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EXHIBIT 10.15
LOAN AND SECURITY AGREEMENT
This LOAN AND SECURITY AGREEMENT ("Agreement") is entered into as of
August 12, 1994, by GREYHOUND FINANCIAL CORPORATION, a Delaware corporation
("Lender"), and ASCENSION RESORTS, LTD., a Texas limited partnership, d/b/a
Silverleaf Resorts, Ltd. ("Borrower").
I. DEFINITIONS
As used in this Agreement and the other Documents (as defined below)
unless otherwise expressly indicated in this Agreement or the other
Documents, the following terms shall have the following meanings (such
meanings to be applicable equally both to the singular and plural
terms defined).
1.1 "Advance": an advance of the proceeds of the Loan by Lender on
behalf of Borrower in accordance with the terms and provisions
of this Agreement.
1.2 "Agents": the Oversight Agent, the Lockbox Agent and the
Servicing Agent.
1.3 "Applicable Usury Law": the usury law chosen by the parties
pursuant to the terms of paragraph 8.10 or such other usury
law which is applicable if such usury law is not.
1.4 "Articles of Organization": the charter, articles, agreements
and other written documents evidencing the formation,
organization and continuing existence of an entity.
1.5 "Assignment": a written assignment of specific Instruments
and/or Purchaser Mortgages and their proceeds, delivered by
Borrower to Lender in the form of EXHIBIT A.
1.6 "Borrowing Base": with respect to an Eligible Instrument, an
amount equal to the lesser of:
(a) seventy percent (70%) of the unpaid principal balance
of such Eligible Instrument; or
(b) seventy-five percent (75%) of the present value of
the unmatured installments of principal and interest
under such Eligible Instrument, discounted at the
greater of the applicable interest rate under the
terms of the Note or 12%.
1.7 "Borrowing Term": the period commencing on the date of this
Agreement and ending on the close of Lender's normal
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business hours on the date (or if not a Business Day, the
first Business Day thereafter) which is the earlier of (a) the
date twelve (12) months from the date of the first Advance or
(b) August 12, 1995.
1.8 "Business Day": any day other than a Saturday, Sunday or a
day on which banks in Phoenix, Arizona are required to close.
1.9 "Commitment Fee": a commitment fee for the Loan payable by
Borrower to Lender in the amount of Sixty Thousand Dollars
($60,000).
1.10 "Collateral": the Receivables Collateral, Insurance Policies
and any and all other assets now or hereafter serving as
security for the Performance of the Obligations, and all
products and proceeds thereof.
1.11 "Default Rate": as defined in the Note.
1.12 "Documents": the Note, the Guarantee, the Subordination
Agreement, the Assignment, the Lockbox Agreement, the
Oversight Agreement, the Environmental Certificate, this
Agreement and all other documents executed in connection with
the Loan, together with any and all renewals, amendments,
restatements or replacements of such documents.
1.13 "Eligible Instrument": an Instrument which conforms to the
standards set forth in EXHIBIT B, (which at all times during
the Borrowing Term shall be limited to Instruments arising
from the sale of Time-Share Interests in Projects for which
agreed-to Permitted Encumbrances have been agreed to by Lender
in writing and stipulated on EXHIBIT E hereto or any
supplement thereto). Without limiting the generality of the
foregoing, Borrower acknowledges and agrees that until such
time as it has delivered to Lender, and Lender has approved,
proforma title policies on each of the Projects identified on
EXHIBIT F hereto and located in the State of Missouri, that
Borrower shall not be entitled to Advances of the Loan with
respect to Instruments arising from the sale of Time-Share
Interests in such Missouri Projects. An Instrument that has
qualified as an Eligible Instrument shall cease to be an
Eligible Instrument upon the date of the first occurrence of
any of the following: (a) any installment due with respect to
that Instrument becomes more than fifty-nine (59) days past
due or (b) that Instrument otherwise fails to continue to
conform to the standards set forth in EXHIBIT B.
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1.14 "Environmental Certificate": an environmental certificate
executed by Borrower and such other persons or parties as
required by Lender in the form of EXHIBIT C.
1.15 "Event of Default": the meaning set forth in paragraph 7.1.
1.16 "Guarantee": a primary, joint and several guarantee made by a
Guarantor of the Obligations.
1.17 "Guarantor": each person or entity now or hereafter
guaranteeing the Obligations, including, without limitation,
Xxxxxx X. Xxxx.
1.18 "Incipient Default": an event which after notice and/or lapse
of time would constitute an Event of Default.
1.19 "Instrument": a promissory note which has arisen out of the
sale of a Time-Share Interest by Borrower to a Purchaser and
is secured by a Purchaser Mortgage.
1.20 "Insurance Policies": such insurance policies required by, and
written by insurers and in amounts and form satisfactory to,
Lender.
1.21 "Loan": the loan made pursuant to this Agreement and the other
Documents.
1.22 "Lockbox Agent": Texas Commerce Bank, or its successor as
lockbox agent under the Lockbox Agreement.
1.23 "Lockbox Agreement": an agreement in form and substance
satisfactory to Lender in its sole and absolute discretion to
be made between Lender, Borrower and Lockbox Agent, which
provides for the Lockbox Agent to collect through a lockbox
payments made on Instruments constituting part of the
Receivables Collateral and to remit them to Lender.
1.24 "Master Club": the Master Endless Escape Club, a Texas non-
profit corporation, which collects all assessments and pays
all expenses for the owners' associations of all of the
Projects, pursuant to a Master Club Agreement and a First
Amendment to Master Club Agreement, both dated March 28, 1990
("Master Club Agreement").
1.25 "Maturity Date": the date (or if not a Business Day, the first
Business Day thereafter) seven (7) years after the date of the
last Advance.
1.26 "Maximum Loan Amount": Six Million Dollars ($6,000,000) minus
the outstanding principal balance of the 1992 Loan.
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1.27 "Non-Disturbance Agreements": agreements executed by the
holder(s) of all liens on the Projects or related amenities
insuring the continued uninterrupted use of the subject
Project(s), common areas and amenities by the owners of Time-
share Interests, all in form and substance acceptable to
Lender.
1.28 "Note": the "Promissory Note" issued by Borrower in the form
of EXHIBIT D to evidence the Loan.
1.29 "Obligations": all obligations, agreements, duties, covenants
and conditions that Borrower is now or hereafter required to
Perform under the Documents.
1.30 "Opening Prepayment Date": the date (or if not a Business Day,
the first Business Day thereafter) one (1) year after the date
of the last Advance.
1.31 "Oversight Agent": GFC Portfolio Services, Inc., an Arizona
corporation, or its successor as Oversight Agent under the
Oversight Agreement.
1.32 "Oversight Agreement": an agreement in form and substance
satisfactory to Lender in its sole and absolute discretion, to
be made among Lender, Borrower and Oversight Agent, which
provides for Oversight Agent to perform for the benefit of
Lender certain oversight and reporting functions in connection
with Borrower's servicing of the Instruments constituting the
Receivables Collateral.
1.33 "Performance" or "Perform": full, timely and faithful
performance.
1.34 "Permitted Encumbrances": the rights, restrictions,
reservations, encumbrances, easements and liens of record
against each Project which Lender has agreed to accept, which
with respect to each Project located in Texas are as set forth
on EXHIBIT E, and which with respect to any other Project not
specifically addressed in the original EXHIBIT E to this
Agreement, shall be delineated on a supplement to EXHIBIT E
after being approved in writing by Lender.
1.35 "Prepayment Premium": an amount equal to (a) six percent
(6.0%) of the outstanding principal balance of the Loan in the
event of a prepayment of the Loan occurring prior to the
Opening Prepayment Date or (b) a percentage, determined in
accordance with SCHEDULE 1, of the outstanding principal
balance of the Loan in the event of a prepayment of the Loan
occurring subsequent to the Opening Prepayment Date.
