LOAN AGREEMENT
By and Between
PACIFIC LIFE INSURANCE COMPANY,
a California corporation
"Lender"
and
THE RESORT LOAN PARTIES NAMED HEREIN
Dated as of June 2, 2003
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LOAN AGREEMENT
(Resort Loans)
This LOAN AGREEMENT is entered into as of this 2nd day of June, 2003 (the
"Agreement"), by and between PACIFIC LIFE INSURANCE COMPANY, a California
corporation, ("Lender") and each of the Resort Loan Parties identified on
Schedule I attached hereto, with reference to the following facts and
circumstances:
RECITALS
A. Each Resort Loan Party is the owner of the respective Resort Property
identified opposite the name of such Resort Loan Party on Schedule II attached
hereto;
B. The Resort Loan Parties and CCI (collectively, the "Loan Parties"), have
requested that Lender advance the proceeds of a loan in the aggregate maximum
principal amount of Two Hundred Sixty Million Dollars ($260,000,000.00) (the
"Loan") to each Resort Loan Party in the amount allocated to such Resort Loan
Party set forth opposite the name of such Resort Loan Party on Schedule II (each
such allocated amount of the Loan being referred to herein as a "Resort Loan"
and collectively as the "Resort Loans");
C. Lender has agreed to advance the proceeds of the Loan to the Resort Loan
Parties on the terms and conditions set forth herein;
AGREEMENT
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged by the parties hereto, the parties
hereto hereby agree as follows:
Section 1. Definitions: Certain Terms.
1.1 Definitions. For purposes of this Agreement, the terms set forth below
shall have the following meanings:
"Affiliate" means, with respect to any specified Person, any other
Person Controlling or Controlled by or under common Control with such specified
Person.
"Agreement" means this Agreement, the Schedules and Exhibits attached
hereto, and any and all amendments, modifications, supplements, extensions,
restatements and substitutions thereof and thereto.
"ALTA Survey" is defined in Section 3.2(a)(i).
"ALTA Title Policy" means with respect to a Resort Property an ALTA
policy of title insurance (1970 Form), in states where available, and otherwise
an extended coverage policy of title insurance, and in each case (i) issued by
the Title Company, (ii) with no exception for creditor's rights (unless the
deletion of such exception for creditor's rights is
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prohibited by the law of the state in which such title policy is being issued),
(iii) naming Lender as insured, (iv) in the Title Insurance Amount, and (iv)
showing the Mortgage on such Resort Property as an encumbrance thereon subject
only to Permitted Encumbrances, and the balance of the policy reflecting a state
of title satisfactory to Lender in its reasonable discretion.
"Alternative Rate" means, for a particular day, either the method for
calculating a market rate of interest that replaced the LIBOR Rate, or if there
is no replacement for the LIBOR Rate, then a method for calculating a market
rate of interest that is on the date of calculation as close to the LIBOR Rate
as possible in terms of both the amount of the LIBOR Rate when last calculated
for purposes of this Agreement and the fluctuations in the LIBOR Rate during the
three (3) year period preceding the date the LIBOR Rate was last calculated for
purposes of this Agreement (all as determined by Lender in its sole and absolute
discretion). The Alternative Rate shall change daily when and as Lender shall
determine.
"Annual Compliance Certificate" is defined in Section 5.4(a)(xi).
"Annual Debt Service" means for a Resort Loan the interest and
principal payments that would be paid on the Principal Indebtedness of such
Resort Loan outstanding on the applicable determination date during a period of
four consecutive Fiscal Quarters, computed by (x) applying to the Principal
Indebtedness a per annum rate of interest equal to the greater of (i) the
applicable Contract Rate for such Resort Loan or (ii) eight percent (8%), and
(y) assuming monthly payments of interest in arrears, and (z) assuming a monthly
payment of principal computed by amortizing the Principal Indebtedness
outstanding on the applicable determination date over the number of months
remaining until the Maturity Date of such Resort Loan at the greater of (i) the
applicable Contract Rate for such Resort Loan, or (ii) eight percent (8%). For
purposes of determining Annual Debt Service, the applicable Contract Rate for
the Barton Creek Loan shall be the Barton Creek Contract Rate in effect on the
date of determination.
"Applicable Time Period" is defined in Section 5.3(b).
