Ex 10.1
Final Execution Copy
9/27/07
LOAN AND SECURITY AGREEMENT
among
SILVERLEAF
RESORTS, INC.
(as
Borrower)
and
THE
PARTIES WHICH HEREAFTER EXECUTE THIS AGREEMENT
OR
A JOINDER AGREEMENT
(as
Lenders)
and
LIBERTY
BANK
(as
Lender and as Facility and Collateral Agent)
As
of September 28, 2007
LOAN AND SECURITY AGREEMENT
THIS LOAN AND SECURITY AGREEMENT , dated as of September
28, 2007, entered into by and among SILVERLEAF RESORTS,
INC. , a Texas corporation, having an address of 1221
River Bend Drive, Suite 120, Dallas, Texas 75247 (as
“Borrower”), the parties, including
LIBERTY BANK , a Connecticut nonstock mutual
savings bank, having an office and place of business at 315 Main
Street, Middletown, Connecticut 06457 which execute and deliver
this Agreement or a joinder agreement to this Agreement in their
respective capacities as Lenders hereunder (collectively, the
“Lenders” and each individually a “Lender”)
and LIBERTY BANK as facility agent and collateral
agent (“Agent”).
WHEREAS,
Borrower is engaged in the business of acquiring,
constructing, developing, owning, managing, selling and
otherwise dealing with Intervals at the Resorts (as each such
term is hereafter defined); and
WHEREAS,
in connection with the Loans to be made by Lenders pursuant to
this Agreement, Agent has agreed to act as facility agent and
collateral agent for the other Lenders and to perform such
duties with respect to the Loans as are expressly set forth
herein;
WHEREAS,
Lenders, subject to the terms and conditions of this Loan and
Security Agreement, have agreed to provide to Borrower, for
the purpose of providing liquidity in connection with
Borrower’s ownership and sale of Intervals, a loan in
the amount of the Commitment.
NOW,
THEREFORE, in consideration of the mutual covenants and
agreements contained in this Agreement, and for other good and
valuable consideration, the receipt and adequacy of which are
acknowledged, the parties to this Agreement, intending to be
legally bound, agree as follows:
Section 1-Definition Of Terms
1.1
Definitions .
Capitalized terms used in this Agreement are
defined in this Section 1 . The
definitions include the singular and plural forms of the terms
defined.
Account means an “account,” as that
term is defined in the Code, and any and all supporting obligations
in respect thereof.
Additional Eligible Resorts or Additional Eligible
Resort have the meanings given to such terms in
Section 3.5 hereof.
Advance means a portion of the proceeds of the Loan
advanced from time to time by Lenders to Borrower in accordance
with the terms of this Agreement.
Affiliate means, with respect to Borrower or any
other Person, any Person who, directly or indirectly through one or
more intermediaries, controls, is controlled by, or is under common
control with, such Person. For purposes of this
definition, “control” means the possession, directly or
indirectly, of the power to direct the management and policies of a
Person, whether through the ownership of stock, by contract, or
otherwise; provided, however , that, in any event: (a) any
Person which owns directly or indirectly 10% or more of the
securities having ordinary voting power for the election of
directors or other members of the governing body of a Person or 10%
or more of the partnership or other ownership interests of a Person
(other than as a limited partner of such Person) shall be deemed to
control such Person, (b) each director (or comparable manager) of a
Person shall be deemed to be an Affiliate of such Person, and (c)
each partnership or joint venture in which a Person is a partner or
joint venturer shall be deemed to be an Affiliate of such
Person.
Agreement means this Loan and Security Agreement by
and among Borrower, Agent and each Lender which executes this
Agreement (including the Exhibits and Schedules to it) or a joinder
agreement hereto, as it may be amended from time to
time.
Annual Operating Plan means Borrower’s
financial and business projections for its operations for the
upcoming fiscal twelve (12) month period inclusive of a budget and
which shall represent Borrower’s good faith best estimate of
its future performance for the period covered thereby.
Applicable Laws means all applicable laws, rules,
regulations and orders of any Governmental Authority.
Assignment of Notes Receivable and Mortgages means
a recordable Assignment of Notes Receivable and Interval Mortgages,
in the form attached hereto as Exhibit A , made by Borrower
in favor of Agent evidencing the assignment to Agent, as collateral
agent for each Lender, of all of the Pledged Notes Receivable and
Mortgages.
Availability means, as of any date of
determination, if such date is a Business Day, and determined at
the close of business on the immediately preceding Business Day, if
such date of determination is not a Business Day, the amount that
Borrower is entitled to borrow as Advances under Section 2.1
hereof (after giving effect to all then outstanding
Obligations).
Borrower means Silverleaf Resorts, Inc., a Texas
corporation.
Borrowing Base means, with respect to each Eligible
Note Receivable pledged to Agent hereunder in connection with each
Advance from and after the Closing Date, an amount equal to
seventy-five percent (75%) of the remaining principal balance of
each such Eligible Note Receivable.
Borrowing Base Report means the form attached as
Exhibit B hereof, which report, from time to time shall be
signed by the Chief Operating Officer, Chief Financial Officer or
Senior Vice President/Capital Markets or such other Person
designated in writing by Borrower to Agent.
Business Day means each day that is not a Saturday,
a Sunday or a legal holiday under the laws of the States of Texas
or Connecticut.
Capital Lease means a lease that is required to be
capitalized for financial reporting purposes in accordance with
GAAP.
Closing Date means the date of this
Agreement.
Code means the Uniform Commercial Code (or any
successor statute), as in effect from time to time, of the State of
Connecticut or of any other state the laws of which are required as
a result thereof to be applied in connection with the issue of
perfection or the effect of perfection of security interests;
provided that to the extent that the Code is used to define
any term herein or in any other Loan Documents and such term is
defined differently in different Articles or divisions of the Code,
the definition of such term contained in Article 9 of the
Connecticut Uniform Commercial Code shall govern.
Collateral means, collectively, all now owned or
hereafter acquired right, title and interest of Borrower, in all of
the following:
(a) Pledged
Notes Receivable and all proceeds of or from
them;
(b) Mortgages
and all proceeds of or from them;
(c) Documents,
instruments, accounts, chattel paper, and general intangibles
relating to the Pledged Notes Receivable and the related
Mortgages;
(d) All
books, records, reports, computer tapes, disks and software
relating to the Collateral; and
(e) Extensions,
additions, improvements, betterments, renewals, substitutions
and replacements of, for or to any of the Collateral, wherever
located, together with the products, proceeds, issues, rents
and profits thereof, and any replacements, additions or
accessions thereto or substitutions thereof.
Commitment means, singly, the obligation of each
Lender to make a Loan or Loans to Borrower in an aggregate amount
not to exceed the Pro Rata Percentage for each Lender of each
Advance and collectively, to all Loans to be made by all Lenders as
provided herein. The Commitment as of the Closing Date
is the Maximum Amount in the aggregate outstanding at any time
during the Term of this Agreement, and may from time to time be
increased or decreased by Agent and Lenders upon written a written
agreement setting forth the terms and conditions of any increase or
decrease by and between Agent, Lenders and
Borrower.
Common Elements means all common elements,
including but not limited to any limited common elements, as each
such common element is defined or provided for in the Declaration
or other Timeshare Documents.
CSF means CapitalSource Finance, LLC.
CSF Facility means that certain credit facility
provided by CSF to Borrower pursuant to the CSF
Documents.
CSF Documents means the loan agreement, the
promissory notes and all other agreements or documents executed in
connection with the CSF Facility, as each may be amended, restated
or otherwise modified from time to time.
Custodian means Wells Fargo Bank, National
Association or Wells Fargo Corporate Trust Services having an
address of 751 Kasota Ave, MAC# N9328-011, Minneapolis,
MN 55414, or such other custodial Agent as may be
approved by Agent in writing from time to
time. Custodian shall be Lender's Agent for the purpose
of maintaining possession of all present and future Collateral
documents described in Section 3.4 hereof.
Custodial Agreement means the Custodial and
Collateral Agency Agreement of even date herewith, by and among
Agent, as Agent for each Lender, Borrower and Custodian, pursuant
to which the Custodian is to maintain possession of all present and
future Collateral documents described in Section 3.4
hereof, or any custodial agreement entered into as a replacement of
such agreement.
Daily Balance means, with respect to each day
during the term of this Agreement, the amount of an Obligation owed
at the end of such day.
Debtor Relief Laws means any applicable
liquidation, conservatorship, bankruptcy, moratorium,
rearrangement, insolvency, reorganization or similar law,
proceeding or device providing for the relief of debtors from time
to time in effect and generally affecting the rights of
creditors.
Declaration or Declarations means, with respect to
each Resort, the applicable Declaration or Declarations described
on Schedule 1.1(a) hereto.
Declarant Rights means the rights of the declarant
in the Declaration for each Resort.
Default means an event or condition the occurrence
of which immediately is or, with a lapse of time or the giving or
notice or both, becomes an Event of Default.
Default Rate means the Interest Rate plus four
hundred (400) basis points per annum; provided, however,
that the Default Rate shall in no event exceed the highest interest
rate permitted to be charged under applicable usury
laws.
Designated Account means account number 753813286
of Borrower maintained with Borrower’s Designated Account
Bank, or such other deposit account of Borrower (located within the
United States) that has been designated as such, in writing, by
Borrower to Agent.
Designated Account Bank means JP Morgan Chase Bank,
ABA Number 113000609.
Division means the governmental authority of each
state in which a Resort is located, having jurisdiction over the
establishment and operation of the Resorts in question and the sale
of Intervals at such Resort.
EBITDA means, with respect to any Person for any
period: (a) the sum of (i) net income (but excluding any
extraordinary gains or losses or any gains or losses from the sale
or disposition of assets other than in the ordinary course of
business, it being agreed however that gains from the sale of Notes
Receivable in connection with securitization or conduit
transactions shall be included in net income, but losses from such
sales shall be deducted from ordinary income), (ii) interest
expense, (iii) depreciation and amortization and other non-cash
items properly deducted in determining net income, and (iv)
federal, state and local income taxes, in each case for such Person
for such period, computed and calculated in accordance with GAAP
minus (b) non-cash items properly added in determining net income,
in each case for the corresponding period.
Eligible Notes Receivable means those Pledged Notes
Receivable which satisfy each of the following
criteria:
(a) Borrower
shall be the sole payee;
(b) it
arises from a bona fide sale by Borrower of one or more
Intervals;
(c) the
Interval sale from which it arises shall not have been
cancelled by Purchaser, and any statutory or other applicable
cancellation or rescission period shall have expired and the
Interval sale is otherwise in compliance with this
Agreement;
(d) it
is secured by a Mortgage on the purchased
Interval;
(e) principal
and interest payments on it are payable to Borrower in legal
tender of the United States;
(f)
payments of principal and interest on it are payable in equal
monthly installments;
(g) it
shall have an original term of no more than one hundred twenty
(120) months, and the weighted average term on all Eligible
Notes Receivable in respect of which Advances are outstanding
shall not be more than one hundred and eight (108)
months;
(h) a
cash down payment has been received from Purchaser or the
maker in an amount equal to at least ten percent (10%) of the
actual purchase price of a one week Interval (at least fifteen
percent (15%) in the case of a Purchaser with a FICO Score
indicator of less than 615), and Purchaser shall have received
no cash or other rebates of any kind;
(i)
the first payment under each Note Receivable must be due
and payable to Borrower within 45 days of the closing date of
the purchase of the Interval, no monthly installment is more
than thirty (30) days contractually past due at the time of an
Advance in respect of such Note Receivable, nor more than
sixty (60) days contractually past due at any
time;
(j)
the rate of interest payable on the unpaid balance is at least
ten percent (10%), and the rate of interest on all Eligible
Notes Receivable in respect of which Advances are outstanding
shall not be less than fifteen percent (15%) per annum at any
time, excluding from each minimum any Note Receivable under
which the applicable Purchaser is paying a lower rate pursuant
to the SCRA;
(k)
the Purchaser of the related Interval has immediate access to
the timeshare “unit week” related to such
purchase, and the related unit has been completed, developed,
and furnished in accordance with the specifications provided
in the Purchaser’s purchase contract, public offering
statement and other Timeshare Documents; and Purchaser has,
subject to the terms of the Declaration, purchase contract,
public offering statement and other Timeshare Documents,
complete and unrestricted access to the related Interval and
the Resort;
(l) neither
Purchaser of the related Interval or any other maker of the
Note is an Affiliate of, or related to, or employed by
Borrower;
(m) Purchaser
or other maker has no claim against Borrower and no defense,
set-off or counterclaim with respect to the Note
Receivable;
(n) the
maximum remaining principal balance of any such Note
Receivable, whether from an individual Purchaser or a related
group of Purchasers, shall not exceed $50,000 (or such greater
amount as may be approved in writing in advance by Agent),
provided , that up to 5% of Eligible Receivables may
have a maximum balance not to exceed $75,000 per Note
Receivable and/or $100,000 in the aggregate for a related
group of Purchasers;
(o) it
is executed by a U.S. citizen or legal resident; provided,
however, that up to five percent (5%) of the outstanding
principal balance of all Eligible Notes Receivable may at any
time be comprised of Notes Receivable executed by a non-U.S.
