Exhibit 10.16
THIS STOCK PURCHASE WARRANT HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "ACT"), OR UNDER APPLICABLE STATE SECURITIES LAWS. THIS
WARRANT MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE
ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THIS WARRANT UNDER THE ACT
AND APPLICABLE STATE SECURITIES LAWS OR AN OPINION OF COUNSEL REASONABLY
SATISFACTORY TO EQUIVEST FINANCE, INC. THAT SUCH REGISTRATION IS NOT REQUIRED OR
UNLESS SOLD PURSUANT TO THE PROVISIONS OF RULE 144 OF THE ACT.
Equivest Finance, Inc.
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STOCK PURCHASE WARRANT
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March 30, 1999
1. Grant. Equivest Finance, Inc., a Delaware corporation (hereinafter, the
"Company"), for value received hereby grants to Xxxxxxxxx Xxxxx (collectively
with successors and registered assigns, "Holder") under the terms herein the
right to purchase 250,000 shares of the Company's authorized but unissued $.01
par value common stock (the "Warrant"), with such number of such shares being
subject to adjustment as provided below. Such $.01 par value common shares are
sometimes hereinafter referred to as Common Stock, which shares, upon payment of
the exercise price, shall be fully paid and non-assessable. The Common Stock
shares issuable under this Warrant are hereinafter sometimes referred to as the
Warrant Shares.
2. Settlement Agreement. This Warrant has been issued in connection with
the settlement agreement among the Company, the Holder and Kosmas Group
International, Inc. dated March 30, 1999 (the "Agreement").
3. Term and Price. The right to exercise this Warrant shall expire three
(3) years after the date hereof or earlier pursuant to Section 4 hereof. The
exercise price of this Warrant (the "Exercise Price") shall be $9.00 per share.
4. Mandatory Exercise. If the Fair Market Value of one share of Common
Stock equals or exceeds $12.00 on any given Trading Day, then the exercise of
this Warrant shall be deemed by the Company to have taken place as if Holder had
exercised the Warrant pursuant to Sections 6 and 7 hereof and the Exercise Date
shall be deemed to be the date of such Trading Day; provided, however, that the
Company shall not issue or deliver any shares of Common Stock to Holder in
exchange for this Warrant until Holder surrenders this Warrant along with
written subscription substantially in the form of Exhibit 7 hereof, which Holder
shall do promptly upon receiving notice from Company that a mandatory exercise
pursuant to this Section 4 has taken place; provided further, however, that such
shares of Common Stock shall be deemed issued for all purposes as of the opening
of business on the Exercise Date notwithstanding any delay in the actual
issuance.
The fair market value ("Fair Market Value") of one share of Common
Stock on any given Trading Day shall be equal to the average of the closing bid
and asked prices of the Common Stock on such Trading Day and the four preceding
Trading Days (a) quoted on the NASDAQ Small Cap Market for such day, or (b) if
the Common Stock is not listed or admitted to trading on the NASDAQ Small Cap
Market, then as reported in the principal consolidated transaction reporting
system with respect to securities listed on the principal national securities
exchange on which the Common Stock is listed or admitted to trading; provided,
however, that if such Common Stock is not listed or admitted to trading on any
national securities exchange, Fair Market Value on any given Trading Day shall
be the average of the high bid and low asked prices in the over-the-counter
market on such Trading Day and the four preceding Trading Days, as reported by
NASDAQ; provided further, however, that if on any such day the Common Stock is
not quoted by any such organization, such day shall be replaced for purposes of
the foregoing calculation by the first Trading Day preceding such day and on
which the Common Stock is so quoted. "Trading Day" shall mean (a) a day on which
the NASDAQ Small Cap Market is open for the transaction of business, or (b) if
the Common Stock is not listed or admitted to trading on the NASDAQ Small Cap
Market, then a day on which the principal national securities exchange on which
the Common Stock is listed or admitted to trading is open for the transaction of
business or (c) if the Common Stock is not listed or admitted to trading on any
national securities exchange, a Monday, Tuesday, Wednesday, Thursday or Friday
on which banking institutions in the State of New York are not authorized or
obligated by law or executive order to close.
