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EXHIBIT NO. 10.1
WAIVER, CONSENT AND AMENDMENT NO.
5
TO
LOAN AGREEMENT
WAIVER, CONSENT AND AMENDMENT NO. 5
, dated as of January 26, 2007 (this "
Amendment "), to that certain Loan Agreement, dated as of
July 29, 2002, as amended by Amendment No. 1 ("
Amendment No. 1 "), dated as of December 20, 2002,
Amendment No. 2 (" Amendment No. 2 "), dated as of
February 13, 2004, Amendment No. 3 (" Amendment
No. 3 "), dated as of July 7, 2004 and Amendment
No. 4 (" Amendment No. 4 "), dated as of
July 28, 2005 (as amended by Amendment No. 1, Amendment
No. 2, Amendment No. 3 and Amendment No. 4, the "
Existing Loan Agreement "), among Sunterra Corporation, a
Maryland corporation (" Parent "), Borrowers (as defined
therein), the Lenders (as defined therein), and Merrill Lynch
Mortgage Capital Inc., as administrative agent and collateral agent
for the Lenders (in such capacity, " Agent ").
W I T N E S S E T H
:
WHEREAS , capitalized terms not
otherwise defined herein shall have the same meanings as specified
in the Existing Loan Agreement;
WHEREAS , Borrowers have
requested that Agent and Lenders agree to amend the Existing Loan
Agreement and waive certain Events of Default that might occur
under the Existing Loan Agreement as more specifically set forth
herein; and
WHEREAS , Agent and Lenders have
indicated their willingness to agree to such amendment of, and to
make such waivers to, the Existing Loan Agreement on the terms and
subject to the satisfaction of the conditions set forth
herein.
NOW, THEREFORE , in
consideration of the premises and of the mutual covenants and
agreements contained herein, the parties hereto hereby agree as
follows:
SECTION 1. Amendment . As of the Effective Date (as defined in
Section 3 hereof):
(a) The definition of " Permitted
Indebtedness " in Section 1.1 of the Existing Loan
Agreement is hereby amended by inserting the following
clause (p) therein:
"and (p) any Indebtedness of a European
Subsidiary to any Loan Party."
(b) The definition of " Permitted
Liens " in Section 1.1 of the Existing Loan Agreement is
hereby amended by deleting clause (j) thereof in its entirety
and inserting in lieu thereof, the following:
"(j) Liens securing Indebtedness
referred to in clauses (h), (j), (l), (n) and (p) of the
definition of "Permitted Indebtedness."’
(c) The definition of " Tangible
Net Worth " in Section 1.1 of the Existing Loan Agreement
is hereby amended by inserting at the end thereof the
following:
" minus (i.e. adjusted to remove the
effect of) any impairment of value of any European Subsidiary or
any losses resulting from the sale or disposition of any European
Subsidiary."
(d) The following definition is added
to Section 1.1 of the Loan Agreement:
‘" European Subsidiary " means
Sunterra Europe (Holdings) Limited, a United Kingdom company or any
Subsidiary thereof, or any other Subsidiary of any Borrower formed
or having its principal place of business in any country in
Europe.’
(e) Section 6.1 of the Existing
Loan Agreement is hereby amended by deleting (i) the words
"30 days" in their entirety and inserting, in lieu thereof,
the words "45 days" in the first sentence of
subsection 6.1(a)(ii) and (ii) inserting the words
"(except any European Subsidiary)" following the word
"Subsidiaries" in each instance where it appears in
subsection 6.1(a)(ii).
(f) Section 6.2 of the Existing
Loan Agreement is hereby amended by (x) adding the following
to the first sentence of subsection 6.2(c) directly following
the words "or permit any of their Subsidiaries to do any of the
foregoing": "(it being the understanding of the parties hereto
that, notwithstanding the foregoing, the sale, conveyance, transfer
or disposition of any European Subsidiary by any Borrower or any
Subsidiary is permitted hereunder provided that no Event of
Default has occurred and is continuing under this Agreement or any
other Loan Document)."
(g) Section 6.3 of the Existing
Loan Agreement is hereby amended by inserting the following
directly prior to the end of Section 6.3(d): "or, in the event
Borrowers or any Subsidiary shall recognize any impairment of value
of any European Subsidiary or shall sell, convey or transfer any
European Subsidiary and there exists any impairment of value of any
European Subsidiary or any losses resulting from such sale or
disposition of any European Subsidiary, permit at any time its
minimum Tangible Net Worth to be less than
$110,000,000."