citizen or legal resident, provided that any such
non-U.S. citizen or legal resident Purchaser makes payments on
the applicable Note Receivable via Payment Authorization
Agreement;
(p) the
original of such Note Receivable has been endorsed to Agent
and delivered to the Custodian as provided in this Agreement,
and the terms thereof and all instruments related thereto
shall comply in all respects with all applicable federal and
state laws and the regulations promulgated
thereunder;
(q) the
Unit in which the timeshare Interval being financed or
evidenced by such Note Receivable is located, shall not be
subject to any Lien which is not previously consented to in
writing by Agent;
(r)
the Note Receivable is in full compliance with all Applicable
Laws;
(s) no
modifications or extensions of the Note Receivable have been
agreed to other than as permitted under Section 3.6
hereof, nor is the Note Receivable the result of a downgrade
to cure a Purchaser default under another Note
Receivable;
(t)
the Note Receivable conforms to Borrower’s underwriting
guidelines and criteria as set forth on Schedule 1.1(b)
hereof;
(u) the
Note Receivable is evidenced by standard legal documentation
and on a form reviewed by and acceptable to
Agent;
(v) the
applicable Purchaser’s FICO Score is not less than 600,
provided that 5% of the outstanding principal balance
of all Eligible Notes Receivable may at any time be comprised
of Notes Receivable where the applicable Purchaser has no FICO
Score, and 25% may at any time be comprised of Notes
Receivable where the applicable Purchaser has no FICO Score or
a FICO Score below 600, and the weighted average FICO Score
(measured once at the time of funding) of Eligible Notes
Receivable in a funding may not be less than 650;
(w) if
the loan is a newly originated Note Receivable which is
replacing an existing Eligible Note Receivable pledged as
Collateral under the Agreement and the proceeds have been used
to finance the purchase of an Interval which is being upgraded
by the Purchaser to a more expensive Interval:
(1) the
principal balance of the existing Eligible Note Receivable
which is being upgraded may still be included for purposes of
calculating the Borrowing Base for a period of time expiring
on the earlier to occur of (i) the 31st day after the consumer
documents effecting the upgrade have been executed or (ii) the
date on which any payment on such Eligible Note Receivable
becomes thirty (30) or more days past due;
(2) on
or before the second Business Day after the expiration of the
statutory rescission period in connection with any consumer
documents executed effecting any upgrade involving an Eligible
Note Receivable and in any event within ten (10) days of such
upgrade, the Borrower shall deliver to the Agent or its
designee the original of the new promissory note, comparable
instrument or installment sale contract executed in connection
with such upgrade duly endorsed in blank by the Borrower and
the Borrower will cause all payments made with respect to such
new promissory note, comparable instrument or installment sale
contract to be forwarded to the lockbox;
(3) any
new upgraded Note Receivable involving a prior Eligible Note
Receivable shall only be included as part of the Borrowing
Base if (i) the prior Eligible Note Receivable has been
removed from the Borrowing Base and the new upgraded Note
Receivable satisfies all conditions for an Eligible Note
Receivable, and (ii) the subject Purchaser’s FICO Score
is not less than 600 (unless the prior Eligible Note
Receivable had been paid in full or the subject Purchaser has
made a cash downpayment of at least 20% of the difference
between the sales price of the prior Eligible Note Receivable
and the sales price of the new Eligible Note
Receivable).
Encumbered Intervals means the Intervals subject to
the Mortgages.
Environmental Laws means the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as
amended from time to time, the Resource Conservation and Recovery
Act of 1976, as amended from time to time, the Superfund Amendments
and Reauthorization Act of 1986, as amended, the federal Clean Air
Act, the federal Clean Water Act, the federal Safe Drinking Water
Act, the federal Toxic Substances Control Act, the federal
Hazardous Materials Transportation Act, the federal Emergency
Planning and Community Right to Know Act of 1986, the federal
Endangered Species Act, the federal Occupational Safety and Health
Act of 1970, the federal Water Pollution Control Act, all state and
local environmental laws, rules and regulations of each state in
which a Resort is located, as all of the foregoing legislation may
be amended from time to time, and any regulations promulgated
pursuant to the foregoing; together with any similar local, state
or federal laws, rules, ordinances or regulations either in
existence as of the date hereof, or enacted or promulgated after
the date of this Agreement, that concern the management, control,
storage, discharge, treatment, containment, removal and/or
transport of Hazardous Materials or other substances that are or
may become a threat to public health or the environment; together
with any common law theory involving Hazardous Materials or
substances which are (or alleged to be) hazardous to human health
or the environment, based on nuisance, trespass, negligence, strict
liability or other tortious conduct, or any other federal, state or
local statute, regulation, rule, policy, or determination
pertaining to health, hygiene, the environment or environmental
conditions.
Environmental Indemnification Agreement means the
Environmental Indemnification Agreement made by Borrower to Agent
pursuant to this Loan Agreement, as the same may be amended from
time to time.
Event of Default has the meaning given to it in
Section 8.1 hereof.
Exchange Company means Resort Condominiums
International, Inc. (“RCI”) or Interval International,
Inc. (“II”).
FICO Score means the credit score attributed to a
Purchaser by the Fair Isaac Company or such similar credit score
reporting company acceptable to Lender. Where a
Purchaser consists of more than one individual, then the applicable
FICO Score shall be deemed to mean that of the primary
obligor.
Final Maturity Date means September 28, 2012 or
such date as is thirty six (36) months following the extension of
any Revolving Loan Period.
Financial Statements means the balance sheets and
statements of income and expense of the Borrower, and the related
notes and schedules delivered by Borrower to Agent prior to the
Closing Date and provided for in
Section 4.4 (c) hereof; and the quarterly, annual
and other periodic financial statements and reports required to be
provided to Agent pursuant to Section 7.1 (h)
hereof.
GAAP means generally accepted accounting
principles, applied on a consistent basis, as described in Opinions
of the Accounting Principles Board of the American Institute of
Certified Public Accountants and/or in statements of the Financial
Accounting Standards Board which are applicable in the
circumstances as of the date in question.
Governmental Authority means any federal, state,
local, or other governmental or administrative body,
instrumentality, department, or agency or any court, tribunal,
administrative hearing body, arbitration panel, commission, or
other similar dispute-resolving panel or body.
Hazardous Materials means each of “hazardous
substances,” “hazardous waste” or
“hazardous constituents,” “toxic
substances”, and “solid waste”, as defined in the
Environmental Laws, and any other contaminant or any material,
waste or substance which is petroleum or petroleum based, asbestos,
polychlorinated biphenyls, flammable explosives, or radioactive
materials.
IRC means the Internal Revenue Code of 1986, as in
effect from time to time.
IRS means the Internal Revenue Service of the
United States of America.
Indebtedness means (a) all obligations for borrowed
money, (b) all obligations evidenced by bonds, debentures, notes,
or other similar instruments and all reimbursement or other
obligations in respect of letters of credit, bankers acceptances,
interest rate swaps, or other financial products, (c) all
obligations under Capital Leases, (d) all obligations or
liabilities of others secured by a Lien on any asset a Person or
its Subsidiaries, irrespective of whether such obligation or
liability is assumed, (e) all obligations for the deferred purchase
price of assets (other than trade debt incurred in the ordinary
course of business and repayable in accordance with customary trade
practices), and (f) any obligation of Borrower or its Subsidiaries
guaranteeing or intended to guarantee (whether directly or
indirectly guaranteed, endorsed, co-made, discounted, or sold with
recourse) any obligation of any other Person that constitutes
Indebtedness under any of clauses (a) through (e)
above.
Interest Rate means a variable rate, adjusted as of
each LIBO Rate Determination Date, equal to the LIBO Rate,
determined as of each LIBO Rate Determination Date, plus two
hundred and forty (240) basis points per annum.
Interval means, with respect to each Resort the
undivided fractional fee interval ownership interest as a
tenant-in-common (sometimes referred to in the Timeshare Documents
as a vacation ownership interest, condoshare interest, or
condoshare week) in a Unit sold to a Purchaser by delivery of a
deed for a time-share period per calendar year (or, in the case of
a biennial use period, per alternate calendar year) of one week (as
defined in the Declaration), together with all appurtenant rights
and interests, including, without limitation, appurtenant rights to
use Common Elements, and easement, license, access and use rights
in and to all Resort facilities and amenities (as described in the
Declaration), all as more particularly described in the Declaration
or other Timeshare Documents. Notwithstanding the
foregoing, the term “Interval” shall also include, with
respect to the Oak N’ Spruce Resort only, the
beneficial interest in the entity which owns each of the Units at
the Oak N’ Spruce Resort, as evidenced by the
delivery to the Purchaser of any such beneficial interest of a
certificate of beneficial interest for a timeshare period per
calendar year (or, in the case of biennial use period, per
alternate calendar year) of one week (as defined in the Oak
N’ Spruce Resort Declaration), together with all
pertinent rights and interests, including, without limitation, a
pertinent right to use Common Elements, and easements, license,
access and use rights in and to all Oak N’ Spruce
Resort facilities and amenities, all as more particularly described
in the Declaration or other Timeshare Documents for the Oak
N’ Spruce Resort.
Lender has meaning given to it in the preamble
hereof, and shall include any other Person made a party to this
Agreement in accordance with the provisions of Section 10.9
hereof.
Lender Expenses means all (a) costs or expenses
(including taxes, and insurance premiums) required to be paid by
Borrower or its Subsidiaries under any of the Loan Documents that
are paid or incurred by Agent or any Lender, (b) fees or
charges paid or incurred by Agent or any Lender in
connection with the Borrower and its Subsidiaries, including, fees
or charges for photocopying, notarization, couriers and messengers,
telecommunication, public record searches (including tax lien,
litigation, bankruptcy and UCC searches), filing, recording,
publication, appraisal (including periodic Collateral appraisals or
business valuations to the extent of the fees and charges (and up
to the amount of any limitation) contained in this Agreement), (c)
costs and expenses incurred by Agent or any Lender in
the disbursement of funds to Borrower (by wire transfer or
otherwise), (d) charges paid or incurred by Agent or
any Lender resulting from the dishonor of checks
relating to the Borrower or associated with the Collateral, (e)
reasonable costs and expenses paid or incurred by the Agent or any
Lender to correct any default or enforce any provision of the Loan
Documents, or in gaining possession of, maintaining, handling,
preserving, storing, shipping, selling, preparing for sale, or
advertising to sell the Collateral, or any portion thereof,
irrespective of whether a sale is consummated, (f) audit fees and
expenses of Agent or any Lender related to audit
examinations of the Books to the extent of the fees and charges
(and up to the amount of any limitation) contained in this
Agreement, (g) reasonable costs and expenses of third party claims
or any other suit paid or incurred by the Agent or
any Lender in enforcing or defending the Loan Documents
or in connection with the transactions contemplated by the Loan
Documents or the Agent or any Lender’s
relationship with Borrower, (h) Agent and each Lender’s and
Participant’s reasonable fees and expenses (including
attorneys fees) incurred in advising, structuring, drafting,
reviewing, administering, or amending the Loan Documents, and (i)
Agent and each Lender’s and Participant’s reasonable
fees and expenses (including attorneys fees) incurred in
terminating, enforcing (including attorneys fees and expenses
incurred in connection with a “workout,” a
“restructuring,” or an Insolvency Proceeding concerning
Borrower or its Subsidiaries or in exercising rights or remedies
under the Loan Documents), or defending the Loan Documents,
irrespective of whether suit is brought, or in taking any Remedial
Action concerning the Collateral.
Liberty Bank means Liberty Bank, a Connecticut
nonstock mutual savings bank.
LIBO Rate Determination Date means the first
Business Day of each month. Notwithstanding the
foregoing, the initial LIBO Rate Determination Date shall be the
Closing Date.
LIBO Rate means the London Interbank Offered Rate
for one-month United States dollar-denominated deposits as
published under the designation “Money Rates” in the
“Money and Investing” section of The Wall Street
Journal (Eastern Edition) (the
“WSJ” ). In the event that
the LIBO Rate established by the WSJ shall no longer be available,
due to either the nonexistence of the WSJ or the WSJ’s
failure to publish such a rate, then Lender shall choose a
substitute rate based upon a national index, selected by Lender in
its sole discretion.
Lien means any interest in property securing an
obligation owed to, or claim by, a Person other than the owner of
such property, whether such interest arises in equity or is based
on the common law, statute, or contract.