5. Anti-dilution Provisions.
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(a) Stock Split or Dividend; Adjustment to Exercise Price and Number
of Warrant Shares. In case the shares of Common Stock at any time outstanding
shall be subdivided into a greater or combined into a lesser number of shares of
Common Stock, by stock-split, reverse split or otherwise, or in case shares of
Common Stock shall be issued as a stock dividend, the Exercise Price shall be
increased or decreased, as applicable, to an amount which shall bear the same
relation to the Exercise Price in effect immediately prior to such subdivision,
combination or stock dividend as the total number of shares of Common Stock
outstanding immediately prior to such subdivision, combination or stock dividend
shall bear to the total number of shares of Common Stock outstanding immediately
after such subdivision, combination or stock dividend; likewise, in case of such
a subdivision, combination or stock dividend, the number of Warrant Shares shall
be increased or decreased as applicable, to the number which shall bear the same
relation to the number of Warrant Shares obtainable hereunder immediately prior
to such event, as the total number of shares of Common Stock outstanding
immediately after such event shall bear to the total number of shares of Common
Stock outstanding immediately prior to such event.
(b) Merger. In case of any capital reorganization, or any
reclassification of the Common Stock of the Company, or in case of any
consolidation of the Company with or the merger of the Company into any other
corporation (other than a consolidation or merger in which the Company is the
continuing corporation) or in case of the sale of the properties and assets of
the Company, as or substantially as, an entirety to any other corporation, this
Warrant shall after such reorganization, reclassification, consolidation, merger
or sale be exercisable upon the terms and conditions specified herein, for the
number of shares of stock or other securities or property of the Company, or of
the corporation resulting from such consolidation or surviving such merger or to
which such sale shall be made, as the case may be, to which the Common Stock
issuable hereunder at the time of such reorganization, reclassification,
consolidation, merger or sale, would have entitled the holder hereof under the
terms of such reorganization, reclassification, consolidation, merger or sale.
In any such case, if necessary, the provision set forth in this Warrant with
respect to the rights and interests thereafter of the Holder shall be
appropriately adjusted so as to be applicable, as nearly as may reasonably be,
to any shares of stock or other securities or property thereafter deliverable on
the exercise of this Warrant. The subdivision or combination of shares of Common
Stock at any time outstanding into a greater or lesser number of shares of
Common Stock shall not be deemed to be a reclassification of the Common Stock of
the Company for the purposes of this section. The Company shall not effect any
such consolidation, merger, or sale, unless prior to or simultaneously with the
consummation thereof the successor corporation (if other than the Company)
resulting from such consolidation or merger or the corporation purchasing such
assets shall assume, by written instrument executed and delivered to the
Company, the obligation to deliver to the Holder such shares of stock,
securities or assets to which in accordance with the foregoing provisions, such
Holder may be entitled, as well as any other obligations arising under this
Warrant.
6. Exchange of Shares for Exercise Price. The Holder at its option
may provide the Exercise Price under this Warrant by reducing the number of
shares for which the Warrant is otherwise exercisable by the number of shares
having Fair Market Value on the Exercise Date equal to the Exercise Price.
7. Exercise Procedure. This Warrant may be exercised by presenting
it and tendering the aggregate Exercise Price in legal tender or by bank's,
cashier's or certified check to the Company at its address specified in the
Agreement, along with written subscription substantially in the form of Exhibit
7 hereof. Except as provided in Section 4 hereof, the date on which this Warrant
is thus surrendered, accompanied by tender or payment as herein before or
hereinafter provided, is referred to herein as the Exercise Date. The Company
shall forthwith at its expense (including the payment of issue taxes), issue and
deliver the proper number of shares of Common Stock, and such shares shall be
deemed issued for all purposes as of the opening of business on the Exercise
Date notwithstanding any delay in the actual issuance.
8. Replacement of Warrant. At the request of the Holder and on
production of evidence reasonably satisfactory to the Company of the loss,
theft, destruction or mutilation of this Warrant and (in the case of loss,
theft, or destruction) if required by the Company, upon delivery of an indemnity
agreement with surety in such reasonable amount as the Company may determine
thereof, the Company at its expense will issue in lieu thereof a new Warrant of
like tenor.
9. Transfer. This Warrant shall be registered on the books of the
Company which shall be kept at its principal office for that purpose, and shall
be transferable in whole or in part but only on such books by the Holder in
person or by duly authorized attorney with written notice substantially in the
form of Exhibit 9 hereof, and only in compliance with the preceding paragraph.
The Company may issue appropriate stop orders to its transfer agent to prevent a
transfer in violation of the preceding paragraph.
10. Investment Covenant. The Holder by its acceptance hereof covenants
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that this Warrant is, and any Warrant Shares will be, acquired for investment purposes,
and that the Holder will not distribute the same in violation of any state or federal law
or regulation.