(h) Schedule 1.1(i) to this
Amendment is hereby incorporated into and shall be deemed a part
of, Schedule 1.1(i) to the Existing Loan Agreement, as
referred to in the definition of "Consolidated EBITDA" in
Section 1.1 of the Existing Loan Agreement.
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SECTION 2. Waiver . As of
the Effective Date the Agent and Required Lenders hereby waive any
Default or Event of Default under Sections 7.1(b), 7.1(c) or 7.1(d)
of the Loan Agreement, breach of representation and warranty, or
failure to satisfy any condition to the making of any Loan, arising
or occurring prior to the Effective Date solely (a) as a result of
the representation and warranty contained in Section 5.1(h) of the
Loan Agreement being incorrect or misleading or any failure to
perform or comply with any covenant contained in Section 6.1(e) of
the Loan Agreement, to the extent occurring in connection with, or
relating to, any event, matter, condition or effect that has been
publicly disclosed by the Parent on or prior to the Effective Date
or (b) from the Borrowers’ failure to deliver to Agent any
(i) financial statements, certificates of an Authorized
Officer and/or any other documents required pursuant to
Section 6.1(a) of the Loan Agreement and (ii) the Notice
of Borrowing required pursuant to Section 2.2(a) of the Loan
Agreement, on or prior to the dates required pursuant to the
applicable provisions of the Loan Agreement, and solely with
respect to the end of fiscal year 2006, Agent and Required Lenders
waive compliance with the provision of Section 6.1(a)(i)
requiring Borrowers to deliver certain financial statements within
120 days after the end of each fiscal year, provided
that Borrowers shall (i) deliver to Agent the financial
statements required pursuant to Section 6.1(a)(i) of the Loan
Agreement on or prior to July 31, 2007 and (ii) following
the Effective Date, deliver to Agent each of the financial
statements, reports, certificates and other documents required
pursuant to Section 6.1(a) and the Borrowing Notice required
pursuant to Section 2.2(a) of the Loan Agreement within the
time periods and in compliance with the requirements of the Loan
Agreement (as amended by this Amendment). It is agreed that (x) any
such Default, Event of Default, breach of representation and
warranty, or failure to satisfy any condition to the making of any
Loan, waived pursuant to the foregoing sentence shall be deemed not
to have occurred and shall no longer be continuing for all purposes
of the Loan Agreement as of and following the Effective Date and
(y) the representation and warranty contained in Section 5.1(h) of
the Loan Agreement that is made or deemed made on and after the
date hereof is hereby qualified to except any and all events,
matters, conditions or effects publicly disclosed by the Parent on
or prior to the Effective Date.
SECTION 3. Conditions
Precedent to the Effectiveness of this Amendment . This
Amendment shall become effective as of the date hereof (the "
Effective Date ") provided that each of the following
conditions precedent shall have been satisfied on or before such
date:
(a) Amendment . Agent has
received counterparts of this Amendment executed by Borrowers and
Agent on behalf of Lenders.
(b) Fees . Borrower shall pay
to Agent a fee in the amount of $225,000.00 on or before the
Effective Date. The failure to pay such fee on or before the
Effective Date shall be (x) an Event of Default and
(y) shall render each of the amendments and waivers set forth
herein to be no longer of any force or effect.
(c) Costs and Expenses.
Borrowers shall pay all costs and expenses of Agent incurred in
connection herewith or otherwise due and owing as of the date
hereof pursuant to Section 9.4 of the Loan
Agreement.
(d) Representations and
Warranties . The representations and warranties contained in
Section 4 of this Amendment and each of the Loan Documents
shall be true and correct in all material respects on and as of the
Effective Date, immediately prior (except to the extent waived) and
after giving effect to this Amendment, as though made on and as of
such date (except for any such representation and warranty that by
its terms refers to a specific date other than the date first above
written, in which case it shall be true and correct in all material
respects as of such earlier date).
(e) No Default or Event of
Default . After giving effect to this Amendment, no Default or
Event of Default shall have occurred and be continuing or shall
occur after giving effect to or result from this
Amendment.
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SECTION 4. Representations
and Warranties . To induce Agent and the Lenders to enter into
this Amendment, each Borrower hereby represents and warrants to
Agent and the Lenders:
(a) Representations and
Warranties . The representations and warranties contained in
this Section 4 and in each of the Loan Documents are true and
correct in all material respects on and as of the Effe
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