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1.36 "Project": any one of the time-share resorts or parts of such
resorts described in EXHIBIT F and any other time-share resort
or part thereof as Lender may in its discretion from time to
time hereafter approve in writing.
1.37 "Projects": collectively, all of the resorts (or parts
thereof) defined above as a "Project."
1.38 "Purchaser": a purchaser of a Time-Share Interest from
Borrower.
1.39 "Purchaser Mortgage": the purchase money mortgage or deed of
trust given to secure an Instrument.
1.40 "Receivables Collateral": (a) the Instruments which are now or
hereafter assigned, endorsed or delivered to Lender pursuant
to this Agreement or against which an Advance has been made;
(b) all rights under all documents evidencing, securing or
otherwise pertaining to such Instruments, including, without
limitation, Purchaser Mortgages and purchase agreements; (c)
the Insurance Policies and related rights pertaining to the
foregoing; (d) all rights under any escrow agreements and
accounts pertaining to the foregoing; (e) all files, books and
records of Borrower pertaining to the foregoing; and (f) the
proceeds from the foregoing.
1.41 "Resolutions": the corporate resolution of a corporation
certified as true and correct by an authorized officer of such
corporation or a partnership certificate signed by all of the
general partners of such partnership.
1.42 "Security Interest": a perfected, direct and exclusive first
priority security interest in and charge upon the property
intended to be covered by it.
1.43 "Servicing Agent": the Borrower or, subject to paragraph
5.4(b), a servicing agent acceptable to Lender or its
successor as Servicing Agent under the Servicing Agreement.
1.44 "Servicing Agreement": an agreement in form and substance
satisfactory to Lender in its sole and absolute discretion, to
be made among Lender, Borrower and Servicing Agent which
provides for Servicing Agent to perform for the benefit of
Lender accounting, reporting and other servicing functions
with respect to the Instruments constituting part of the
Receivables Collateral.
1.45 "Subordination Agreement(s)": the subordination agreement(s)
made and delivered to Lender pursuant to paragraph 6.11.
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1.46 "Term": the duration of this Agreement, commencing on the date
as of which this Agreement is entered into and ending when all
of the Obligations shall have been Performed.
1.47 "Time-Share Interest": the estate described in EXHIBIT F in a
Project or the right to the exclusive use of a Unit and to the
non-exclusive use of the related Project's common areas for a
one week period of each year.
1.48 "Title Policy (Purchaser Mortgage)": a policy of title
insurance in an amount not less than Borrowing Base of an
Instrument secured by a Purchaser Mortgage, insuring Lender's
interest in such Purchaser Mortgage as a valid first priority
lien subject only to the Permitted Encumbrances, issued by a
title company and in form and substance acceptable to Lender.
1.49 "Unit": a dwelling unit in a Project.
1.50 "1992 Loan": the loan in the original principal amount of
$1,000,000 made by Lender's predecessor, Greyhound Real Estate
Finance Company, an Arizona corporation to Borrower pursuant
to a Loan And Security Agreement dated January 7, 1992.
II. LOAN COMMITMENT; USE OF PROCEEDS
2.1 Lender hereby agrees, if Borrower has Performed all of the
obligations then due, to make Advances to Borrower in amounts
equal to (a) the then Borrowing Base of all Eligible
Instruments then held by Lender together with those delivered
to and accepted by Lender with a Request for Advance, less (b)
the then unpaid principal balance of the Loan; provided, at no
time shall the unpaid principal balance of the Loan exceed the
Maximum Loan Amount. Lender shall have no obligation to make
any Advance after the Borrowing Term has expired.
2.2 The Loan is a revolving line of credit; however, all of the
Advances shall be viewed as a single loan. Borrower shall not
be entitled to obtain Advances after the expiration of the
Borrowing Term unless Lender, in its sole and absolute
discretion, agrees in writing with Borrower to make Advances
thereafter on terms and conditions satisfactory to Lender.
This Agreement and Borrower's liability for Performance of the
Obligations shall continue, however, until the end of the
Term.
2.3 Borrower will use the proceeds of the Loan only for Borrower's
business purposes, which shall consist of use for working
capital.
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III. SECURITY
3.1 To secure the Performance of all of the Obligations, Borrower
hereby grants to Lender a Security Interest in and assigns to
Lender the Receivables Collateral. Such Security Interest
shall be absolute, continuing and applicable to all existing
and future Advances and to all of the Obligations. All of the
Receivables Collateral shall secure repayment of the Loan and
the Performance of the other Obligations. Borrower will
unconditionally deliver to Lender, with full recourse, all
Instruments which are part of the Receivables Collateral.
Lender is hereby appointed Borrower's attorney-in-fact to take
any and all actions in Borrower's name and/or on Borrower's
behalf deemed necessary or appropriate by Lender with respect
to the collection and remittance of payments (including the
endorsement of payment items) received on account of the
Receivables Collateral.
3.2 If a previously Eligible Instrument which is part of the
Receivables Collateral ceases to be an Eligible Instrument,
then within thirty (30) days thereafter, Borrower will either
(i) pay to Lender an amount equal to the Borrowing Base of the
ineligible Instrument, together with interest, costs and
expenses attributable to it, or (ii) replace such ineligible
Instrument with an Eligible Instrument or Eligible Instruments
having a Borrowing Base not less than the Borrowing Base
(calculated immediately before its ineligibility) of the
ineligible Instrument(s) being replaced. Simultaneously with
such payment or the delivery of the replacement Instrument to
Lender, Borrower will deliver to Lender all of the items
(except for a "Request for Advance and Certification")
required to be delivered by Borrower to Lender pursuant to
paragraph 4.1, together with a "Borrower's Certificate" in
form and substance identical to EXHIBIT G. If no Event of
Default or Incipient Default has occurred and is continuing,
then upon the substitution of an Eligible Instrument for an
ineligible Instrument, Lender will reassign to Borrower,
without recourse or warranty of any kind, the ineligible
Instrument. Borrower will prepare the reassignment instrument,
which shall be in form and substance identical to EXHIBIT G-1,
and shall deliver it to Lender for execution.
3.3 Borrower will deliver or cause to be delivered to Lender and
will maintain or cause to be maintained throughout the Term in
full force and effect the Guarantee, the Subordination
Agreement(s), and all other security agreements required
pursuant to the Documents.
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IV. ADVANCES
4.1 Lender's obligation to make the initial Advance and
subsequent Advances shall be subject to and conditioned upon
the terms and conditions set forth in the following
subparagraphs and elsewhere in this Agreement being satisfied
and remaining satisfied during the Term.
(a) Borrower shall have delivered to Lender the following
Documents, duly executed, delivered and in form and
substance satisfactory to Lender:
(i) the Note;
(ii) an Assignment of the specific Instruments for
which the Advance is requested;
(iii) the specific Instruments for which the
Advance is requested, properly endorsed;
(iv) the Guarantee;
(v) the Subordination Agreement(s);
(vi) the Environmental Certificate;
(vii) UCC financing statements for filing and/or
recording, as appropriate, where necessary to
perfect the Security Interest in the security
required pursuant to the Documents;
(viii) a favorable opinion from independent counsel
for Borrower in form and substance
substantially identical to EXHIBIT H;
(ix) a favorable opinion from independent counsel
for Guarantor in form and substance
substantially identical to EXHIBIT I;
(x) a favorable opinion from independent counsel
for Borrower and Freedom Financial Corp.