11. Accredited Investor; Experience; Risk. The Holder is an accredited
investor within the definition of Rule 501 promulgated under the Act. The Holder
has such knowledge and experience, or has consulted with persons having
knowledge and experience, in financial and business matters that its capable of
evaluating the merits and risks of purchase of the Warrants and the Warrant
Shares.
12. Fractional Shares. No fractional shares or scrip representing
fractional shares shall be issued upon the exercise of this Warrant. With
respect to any fraction of a share called for upon any exercise hereof, the
Company shall pay to the Holder an amount in cash equal to such fraction
multiplied by the Fair Market Value of a share on the Exercise Date.
13. Waiver of Jury Trial. THE COMPANY WAIVES ALL RIGHT TO TRIAL BY JURY
OF ALL CLAIMS, DEFENSES, COUNTERCLAIMS AND SUITS OF ANY KIND DIRECTLY OR
INDIRECTLY ARISING FROM OR RELATING TO THIS WARRANT OR THE DEALINGS OF THE
PARTIES IN RESPECT HERETO. THE COMPANY ACKNOWLEDGES AND AGREES THAT THIS
PROVISION IS A MATERIAL TERM OF THIS WARRANT AND THAT THE HOLDER WOULD NOT
EXTEND ANY FUNDS UNDER THE LOAN DOCUMENTS IF THIS WAIVER OF JURY TRIAL WERE NOT
A PART OF THIS WARRANT. THE COMPANY ACKNOWLEDGES THAT THIS IS A WAIVER OF A
LEGAL RIGHT AND THAT IT MAKES THIS WAIVER VOLUNTARILY AND KNOWINGLY AFTER
CONSULTATION WITH, OR THE OPPORTUNITY TO CONSULT WITH, COUNSEL OF ITS CHOICE.
THE COMPANY AGREES THAT ALL SUCH CLAIMS, DEFENSES, COUNTERCLAIMS AND SUITS SHALL
BE TRIED BEFORE A JUDGE OF A COURT OF COMPETENT JURISDICTION, WITHOUT A JURY.
IN WITNESS WHEREOF, the Company has caused this Warrant to be signed on
its behalf by its undersigned officer, and its corporate seal to be hereunto
affixed, as of the date first above written.
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Equivest Finance, Inc.
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By: _________________________________
Name:
Title:
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Exhibit 7
IRREVOCABLE SUBSCRIPTION
To: Equivest Finance, Inc.
Gentlemen:
The undersigned hereby elects to exercise its right under the attached Warrant
by purchasing ______________________ shares of the Common Stock of your company,
and hereby irrevocably subscribes to such issue. The certificates for such
shares shall be issued in the name of
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(Name)
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(Address)
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(Taxpayer Number)
and deliver to ________________________________________________________________
(Name)
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(Address)
The exercise price of $_____________ is enclosed .
Date:________________________________________
Signed:______________________________________ (Name of Holder, Please Print)
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(Address)
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(Signature)
Exhibit 9
ASSIGNMENT
FOR VALUE RECEIVED,_____________________________________________________
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(Name)
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(Address)
__________________ the attached Warrant together with all right, title and
interest therein, and does hereby irrevocably appoint
_____________________________________ attorney to transfer said Warrant on the
books of Equivest Finance, Inc., with full power of substitution in the
premises.
Done this ____ day of ___________, _____.
Signed:______________________________________
By:_________________________________________
Its:_________________________________________
11728.18700.386303-8
LOAN AND SECURITY AGREEMENT
$20,000,000 Receivables Loans Warehouse Credit Facility
provided by
FINOVA CAPITAL CORPORATION
to
RESORT FUNDING, INC.
