

 

7.20       Cash Coverage .  Borrowers, on a consolidated basis, shall (i) as of June 30, 2010, and at all times through September 29, 2010, have a Cash Coverage Amount of not less than One-Month Debt Service, (ii) as of September 30, 2010, and at all times through December 30, 2010, have a Cash Coverage Amount of not less than Two-Month Debt Service, and (iii) as of December 31, 2010, and at all times thereafter, have a Cash Coverage Amount of not less than Three-Month Debt Service.”

 

13.            Amendment to Schedule 19 .  Effective as of the Effective Date, Schedule 19 to the Loan Agreement is hereby amended and restated in its entirety in the form of Exhibit A attached hereto.

 

B.           Conditions Precedent.

 

The effectiveness of this Agreement is subject to the satisfaction of the following conditions precedent in a manner satisfactory to Agent, unless specifically waived in writing by Agent (the date on which all such conditions are satisfied or waived being the “ Effective Date ”):

 

(a)           Agent shall have received this Agreement, duly executed by each of the parties hereto.

 

 (c)           The representations and warranties contained herein and in the Loan Agreement, as amended hereby, and the Loan Documents, shall be true and correct in all material respects as of the date hereof, as if made on the date hereof, except for representations and warranties that speak as to a particular date, in which case such representations and warranties shall be true and correct in all material respects as of such applicable date.

 

 

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(d)           After giving effect to this Agreement, no Default or Event of Default shall have occurred and be continuing, unless such Default or Event of Default has been otherwise specifically waived in writing by Agent.

 

(e)           All documents, instruments and other legal matters in connection with the execution of this Agreement shall be satisfactory in form and substance to Agent and its counsel.

 

C.           Limited Waiver.

 

As of April 1, 2010, and until the date immediately prior to the date hereof, the aggregate outstanding principal amount of the Loan exceeded the Borrowing Base.  In connection with the foregoing, Borrowers failed to comply with the provisions set forth in Section 2.3(d) of the Loan Agreement requiring Borrowers to promptly pay the amount of such excess to Agent together with interest accrued thereon (the “ Specified Default ”).  The Specified Default constitutes an Event of Default under Section 8.1(a) of the Loan Agreement (the “ Specified Event of Default ”).  As a result, Agent, Bahamian Collateral Agent and Lenders have the right to exercise any and all rights and remedies available to them at law or in equity, including, without limitation, the rights and remedies set forth in the Loan Agreement.  Notwithstanding the foregoing, Agent and Lenders hereby agree to waive the Sp


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