("FFC") regarding the existence of claims
against FFC, in form and substance
satisfactory to Lender;
(xi) the Lockbox Agreement;
(xii) the Oversight Agreement;
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(xiii) the Non-Disturbance Agreements or other
assurance of lien releases; and
(xiv) this Agreement.
(b) Borrower shall have delivered to Lender at least ten
(10) Business Days prior to the date of the Advance,
or in the case of the items called for in item (x) at
least five (5) Business Days prior to the date of the
Advance:
(i) the Articles of Organization of Borrower and
its partners, if any, to the extent any such
entity is not a natural person;
(ii) the Resolutions of Borrower and its
respective partners, if any, to the extent
any such entity is not a natural person;
(iii) unless waived in writing by Lender, prior
only to the initial Advance for each Project,
an environmental assessment of each Project;
(iv) except as to the Projects identified on the
original EXHIBIT F to this Agreement, as to
which such requirement is waived by Lender, a
1988 ALTA/ACSM survey and condominium map of
each Project prepared by a licensed land
surveyor acceptable to Lender, showing the
dimensions of each Unit and such other
details as Lender may reasonably require;
(v) a copy of the registrations/consents to sell,
the final subdivision public reports/public
offering statements and/or prospectuses and
approvals thereof required to be issued by or
used in the state where each Project is
located and other jurisdictions where Time-
Share Interests have been offered for sale or
sold;
(vi) if any Project has not been registered under
such act and Lender requests such an opinion,
a copy of an advisory opinion issued by the
federal Office of Interstate Land Sales
Registration that the subject Project does
not fall within the purview of the Interstate
Land Sales Full
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Disclosure Act, or a legal opinion from
Borrower's counsel acceptable to Lender;
(vii) a copy of the form of the purchase contract,
deed, Instrument, Purchaser Mortgage, credit
applications and disclosures, and other
documents and exhibits which have been or are
being used by Borrower in connection with
each Project or the sale of Time-Share
Interests, together with the Project
governing documents, the Project management
agreement, the Project exchange affiliation
agreement(s) and advertising materials;
(viii) the Insurance Policies;
(ix) intentionally omitted;
(x) the items described in EXHIBIT J; and
(xi) such other items as Lender requests which are
reasonably necessary to evaluate the request
for the Advance and the satisfaction of the
conditions precedent to the Advance.
(c) No material adverse change shall have occurred in any
Project or in Borrower's or Guarantor's business or
financial condition since the date of the latest
financial and operating statements given to Lender by
or on behalf of Borrower or Guarantor.
(d) There shall have been no change in the warranties and
representations made in the Documents by Borrower,
Guarantor and/or any other surety for the Performance
of any of the Obligations.
(e) Neither an Event of Default nor Incipient Default
shall have occurred and be continuing.
(f) The interest rate applicable to the Advance (before
giving effect to any savings clause) will not exceed
the maximum rate permitted by the Applicable Usury
Law.
(g) Borrower shall have paid to Lender the Commitment Fee
and all other fees required to be paid at the time of
the Advance.
(h) Borrower shall not be entitled to any Advance unless
on or before September 15, 1994 all
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Documents have been executed by the persons required
to do so and delivered to Lender and the first
Advance has been requested.
4.2 Advances shall be requested in writing by Borrower and shall
not be made more frequently than two (2) per month or in
amounts less than One Hundred Thousand Dollars ($100,000).
Borrower shall pay to Lender an administrative fee for each
advance in excess of one (1) per month in an amount equal to
the greater of $500 or 0.25% of the amount of the subject
advance.
4.3 Advances may be disbursed by checks, wire transfers or drafts
payable to Borrower.
4.4 Although Lender shall have no obligation to make an Advance
unless and until all of the conditions precedent to the
Advance have been satisfied, Lender may, at its sole
discretion, make Advances prior to that time without waiving
or releasing any of the Obligations.
V. NOTE, MAINTENANCE OF BORROWING BASE; PAYMENTS; SERVICING AND
COLLECTION
5.1 The Loan shall be evidenced by the Note and shall be repaid in
immediately available funds according to the terms of the
Note.
5.2 Subject to Borrower's rights under paragraph 3.2 to provide
replacement Eligible Instruments, if for any reason the
aggregate principal amount of the Loan outstanding at any time
shall exceed the then Borrowing Base of all Eligible
Instruments, Borrower, without notice or demand, will
immediately make to Lender a principal payment in an amount
equal to such excess plus accrued and unpaid interest on such
principal payment.
5.3 Borrower will not be entitled to prepay, in whole or in part,
the Loan until the Opening Prepayment Date. Thereafter, if
neither an Event of Default nor an Incipient Default has
occurred and is continuing, then Borrower shall have the
option to prepay the Loan in full, but not in part, upon 60
days prior written notice and the simultaneous payment of the
Prepayment Premium on any date an installment is due on the
Note. If (a) there shall occur an Event of Default and such
occurrence results in acceleration of the Loan, or if (b)
there shall occur a casualty to or condemnation of all or any
portion of any Project and such occurrence results in
prepayment of the Loan, a Prepayment Premium will be required
in the amount which shall be determined as of and due on the
earlier of the date of acceleration or prepayment. The
prohibition
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on prepayment and the requirement to pay a Prepayment Premium
shall not apply to prepayment resulting from the application
of payments required from obligors on the Receivables
Collateral (unless solicited by Borrower in contravention of
its Obligations) or from performance by Borrower of its
Obligations under paragraph 3.2 or 5.2 (unless due to a
misrepresentation or breach of warranty concerning the
Receivables Collateral qualifying as Eligible Instruments).
5.4 (a) Lockbox Agent shall collect payments on the
Instruments constituting part of the Receivables
Collateral and remit collected payments to Lender on
the last Business Day of each and every week after
the date of first Advance, according to the terms of
the Lockbox Agreement. Payments shall not be deemed
received by Lender until Lender actually receives
such payments from Lockbox Agent. Servicing Agent
shall furnish to Lender at Borrower's sole cost and
expense, no later than the tenth (10th) day of each
month commencing with the first full calendar month
following the date of this Agreement, a report,
substantially in the format of EXHIBIT K, which: (i)
shows as of the end of the prior month with respect
to each Instrument which constitutes part of the
Receivables Collateral (A) all payments received,
allocated between principal, interest, late charges
and taxes, (B) the opening and closing balances, (C)
present value, (D) average consumer interest rate,
and (E) extensions, refinances, prepayments, and
other similar adjustments; and (ii) indicates
delinquencies of thirty (30), sixty (60) and ninety
(90) days and in excess of ninety (90) days. On the
basis of such reports, Lender will compute the
amount, if any, which was due and payable by Borrower
on the last Business Day of the preceding month and
will notify Borrower of any amount due. If such
reports are not timely received, Lender may estimate
the amount which was due and payable. Borrower will
pay upon demand the amount determined by Lender to be
due and payable. If payment is made on the basis of
Lender's estimate and thereafter reports required by
this paragraph are received by Lender, the estimated
payment amount shall be adjusted by an additional
payment or a refund to the correct amount, as the
reports may indicate; such additional amount to be
paid by Borrower upon demand and such refund to be
made by Lender within five (5) Business Days after
receipt of written request therefor by Borrower. At
the end of each calendar quarter, Borrower will
deliver or cause the Servicing Agent to deliver to
Lender a
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current list of the names, addresses and phone
numbers of the obligors on each of the Instruments
constituting part of the Receivables Collateral.
Borrower will also deliver or cause Servicing Agent
to deliver to Lender, promptly after receipt of a
written request for them, such other reports with
respect to Instruments constituting part of the
Receivables Collateral as Lender may from time to
time require.