"Appropriate Filing Office" means the records office in which UCC-1
Financing Statements are filed, located in the State in which a filing is
required to be made pursuant to the Texas UCC in order to perfect Lender's
security interest in the collateral described therein.
"Appropriate Officer" means, with respect to a Loan Party, any of the
chief financial officer, chief accounting officer or treasurer of such Loan
Party.
"Appropriate Recording Office" means the office of public records in
which instruments affecting title to real property are recorded, located in the
State and County in which the Resort Property is located.
"Approved Financial Institution" means a commercial bank, savings and
loan association or other depository approved by Lender.
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"Approved Original Property Closing Date Appraisal" is defined in
Section 2.3(b)(vii).
"Approved Original Property Substitution Date Appraisal" is defined in
Section 2.3(b)(vii).
"Approved Substitute Property MAI Appraisal" is defined in Section
2.3(b)(vii).
"Audited Statements" is defined in Section 5.2.
"Barton Creek" means Barton Creek Resort & Clubs, Inc., a Texas
corporation.
"Barton Creek Contract LIBOR Margin" means Three Hundred Twenty-Five
(325) Basis Points.
"Barton Creek Contract Rate" means a per annum rate of interest equal
to the greater of (a) Four and One Quarter Percent (4.25%), or (b) the sum of
(i) the LIBOR Rate, plus (ii) the Barton Creek Contract LIBOR Margin; provided,
however, that if the LIBOR Rate is unavailable, or if insufficient LIBOR funds
are available in the London Inter-Bank Market for determination of the LIBOR
Rate (which availability in each case shall be determined by Lender in its sole
and absolute discretion), then in lieu of the LIBOR Rate there shall be used the
Alternative Rate for purposes of determining the Barton Creek Contract Rate
pursuant to this clause (b). The Barton Creek Contract Rate may change for each
Interest Period when and as the LIBOR Rate (or Alternative Rate, if applicable)
shall change.
"Barton Creek Loan" means the Resort Loan in the amount set forth on
Schedule II made by Lender to Barton Creek on the terms and conditions set forth
in this Agreement and the other Loan Documents.
"Barton Creek Loan Maturity Date" means July 1, 2006.
"Barton Creek Mortgage" is defined in Section 2.3(b)(v).
"Barton Creek Property" means the real property described on Exhibit A
and all Improvements located thereon and Personal Property related thereto.
"Basis Point" means one one-hundredth of one percent (.01%).
"Business Day" means any day other than (i) a Saturday or a Sunday, or
(ii) a day on which federally insured depository institutions in the State of
California are authorized or obligated by law, governmental decree or executive
order to be closed.
"Businesses" is defined in Section 4.25(a).
"Cap Agreements" means any and all agreements, devices or arrangements
designed to protect at least one of the parties thereto from fluctuations of
interest rates,
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including interest rate cap or collar protection agreements, interest rate swap
agreements or interest rate options, as the same may be amended or modified and
in effect from time to time, and any and all terminations or assignments of any
of the foregoing.
"Capital Expenditure Project" is defined in Section 5.22.
"Capital Expenditures" means with respect to each Resort Property and
any businesses conducted thereon; Capital Lease Obligations in connection with
Capital Leases on equipment used in connection with such Resort Property and the
businesses conducted thereon, including, without limitation, golf carts, grounds
equipment, and utility and maintenance vehicles; expenditures for physical
improvements, including, without limitation, tenant improvements, septic
systems, building additions, irrigation system improvements and additions,
paving and repaving cart paths, parking areas and roadways, exterior painting,
golf course renovations, and installation of new golf holes; acquisition of
furniture, fixtures and equipment, including, without limitation, clubhouse
furniture and fixtures, kitchen equipment, major utilities (for example,
transformers), computer equipment and systems and telephone systems.
"Capital Expenditures Amount" is defined in Section 5.3(b).
"Capital Lease" is defined in the definition of Capital Lease
Obligations.
"Capital Lease Obligations" of any Person means the obligations of
such Person to pay rent or other amounts under any lease of (or other
arrangement conveying the right to use) personal property (a "Capital Lease"),
or a combination thereof, which obligations are required to be classified and
accounted for as capital leases on a balance sheet of such Person under GAAP,
and the amount of such obligations shall be the capitalized amount thereof
determined in accordance with GAAP.