Loan means, as the context requires,
singly each Advance and collectively all Advances made by Lenders
to Borrower under or pursuant to this Agreement.
Loan Documents means, collectively, this Agreement
and the following documents and instruments listed below as such
agreements, documents, instruments or certificates may be amended,
renewed, extended, restated or supplemented from time to
time.
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(c)
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The
Environmental Indemnification Agreement;
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(d)
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The
Assignment of Notes Receivable and Mortgages;
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(e)
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Borrower’s
Certificate and Request for Advance;
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(f)
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The
Lockbox Agreement;
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(g)
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The
Custodial Agreement;
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(h)
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The
Standby Servicing Agreement Assignment;
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(i)
UCC financing statements covering the Collateral, to be filed
with the Texas Secretary of State and the Secretary of State
and/or such other office where UCC financing statements are
required to be filed pursuant to the Code; and
(j)
Such other agreements, documents, instruments, certificates
and materials as Agent may request to evidence the
Obligations; to evidence and perfect the rights and Liens and
security interests of Agent, as agent for Lenders,
contemplated by the Loan Documents, and to effectuate the
transactions contemplated herein, as such agreements,
documents, instruments or certificates may be hereafter
amended, renewed, extended, restated or supplemented from time
to time.
Loan Year means the period from the Closing Date
through the last day of the next full twelve (12) calendar month
period and each twelve (12) calendar month period
thereafter.
Lockbox Agent means JP Morgan Chase Bank, a New
York banking association having a place of business at
2200 Ross Avenue, Dallas, Texas 75201, or such other
financial institution as may be approved by Agent in writing from
time to time.
Lockbox Agreement means the Lockbox Agreement of
even date herewith, by and among Borrower, Lenders, Agent,
Servicing Agent and Lockbox Agent, pursuant to which the Lockbox
Agent is to provide lockbox, reporting and related services and is
to provide for the receipt of payments on the Notes Receivable and
the disbursement of such payments to Agent.
Mandatory Prepayment means any prepayment required
by Section 2.4 (b) hereof.
Marketing and Sales Expenses means all promotion,
lead generation, sales commissions and all other marketing expenses
incurred or paid by Borrower pursuant to any marketing agreements
or otherwise.
Material Adverse Change means (a) a material
adverse change in the business, prospects, operations, results of
operations, assets, liabilities or condition (financial or
otherwise) of Borrower, taken as a whole, (b) a material
impairment of the ability of Borrower to perform its obligations
under the Loan Documents or of the Lender’s ability to
enforce the Obligations or realize upon the Collateral, or
(c) any impairment of the enforceability or priority of the
Lender’s Liens with respect to the Collateral.
Maximum Amount means an aggregate amount not to
exceed at any time $37,500,000.00. provided that such maximum
amount is subject to the restrictions set forth in
Section 2.1(a) hereof.
Mortgage means a properly recorded, first priority
mortgage, deed of trust, deed to secure debt, assignment of
beneficial interest or other security instrument, as applicable,
executed and delivered by each Purchaser to Borrower, securing a
Pledged Note Receivable and encumbering all of the right, title and
interest of such Purchaser in the related Encumbered Interval and
related or appurtenant easement, access and use rights and
benefits. Agent acknowledges that assignments of
beneficial interest executed by Purchasers of Intervals at Oak
N’ Spruce Resort will not be recorded and that
Borrower will not be required to provide Agent or Lenders with any
title insurance with respect to Intervals at Oak N’ Spruce
Resort.
Note means the Promissory Note of even
date herewith in the amount of the Maximum Amount, as amended,
increased or extended from time to time, or any new promissory note
issued in replacement (but not in repayment) thereof.
Note Receivable means a promissory note executed in
favor of Borrower in connection with a Purchaser’s
acquisition of an Interval.
Obligations means all Indebtedness due Agent, any
Lender or any Affiliate of a Lender, all amounts due or becoming
due to Agent or any Lender in respect of the Loan under any of the
Loan Documents, including principal, interest, prepayment premiums,
contributions, taxes, insurance, loan charges, custodial fees,
attorneys’ and paralegals’ fees and expenses and other
fees or expenses incurred by Agent or any Lender or advanced to or
on behalf of Borrower by Agent or any Lender pursuant to any of the
Loan Documents, and the prompt and complete payment and performance
by the Borrower of all obligations, indebtedness and liabilities
pursuant to this Agreement or any of the Loan Documents or
otherwise.
Operating Contract or Operating Contracts has the
meaning given to it in Section 6.20
hereof.
Origination Fee has the meaning given to it in
Section 4.2 hereof.
Participant means, singly and collectively, any
bank or other entity, which is indirectly or directly funding to or
through Liberty Bank with respect to the Loan, in whole or in part,
including, without limitation, any direct or indirect assignee of
Liberty Bank in the Loan.
Payment Authorization Agreement means a
pre-authorized electronic debit agreement by a Purchaser for
payment of a Note Receivable.
Permitted Discretion means a determination made in
the exercise of reasonable (from the perspective of a secured
asset-based lender in the same or similar circumstances) business
judgment.
Person means an individual, partnership,
corporation, limited liability company, trust, unincorporated
organization, other entity, or a government or agency or political
subdivision thereof.
Pledged Notes Receivable means any Note Receivable
which at any time has been pledged to Agent on behalf of Lenders by
Borrower pursuant to this Agreement or any of the Loan
Documents (and all replacements of such Notes Receivable
pursuant to Section 2.4(b) hereof.).
Prescribed Laws means, collectively, (a) the
Uniting and Strengthening America by Providing Appropriate Tools
Required to Intercept and Obstruct Terrorism Act of 2001 (Public
Law 107 56) (the USA PATRIOT Act), (b) Executive Order No. 13224 on
Terrorist Financing, effective September 24, 2001, and relating to
Blocking Property and Prohibiting Transactions With Persons Who
Commit, Threaten to Commit, or Support Terrorism, (c) the
International Emergency Economic Power Act, 50 U.S.C. § 1701
et seq., (d) the Trading with the Enemy Act, 50 U.S.C. App. 1 et
seq., and (d) all other Legal Requirements relating to money
laundering or terrorism, and, in each case, any Executive Orders or
regulations promulgated under any such laws.
Property or Properties means any interest in any
kind of property or asset, whether real, personal or mixed,
tangible or intangible.
Pro Rata Percentage means the applicable percentage
of the Loan that each Lender has agreed to make to Borrower
pursuant to this Agreement as set forth in Schedule 1.0
hereof, as such percentage may from time to time be amended by
Agent and the applicable Lender.
Purchase Price means the total purchase price of a
timeshare Interval, as set forth in the Timeshare Documents and
Note Receivable relating to the purchase of such
Interval.
Purchaser means any Person who purchases one or
more Intervals.
Quarterly Financial Report means, individually and
collectively, as applicable, the financial reports delivered in
accordance with Section 7.1 (h)(i) hereof .
Renewal Fee has the meaning given to it in
Section 2.3(c) hereof.
Resort or Resorts (also “Eligible Resort” or
“Eligible Resorts”) means, individually
and collectively, as applicable, each or all of the interval
ownership and time-share projects consisting of: (i) (A) Holly Lake
Ranch, Hawkins, Texas; (B) Piney Shores Resort, Conroe, Texas; (C)
Lake O’ The Woods, Flint, Texas; (D) Hill Country Resort,
Canyon Lake, Texas; (E) Ozark Mountain Resort, Kimberling City,
Missouri; (F) Holiday Hills Resort, Branson, Missouri; (G) Fox
River Resort, LaSalle County, Illinois; (H) Timber Creek Resort,
Jefferson County, Missouri (I) Oak N’ Spruce Resort, South
Lee, Massachusetts; (J) Apple Mountain Resort, Habersham County,
Georgia; (K) The Villages, Flint, Texas and (L) Silverleaf’s
Seaside Resort, Galveston County, Texas; (M) Orlando Breeze Resort,
Davenport, Polk County, Florida (also sometimes individually and
collectively referred to herein as the “Existing
Resorts”) and (ii) subject to Agent’s prior written
approval and satisfaction by the Borrower of the conditions
precedent set forth in Sections 3.5 and 4.4
hereof, the Additional Eligible Resorts. The term
“Resort” or “Resorts” includes, among other
things, the undivided annual or (biennial) timeshare ownership
interests (Intervals) in the respective Resorts, and the
appurtenant exclusive rights to use Units in one or more buildings
or phases and all appurtenant or related properties, amenities,
facilities, equipment, appliances, fixtures, easements, licenses,
rights and interests, including without limitation, the Common
Elements, as established by and more fully defined and described in
the respective Declarations, and the other Timeshare
Documents.
Revolving Loan Period means the period during the
Term in which the Borrower may borrow, repay and re-borrow
Advances, commencing on the Closing Date and terminating on
September 28, 2009 or such later date pursuant to Section
2.3(c).
Servicing Agent means Lender’s exclusive
Agent, which shall be such Person or Persons designated by Borrower
and approved by Agent in its sole discretion, for the purposes of
billing and collecting amounts due on account of the Pledged Notes
Receivable, providing reports pursuant to the Lockbox Agreement and
performing other servicing functions not performed by the Lockbox
Agent. Borrower shall be the Servicing Agent until an
Event of Default shall have occurred and Agent replaces Borrower as
Servicing Agent as provided in Section 9.1 (i)
hereof.
Silverleaf Club means Silverleaf Club, a Texas
non-profit corporation.
Silverleaf Finance II Documents means the loan
agreement, the developer transfer agreement, the demand notes and
all other agreements or documents executed in connection with the
TFC Conduit Loan, as each may be amended, restated or otherwise
modified from time to time.
SCRA means The Servicemembers Civil Relief Act, 50
United States Code Appendix Sections 501-593, which in relevant
part limits to 6% per annum the interest charged on credit
obligations of active duty military members, reservists who are in
active federal service, and National Guardsmen who are in active
federal service, applicable to all obligations entered into before
beginning active duty if the military service materially affects
his or her ability to meet such obligations.
SPV means any special purpose entity created for
the purpose of effecting a securitization of certain of the assets
of Borrower.
SPV Assets means those assets sold or conveyed by
Borrower to the SPV pursuant to the documents created for the
securitization transaction.
Standby Servicer means the Person selected by Agent
to act as standby servicer in accordance with this
Agreement. The Standby Servicer shall be Concord
Servicing Corporation.
Standby Servicing Agreement means the agreement of
even date herewith among Borrower, Standby Servicer and Agent, as
amended from time to time, pursuant to which the Standby Servicer
shall provide servicing functions with respect to the Pledged Notes
Receivable in accordance with Section 9 .1(i)
hereof.
Subsidiary means, with respect to a Person, a
corporation, partnership, limited liability company, or other
entity in which that Person directly or indirectly owns or controls
the shares of Stock having ordinary voting power to elect a
majority of the board of directors (or appoint other comparable
managers) of such corporation, partnership, limited liability
company, or other entity.
Survey means a plat or survey of the Resorts
prepared by a licensed surveyor acceptable to Agent.
Tangible Net Worth means, with respect to any
Person, the amount calculated in accordance with GAAP as: (i) the
consolidated net worth of such Person and its consolidated
subsidiaries, minus (ii) the consolidated intangibles of such
Person and its consolidated subsidiaries, including, without
limitation, goodwill, trademarks, tradenames, copyrights, patents,
patent allocations, licenses and rights in any of the foregoing and
other items treated as intangible in accordance with
GAAP. Notwithstanding the foregoing, if subsequent to
the Closing Date deferred sales are no longer considered an asset
under GAAP, Agent agrees, at the request of Borrower, to determine,
in its reasonable discretion, whether deferred sales should
continue to be considered an asset for purposes of determining
Borrower’s Tangible Net Worth.
Term means the period beginning on the Closing Date
and ending on the Final Maturity Date.
TFC means Textron Financial
Corporation.
TFC Facility means that certain credit facility
provided by TFC to Borrower pursuant to the TFC
Documents.
TFC Documents means the loan agreement, the
promissory notes and all other agreements or documents executed in
connection with the TFC Facility, as each may be amended, restated
or otherwise modified from time to time.
TFC Conduit Loan means that certain loan facility
provided by TFC in accordance with the terms of the Silverleaf
Finance II Documents.
Timeshare Act means any statute, act, regulation,
ordinance, rule or law applicable to the establishment and
operation of the Resorts and the sales of the
Intervals.
Timeshare Documents means any registration
statement required under any Timeshare Act approving the
establishment and operation of the Resorts and the sales of
Intervals.
Timeshare Owners’ Association means, with
respect to each Resort, the applicable not-for-profit corporations
described on Schedule 1.1(c) hereof.