(b) At any time following the occurrence of an Event of
Default (and regardless of whether such Event of
Default is cured), at Lender's election, an
independent Servicing Agent may be engaged under a
Servicing Agreement and Borrower shall cooperate in
such appointment. Lender, subject to any restriction
contained in the Lockbox Agreement or the Servicing
Agreement, as the case may be, may at any time and
from time to time in its discretion substitute or
require Borrower to substitute a successor or
successors to any Agent acting under the Lockbox
Agreement or (at any time after appointment of a
Servicing Agent other than Borrower pursuant to the
terms of this Agreement) the Servicing Agreement.
5.5 Subject to Lender's rights under Article VII, all proceeds
from the Receivables Collateral (except payments which are
identified by Purchasers as tax and insurance impounds or
maintenance and other assessment payments and are required to
be so treated by Borrower) and the other security shall be
applied as follows: first to the payment of all late charges,
costs, fees and expenses required by the Documents to be paid
by Borrower; second to accrued and unpaid interest due on the
Note; third to the unpaid principal balance of the Note; and
then to the other Obligations in such order and manner as
Lender may determine. Unless and until all the Obligations
have been Performed, Borrower shall have no right to any
portion of the proceeds of the Receivables Collateral;
provided, however, that any payments which are received by
Lender which are identified by Purchasers as assessment
payments will be delivered to Borrower within thirty (30) days
of Lender's receipt thereof.
5.6 Whether or not the proceeds from the Receivables Collateral
shall be sufficient for that purpose, Borrower will pay when
due all payments required to be made pursuant to any of the
Documents, Borrower's Obligation to make such payments being
absolute and unconditional.
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VI. BORROWER'S REPRESENTATIONS, WARRANTIES AND COVENANTS
6.1 (a) Borrower is, and will remain at all times, duly
organized, validly existing and in good standing
under the laws of Texas and in each jurisdiction in
which it is selling Time-Share Interests or where the
location or nature of its properties or its business
makes such qualification necessary. Borrower has full
authority to Perform the Obligations and to carry on
its business and own its property.
(b) Borrower has full power and authority to grant the
Security Interest in the Receivables Collateral and
to execute and deliver the Documents and to Perform
the Obligations. All action necessary and required by
the Articles of Organization and all applicable laws
for the obtaining of the Loan and for the execution
and delivery of the Documents executed and delivered
in connection with the Loan has been duly and
effectively taken. The Documents are and shall be
legal, valid, binding and enforceable against
Borrower; and do not violate the Applicable Usury Law
or constitute a default or result in the imposition
of a lien under the terms or provisions of any
agreement to which Borrower is a party. No consent of
any governmental agency or any other person not a
party to this Agreement is or will be required as a
condition to the execution, delivery or
enforceability of the Documents.
6.2 There is no action, litigation or other proceeding pending or,
to Borrower's knowledge, threatened before any arbitration
tribunal, court, governmental agency or administrative body
involving Borrower, its property or any Project which might
materially adversely affect the Performance of the
Obligations, the Project, the business or financial condition
of Borrower, or the ability of Borrower to Perform the
Obligations.
6.3 (a) Borrower has sold or has offered for sale Time-Share
Interests only in the states in which the Projects
are located and all sales have been made at the
Projects. Before it sells or offers for sale
Time-Share Interests in jurisdictions other than the
states in which the Projects are located and the
state(s) listed in the preceding sentence, Borrower
will promptly notify Lender and provide Lender with
evidence that it has complied with all laws of such
jurisdiction governing its proposed conduct.
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(b) Borrower has complied, and will comply, with all laws
and regulations of the state in which the Projects
are located and all other governmental jurisdictions
in which the Projects are located or in which
Time-Share Interests have been sold or offered for
sale.
(c) The time-share use and occupancy of Units will not
violate or constitute a non-conforming use under any
private covenant or restriction or any zoning, use or
similar law, ordinance or regulation affecting the
use or occupancy of the Projects.
6.4 (a) Each Instrument assigned to Lender pursuant to this
Agreement shall be an Eligible Instrument. Borrower
has Performed all its obligations to Purchasers, and
there are no executory obligations to Purchasers to
be Performed by Borrower. Borrower further warrants
and guarantees the enforceability of the Receivables
Collateral.
(b) Without the prior written consent of Lender, Borrower
will not cancel or materially modify, or consent to
or acquiesce in any material modification to, or
solicit the prepayment of, any Instrument which
constitutes part of the Receivables Collateral; or
waive the timely performance of the obligations of
the Purchaser under any such Instrument or its
security; or release the security for any such
Instrument. Borrower will not pay or advance directly
or indirectly for the account of any Purchaser any
sum owing by the Purchaser under any Instrument which
constitutes part of the Receivables Collateral.
(c) Borrower at all times will fulfill and will cause its
affiliates, agents and independent contractors at all
times to fulfill all obligations to Purchasers.
(d) True and complete copies of the Project governing
documents, the purchase contract form, the deed form,
the Instrument form, the Purchaser Mortgage form,
advertising materials and other documents and
exhibits thereto which have been and are being used
by Borrower in connection with the Projects and the
sale or offering for sale of Time-Share Interests
have been delivered to Lender. Borrower, without the
prior written consent of Lender, will not cancel or
materially modify any such documents except as
required by law. Borrower will perform all of
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its obligations under the Project governing documents.
(e) Each Purchaser is a member of a Project owners'
association or associations having authority to levy
annual assessments to cover the costs of maintaining
and operating the Projects. To Borrower's knowledge,
the Master Club and each owners' association is
solvent; currently levied assessments are adequate to
cover such costs and to establish and maintain a
reasonable reserve for capital improvements; and
there are no events which could give rise to a
material increase in such costs. Borrower will use
its best efforts to cause the Master Club to (A)
discharge its obligations under the Master Club
Agreement and all of the Project's governing
documents and (B) maintain the reserve for capital
improvements described above.
(f) Except as otherwise permitted and disclosed by the
Project governing documents, the Project owners'
association(s) have a non-exclusive recreation and use
easement over all the common areas in the Projects and
other amenities which have been promised or
represented as being available to Purchasers, which
common areas and amenities are free and clear of liens
and security interests. Such interests are represented
by the documents described on EXHIBIT M hereto (the
"Recreation And Use Documents"). Borrower will
maintain or cause to be maintained in good condition
and repair all amenities and common areas which have
been promised or represented as being available to
Purchasers and all roads and off-site improvements
which are not the responsibility of the Project
owners' association(s) to maintain and repair and have
not been dedicated to or accepted by the responsible
governmental authority or utility company. Without
limiting the generality of the foregoing, Borrower
shall not sell or further encumber its fee simple
interest in any common areas and amenities which are
the subject of the Recreation and Use Documents which
are presently improved and available for use by owners
of Time-share Interests; Borrower shall not terminate
or cause to be terminated any of the Recreation and
Use Documents with respect to any common areas or
amenities and which are presently improved and
available for use by owners of Time-Share Interests;
and Borrower shall fully perform its contractual
obligations under the Recreation and Use Documents for
each Project regarding maintenance and upkeep of the
subject common areas and amenities. Finally, Borrower
hereby represents and warrants to Lender that the
amenities available
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to Purchasers at each Project, as represented in the
Project and related marketing documents used by
Borrower, are in fact located on the easement parcels
identified in the respective Recreation and Use
Documents for each Project.
(g) In its capacity as the contract manager for each of
the Projects (and related common areas and
amenities), and as the party which shall at all times
control each Project owner's association, Borrower
covenants and agrees that it shall at no time cause
assessments to be levied against the owners of
Time-Share Interests in such Projects which, with
respect to each Project, constitute in the aggregate,
amounts which are more than the amount reasonably
necessary to maintain that portion of each Project
(including any amenities and common areas) from time
to time representing Time-Share Interests sold to
consumers.