As of September 17, 1999
TABLE OF CONTENTS
Page
SECTION 1. DEFINITION OF TERMS..............................................1
1.1 Advance..........................................................1
1.2 Advance Request..................................................1
1.3 Affiliate........................................................1
1.4 Agreement........................................................2
1.5 Applicable Borrowing Base Percentage.............................2
1.6 Applicable Declaration...........................................2
1.7 Applicable Jurisdiction..........................................2
1.8 Applicable Laws..................................................2
1.9 Applicable Mortgage..............................................2
1.10 Applicable Resort................................................2
1.11 Applicable Timeshare Documents...................................2
1.12 Applicable Timeshare Owners' Association.........................2
1.13 Applicable Underlying Borrower...................................2
1.14 Applicable Underlying Consumer Notes Receivable Purchase Portfolio 3
1.15 Applicable Underlying Developer..................................3
1.16 Applicable Underlying Guarantor..................................3
1.17 Applicable Underlying Loan.......................................3
1.18 Applicable Underlying Loan Collateral............................3
1.19 Applicable Underlying Loan Documents.............................3
1.20 Applicable Underlying Purchase...................................3
1.21 Applicable Underlying Purchase Collateral........................3
1.22 Applicable Underlying Purchase Documents.........................4
1.28 Borrower.........................................................4
1.29 Borrowing Base...................................................4
1.30 Borrowing Term...................................................5
1.31 Business Day.....................................................5
1.32 Closing Date.....................................................5
1.33 Code.............................................................5
1.34 Collateral.......................................................5
1.35 Combined Outstanding Commitments.................................7
1.36 Common Elements..................................................7
1.37 Common Furnishings...............................................7
1.38 Consumer Note Receivable.........................................7
1.39 Custodial Agreement..............................................7
1.40 Custodial Fee....................................................8
1.41 Custodian........................................................8
1.42 Debtor Relief Laws...............................................8
1.43 Default..........................................................8
1.44 Default Rate.....................................................8
1.45 Eligible Consumer Note Receivable................................8
1.46 Eligible Note Receivable........................................10
1.47 Eligible Encumbered Interval....................................11
1.48 Encumbered Personal Property....................................11
1.49 Environmental Laws..............................................12
1.50 Event of Default................................................12
1.51 Financial Statements............................................12
1.52 GAAP............................................................12
1.53 Guarantor.......................................................12
1.54 Guaranty........................................................13
1.55 Hazardous Materials.............................................13
1.56 Initial Advance.................................................13
1.57 Initial Underlying Transaction Advance..........................13
1.58 Interest Rate...................................................13
1.59 Interval........................................................13
1.60 Interval Mortgage...............................................13
1.61 Land............................................................13
1.62 Lien............................................................13
1.63 Loan............................................................14
1.64 Loan Documents..................................................14
1.65 Lockbox Agent...................................................15
1.66 Lockbox Agreement...............................................15
1.67 Mandatory Prepayment............................................15
1.68 Maturity Date...................................................15
1.69 Maximum Credit Facilities Amount................................15
1.70 Maximum Loan Amount.............................................15
1.71 Minimum Net Worth Requirement...................................15
1.72 Note............................................................15
1.73 Note Receivable.................................................15
1.74 Obligations.....................................................15
1.75 Outstanding Applicable Underlying Loan Commitment...............16
1.76 Outstanding Applicable Underlying Purchase Commitment...........16
1.77 Outstanding RFI Receivables Credit Facility Commitment..........16
1.78 Payment Authorization Agreement.................................16
1.79 Permitted Liens and Encumbrances................................16
1.80 Person..........................................................16
1.81 Phase I Environmental Inspection................................16
1.82 Pledged Consumer Note Receivable................................17
1.83 Pledged Note Receivable.........................................17
1.84 Pledged Put and Reserve Agreement...............................17
1.85 Pre-Sales Consumer Note Receivable..............................17
1.86 Prime Rate......................................................17
1.87 Purchased Consumer Note Receivable..............................17
1.88 Purchaser.......................................................17
1.89 Put and Reserve Agreement.......................................18
1.90 Qualified Developer. ..........................................18
1.91 Qualified Loan..................................................18
1.92 Qualified Purchase..............................................18
1.93 Qualified Resort................................................18
1.95 Release Fee.....................................................19
1.96 RFI ADC Credit Facility.........................................19
1.97 RFI ADC Credit Facility Agreement...............................19
1.98 RFI Credit Facilities...........................................19
1.99 RFI Credit Facilities Agreements................................19
1.100 Servicing Agent.................................................19
1.101 Servicing Agreement.............................................19
1.102 Survey..........................................................20
1.103 Underlying Guaranty.............................................20
1.104 Unit............................................................20
SECTION 2. THE LOAN........................................................20