Total Interest Expense means, for any period, the
aggregate amount of interest required to be paid or accrued by
Borrower and its Subsidiaries during such period on all
indebtedness of Borrower and its consolidated Subsidiaries
outstanding during all or any part of such period, whether such
interest was or is required to be reflected as an item of expense
or capitalized, including payments consisting of interest in
respect of any capitalized lease, or any synthetic lease and
including commitment fees, agency fees, facility fees, balance
deficiency fees and similar fees or expenses in connection with the
borrowing of money.
Transfer Account means the account established by
Agent to which all Loans by Lenders will be made.
UBS means UBS Real Estate Securities,
Inc.
UBS Facility means that certain credit facility
provided by UBS pursuant to the UBS Documents.
UBS Documents means the loan agreement, the
promissory notes and all other agreements or documents executed in
connection with the UBS Facility, as each may be amended, restated
or otherwise modified from time to time.
UCC Financing Statements means the UCC-1 Financing
Statements, naming the Borrower as debtor and the Agent as secured
party on behalf of Lenders, heretofore or hereafter filed in
connection with the Loan and all amendments thereto.
Unit means, with respect to each Resort, one living
unit in a building incorporated into the Resort pursuant to the
Declaration, together with all related or appurtenant interests in
services, easements and other rights or benefits, as described and
provided for in the Declaration, including but not limited to the
right to use the Resort amenities and facilities in accordance with
the Timeshare Documents.
Unused Line Fee has the meaning given to it in
Section 2.3(c) hereof.
Wellington means New Wellington Financial, L.L.C.,
located in Charlottesville, Virginia.
WFF means Wells Fargo
Foothill, LLC.
WFF Facility means that certain credit facility
provided by WFF to Borrower pursuant to the WFF
Documents.
WFF Documents means the loan agreement, the
promissory notes and all other agreements or documents executed in
connection with the WFF Facility, as each may be amended, restated
or otherwise modified from time to time.
1.2
Construction . Unless the
context of this Agreement clearly requires otherwise,
references to the plural include the singular, references to
the singular include the plural, the term
“including” is not limiting, and the term
“or” has, except where otherwise indicated, the
inclusive meaning represented by the phrase
“and/or.” The words
“hereof,” “herein,”
“hereby,” “hereunder,” and similar
terms in this Agreement refer to this Agreement as a whole and
not to any particular provision of this
Agreement. An Event of Default shall
“continue” or be “continuing” until
such Event of Default has been waived in writing by
Lender. Section, subsection, clause, schedule, and
exhibit references are to sections, subsections, clauses,
schedules and exhibits in this Agreement unless otherwise
specified. Any reference in this Agreement or in
the Loan Documents to this Agreement, any of the Loan
Documents or any other document or agreement shall include all
alterations, amendments, changes, extensions, modifications,
renewals, replacements, substitutions, supplements, and
restatements thereto and thereof, as applicable.
1.3
Schedules and Exhibits
. All of the schedules and exhibits attached to or
referred to within this Agreement, as they may from time to
time be amended or restated, shall be deemed incorporated
herein by reference.
Section 2-The Loan
2.1
Revolving Loan and Lending Limits
.
(a)
Revolving Loan; Lending Limits; Making of
Loans . Upon the terms and subject to
the conditions set forth herein (including without limitation
Sections 2.1(c) and 2.6 hereof), each Lender
agrees severally, at any time and from time to time during the
Revolving Loan Period to make Advances to Borrower and
Borrower may borrow, repay and re-borrow during the Revolving
Loan Period, in an aggregate amount not to exceed at any time
the lesser of each Lender’s Pro Rata Percentage of: (i)
the Borrowing Base, (ii) the Availability or (iii) the
Commitment. The Revolving Loan Period shall be the
period during the Term in which the Borrower may borrow, repay
and re-borrow Advances.
Borrower
acknowledges, agrees and confirms that the obligations of all
Lenders to make Loans under this Agreement to Borrower is
limited to the lesser of: (i) the Borrowing Base, (ii) the
Availability or (iii) the Commitment. Borrower
further acknowledges, agrees and confirms that the obligation
of each Lender to make loans hereunder to Borrower is limited
to: (i) with respect to each Advance hereunder, each
Lender’s Pro Rata Percentage of any such Advance
hereunder and (ii) with respect to all Advances made
hereunder, such Lender’s obligation hereunder shall be
limited to its commitment as set forth on Schedule 1.0
.
Each
Loan by a Lender shall be made ratably in accordance with each
Lender’s respective Pro Rata Percentage, provided,
however, that the failure of any Lender to make any required
Loan shall not in itself relieve any other Lender of its
obligation to make any required Loan
hereunder. Likewise, no Lender shall be responsible
or liable for the failure of any other Lender to make any Loan
required to be made by such other Lender, nor shall any Lender
be obligated to make any Loan or Loans in excess of its
respective Pro Rata Percentage, but not in excess of its
Commitment, in the event that any other Lender fails or
refuses to make a Loan or Loans as provided
hereunder. As and when additional Lenders execute
and deliver this Agreement, then (A) such additional Lenders
shall be deemed to have simultaneously purchased from each of
the other Lenders who have previously executed and delivered
this Agreement, a share in such other Lenders’ Loans so
that the amount of the Loans of all Lenders shall be pro rata
as otherwise set forth above and (B) such other adjustments
shall be made from time to time as shall be equitable to
insure that the Advances to Borrower are made ratably by each
Lender in accordance with its respective Pro Rata
Percentage.
(b)
Advances for Certain Fees.
Borrower has advised Lender that Custodian will bill on a
monthly basis for its services. Borrower agrees
that upon receipt of a monthly billing from Custodian, it
will, unless Custodian shall have delivered such billing to
Agent directly, review and approve such billing or discuss and
resolve with Custodian any discrepancies in such billing,
within five (5) days of receipt of such billing and advise
Agent of Borrower’s approval of such
billing. Agent is authorized by Borrower to pay
directly to Custodian the amount of such billing as an
Advance, to the extent of Availability, or as a deduction from
the next requested Advance by Borrower.
(c)
Maximum Amount of Advances
. Notwithstanding anything to the contrary
contained herein, no Lender shall have an obligation to make
an Advance of its Pro Rata Percentage thereof hereunder to the
extent that (i) the aggregate of Advances outstanding would
cause the Loan to exceed the lesser of (A) Borrowing Base, (B)
the Availability or (C) the Commitment, or (ii) in an amount
which would cause the aggregate outstanding principal balance
of Liberty Bank’s Commitment retained by Liberty Bank
and not participated to other lenders to exceed Twenty-Five
Million Dollars ($25,000,000); or (C) such an Advance would
cause such Lender or any Participant in such loans to violate
any legal lending limit under Section 2.5 hereof or
otherwise.
(d)
Note Evidencing Borrower’s
Obligations . Borrower’s
obligations to pay the principal of and interest on the Loan
or Loans made by each Lender shall be evidenced by the Note to
the Agent, as Agent for each Lender, which Note shall be dated
as of the date hereof and be in the principal amount of the
Maximum Amount. The Note will mature on the Final
Maturity Date, bear interest as provided in
Section 2.2 hereof and be otherwise entitled to
the benefits of this Agreement. Notwithstanding the
stated principal amount of the Note, the aggregate outstanding
principal amount of the Loan at any time shall be the
aggregate principal amount owing on the Note at such
time. Agent shall and is hereby authorized to
record in its internal books and records the date and amount
of each Advance made by Lenders, the Interest Rate and
interest period applicable thereto and each repayment thereof;
and such books and records shall, as between Borrower and each
Lender, absent manifest error, constitute prima facie evidence
of the accuracy of the information contained
therein. Failure by Agent to so record any Advance
made by Lenders (or any error in such recordation) or any
payment thereon shall not affect the Obligations of Borrower
under this Agreement or under the Note and shall not adversely
affect Lender’s rights under this Agreement with respect
to the repayment thereof. At the election of any
Lender, Borrower shall execute and deliver to such Lender a
note in a stated principal amount equal to such Lender’s
Pro Rata Percentage of the Loan, which such note or notes
shall be on the same terms and conditions as provided above
and which note or notes shall be included within the
definition of “Note” as such term is used
herein.
(e)
Notice of
Advances.
(i)
Upon receipt by Agent from Borrower of a written request
for Advance in accordance with Section 5 hereof and
Borrower’s satisfaction of the requirements set forth in
Section 5 hereof, Agent shall give a written notice (a
“ Notice of Borrowing ”)
to each Lender, (which Notice of Borrowing shall be given to
each Lender not less than two (2) Business Days prior to the
date of the proposed Advance), setting forth: (i) the
total amount of the Advance requested by Borrower; (ii) the
Borrowing Base received from Borrower supporting such
requested Advance; (iii) the amount of all Loans remaining
outstanding by each respective Lender; (iv) the outstanding
principal balance of the Loan; (v) each such Lender’s
Pro Rata Percentage of the requested Advance and (vi) the date
on which such Advance is to be made; or
(ii) at
its option, the Agent shall provide to each Lender: (A) each
month by the close of business on the fifth (5th) Business Day
following receipt by Agent from Borrower, but in no event
later than the 30th day of the month: (i) a reconciled
Borrowing Base Report in the form attached as Exhibit B
hereof; and (ii) an updated trial balance and aging report for
the Pledged Notes Receivable (a “ Collateral
Data Report ”); and (B) by the close of
business on the tenth (10th) Business Day following receipt by
Agent from Borrower of the Borrowing Base Report and the
Collateral Data Report: (i) a summary of all Advances made by
Agent during the immediately preceding month (a “
Summary of Weekly Advances ”);
and (ii) a summary report of Advances and repayments or
collections for the immediately preceding month and a
calculation of the net Lender’s Advance required of such
Lender with respect to all Advances made during the
immediately preceding month (a “ Lender
Advance Report ”).
(f)
Disbursement of Funds
.
(i) If
Notice of Borrowing is provided in accordance with Section
2.1(e) above, then after receiving a Notice of Borrowing
from Agent, each Lender shall, not later than 11:00 a.m.,
Eastern Standard Time, on the date specified in such Notice of
Borrowing on which the proposed Advance is to be made, wire
transfer to Agent at the Transfer Account, in immediately
available funds, an amount equal to each such Lender’s
Pro Rata Percentage of the proposed Advance as set forth in
the Notice of Borrowing. Upon Agent’s receipt
of funds from each Lender equal to the amount of the requested
Advance, and subject to Borrower’s compliance with the
terms and conditions of this Agreement, Agent shall disburse
the Advance to Borrower by wire transfer of funds as directed
in writing by Borrower. If Agent shall not receive
funds from any Lender as set forth above, then the amount of
the Advance in question shall be automatically reduced by an
amount equal to the missing Lender’s Pro Rata Percentage
of the Advance in question, and Agent shall, subject to
Borrower’s compliance with the terms and conditions of
this Agreement, disburse the Advance in the reduced amount to
Borrower by wire transfer of funds as directed in writing by
Borrower. Agent, in its sole and absolute
discretion, may (but shall not be obligated to) make the full
amount of the requested Advance available to Borrower prior to
the receipt by Agent from one or more Lenders of funds
representing such Lender’s or Lenders’ Pro Rata
Percentage of the Advance in question. If the funds
representing such Lender’s or Lenders’ Pro Rata
Percentage of the Advance in question are not received by
Agent within two (2) Business Days of the date of such
Advance, Borrower shall immediately, upon demand of Agent,
repay such amount to Agent. Nothing herein shall be
deemed to relieve Agent or any Lender from its obligations
hereunder or to prejudice any rights Agent may have against
any Lender as a result of any Lender’s failure to make
any Loan or Loans as provided herein; or
(ii) If
notice of Advances is provided in accordance with
Section 2.1(e) above, then by the close of
business on the third (3rd) Business Day following such
Lender’s receipt of the Lender Advance Report, such
Lender shall wire transfer to Agent at the Transfer Account,
in immediately available funds, the net amount due from such
Lender as set forth in the Lender Advance
Report. If the funds representing such
Lender’s amount of the Advance or Advances in question
are not received by Agent within five (5) Business Days of the
date of such Lender’s receipt of the Lender Advance
Report, Borrower shall immediately, upon demand of Agent,
repay such amount to Agent. Nothing herein shall be
deemed to relieve Agent or any Lender from its obligations
hereunder or to prejudice any rights Agent may have against
any Lender as a result of any Lender’s failure to make
any Loan or Loans as provided herein.
(g)
Monthly Collateral and Borrowing Base
Reporting . Within ten (10) days
following the end of any calendar month, Borrower shall
provide to Agent: (i) an updated Borrowing Base Report in the
form attached as Exhibit B hereof; and (ii) an updated
trial balance and aging report for the Pledged Notes
Receivable (a “ Collateral Data
Report ”); and (iii) by the close of
business on the tenth (10th) Business Day following receipt by
Agent from Borrower of the Borrowing Base Report and the
Collateral Data Report: (a) a summary of all Advances made by
Agent during the immediately preceding month (a “
Summary of Weekly Advances ”);
and (b) a summary report of Advances and repayments or
collections for the immediately preceding month.