6.5 Borrower will undertake the diligent and timely collection of
amounts delinquent under each Instrument which constitutes
part of the Receivables Collateral and will bear the entire
expense of such collection. Lender shall have no obligation to
undertake any action to collect under any Instrument.
6.6 Lender may notify Purchasers of the existence of Lender's
interest as assignee in the Receivables Collateral and request
from Purchasers any information relating to the Receivables
Collateral. Borrower will deliver such notice under its
letterhead if requested.
6.7 Borrower, without the prior written consent of Lender, will
not: (a) sell, convey, pledge, hypothecate, encumber or
otherwise transfer any security for the Performance of the
Obligations; (b) permit or suffer to exist any liens, security
interests or other encumbrances on any security for the
Performance of the Obligations, except for the Permitted
Encumbrances and liens and security interests expressly
granted to Lender; (c) sell, lease, transfer or dispose of all
or substantially all of its assets to another entity; or (d)
permit or suffer to exist any transfer of the ownership
interests or control of Borrower and, if Borrower is a
partnership, any general partner of Borrower.
6.8 Borrower will ensure that the Master Club and/or the
underlying Project owners associations maintains and pays the
cost of the Insurance Policies and will deliver copies of the
Insurance Policies to Lender. Subject to existing laws for the
protection of time-share owners,
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Lender shall have the right to approve the use of any
insurance proceeds, and shall have the right to require that
such proceeds be applied to the outstanding balance of the
Loan.
6.9 (a) The Documents and all certificates, financial
statements and written materials furnished to Lender
by or on behalf of Borrower in connection with the
Loan do not contain any untrue statement of a
material fact or omit to state a fact which
materially adversely affects or in the future may
materially adversely affect the Receivables
Collateral or any other security for the Performance
of the Obligations or the business or financial
condition of Borrower or the Project.
(b) Lender's examination, inspection, or receipt of
information pertaining to the Receivables Collateral
or the Projects and their proposed operation shall
not in any way be deemed to reduce the full scope and
protection of the warranties, representations and
Obligations contained in this Agreement.
6.10 (a) On or before the tenth (10th) day of each month,
Borrower will cause to be furnished to Lender (i) the
reports required pursuant to paragraph 5.4(a) and
(ii) if requested by Lender, a sales report for the
prior month showing the number of sales of Time-Share
Interests, their aggregate dollar amount and related
down payments.
(b) Borrower will furnish or cause to be furnished to
Lender within ninety (90) days after each fiscal year
of the subject, a copy of the current annual
financial statements of Borrower, each Guarantor and,
subject to the best efforts of Borrower, the Master
Club; and shall furnish or cause to be furnished to
Lender within forty-five (45) days after each interim
quarterly fiscal period of Borrower during the
Borrowing Term a copy of the current financial
statements of Borrower for the period commencing with
the first day of the fiscal year and concluding with
such quarter end, together with a status report
covering the subject quarter from Xxxxx Xxxxxxxx &
Associates, including financial, management,
marketing and collateral aspects of Borrower's
business operations. Such financial statements for
Borrower shall contain a balance sheet as of the end
of the relevant fiscal period and statements of
income and of cash flow for such fiscal period and
for Guarantor, a balance
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sheet as of the end of the relevant fiscal period
(together, in each case, with the comparable figures
for the corresponding period of the previous fiscal
year), all in reasonable detail. All financial
statements shall be prepared in accordance with
generally accepted accounting principles,
consistently applied. All financial statements
required pursuant to this paragraph shall be
certified by the chief financial officer or general
partner, as the case may be, of the subject of such
statements. Annual statements shall be reviewed and
certified by a recognized firm of certified public
accountants reasonably satisfactory to Lender.
Together with such financial statements, Borrower
will deliver to Lender a certificate signed by the
chief financial officer or managing general partner,
as the case may be, of Borrower stating that there
exists no Event of Default or Incipient Default or,
if any such Event of Default or Incipient Default
exists, specifying the nature and period of its
existence and what action Borrower proposes to take
with respect to it.
(c) Borrower will deliver to Lender from time to time, as
available, and promptly upon amendment or effective
date, current price lists, sales literature,
registrations/consents to sell, final subdivisions
public reports/public offering statements/
prospectuses, purchase documents, and any other items
requested by Lender which relate to the Time-Share
Interests.
(d) Borrower will at its expense permit Lender and its
representatives at all reasonable times to inspect
the Projects and to inspect, audit and copy
Borrower's records; and shall make available such
further information as Lender may from time to time
reasonably request.
(e) Borrower will submit to Lender annually, within ten
(10) days after each is available, proposed annual
maintenance and operating budgets of the Master Club,
certified to be adequate by the managing agent for
the Master Club and the underlying Project owners
associations, and a statement of the annual
assessment to be levied upon the Purchasers for each
Project owners' association; and will use its best
efforts to cause to be made available to Lender for
inspection, auditing and copying, upon Lender's
request, the books of account, logs and records of
the Master Club.
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6.11 Borrower will cause any and all indebtedness owing by
it to its shareholders, directors, officers or
partners, as the case may be, Guarantor(s), or the
relatives and affiliates of Borrower or the foregoing
to be subordinated in all aspects to the Obligations;
provided, however, that if no Event of Default or
Incipient Default is outstanding, such subordination
shall not prohibit (a) regularly scheduled payments
on the subordinated indebtedness, or (b) reasonable
salaries or fees at normal and customary rates for
services actually rendered.
6.12 Borrower is not in default of any payment on account
of indebtedness for borrowed money or of any
repurchase obligations in connection with a
receivables purchase financing, or in violation of or
in default under any material term in any agreement,
order, decree or judgment of any court, arbitration
or governmental authority to which it is a party or
by which it is bound.
6.13 Borrower has filed all tax returns and paid all
taxes, assessments, levies and penalties, if any,
required to be filed by it or paid by it to any
governmental or quasi-governmental authority or
subdivision, including real estate taxes and
assessments relating to the Project. Borrower will
provide to Lender not more than thirty (30) days
after such taxes and assessments become due evidence
that all taxes and assessments on the Units and
Project common areas and related amenities have been
paid in full.
6.14 Borrower will pay to Lender the Commitment Fee and,
in addition to that fee, Twenty Thousand Dollars
($20,000) ("Documentation Fee") for the preparation
of the Documents executed at or prior to the closing
of the first Advance. Borrower has paid to Lender
Twenty Thousand Dollars ($20,000) of the Commitment
Fee. Borrower will pay to Lender the Forty Thousand
Dollar ($40,000) balance of the Commitment Fee and
the Twenty Thousand Dollar ($20,000) Documentation
Fee at the time the initial Advance is made, but in
no event later than September 15, 1994. Borrower
acknowledges that the Commitment Fee and the
Documentation Fee have been earned and are
nonrefundable. Borrower will pay on demand any and
all costs and expenses incurred by Lender in
connection with the initiation, documentation and
closing of the Loan, the making of Advances, the
protection of the security for the Performance of the
Obligations, or the enforcement of the Obligations
against Borrower or Guarantor(s), including, without
limitation, all attorneys' and other professionals'
fees, consumer credit reports, and revenue,
documentary stamp and intangible
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taxes. Notwithstanding anything in this paragraph to
the contrary, Borrower will have no obligation to pay
or reimburse Lender for Lender's attorneys' fees
which are incurred in connection with the original
preparation, negotiation and execution of the
Documents delivered prior to or in connection with
the first Advance ("Original Documents") or the
closing of the first Advance, except for such
attorneys' fees which are in excess of the
Documentation Fee and are caused by the negligence or
lack of diligence or cooperation by Borrower in the
negotiation of the Original Documents and the closing
of the first Advance, changes requested by Borrower
to that commitment letter from Lender to Borrower
dated June , 1994, or circumstances which could not
reasonably have been foreseen by Lender.