2.1 Purposes........................................................20
2.2 Qualified Loans and Qualified Purchases.........................20
2.3 Advances........................................................20
2.4 Interest Rate...................................................21
2.5 Payments........................................................22
2.6 Prepayments.....................................................23
2.7 Guaranty........................................................24
SECTION 3. COLLATERAL......................................................24
3.1 Grant of Security Interest......................................24
3.2 Security Interest in All Pledged Notes Receivable, Pledged Put and Reserve
Agreements and Purchased Consumer Notes Receivable..............24
3.3 Financing Statements............................................24
3.4 Location of Collateral..........................................24
3.5 Protection of Collateral; Reimbursement.........................24
3.6 Cross-Collateralization and Default.............................26
SECTION 4. CONDITIONS PRECEDENT TO CLOSING AND FUNDING PROCEDURES..........26
4.1 The Loan........................................................26
4.2 Applicable Underlying Loans.....................................28
4.3 Funding Procedures..............................................34
4.4 Advances Do Not Constitute a Waiver.............................38
SECTION 5. GENERAL REPRESENTATIONS AND WARRANTIES..........................39
5.1 Organization, Standing, Qualification...........................39
5.2 Authorization, Enforceability, Etc..............................39
5.3 Financial Statements and Business Condition.....................41
5.4 Taxes...........................................................41
5.5 Title to Properties; Prior Liens................................42
5.6 Subsidiaries, Affiliates, and Capital Structure.................42
5.7 Litigation, Proceedings, Etc....................................42
5.8 Environmental Matters...........................................42
5.9 Full Disclosure.................................................43
5.10 Use of Proceeds/Margin Stock....................................43
5.11 No Defaults.....................................................43
5.12 Restrictions of Borrower or Guarantors..........................43
5.13 Broker's Fees...................................................44
5.14 Tax Identification/Social Security Numbers......................44
5.15 Legal Compliance................................................44
5.16 Representations and Warranties of Applicable Underlying Borrowers44
5.17 Applicable Timeshare Documents and Reports......................44
5.18 Continuation and Investigation..................................45
SECTION 6. COVENANTS.......................................................45
6.1 Affirmative Covenants...........................................45
6.2 Negative Covenants..............................................58
SECTION 7. EVENTS OF DEFAULT...............................................59
7.1 The Loan........................................................59
7.2 Applicable Underlying Loans.....................................62
SECTION 8. REMEDIES........................................................64
8.1 Remedies Upon Default...........................................64
8.2 Notice of Sale..................................................66
8.3 Application of Collateral; Termination of Agreements............67
8.4 Rights of Lender Regarding Collateral...........................67
8.5 Delegation of Duties and Rights.................................68
8.6 Lender Not in Control...........................................68
8.7 Waivers.........................................................68
8.8 Cumulative Rights...............................................68
8.9 Expenditures by Lender..........................................68
8.10 Diminution in Value of Collateral...............................68
SECTION 9. CERTAIN RIGHTS OF LENDER........................................69
9.1 Protection of Collateral........................................69
9.2 Performance by Lender...........................................69
9.3 No Liability of Lender..........................................69
9.4 Right to Defend Action Affecting Security.......................70
9.5 Expenses........................................................71
9.6 Lender's Right of Set-Off.......................................71
9.7 Right of Lender to Extend Time of Payment, Substitute, Release
Security, Etc...................................................71
9.8 Assignment of Lender's Interest.................................71
9.9 Notice to Purchaser.............................................71
9.10 Collection of the Notes.........................................72
9.11 Power of Attorney...............................................72
9.12 Relief from Automatic Stay, Etc.................................73
9.13 Investigations and Inquiries....................................73
9.14 Verification of Use.............................................73
SECTION 10. TERM OF AGREEMENT..............................................74
SECTION 11. MISCELLANEOUS..................................................74
11.1 Notices.........................................................74
11.2 Survival........................................................75
11.3 GOVERNING LAW...................................................75
11.4 CHOICE OF JURISDICTION; WAIVER OF VENUE.........................75
11.5 Limitation on Interest..........................................76
11.6 Invalid Provisions..............................................77
11.7 Successors and Assigns..........................................77
11.8 Amendment.......................................................77
11.9 Counterparts; Effectiveness.....................................77
11.10 Lender Not a Fiduciary..........................................77
11.11 Release and Return of Notes Receivable and Collateral...........78
11.12 Accounting Principles...........................................78
11.13 Entire Agreement; Inconsistencies...............................78
11.14 WAIVER OF JURY TRIAL............................................78
11.15 Incorporation of Exhibits and Schedules.........................79
11.16 Consent to Advertising and Publicity of Applicable Timeshare Documents 79
11.17 Directly or Indirectly..........................................79
11.18 Captions........................................................79
11.19 Gender..........................................................79
11.20 No Duty.........................................................79
11.21 Reimbursement for Taxes.........................................80
11.22 Submissions.....................................................80
11.23 Confidentiality.................................................80
11.24 Year 2000 Issues................................................81
11.25 Standards Applied to Lender's Actions...........................81
11.26 Scope of Attorneys Fees.........................................81