2.2
Interest Rates
.
(a)
Interest Rates . Except as
provided in clause (b) below, all Obligations that have
been charged to the Loan pursuant to the terms hereof shall
bear interest on the Daily Balance thereof at a per annum rate
equal to the Interest Rate from the date of Agent’s
wiring of funds to Borrower through the date of Agent’s
receipt of repayment of the Loan (if received by Agent later
than noon, Eastern Standard Time, then interest accrual shall
be through the next Business Day following such
receipt).
(b)
Default Rate . Upon the occurrence
and during the continuation of an Event of Default (and at the
election of Agent), all Obligations that have been charged to
the Loan pursuant to the terms hereof shall bear interest on
the Daily Balance thereof at a per annum rate equal to the
Default Rate. Each Lender’s Loan shall bear
interest at the Interest Rate or the Default Rate as
applicable as of the date funds are received by Agent as
provided in Section 2.1(f) hereof through
the date of Agent’s wiring of repayment funds to each
Lender in accordance with Sections 2.1(f)
and 2.3(d) hereof.
2.3
Payments . From and after
the Closing Date, Borrower agrees punctually to pay or cause
to be paid to Agent, as Agent for each Lender, all principal
and interest due under the Note in respect of the
Loans. Interest and all other fees payable
hereunder shall be due and payable, in arrears, on the first
day of each month at any time that Obligations are
outstanding. Borrower shall make the following
payments on the Loan:
(a)
Monthly Payments . Borrower
shall direct or otherwise cause all makers of all Pledged
Notes Receivable to pay all monies due thereunder to the
lockbox established pursuant to the Lockbox Agreement, or as
otherwise required by Agent. One hundred percent
(100%) of the cleared funds collected from the Pledged Notes
Receivable each week will be paid to Agent by the Lockbox
Agent pursuant to the Lockbox Agreement, and will be applied
by Agent twice monthly as follows: first to the payment
of costs or expenses incurred by Agent pursuant to this
Agreement in creating, maintaining, protecting or enforcing
the Liens in and to the Collateral and in collecting any
amounts due any Lender in connection with the Loan (“
Collection Costs ”) and the balance to
each Lender in accordance with the applicable percentage of
the outstanding principal balance of the Loan that each Lender
has made (the “ Pro Rata Payment
Percentage ”). Each Lender shall
apply each such payment in the following order: (i) to
any interest accrued at the Default Rate; (ii) then to
interest accrued and payable at the Interest Rate; and (iii)
then to outstanding principal. In the event that
the cleared funds received by Agent are insufficient to pay
the amounts described in aforementioned clauses (i)-(ii), then
Borrower shall pay the difference to Agent on or before the
fifth (5th) day of the following month. In the
event Borrower receives any payments on any of the Pledged
Notes Receivable directly from or on behalf of the maker or
makers thereof, Borrower shall receive all such payments in
trust for the sole and exclusive benefit of Lenders; and
Borrower shall deliver to the Lockbox Agent all such payments
(in the form so received by Borrower) as and when received by
Borrower, unless Agent shall have notified Borrower to deliver
directly to Agent all payments in respect of the Pledged Notes
Receivable which may be received by Borrower, in which event
all such payments (in the form received) shall be endorsed by
Borrower to Agent, as agent for Lenders and delivered to Agent
promptly upon Borrower’s receipt thereof.
(b)
Final Payment . The entire
outstanding principal amount of the Loan, together with all
other Obligations hereunder, shall be due and payable on the
Final Maturity Date.
(c)
Origination Fee; Renewal Fee(s); Unused Line
Fee(s) . Borrower shall pay the
Origination Fee as prescribed in Section 4.2
hereof. In addition, annually for each twelve-month
extension to the Revolving Loan Period agreed to in writing by
Agent, Lenders and Borrower (and without binding any of the
foregoing parties in advance to enter into such an extension),
Borrower shall pay a fee of 0.25% (each, a “Renewal
Fee”) of the Commitment on or before the effective date
of such extension. In addition, the Borrower shall
pay an unused line fee (the “Unused Line Fee”)
calculated as of the last day of each calendar month equal to
one quarter of one percent (0.250%) per annum of the
difference between (i) the Maximum Amount, and (ii) the
average outstanding principal balance of the Loan during such
month, due and payable by the fifteenth (15 th ) day
of the following calendar month; provided , that the
Unused Line Fee would be waived: (A) through the last day of
the sixth (6 th )
full calendar month after the Closing Date, and (B) for any
calendar month where the average outstanding principal balance
of the Loan during such month exceeded
$15,000,000.
(d)
Payments to Lender . Agent
may at its sole and absolute discretion either: (i) promptly
upon receipt wire transfer to any Lender its Pro Rata
Percentage of any payment received from Borrower in accordance
with this Section 2.3 or Section 2.4
hereof; or (ii) include any Lender’s Pro Rata Percentage
of any payment received from Borrower in accordance with this
Section 2.3 or Section 2.4 hereof in the
Lender Advance Report pursuant to Section 2.1(g) , for
transfer to Lender pursuant to Section 2.1(f)
hereof.
2.4
Prepayments .
(a)
Voluntary Prepayments
. Except for regular payments of interest and
principal as provided hereunder, prepayments, (i) shall not be
permitted during the Revolving Loan Period, and (ii) may be
made in whole, but not in part, upon five (5) days prior
written notice to the Agent at any time after the end of the
Revolving Loan Period upon payment of the applicable
Prepayment Premium (whether such prepayment results from
voluntary payments by Borrower, acceleration, or otherwise);
provided, however, that (A) payments or prepayments of Pledged
Notes Receivable made by Purchasers who are not directly or
indirectly solicited by Borrower to make such prepayment shall
not violate this Section 2.4(a) , and no Prepayment
Premium shall be payable as a result of any such payment by
Purchasers; and (B) if at any time the Borrower wishes to
release any Pledged Notes Receivable for the purpose of
including those Pledged Notes Receivable in a securitization
pooling or similar conduit transaction, after 30 days’
prior written notice to Agent, Borrower may prepay the
principal balance of the Loan in whole (but not in part), and
no Prepayment Premium will be due where such prepayment is the
result of a securitization or similar conduit transaction
closing, as certified by Borrower to
Agent.
(b)
Mandatory Prepayments .
(i) Overadvances. If
at any time the outstanding principal balance of the Loan
exceeds the Borrowing Base or the Commitment, Borrower shall
immediately either (A) prepay the Loan in an amount necessary
to reduce the outstanding principal balance of the Loan to an
amount within the lending limits set forth in Section
2.1 hereof, or (B) pledge and deliver to Agent such
additional or replacement Eligible Notes Receivable such that
the remaining outstanding principal balance of the Loan is
within the lending limits set forth in Section 2.1
hereof.
(ii) Ineligible
Pledged Notes Receivable. If at any time after the
expiration of the Revolving Loan Period, Agent determines that
any Pledged Notes Receivable which are included in the
Borrowing Base, do not qualify as Eligible Notes Receivable
(“Ineligible Notes Receivable”), then Borrower
shall, within five (5) Business Days after notice, either (A)
prepay the Loan in an amount equal to the balance due under
such Pledged Note Receivable, or (B) replace the Ineligible
Note Receivable with an Eligible Note Receivable having an
outstanding aggregate principal balance equal to or in excess
of the outstanding principal balance of such Ineligible Note
Receivable. The pledge and delivery to Agent as
agent for Lenders of additional Eligible Notes Receivable
shall comply with the document delivery and recordation
requirements set forth in Section 5.1
hereof.
(iii) No
Prepayment Premium. No Prepayment Premium shall be
due in connection with any mandatory prepayment made in
accordance with Sections 2.4(b)(i)
or 2.4(b)(ii) hereof.
(c)
Prepayment Premium . Except
as specifically set forth in Section 2.4(a) and
2.4(b) hereof, any prepayment of the Loan pursuant to
Section 2.4( a) hereof, whether prior to or
after acceleration based upon an Event of Default, hereof must
be accompanied by a prepayment premium (the “Prepayment
Premium”) calculated, as of immediately prior to such
prepayment, as follows:
|
Date of Prepayment
|
|
Premium
|
| |
|
|
|
During
the first Loan Year after expiration of the Revolving Loan
Period;
|
|
three
percent (3%) of the then outstanding balance of the
Loan;
|
| |
|
|
| |
|
|
|
During
the second Loan Year after expiration of the Revolving Loan
Period;
|
|
two
percent (2%) of the then outstanding balance of the
Loan;
|
| |
|
|
|
During
the third Loan Year after expiration of the Revolving Loan
Period;
|
|
one
percent (1%) of the then outstanding balance of the Loan;
and
|
| |
|
|
|
Thereafter;
|
|
none.
|
(d)
Prepayment Premium upon Acceleration
. If the Loan is accelerated based on an Event of
Default prior to or after the expiration of the Revolving Loan
Period, or if Borrower undertakes a voluntary prepayment prior
to expiration of the Revolving Loan Period, at Agent’s
sole discretion, payments on the Loan must include the
Prepayment Premium that would be applicable if prepayment
occurred in the first Loan Year after expiration of the
Revolving Loan Period.
2.5
Capital Adequacy Event.
If, after the date hereof, a Lender or Participant
determines that (i) the adoption of or change in any law,
rule, regulation or guideline regarding capital requirements
for banks or bank holding companies, or any change in the
interpretation or application thereof by any Governmental
Authority charged with the administration thereof, or (ii)
compliance by Lender or Participant or its respective parent
bank holding company with any guideline, request, or directive
of any such entity regarding capital adequacy (whether or not
having the force of law), has the effect of reducing the
return on Lender’s or Participant’s or their
respective holding company’s capital as a consequence of
such Lender’s or Participant’s agreements
hereunder to a level below that which such Lender or
Participant or respective holding company could have achieved
but for such adoption, change, or compliance (taking into
consideration Lender’s or Participant’s or
respective holding company’s then existing policies with
respect to capital adequacy and assuming the full utilization
of such entity’s capital) by any amount deemed by Lender
or Participant to be material, then Agent may notify Borrower
thereof. Following receipt of such notice, Borrower
agrees to pay Agent on demand the amount of such reduction of
return of capital as and when such reduction is determined,
payable within 90 days after presentation by Lender or
Participant of a statement in the amount and setting forth in
reasonable detail Lender’s or Participant calculation
thereof and the assumptions upon which such calculation was
based (which statement shall be deemed true and correct absent
manifest error). In determining such amount, Lender
or Participant may use any reasonable averaging and
attribution methods.
2.6
Suspension of Advances .
(a)
Suspension of Sales . If
any stay, order, cease and desist order, injunction, temporary
restraining order or similar judicial or non-judicial sanction
shall be issued limiting or otherwise materially adversely
affecting any Interval sales activities, other business
operations in respect of the Resorts, or the enforcement of
the remedies of Agent and Lenders hereunder, then, in such
event, Agent and Lenders shall have no obligation to make any
Advances hereunder: (i) in respect of Pledged Notes Receivable
from the sale of Intervals which are the subject of any stay,
order, cease and desist order, injunction, temporary
restraining order or similar judicial or non-judicial sanction
that has been issued until the stay, order, cease and desist
order, injunction, temporary restraining order or similar
judicial or non-judicial sanction has been lifted or released
to the satisfaction of Agent and (ii) in respect of Pledged
Notes Receivable from the sale of Intervals at any Resort if:
(x) the stay, order, cease and desist order, injunction,
temporary restraining order or similar judicial or
non-judicial sanction in question has not been lifted or
released to the satisfaction of Agent within sixty (60) days
of its issuance and (y) there is a reduction in the total
number of sales of Intervals by Borrower in any Loan Year of
more than twenty percent (20%) from the total number of sales
of Intervals in the immediately preceding Loan
Year.
(b)
Change in Control . If
there shall occur a change, singly or in the aggregate, of
more than fifty percent (50%) of the executive management of
Borrower as described in Schedule 2.6 hereto, Agent
shall have no obligation to make any Advances hereunder,
unless within thirty (30) days prior thereto Borrower provides
Agent with written information setting forth the replacement
executive management personnel of Borrower together with a
description of those Persons’ experience, ability and
reputation, and Agent, acting in good faith, determines that
the replacement management personnel’s experience,
ability and reputation is equal to or greater than that of
Borrower’s executive management as set forth on
Schedule 2.6 . Agent shall have no
obligation to make any Advances hereunder if more than two (2)
of the five (5) Board of Directors’ positions are
controlled by the Borrower’s bond holders.