6.15 Borrower will INDEMNIFY, PROTECT, HOLD HARMLESS, AND
DEFEND Lender, its successors, assigns and
shareholders (including corporate shareholders), and
the directors, officers, employees, agents and
servants of the foregoing, for, from and against any
and all losses, costs, expenses (including, without
limitation, and attorneys' fees), demands, claims,
suits, proceedings (whether civil or criminal),
orders, judgments, penalties, fines and other
sanctions arising from or brought in connection with
(a) the Projects, the Collateral, Lender's status by
virtue of the Assignments, creation of Security
Interests, the terms of the Documents or the
transactions related thereto, or any act or omission
of Borrower or any Agent, or their respective
employees, contractors or agents, whether actual or
alleged, and (b) any and all brokers' commissions or
finders' fees or other costs of similar type by any
party in connection with the Loan; excluding,
however, any such matters that arise solely by reason
of Lender's gross negligence or willful misconduct.
On written request by a person or other entity
covered by the above agreement of indemnity, Borrower
will undertake, at its own cost and expense, on
behalf of such indemnitee, using counsel satisfactory
to the indemnitee, the defense of any legal action
or proceeding to which such person or entity shall be
a party. At Lender's option, Lender may at Borrower's
expense prosecute or defend any action involving the
priority, validity or enforceability of the Security
Interests in the Receivables Collateral and any
other security required pursuant to the Documents.
6.16 Borrower shall be required to have a minimum tangible
net worth (as reflected on the financial statements
delivered pursuant to paragraph 6.10) of Seven
Million Dollars ($7,000,000) at all times during the
term of the Loan.
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6.17 Sales and marketing expenses incurred in connection
with the marketing of Time-Share Interests in the
Projects will not exceed fifty percent (50%) of the
net sales revenue realized from the sale of such
Time-Shares Interests. Such determination will be
made at the end of each calendar quarter based upon
expenses and net sales revenues being annualized over
the preceding twelve month period. Sales and
marketing expenses shall include the aggregate of all
costs and expenses for commissions and sales relating
to the sale of time-share interests, including but
not limited to all costs and expenses for
advertising, mailing, consumer premiums, referral and
lead generation.
6.18 Annual distributions by Borrower to its partners
shall be permitted only when there is no Event of
Default or Incipient Default, and when permitted,
shall be limited to the lesser of (1) Borrower's net
income, or (2) one hundred percent (100%) of cash
flow. As used above, "net income" shall be determined
in accordance with generally accepted accounting
practices applied on a consistent basis, and "cash
flow" shall mean net cash generated by Borrower's
operations and financings for a given period of time
determined by subtracting cash outflows from cash
inflows, all in accordance with GAAP.
6.19 The outstanding balance of the Receivables Collateral
which are sixty (60) days or more delinquent shall at
no time exceed five percent (5%) of the total balance
of all Receivables Collateral held by Lender for
three (3) consecutive months.
6.20 Borrower shall pay to Lender a Ten Dollar ($10) fee
for each Eligible Receivable held by Lender,
exclusive of substitutions and cancellations. Such
fee shall be payable with respect to each Eligible
Receivable at the time of the Advance made with
respect to such Eligible Receivable.
6.21 Borrower covenants and agrees that within thirty (30)
days following the date of this Agreement it shall
have, with respect to each of the Projects,
reproduced the booklet provided to Purchasers
containing the Declaration and Bylaws for the
respective Project owner's association, so as to
correct all errors and omissions in such booklets
identified in EXHIBIT L.
6.22 Borrower represents and warrants that none of the
Units are located in a flood prone area. Borrower
covenants and agrees that it shall, within ninety
(90) days following the date of this Agreement:
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(a) With respect to the Piney Shores Project,
provide to Lender documentation evidencing
that dumped roofing materials identified in
the March 9, 1994 Professional Service
Industries, Inc. Environmental Site
Assessment, have been removed from the
subject Project and disposed of properly; and
(b) With respect to the Piney Shores, the
Villages and Xxxxx Lake Projects, provide to
Lender documentation (to the extent Borrower
now possesses or obtains such documentation
within the prescribed ninety (90) day period)
regarding the presence of polychlorinated
byphenyls in the medium of on-site
transformers located at such Projects.
6.23 Borrower will execute or cause to be executed all
documents and do or cause to be done all acts
necessary for Lender to perfect and to continue the
perfection of the Security Interest of Lender in the
Receivables Collateral or the other security required
pursuant to the Documents or otherwise to effect the
intent and purposes of the Documents.
6.24 The representations, warranties and covenants
contained in this Article VI are in addition to, and
not in derogation of, the representations, warranties
and covenants contained elsewhere in the Documents
and shall be deemed to be made and reaffirmed prior
to the making of each Advance.
VII. DEFAULT
7.1 The occurrence of any of the following events or
conditions shall constitute an Event of Default by
Borrower under the Documents:
(a) failure of Lender to receive from Borrower
within five (5) Business Days following
written notice from Lender that such amount
is due, (i) any amount payable under the Note
or (ii) any other payment due under the
Documents, except for the Note payment due at
the Maturity Date for which no grace period
is allowed;
(b) any representation or warranty of Borrower
contained in the Documents or in any
certificate furnished under the Documents
proves to be, in any material respect, false
or misleading as of the date deemed made;
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(c) a default in the Performance of the
Obligations set forth in paragraph 3.2,
6.7(a), 6.7(c), 6.7(d), 6.8 or 6.11;
(d) a default in the Performance of the
Obligations or a violation of any term,
covenant or provision of the Documents (other
than a default or violation referred to
elsewhere in this paragraph 7.1) which
continues unremedied (i) for a period of five
(5) Business Days after notice of such
default or violation to Borrower in the case
of a default under or violation of paragraph
6.7(b) or any other default or violation
which can be cured by the payment of money
alone or (ii) for a period of twenty (20)
Business Days after notice to Borrower in the
case of any other default or violation;
(e) an "Event of Default", as defined elsewhere
in any of the Documents;
(f) any default by Borrower under any other
agreement evidencing, guaranteeing, or
securing borrowed money or a receivables
purchase financing involving an obligation in
excess of Fifty Thousand Dollars ($50,000) to
make a payment of principal or interest or to
repurchase receivables or any other material
default permitting the acceleration of the
repayment of the borrowed money or the
repurchase of receivables, which accelerated
repayment or repurchase obligations are in
excess of Fifty Thousand Dollars ($50,000) in
the aggregate;
(g) any final, non-appealable judgment or decree
for money damages or for a fine or penalty
against Borrower which is not paid and
discharged or stayed within thirty (30) days
thereafter and when aggregated with all other
judgment(s) or decree(s) that have remained
unpaid and undischarged or stayed for such
period is in excess of Fifty Thousand Dollars
($50,000);
(h) any party holding a lien or security interest
in the Receivables Collateral or any other
security for the Performance of the
Obligations or a lien (other than a lien
created by Purchaser solely with respect to
its Time-Share Interest) on any part of any
Project or its related amenities commences
foreclosure or similar sale thereof;
(i) Borrower shall (i) generally not be paying
its debts as they become due, (ii) file or
consent by answer or otherwise to the filing
against it of a
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petition for relief or reorganization,
arrangement or liquidation or any other
petition in bankruptcy or insolvency under
the laws of any jurisdiction, (iii) make an
assignment for the benefit of its creditors,
(iv) consent to the appointment of a
custodian, receiver, trustee or other officer
with similar powers for itself or any
substantial part of its property, (v) be
adjudicated insolvent, (vi) dissolve or
commence to wind-up its affairs or (vii) take
any action for purposes of the foregoing;
(j) a material adverse change in any of the
Projects or in the business or financial
condition of Borrower or in the Receivables
Collateral or any other security for the
Performance of the Obligations, which change
is not enumerated in this paragraph 7.1 as
the result of which Lender in good xxxxx
xxxxx the prospect of Performance of the
Obligations impaired or its security for the
Performance of the Obligations imperiled;
(k) any of the events enumerated in paragraph
7.1(b), (f), (g), (i) or (j) occurs with
respect to any Guarantor or surety for the
Performance of the Obligations;
(l) failure of Lender to receive from Borrower,
within twenty (20) days of the date Borrower
knows or should have known of such change,
notice of any material change in any
representations or warranties in the
Documents or otherwise made in connection
with the Loan;
(m) an order or decree has been entered by any
court of competent jurisdiction enjoining the
intended use of any of the Projects as a
time-share resort and judgment is not
vacated within ninety (90) days after
Borrower has obtained knowledge or notice
thereof; or
(n) the cessation of the legal existence of the
Master Club.