(c)
Change in Underwriting Standards
. No Lender shall be obligated to fund any Advance
hereunder if there shall occur a change in the underwriting
standards, or the adherence thereto in the sole discretion of
the Agent, of Borrower with respect to the qualification or
eligibility of Purchaser’s which in the Permitted
Discretion of Agent causes or would most likely result in a
Material Adverse Change in the Borrower’s business or if
there shall occur a change in the business of Borrower, which
in the Permitted Discretion of Agent causes or would most
likely result in a Material Adverse Change in the
Borrower’s business.
(d)
Default or Event of Default
. No Lender shall be obligated to fund any Advance
hereunder if a Default or Event of Default shall have occurred
and be continuing.
2.7
Pro Rata Treatment . Each
repayment of principal and interest shall be allocated among
Lenders in accordance with their respective Pro Rata Payment
Percentage. Each Lender agrees that in computing
such Lender’s portion of any Advance to be made
hereunder, Agent may, in its discretion, round each
Lender’s such Advance to the next higher or lower whole
dollar amount. If any Lender shall, through the
exercise of a right of banker’s lien, set-off,
counterclaim or otherwise, obtain payment with respect to its
Loans which results in its receiving more than its Pro Rata
Payment Percentage of any payments described above, then (A)
such Lender shall be deemed to have simultaneously purchased
from each of the other Lenders a share in such other
Lender’s Loans so that the amount of the Loans of all
Lenders shall be pro rata as otherwise set forth above, (B)
such Lender shall immediately pay to the other Lenders their
Pro Rata Payment Percentage of the payments otherwise received
as consideration for such purchase and (C) such other
adjustments shall be made from time to time as shall be
equitable to insure that all Lenders share such payments
ratably. If all or any portion of any such excess
payment is thereafter recovered from Lender which received the
same, the purchase provided in this Section 2.7 shall
be deemed to have been rescinded to the extent of such
recovery, without interest. Borrower expressly
consents to the foregoing arrangements and agrees that each
Lender so purchasing a portion of another Lender’s loans
may exercise all rights of payment (including all rights of
set-off, banker’s lien or counterclaim) with respect to
such portion as fully as if such Lender were the direct holder
of such portion.
Section 3-Collateral
3.1
Grant of Security Interest
. To secure the payment and performance of the
Obligations, for value received, Borrower unconditionally and
irrevocably assigns, pledges and grants to Agent, as Agent for
each Lender:
(a) a
first priority security interest in the Eligible Notes
Receivable pledged to Agent on behalf of Lenders as provided
herein, the Mortgages with respect thereto and that portion of
the other Collateral related thereto;
(b) a
security interest in all books, records, reports, computer
tapes, disks and software relating to the Collateral and all
extensions, additions, improvements, betterments, renewals,
substitutions and replacements of, for or to any of the
Collateral, wherever located, together with the products,
proceeds, issues, rents and profits thereof, and any
replacements, additions or accessions thereto or substitutions
thereof.
For
convenience of administration, Agent is acting as agent for
Lenders under the Agreement. Agent, as such agent,
may execute any of its duties hereunder by or through its
agents, officers or employees and shall be entitled to rely
upon the advice of counsel as to its duties. Agent,
as such agent, shall not be liable to any Lender for any
action taken or omitted to be taken by it in good faith and
shall neither be responsible to Lenders for the consequences
of any oversight or error of judgment nor be answerable to
Lenders for any loss unless the same shall happen through
Agent’s gross negligence or willful
misconduct. To the extent that Agent, as such
agent, shall not be reimbursed by Borrower for any costs,
liabilities or expenses incurred in such capacity, Lenders
shall reimburse Agent therefor pro rata in accordance with
their respective Pro Rata Percentages (including Agent as a
Lender for this purpose). Each Lender agrees that
Agent shall be entitled to take and shall only be required to
take, any action which it is permitted to take under this
Agreement.
3.2
Financing Statements; Priority of
Liens . Borrower agrees, at its own
expense, to authorize the filing of financing statements,
continuation statements and amendments provided for by the
Code and to execute and deliver any and all other instruments
or documents and take such other action as may be required to
perfect and to continue the perfection of Agent’s
security interest in the Collateral. Borrower hereby
authorizes Agent to execute and/or file on Borrower’s
behalf any such financing statements, continuation statements
and amendments. Each Lender shall have an equal
security interest in the Collateral based upon its Pro Rata
Percentage and no Lender’s security interest in the
Collateral shall have priority over any other Lender’s
security interest in the Collateral.
3.3
Insurance . Insurance
coverage with respect to the Resort(s) is provided by the
Silverleaf Club. Borrower shall furnish Agent, upon
request, with satisfactory evidence that the Units, Buildings
and Resorts are adequately insured. Such insurance
coverage shall insure against such risks, be in such amounts,
with such companies and on such other terms as Agent may
reasonably require. Each such policy shall name
Agent as an additional insured and loss payee as agent for
Lenders, as their respective interests may
appear.
3.4
Protection of Collateral;
Reimbursement . The portion of the
Collateral consisting of: (i) the original Pledged Notes
Receivable, (ii) the original Mortgages, (iii) the
original purchase contracts (including addendum) related to
such Pledged Notes Receivable and Mortgages,
(iv) originals or true copies of the related
truth-in-lending disclosure, loan application, warranty deed,
and if required by Agent, the related Purchaser’s
acknowledgement receipt and the Exchange Company application
and disclosures and (v) such other items as Agent may
determine from time to time in its Permitted Discretion, shall
be delivered at Borrower’s expense to the Custodian, and
held in Custodian’s possession and control pursuant to
the Custodial Agreement. All fees and costs arising
under the Custodial Agreement shall be borne and paid by
Borrower; and if Borrower fails to promptly pay any portion
thereof when due, Agent may, at its option, but shall not be
required to, pay the same and charge Borrower’s account
therefor, and Borrower agrees promptly to reimburse Agent
therefor with interest accruing thereon daily at the Default
Rate. All sums so paid or incurred by Agent for any
of the foregoing and any and all other sums for which Borrower
may become liable hereunder and all costs and expenses
(including attorneys’ and paralegals’ fees, legal
expenses and court costs) which Agent may incur in enforcing
or protecting its Lien on, or rights and interest in, the
Collateral or any of its rights or remedies under this
Agreement or any other Loan Document or with respect to any of
the transactions hereunder or thereunder, until paid by
Borrower to Agent with interest at the Default Rate, shall be
included among the Obligations, and, as such, shall be secured
by all of the Collateral. Agent shall not be liable
or responsible in any way for the safekeeping of any of the
Collateral or for any loss or damage thereto or for any
diminution in the value thereof, or for any act or default of
the Custodian, Lockbox Agent, or Servicing Agent or any
warehouseman, carrier, forwarding agency, or other Person
whomsoever.
3.5
Additional Eligible Resorts
. From time to time during the Term, Borrower may
propose to Agent that one or more additional time-share plans
and projects owned and operated by Borrower be included among
the Eligible Resorts in respect of which Advances may be
made. Any such proposal will be in writing, and
will be accompanied or supported by the due diligence and
supporting Borrower, Affiliate, project, financial and related
information identified in Section 4.4 hereof, and
such other information as Agent may
require. Borrower will reasonably cooperate with
Agent’s underwriting and due diligence, and Borrower
will be responsible for payment upon billing for Agent’s
and each Lender’s out-of-pocket expenses in connection
therewith. Subject to Agent’s satisfactory
underwriting and due diligence review, including satisfaction
of the conditions in Sections 4.4 and
5 hereof as they relate to such additional time-share
resorts, Agent may, but shall not be required to, approve one
or more such additional time-share resorts, including future
phases or condominiums in an Existing Eligible Resort, as an
Eligible Resort qualifying for Advances under and subject to
the terms of this Agreement and the other Loan
Documents.
Subject
in each instance to Agent’s underwriting and due
diligence review, and Agent’s prior written approval,
any project as may be approved by Agent and Lenders after the
Closing Date, if any, is hereinafter referred to as an
“Additional Eligible Resort”. Any
Advances hereunder with respect to any Additional Eligible
Resort will be subject to all terms and conditions of this
Agreement and the other Loan Documents.
3.6
Modification of Eligible Notes
Receivable . Notwithstanding anything
herein to the contrary, Borrower shall have the right to
modify the interest rate and term only of the Eligible Notes
Receivable without Agent’s prior consent, provided that:
(i) any such change in the rate of interest on any one or more
Eligible Notes Receivable shall not reduce the average
interest rate on all Eligible Notes Receivable to less than
ten percent (10%) per annum at any time (excluding Eligible
Notes Receivable with a lower interest rate pursuant to the
SCRA); (ii) the term of no Eligible Notes Receivable shall be
increased to a term longer than one hundred twenty (120)
months from the date of the first required monthly payment of
such Eligible Note Receivable, except that with respect to any
Eligible Note Receivable in respect of which one or more
monthly payments have been deferred, the term of such Eligible
Note Receivable may be extended one month for each such
deferred payment provided, however, that in no event shall the
term of such Eligible Note Receivable be increased to a term
longer than one hundred twenty eight (128) months from the
date of the first required monthly payment of such Eligible
Note Receivable; (iii) no Eligible Note Receivable is so
modified more than once in any twelve (12) month period or
more than twice during the term of such Eligible Note
Receivable, and (iv) at no time may Borrower so modify the
terms of Eligible Notes Receivable constituting more than ten
percent (10%) of the outstanding principal balance of all
Eligible Notes Receivable at any time.
3.7
Assumption of Obligations under Eligible Notes
Receivable . Notwithstanding anything
herein to the contrary, upon the sale by a Purchaser of an
Interval, the new Purchaser of the Interval may be substituted
as obligor under the Eligible Note Receivable in question,
provided that: (i) said new Purchaser assumes in writing all
of the obligations of the original obligor under the Eligible
Note Receivable in question; (ii) the Eligible Note Receivable
continues to meet all of the criteria for an Eligible Note
Receivable as set forth herein and (iii) the new Purchaser has
made a cash down payment equal to at least 10% of the original
sales price of the Interval in question, which down payment
shall be in addition to the cash down payment made by the
original obligor.
3.8
Purchaser/Criteria . All
Eligible Notes Receivable pledged as Collateral to Agent
subsequent to the Closing Date will be underwritten in a
manner consistent with the Borrower’s general
underwriting guidelines and criteria as set forth on
Schedule 1.1(b) hereof. Borrower shall
not materially alter its general underwriting criteria without
the prior written approval of Agent, which approval Agent may
withhold in its sole discretion. On a semi-annual
basis, Borrower shall provide Agent with written certification
that the underwriting criteria as approved by Agent remain in
full force and effect and have not been revised or altered
without Agent’s consent.
Section 4-Conditions Precedent To The
Closing
4.1
Conditions Precedent . The
obligation of Agent and Lenders under this Agreement and the
obligation to fund any Advance, including the initial Advance,
hereunder shall be subject to the satisfaction of each of the
following conditions precedent, in addition to all of the
conditions precedent set forth elsewhere in the Loan
Documents:
(a)
Representations, Warranties, Covenants and
Agreements . The representations and
warranties contained in the Loan Documents are and shall be
true and correct in all respects, and all covenants and
agreements have been complied with and are correct in all
respects, and all covenants and agreements to have been
complied with and performed by Borrower shall have been fully
complied with and performed to the satisfaction of
Agent.
(b)
No Prohibited Acts
. Borrower shall not have taken any action or
permitted any condition to exist which would have been
prohibited by any provision of this Agreement or the Loan
Documents.
(c)
No Changes . That all
information and documents heretofore delivered by Borrower to
Agent with respect to Borrower or the Resorts remain true and
correct in all respects.
(d)
Approval of Documents Prior to Closing
Date . Borrower has delivered to Agent
(with copies to Agent’s counsel), and Agent has reviewed
and approved the form and content of all of the items
specified in Subsection 4.1(d)(i)
through 4.1(d)(v) hereof (the
“Submissions”). Agent shall have the
right to review and approve any changes to the form of any of
the Submissions. If Agent disapproves of any
changes to any of the Submissions, Agent shall have the right
to require Borrower either to cure or correct the defect
objected to by Agent or to elect not to fund the Loan or any
Advance. Under no circumstances shall Agent’s
failure to approve or disapprove a change to any of the
Submissions be deemed to be an approval of such
Submissions. All of the Submissions were and shall
be prepared at Borrower’s sole cost and expense, unless
expressly stated to be an obligation and expense of Agent.
Agent shall have the right of prior approval of any Person
responsible for preparing a Submission
(“Preparer”) and may disapprove any Preparer in
its sole discretion, for any reason, including without
limitation, that Agent believes that the experience, skill,
reputation or other aspect of the Preparer is unsatisfactory
in any respect. All Submissions required pursuant
to this Agreement shall be addressed to Agent and include the
following language: “THE UNDERSIGNED ACKNOWLEDGES THAT
LIBERTY BANK, AS AGENT FOR EACH LENDER IS RELYING ON THE
WITHIN INFORMATION IN CONNECTION WITH ITS DETERMINATION TO
MAKE A LOAN TO SILVERLEAF RESORTS, INC. IN CONNECTION WITH THE
SUBJECT COLLATERAL.”
(i) A
certificate to be dated as of the Closing Date and signed by
the president, vice president, or secretary of Borrower,
certifying that the conditions specified in Sections
4.1(a) , 4.1(b) and 4.1(c)
hereof are true;
(ii) Copies
of the articles of incorporation and any amendments thereto of
Borrower not previously delivered to Agent, certified to be
true and complete by Borrower and the Secretary of State of
the State of Texas and a current certificate of good standing
for Borrower, and copies of any by-laws of Borrower and any
amendments thereto not previously delivered to Agent,
certified to be true, correct and complete by the secretary or
assistant secretary of Borrower;
(iii) A
certificate of the Secretary of Borrower certifying the
adoption by the Board of Directors of Borrower of a resolution
authorizing Borrower to enter into and execute this Agreement,
the Note, and the other Loan Documents, to borrow the Loan
from the Lenders, and to grant to Agent for the benefit of the
Lenders a first priority security interest in and to the
Collateral;
(iv) A
certificate of the secretary or assistant secretary of
Borrower certifying the incumbency, and verifying the
authenticity of the signatures, of the specified officers of
Borrower authorized to sign the Agreement, the Note and the
other Loan Documents; and
(v) Copies
or other evidence of all loans to Borrower from any officers,
shareholders, or Affiliates of Borrower not previously
delivered to Agent.
(e)
Execution and Delivery of Loan
Documents . Borrower shall have
delivered to Agent, on or before the Closing Date, the
following Loan Documents, each of which when required, shall
be in recordable form:
(i)
This Agreement;
(ii)
Closing Opinions for
Borrower;
(iii)
Note;
(iv)
Environmental Indemnification
Agreement;
(v)
Intercreditor Agreement
. Borrower, Agent, TFC, CSF and WFF shall have
executed and delivered to Agent, on or before the Closing
Date, a modification of the in-force intercreditor agreement
for the purpose of adding Agent as a party
thereto;
(vi)
Pro Forma Title Insurance Policies For Each
Resort. Borrower shall have provided
Agent with a pro forma title insurance policy for each Resort
which shall be the form which will be issued to and obtained
by Borrower in connection with the pledge to Lender of an
Eligible Note Receivable, subject however to the provisions of
Section 5.1(f); (it is acknowledged that the condition in this
subsection may not be satisfied by the Closing Date but
satisfaction shall be a condition of funding);
and
(vii)
Other Items . Such other
agreements, documents, instruments, certificates and materials
as Agent may request to evidence the Obligations; to evidence
and perfect the rights and Liens and security interests of
Agent as agent for Lenders contemplated by the Loan Documents,
and to effectuate the transactions contemplated
herein.
(f)
Closing Date Conditions
. On or before the Closing Date, the following
conditions shall be satisfied:
(i)
UCC Search . Agent shall
have obtained, at Borrower’s cost, such searches of the
applicable public records as it deems necessary under Texas,
and other applicable law to verify that it will have a first
and prior perfected Lien and security interest covering all of
the Collateral. Agent shall not be obligated to
fund any Advance if Agent determines that Lenders do not have
a first and prior perfected lien and security interest
covering any portion of the Collateral, except as expressly
provided herein.
(ii)
Litigation Search . Agent
shall have obtained, at Borrower’s cost, an independent
search to verify that there are no bankruptcy, foreclosure
actions or other material litigation or judgments pending or
outstanding against the Resorts, any portion of the
Collateral, Borrower, or any Affiliates of Borrower (each a
“Material Party”). The term
“other material litigation” as used herein shall
not include matters in which (i) a Material Party is
plaintiff and no counterclaim is pending or (ii) which
Agent determines in its sole discretion exercised in good
faith, are immaterial due to settlement, insurance coverage,
frivolity, or amount or nature of claim. Lenders
shall not be obligated to fund any Advance if Agent determines
that any such litigation is pending.
(iii)
Insurance . Evidence that
Borrower is maintaining all policies of insurance required by
and in accordance with Section 7.1(d )
hereof, including copies of the most current paid insurance
premium invoices;
(iv)
Governmental Permits . To
the extent not previously delivered to Agent, copies of all
applicable government permits, approvals, consents, licenses
and certificates with respect to the use and operation of the
Resorts;
(g)
Taxes . Evidence
satisfactory to Agent that all taxes and assessments owed by
or for which Borrower is responsible for collection have been
paid with respect to the Resorts and the Collateral, including
but not limited to sales taxes, room occupancy taxes, payroll
taxes, personal property taxes, excise taxes, intangible
taxes, real property taxes and any assessments related to the
resorts or the Collateral. Copies of the most
current tax bills for the Resorts shall be provided to
Agent.
4.2
Origination Fee; Expenses
. Borrower shall have paid to Agent an origination
fee of $375,000 (the “Origination Fee”) together
with all Lender Expenses required to be paid pursuant to this
Agreement. Lenders shall have no obligation to fund
the Loan or make the initial Advance or any subsequent Advance
unless the amount of the Loan together with any moneys paid by
Borrower is sufficient to satisfy all fees and expenses
required to be paid pursuant to this Agreement.
4.3
Proceedings Satisfactory
. Borrower shall execute all of the Loan Documents
approved by Agent on the Closing Date, and all actions taken
in connection with the execution or delivery of the Loan
Documents, and all documents and papers relating thereto,
shall be satisfactory to Agent and its
counsel. Agent and its counsel shall have received
copies of such documents and papers as Agent or such counsel
may reasonably request in connection therewith, all in form
and substance satisfactory to Agent and its
counsel.
4.4
Conditions Precedent to Funding of Advances with
Respect to Additional Eligible Resorts
. As provided in Section 3. 5
hereof, Borrower may propose to Agent that Agent approve one
or more additional timeshare plans for inclusion hereunder as
an Additional Eligible Resort in respect of which Advances may
be made. The obligation of Lenders to fund any
Advances with respect to an Additional Eligible Resort shall
be subject to the satisfaction of each of the following
conditions precedent, in addition to all of the conditions
precedent set forth elsewhere in the Loan
Documents:
(a)
Representations, Warranties, Covenants and
Agreements . The representations and
warranties contained in the Loan Documents are and shall be
true and correct in all respects, and all covenants and
agreements have been complied with and shall be correct in all
respects, and all covenants and agreements to have been
complied with and performed by Borrower shall have been fully
complied with and performed to the satisfaction of
Agent.
(b)
No Prohibited Acts or Changes
. Borrower shall not have taken any action or
permitted any condition to exist which would have been
prohibited by any provision of the Loan Documents and all
information and documents heretofore delivered by Borrower to
Agent with respect to Borrower or the Resorts remain true and
correct in all respects.
(c)
Approval of Documents Prior to Advance
. Borrower has delivered or caused to be delivered
to Agent (with copies to Agent’s counsel), at least
fifteen (15) Business Days prior to the date of such Advance,
and Agent has reviewed and approved, at least five (5)
Business Days prior to such date, the form and content of all
of the items specified in each of the Submissions required
pursuant to this Section 4. 4. Agent
shall have the right to review and approve any changes to the
form of any of the Submissions. If Agent
disapproves of any changes to any of the Submissions, Agent
shall have the right to require Borrower either to cure or
correct the defect objected to by Agent or to elect not to
fund the Loan or any Advance. Under no
circumstances shall Agent’s failure to approve or
disapprove a change to any of the Submissions be deemed to be
an approval of such Submissions. All of the
Submissions were and shall be prepared at Borrower’s
sole cost and expense, unless expressly stated to be an
obligation and expense of Agent. Agent shall have
the right of prior approval of any Preparer and may disapprove
any Preparer in its sole discretion, for any reason, including
without limitation, that Agent believes that the experience,
skill, reputation or other aspect of the Preparer is
unsatisfactory in any respect. All Submissions
required pursuant to this Agreement shall be addressed to
Agent and include the following language: “THE
UNDERSIGNED ACKNOWLEDGES THAT LIBERTY BANK, AS AGENT FOR EACH
LENDER IS RELYING ON THE WITHIN INFORMATION IN CONNECTION WITH
ITS DETERMINATION TO MAKE A LOAN TO SILVERLEAF RESORTS, INC.
IN CONNECTION WITH THE SUBJECT COLLATERAL.”
(i) a
certificate in the form attached as Exhibit C , to be
dated as of the date of each such Advance and signed by the
president, vice president, or secretary of Borrower,
certifying that the conditions specified in
Sections 4.4(a) and 4.4(b) hereof are
true;
(ii) copies
of the articles of incorporation of Borrower, together with
any amendments thereto certified to be true and complete by
Borrower and the Secretary of State of the State of Texas, a
current certificate of good standing for Borrower issued by
the Secretary of State of the State of Texas, a current
certificate of authority to conduct business issued by the
secretary of state in each state in which the Borrower
conducts business, and copies of the by-laws of Borrower
certified to be true, correct and complete by the secretary or
assistant secretary of Borrower;
(iii) a
Survey for each Additional Eligible Resort for which Eligible
Notes Receivable are being pledged to Agent in connection with
the Advance in question;
(iv) a
certificate of the secretary or assistant secretary of
Borrower certifying the adoption by the board of directors
thereof, respectively, of a resolution authorizing the
addition of the Resort in question as an Additional Eligible
Resort and to authorize Borrower to enter into, execute and
deliver any Documents in connection therewith;
(v) a
certificate of the secretary or assistant secretary of
Borrower certifying the incumbency, and verifying the
authenticity of the signatures, of the specified officers of
Borrower authorized to sign all documents required in
connection with such Additional Eligible Resort as required
pursuant to this Section 4.4 ;
(vi) an
inspection report or reports covering each Additional Eligible
Resort for which Eligible Notes Receivable are being pledged
to Agent in connection with the Advance in question, including
without limitation all real property and personal property
subject to the Declaration and all adjacent property,
confirming:
(1) the
absence of Hazardous Materials on the personal property and
real property comprising each such Additional Eligible
Resort;
(2) that
the inspection firm has obtained, reviewed and included within
its report a CERCLIS printout from the Environmental
Protection Agency (the “EPA”), statements from the
EPA and other applicable state and local authorities and a
Phase I Environmental Audit, all of which information shall
confirm that there are no known or suspected Hazardous
Materials located at, used or stored on, or transported to or
from each such Additional Eligible Resort or in such proximity
thereto as to create a material risk of contamination of each
such Additional Eligible Resort;
(vii) evidence
that Borrower is maintaining all policies of insurance
required by and in accordance with Section
7.1(d) hereof, including copies of the most current
paid insurance premium invoices;
(viii) evidence
that Borrower and the Timeshare Documents for each Additional
Eligible Resort for which Eligible Notes Receivable are being
pledged to Agent as agent for Lenders in connection with the
Advance in question are in compliance with all Applicable Laws
in connection with its sales of Intervals, including without
limitation, the Timeshare Acts;
(ix) a
current preliminary title report or certificate of title for
each Additional Eligible Resort for which Eligible Notes
Receivable are being pledged to Agent in connection with the
Advance in question, with copies of all title
exceptions;
(x) copies
of all applicable governmental permits, approvals, consents,
licenses, and certificates for the establishment of each
Additional Eligible Resort for which Eligible Notes Receivable
are being pledged to in connection with the Advance in
question as timeshare projects in accordance with the
applicable Timeshare Act, and for the occupancy and intended
use and operation of each such Additional Eligible Resort,
including the Units, including a letter certification from
Borrower regarding zoning classification and compliance,
letters or other satisfactory evidence from utility companies,
governmental entities or other persons confirming that water,
sewer (sanitary and storm), electricity, solid waste disposal,
telephone, police, fire and rescue services are being provided
to each Resort, and any business licenses necessary for
operation of each such Additional Eligible
Resort;
(xi) certified
true, correct and complete copies of all of the Timeshare
Documents for each Additional Eligible Resort for which
Eligible Notes Receivable are being pledged to Agent as agent
for Lenders in connection with the Advance in
question;
(xii) evidence
satisfactory to Agent that all taxes and assessments owed by
or for which Borrower is responsible for collection have been
paid, including but not limited to sales taxes, room occupancy
taxes, payroll taxes, personal property taxes, excise taxes,
intangibles taxes, real property taxes, and income taxes, and
any assessments related to each Additional Eligible Resort for
which Eligible Notes Receivable are being pledged to Agent as
agent for Lenders in connection with the Advance in question
and copies of the most current paid tax bills for each such
Additional Eligible Resort evidencing that each such
Additional Eligible Resort have been segregated from all other
property on the applicable municipal taxrolls;
(xiii) written
confirmation from an architect covering each Additional
Eligible Resort, for which Eligible Notes Receivable are being
pledged to Agent as agent for Lenders in connection with the
Advance in question as to the physical condition of the
improvements at each such Additional Eligible Resort,
including that soil conditions are sufficient to support all
existing and any contemplated improvements to the real
property; which written confirmation shall be in form and
substance reasonably acceptable to Agent;
(xiv) such
credit references on Borrower as Agent deems necessary in its
sole discretion;
(xv) copies
or other evidence of all loans to Borrower from any officers,
shareholders, or Affiliates of Borrower, if any;
(xvi) a
commitment to issue Mortgagee Title Policies from Title
Company for each such Additional Eligible
Resort. Notwithstanding anything heretofore to the
contrary, if any claim, lien, encumbrance, charge or other
matter arises with respect to any Interval or Intervals for
which an Eligible Note Receivable has been pledged to Agent as
agent for Lenders pursuant to this Agreement, then, in such
event:
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a.