7.2 At any time after an Event of Default has occurred
and while it is continuing, Lender may but without
obligation, in addition to the rights and powers
granted elsewhere in the Documents and not in
limitation thereof, do any one or more of the
following:
(a) cease to make further Advances;
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(b) declare the Note, together with prepayment
premiums and all other sums owing by Borrower
to Lender in connection with the Documents,
immediately due and payable without notice,
presentment, demand or protest, which are
hereby waived by Borrower;
(c) with respect to the Receivables Collateral,
(i) institute collection, foreclosure and
other enforcement actions against Purchasers
and other persons obligated on the
Receivables Collateral, (ii) enter into
modification agreements and make extension
agreements with respect to payments and other
performances, (iii) release persons liable
for performance, (iv) settle and compromise
disputes with respect to payments and
performances claimed due, all without notice
to Borrower, without being called to account
for such actions by Borrower and without
relieving Borrower from Performance of the
Obligations, and (v) receive, collect, open
and read all mail of Borrower for the purpose
of obtaining all items pertaining to the
Receivables Collateral; and
(d) proceed to protect and enforce its rights and
remedies under the Documents, to foreclose or
otherwise realize upon its security for the
Performance of the Obligations, and/or to
exercise any other rights and remedies
available to it at law, in equity or by
statute.
7.3 Notwithstanding anything in the Documents to the
contrary, while an Event of Default exists, any cash
received and retained by Lender in connection with
the Receivables Collateral may be applied to payment
of the Obligations in the manner provided in
paragraph 7.5.
7.4 (a) Lender shall have all of the rights and
remedies of a secured party under the Uniform
Commercial Code of the State of Arizona and
all other rights and remedies accorded to a
Secured Party at equity or law. Any notice of
sale or other disposition of the Receivables
Collateral given not less than ten (10)
Business Days prior to such proposed action
in connection with the exercise of Lender's
remedies shall constitute reasonable and fair
notice of such action. Lender may postpone or
adjourn any such sale from time to time by
announcement at the time and place of sale
stated on the notice of sale or by
announcement of any adjourned sale, without
being required to give a further notice of
sale. Any such sale may be for cash or,
unless prohibited by applicable law, upon
such credit or installment
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as Lender may determine. Borrower shall be
credited with the net proceeds of such sale
only when such proceeds are actually received
by Lender in good current funds. Despite the
consummation of any such sale, Borrower shall
remain liable for any deficiency on the
Obligations which remains outstanding
following such sale. All net proceeds
recovered pursuant to a sale shall be applied
in accordance with the provisions of
paragraph 7.5.
(b) Lender may, in the name of Borrower or in its
own name, make and execute all conveyances,
assignments and transfers of the Receivables
Collateral sold in connection with the
exercise of Lender's remedies; and Lender is
hereby appointed Borrower's attorney-in-fact
for this purpose.
(c) Upon request of Lender when an Event of
Default exists, Borrower shall assemble the
Receivables Collateral not already in
Lender's possession and make it available to
Lender at a time and place designated by
Lender.
7.5 The proceeds realized from any sale of all or any
part of the Receivables Collateral made in connection
with the exercise of Lender's remedies shall be
applied in the following order of priorities; first,
to the payment of all costs and expenses of such
sale, including without limitation, reasonable
compensation to Lender and its agents, attorneys
fees, and all other expenses, liabilities and
advances incurred or made by Lender, its agents and
attorneys, in connection with such sale, and any
other unreimbursed expenses for which Lender may be
reimbursed pursuant to the Documents; second, to the
payment of the other Obligations, in such order and
manner as Lender shall in its discretion determine,
with no amounts applied to payment of principal until
all interest has been paid; and third, to the payment
to Borrower, its successors or assigns, or to
whomsoever may be lawfully entitled to receive the
same, or as a court of competent jurisdiction may
direct, of any surplus then remaining from such
proceeds.
7.6 Lender may, at its option, and without any obligation
to do so, pay, perform and discharge any and all
liabilities agreed to be paid or performed in the
Documents by Borrower, any Guarantor or any surety
for the Performance of the Obligations if the person
obligated fails to do so. For such purposes Lender
may use the proceeds of the Receivables Collateral.
All amounts expended by Lender in so doing or in
exercising its remedies under the Documents following
an Event of Default shall become part of
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the Obligations, shall be immediately due and payable
by Borrower to Lender upon demand, and shall bear
interest at the Default Rate from the dates of such
expenditures until paid.
7.7 No remedy in any Document conferred on or reserved to
Lender is intended to be exclusive of any other
remedy or remedies, but each and every such remedy
shall be cumulative and shall be in addition to every
other remedy given under any Document or now or
hereafter existing at law or in equity. No delay or
omission to exercise any right or power shall be
construed to be a waiver of or acquiescence to any
default or a waiver of any right or power; and every
such right and power may be exercised from time to
time and as often as may be deemed expedient.
7.8 Borrower, for itself and for all who may claim
through or under it, hereby expressly waives and
releases all right to have the Receivables Collateral
or any other security for the Performance of the
Obligations, or any part of such security, marshalled
on any foreclosure sale or other enforcement of
Lender's rights and remedies.
7.9 For the purpose of exercising its rights and remedies
under Paragraph 7.2(c) and 7.6, Lender may do so in
Borrower's name or its name and is hereby appointed
as Borrower's attorney-in-fact to take any and all
actions in Borrower's name and/or on Borrower's
behalf as Lender may deem necessary or appropriate in
its sole and absolute discretion in the
accomplishment of such purposes.
VIII. CONSTRUCTION AND GENERAL TERMS
8.1 All moneys payable under the Documents shall be paid
to Lender at its address set forth on the signature
page of this Agreement in lawful monies of the United
States of America, unless otherwise designated in the
Documents or by Lender by notice.
8.2 The Documents exclusively and completely state the
rights and obligations of Lender and Borrower with
respect to the Loan. No modification, variation,
termination, discharge, abandonment or waiver of any
of the terms or conditions of the Documents shall be
valid unless in writing and signed by duly authorized
representatives of the party sought to be bound by
such action. The Documents supersede any and all
prior representations, warranties and/or inducements,
written or oral, heretofore made by Lender concerning
this transaction, including any commitment for
financing.
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8.3 The powers and agency granted to Lender by Borrower
in the Documents are coupled with an interest and are
irrevocable and are granted as cumulative to Lender's
other remedies for collection and enforcement of the
obligations.