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The
Note Receivable with respect to the Interval in question shall
cease to be an Eligible Note Receivable and Borrower immediately
shall either replace the Note Receivable in question or make a
Mandatory Prepayment, if necessary, as provided in Section
2.4(b) hereof; and
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b.
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The
Resort at which the Interval in question is located shall cease to
be an Additional Eligible Resort, unless and until Borrower shall
cure any such claim, lien, encumbrance, charge or other matter to
the satisfaction of Agent. Furthermore, any and all
further requests for Advances in respect of such Resort must be
accompanied by satisfactory Mortgagee Title Policies for all
Intervals with respect to which such Advances are
requested.
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(d)
Financial Statements To Be Delivered Prior to
Advance . A current set of the
Financial Statements;
(e)
Additional Documents To Be Delivered Prior to
Advance .To the extent not previously delivered
hereunder, Borrower will execute, or cause to be executed with
respect to each Additional Eligible Resort, an Assignment of
Notes Receivable and Mortgages, Borrower’s Affidavit
with Respect to the Additional Eligible Resorts and an
Environmental Indemnification Agreement; and with respect to
any improvements, including any Units, constructed at a Resort
within the twenty-four month period prior to any Advance with
respect to an Additional Eligible Resort, Borrower shall also
deliver to Agent, for its approval, such documents and
instruments as Agent may reasonably request in connection with
such newly constructed improvements, including, without
limitation, copies of building permits, plans and
specifications, construction and architectural contracts,
title insurance insuring over, among other things, mechanics
liens, certificates of occupancy and satisfactory evidence of
the completion of such improvements and such other documents,
instruments, agreements, tests, reports and inspections as
Agent may require with respect to Borrower or any applicable
Affiliate, the Loan or any Resort, including any Additional
Eligible Resort; and upon request of Agent, Borrower shall
deliver evidence, satisfactory to Agent, that there is no
material litigation, written complaint, suit, action, written
claim or written charge pending against Borrower or any
Affiliate with any court or with any governmental authority
with respect to the Resorts, the Timeshare Documents, any
Eligible Notes Receivable, any Interval, or any marketing,
offer or sale of any Interval.
(f)
Physical Inspection . Agent
shall be satisfied with its physical inspection of the
Additional Eligible Resorts.
(g)
UCC Search . Agent shall
have obtained, at Borrower’s cost, such searches of the
applicable public records as it deems necessary under all
applicable law to verify that it has a first and prior
perfected Lien and security interest covering all of the
Collateral. Agent shall not be obligated to fund
any Advance if Agent determines that Lenders do not have a
first and prior perfected lien and security interest covering
any portion of the Collateral, except as expressly provided
herein.
(h)
Litigation Search . Agent
shall have obtained, at Borrower’s cost, an independent
search to verify that there are no bankruptcy, foreclosure
actions or other material litigation or judgments pending or
outstanding against the Additional Eligible Resorts, any
portion of the Collateral, Borrower, or any Affiliate, (each a
“Material Party”). The term
“other material litigation” as used herein shall
not include matters in which (i) a Material Party is plaintiff
and no counterclaim is pending or (ii) which Agent determines,
in its sole discretion, exercised in good faith, are
immaterial due to settlement, insurance coverage, frivolity,
or amount or nature of claim. Agent shall not be
obligated to fund any Advance if it determines that any such
litigation is pending.
(i)
Opinions of Borrower’s Counsel
. Borrower shall deliver to Agent for the benefit
of Agent and each Lender, at Borrower’s sole cost and
expense, such opinions of counsel, including counsel admitted
in each state in which each Additional Eligible Resort is
located, as to such matters with respect to Borrower and each
Additional Eligible Resort as Agent may request, and in form
and substance acceptable to Agent in its sole
discretion.
(j)
Funding Procedure
. Borrower shall have complied to Agent’s
satisfaction with each of the conditions precedent to funding
of an Advance set forth in Section 5
hereof.
(k)
Management of Resort
. Borrower shall provide evidence satisfactory to
Agent that Borrower, or an Affiliate, is the manager or
operator of each Resort, pursuant to a written management or
operating agreement, in form and substance satisfactory to
Agent, which with respect to all Resorts shall have a term of
at least three years.
(l)
Other Items . Such other
agreements, documents, instruments, certificates and materials
as Agent may request to determine the acceptability of any
such Additional Eligible Resort, to evidence the Obligations,
to evidence and perfect the rights and Liens and security
interests of Agent contemplated by the Loan Documents, and to
effectuate the transactions contemplated herein, including,
without limitation, true copies of all Resort Documents for
each such Additional Eligible Resort, all Timeshare Documents
and operating and management contracts and agreements,
evidence of compliance with the applicable Timeshare Act and
other Applicable Laws, evidence of all required governmental
licenses and permits; title searches; title commitments or
policies, including complete and legible copies of each title
exception, engineering, environmental and soil reports and
evidence of compliance with all applicable zoning and building
codes; each of which shall be satisfactory to Agent in its
Permitted Discretion.
Section 5-Funding Procedure
5.1 The
obligation of any Lender to make any Advance shall be subject
to the satisfaction of all of the following conditions
precedent:
(a)
Requests for Advances
. Each request for an Advance shall:
(i)
be in writing in form attached hereto as Exhibit D ,
certify the amount of the then-current Borrowing Base and
specify the principal amount of the Advance requested and
designate the account to which the proceeds of such Advance
are to be transferred;
(ii)
state that the representations and warranties of Borrower
contained in the Agreement and any closing or funding related
certifications are true and correct as of the date of the
request and, after giving effect to the making of such
requested Advance, will be true and correct as of the date on
which the requested Advance is to be made;
(iii) state
that no Default or Event of Default exists as of the date of
the request and, after giving effect to the making of such
requested Advance, no Default or Event of Default would exist
as of the date on which the requested Advance is to be
made;
(iv) be
delivered to the office of Agent at least five (5) Business
Days prior to the date of the requested Advance;
(v) be
signed by a principal financial officer of
Borrower;
(vi) certify
that Borrower has no knowledge of any asserted or threatened
defense, offset, counterclaim, discount or allowance in
respect of each Note Receivable to be pledged in connection
with such requested Advance, or in respect of any of the
Pledged Notes Receivable;
(vii) contain
an aging report of the Pledged Notes Receivable; identifying,
among other things, which among them are Eligible Notes
Receivable; and
(viii) contain
a delinquency report which shall be in form and substance
satisfactory to Agent and shall show which of such Notes
Receivable is delinquent and the duration of such delinquency,
and which of such Pledged Notes Receivable is not an Eligible
Note Receivable;
(b)
Loan Documents/Collateral
. Not less than five (5) Business Days prior to the
date of any Advance, Borrower shall have:
(i)
delivered to Agent a list of all Eligible Notes Receivable and
related Mortgages which are to be the subject of such
requested Advance, indicating the unpaid principal balance
owing on each of the Pledged Notes Receivable deemed to be an
Eligible Note Receivable, together with such additional
information as Agent may require;
(ii) delivered
to Agent (or, if Agent shall so instruct, a designee appointed
by Agent in writing) (A) the original of each Pledged
Note Receivable (duly endorsed with the words “Pay to
the order of Liberty Bank, as Agent, with recourse”),
(B) the original of each Mortgage securing such Pledged
Notes Receivable, (C) the original of each purchase
contract (including addenda) relating to the Pledged Notes
Receivable and Mortgages, (D) originals or true copies of
the related truth-in-lending disclosures, loan application,
warranty deed, Payment Authorization Agreement and, if
required by Agent, the related Purchaser’s
acknowledgement, receipt and exchange company application,
disclosures and materials, and (E) with respect to each
Eligible Note Receivable from the sale of Intervals at Oak
N’ Spruce evidence satisfactory to Agent of
the filing in the appropriate recorder’s office of the
original UCC-1 Financing Statement, naming the Purchaser of
the Interval giving rise to the Eligible Note Receivable as
debtor and Borrower as secured party (the “Purchaser
Financing Statement”), perfecting Borrower’s
security interest in the applicable Interval to secure the
Purchaser’s obligations under the Eligible Note
Receivable and naming Borrower as assignor and Agent as
assignee, assigning to Agent, all of Borrower’s right,
title and interest under each Purchaser Financing
Statement.
(iii) delivered
to Agent a duly executed Assignment of Notes Receivable and
Mortgages assigning to Agent all of Borrower’s right,
title and interest in and to each such Pledged Note Receivable
and the related Mortgage; and
(iv) subject
to Section 4.4(c)(xvi ) hereof and the
partial waiver set forth in Section 5.1(f) hereof,
delivered to Agent, with respect to each Encumbered Interval,
a commitment for a Mortgagee’s Title Policy showing that
the Mortgage in respect of such Interval has been assigned to
Agent and insuring in favor of Agent the first priority Lien
of such Mortgage in the amount of the Advance to be made in
respect of such Pledged Note Receivable, with a satisfactory
title insurance policy to be issued within forty five (45)
days from the date of the Advance.
The
Mortgages and the assignments thereof to Agent shall each be
duly recorded in the applicable land records. The
Mortgagee’s Title Policies shall be in form and
substance satisfactory to Agent and shall be issued by a title
insurance company satisfactory to Agent (the “Title
Company”), and name Borrower as the insured party
therein. The funding of the requested Advance,
delivery of the Collateral and issuance of the title insurance
policy, and recording of the assignments or any releases may,
in Agent’s discretion, be effected by way of an escrow
arrangement with the Title Company or other fiduciary, the
form and substance of which shall be satisfactory to
Agent.
(c)
Other Conditions . In
addition to the other conditions set forth in this Agreement,
the making of the initial or any subsequent Advance shall be
subject to the satisfaction of the following
conditions:
(i)
no Default or Event of Default shall exist immediately
prior to the making of such requested Advance or, after giving
effect thereto, immediately after the making of such requested
Advance;
(ii) each
agreement required to have been executed and delivered in
connection with any prior Advance shall be consistent with the
terms of this Agreement and shall be in full force and
effect;
(iii) the
date on which such requested Advance is to be made shall be a
Business Day;
(iv) Borrower
shall have delivered to Agent a certification showing the
dollar amount of the requested Advance based on the Eligible
Notes Receivable pledged to Agent, and the Notes Receivable
being pledged contemporaneously with each requested Advance in
the form attached hereto as Exhibit D ;
(v) not
more than one Advance shall have previously been made in the
same calendar month in which such requested Advance is to be
made, unless Agent, in its sole discretion, agrees to make an
additional Advance during such calendar month;
(vi) such
requested Advance shall be in a principal amount of not less
than $50,000, unless Agent, in its sole discretion, agrees to
make an Advance in an amount less than $50,000;
(vii) Agent
shall have determined that the requested Advance, when added
to the aggregate outstanding principal amount of all previous
Advances, if any, does not, based on the Eligible Notes
Receivable that have been duly pledged in favor of Agent
exceed the lesser of: (i) total amount of the Borrowing Base,
(ii) the Availability or (iii) the Commitment;
(viii) if
Agent shall so require, Agent shall have received an executed
closing protection letter issued by the Title Company, which
shall be reasonably acceptable to Agent; and
(ix) each
Lender shall have agreed to make and does make an Advance in
an amount equal to its respective Pro Rata
Percentage.
(d)
Renewal Fees; Unused Line Fee;
Expenses . The Borrower shall have
paid any Renewal Fee and/or Unused Line Fee then due together
with all Lender Expenses required to be paid by Borrower
pursuant to this Agreement in connection with such requested
Advance or any conditions related thereto.
(e)
Proceedings Satisfactory
. All actions taken in connection with such
requested Advance and all documents and papers relating
thereto shall be satisfactory to Agent and its
counsel. Agent and its counsel shall have received
copies of such documents and papers as Agent or such counsel
may reasonably request in connection with such requested
Advance, all