8.4 Any Document may be executed simultaneously in any
number of identical copies each of which shall
constitute an original for all purposes.
8.5 Except as otherwise expressly provided in the
Document, any notice required or permitted to be
given under any Document by Lender or Borrower to the
other shall be in writing and shall be (a) personally
delivered, (b) transmitted postage prepaid by
certified or registered mail, (c) sent by overnight
express carrier, or (d) sent by telecopy, to Lender
or Borrower at its address and/or telecopy number as
set forth on the signature page of this Agreement, or
at such other address and/or telecopy number as
either party may designate for such purpose in a
notice given to the other party. Such notice shall be
deemed received upon the earliest of the following to
occur: (a) upon personal delivery; (b) on the third
Business Day following the day sent, if sent by
registered or certified mail; (c) on the next
Business Day following the day sent, if sent by
overnight express courier; and (d) on the day sent or
if such day is not a Business Day on the next
Business Day after the day sent, if sent by telecopy.
8.6 All the covenants of Borrower and all the rights and
remedies of the Lender contained in the Documents
shall bind Borrower, and, subject to the restrictions
on merger, consolidation and assignment contained in
the Documents, its successors and assigns, and shall
inure to the benefit of Lender, its successors and
assigns, whether so expressed or not. Borrower may
not assign its rights in the Documents in whole or in
part. Except as may be expressly provided in a
Document, no person or other entity shall be deemed a
third party beneficiary of any provision of the
Documents.
8.7 If any one or more of the provisions contained in any
Document shall be held invalid, illegal or
unenforceable in any respect, the validity, legality
and enforceability of the remaining provisions
contained in the Document shall not in any way be
affected or impaired thereby.
8.8 Time is of the essence in the Performance of the
Obligations.
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8.9 All headings are inserted for convenience only and
shall not affect any construction or interpretation
of the Documents. Unless otherwise indicated, all
references in a Document to clauses and other
subdivisions refer to the corresponding paragraphs,
clauses and other subdivisions of the Document; the
words "herein", "hereof", "hereto", hereunder" and
words of similar import refer to the Document as a
whole and not to any particular paragraph, clause or
other subdivision; the use of any gender shall be
deemed to include other genders, unless
inappropriate; and reference to a numbered or
lettered subdivision of an Article, or paragraph
shall include relevant matter within the Article or
paragraph which is applicable to but not within such
numbered or lettered subdivision. All Schedules and
Exhibits referred to in this Agreement are
incorporated in this Agreement by reference.
8.10 THE DOCUMENTS SHALL BE CONSTRUED AND GOVERNED IN
ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF
ARIZONA, AND TO THE EXTENT THEY PREEMPT THE LAWS OF
SUCH STATE, THE LAWS OF THE UNITED STATES; PROVIDED
THAT IF ANY OBLIGATION, AGREEMENT OR WAIVER ON THE
PART OF BORROWER OR ANY OTHER PERSON OBLIGATED
PRIMARILY OR SECONDARILY ON THE DOCUMENTS OR RIGHT OF
REMEDY OF LENDER WOULD BE INVALID OR UNENFORCEABLE
UNDER SUCH LAWS BUT WOULD BE VALID OR ENFORCEABLE
UNDER THE LAWS OF THE STATES OF TEXAS OR MISSOURI,
THEN THE INTERNAL LAWS OF THE STATES OF TEXAS OR
MISSOURI SHALL APPLY WITH RESPECT TO SUCH MATTER.
BORROWER HEREBY AGREES THAT, EXCEPT AS EXPRESSLY
PROVIDED IN ANOTHER DOCUMENT, ALL ACTIONS OR
PROCEEDINGS INITIATED BY BORROWER AND ARISING
DIRECTLY OUT OF THE DOCUMENTS SHALL BE LITIGATED IN
THE SUPERIOR COURT OF ARIZONA, MARICOPA COUNTY
DIVISION, OR THE UNITED STATES DISTRICT COURT FOR THE
DISTRICT OF ARIZONA, OR, IF LENDER INITIATES SUCH
ACTION, ANY COURT IN WHICH LENDER SHALL INITIATE SUCH
ACTION TO THE EXTENT SUCH COURT HAS JURISDICTION.
BORROWER HEREBY KNOWINGLY AND VOLUNTARILY WAIVES TRIAL
BY JURY IN ANY SUCH PROCEEDING. THIS PROVISION IS A
MATERIAL INDUCEMENT FOR LENDER'S MAKING THE LOAN TO
BORROWER.
[Borrower (initial /s/ )]
8.11 It is the intent of the parties hereto to comply with
the Applicable Usury Law. Accordingly,
notwithstanding any provision to the contrary in the
Documents, in no event shall this Agreement or the
Documents require the payment or permit the
collection of interest in excess of the maximum
contract rate permitted by the Applicable Usury Law.
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8.12 LENDER DOES NOT HEREBY ASSUME AND SHALL HAVE NO
RESPONSIBILITY, OBLIGATION OR LIABILITY TO
PURCHASERS, LENDER'S RELATIONSHIP BEING THAT ONLY OF
A CREDITOR WHO HAS TAKEN, AS SECURITY FOR
INDEBTEDNESS OWED TO IT, A COLLATERAL ASSIGNMENT FROM
BORROWER OF THE INSTRUMENTS. EXCEPT AS REQUIRED BY
LAW, BORROWER WILL NOT, AT ANY TIME, USE THE NAME OF
OR MAKE REFERENCE TO LENDER WITH RESPECT TO THE
PROJECT, THE SALE OF TIME-SHARE INTERESTS OR
OTHERWISE, WITHOUT THE EXPRESS WRITTEN CONSENT OF
LENDER.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed in their respective names, personally or by their duly authorized
representatives as of the date above written.
BORROWER: ASCENSION RESORTS, LTD., a Texas limited
partnership, d/b/a Silverleaf Resorts, Ltd.
By: ASCENSION CAPITAL CORPORATION, a
Texas corporation
Its: General Partner
BY: /s/ XXXXXX X. XXXX
----------------------------------
Xxxxxx X. Xxxx
Its: Chief Executive Officer
Address: 0000 Xxxxxxxxx Xx., Xxx.000
Xxxxxx, XX 00000
Telecopy No.: 000-000-0000
LENDER: GREYHOUND FINANCIAL CORPORATION, a
Delaware corporation
By: /s/ X.X. XXXXXXXXXXX
--------------------------------------
Type/Print Name: X.X. XXXXXXXXXXX
--------------------------
Title: Vice President Credit
------------------------------------
Address: Dial Corporate Center 0000
Xxxxx Xxxxxxx Xxxxxx Xxxxxxx,
Xxxxxxx 00000-0000
(Attention: Vice President,
Law)
Telecopy No.: (000) 000-0000
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LIST OF EXHIBITS
Schedule 1 Prepayment Schedule
Exhibit A Assignment of Mortgages
Exhibit B Conditions of Eligible Instrument
Exhibit C Environmental Certificate
Exhibit D Promissory Note
Exhibit E Permitted Encumbrances
Exhibit F Description of Time-Share Resort and
Time-Share Interest
Exhibit G Borrower's Certificate
Exhibit G-1 Re-Assignment of Mortgages
Exhibit H Borrower's Opinion of Counsel
Exhibit I Guarantor's Opinion of Counsel
Exhibit J Additional Condition to Advances
Exhibit J-1 Request for Advance and Certification
Exhibit K Borrower's Monthly Reports (Format)
Exhibit L Agreed-to Changes To Consumer
Booklets
Exhibit M Recreation And Use Documents
The above-listed exhibits are omitted from this filing. Registrant
agrees to furnish supplementally a copy of any omitted exhibit to the
Commission upon request.
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