"Cash Equivalents" is defined in Section 6.5.
"CCI" means ClubCorp, Inc., a Delaware corporation.
"CERA" is defined in Section 3.2(b).
"CERA Depository Bank" is defined in Section 3.2(b).
"Charges" is defined in Section 9.2.
"CICR" is defined in Section 6.5.
"CICR Cure" is defined in Section 6.3.
"CICR Plan of Action" is defined in Section 6.3(c).
"Closing" means the fulfillment of each of the conditions set forth in
Section 3.2 hereof that by the terms of said Section are to be fulfilled by the
Closing Date (or the waiver thereof by Lender in writing).
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"Closing Certification" is defined in Section 3.2(a)(xiv).
"Closing Date" means the date on which the Closing occurs.
"CLR" is defined in Section 6.5.
"CLR Cure" is defined in Section 6.2.
"CLR Plan of Action" is defined in Section 6.2(c).
"Code" means the Internal Revenue Code of 1986, as amended, and as it
may be further amended from time to time, any successor statutes thereto, and
applicable U.S. Department of Treasury regulations issued pursuant thereto in
temporary or final form and proposed regulations thereunder to the extent that,
by reason of their proposed effective date, such proposed regulations would
apply.
"Collateral" means all property, whether Real Property or Personal
Property, subject to the Liens of the Security Documents.
"Consent to Assignment" is defined in Section 3.2(a)(xxix).
"Consolidated EBITDA" is defined in Section 6.5.
"Consolidated Interest Coverage Ratio" is defined in Section 6.5.
"Consolidated Interest Expense" is defined in Section 6.5.
"Consolidated Leverage Ratio" is defined in Section 6.5.
"Consolidated Total Debt" is defined in Section 6.5.
"Contingent Obligation" means any obligation of a Resort Loan Party
guaranteeing or effectively guaranteeing any indebtedness, leases, dividends or
other obligations ("primary obligations") of any other Person (the "primary
obligor") in any manner, whether directly or indirectly, including, without
limitation, any pledge or hypothecation of property by such Resort Loan Party
for the benefit of another and any obligation of such Resort Loan Party, whether
or not contingent, (i) to purchase any such primary obligation or any property
constituting direct or indirect security therefor, (ii) to advance or supply
funds (x) for the purchase or payment of any such primary obligation or (y) to
maintain working capital or equity capital of the primary obligor or otherwise
to maintain the net worth or solvency of the primary obligor, (iii) to purchase
property, securities or services primarily for the purpose of assuring the owner
of any such primary obligation of the ability of the primary obligor to make
payment of such primary obligation or (iv) otherwise to assure or hold harmless
the owner of such primary obligation against loss in respect thereof. The amount
of any Contingent Obligation shall be deemed to be an amount equal to the stated
or determinable amount of the primary obligation in respect of which such
Contingent Obligation is made or, if not stated or determinable or if such
Resort Loan Party's obligation is less than the stated or determinable amount,
the maximum
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reasonably anticipated liability of such Resort Loan Party in respect thereof
(assuming such Resort Loan Party is required to perform thereunder) as
determined by Lender in good faith.
"Contract Rate, "means the Barton Creek Contract Rate, the Homestead
Contract Rate and the Pinehurst Contract Rate, as applicable.
"Control" means, as to any Person, the power to direct the management
and policies of such Person, directly or indirectly, whether through ownership
of a majority of voting rights or other beneficial interest, by contract or
otherwise. "Controlling" and "Controlled" have meanings correlative to the
foregoing.
"Controlling Interest" means the interest of a Controlling Person in
another Person over which the Controlling Person has Control.
"Controlling Ownership Interest" means, with respect to any Person, a
Controlling Interest in such Person which arises out of direct or indirect
beneficial ownership thereof.
"Control Person" or "Controlling Person" means, as to any Person, any
other Person that has the ability to exercise Control over such first Person.
"Counterparty" means the provider of a Cap Agreement.
"Country Club Loan Agreement" is defined in Section 3.2(i).
"DCR" means Debt Coverage Ratio.
"Debt Coverage Ratio" means the ratio of (x) the aggregate Net
Operating Income of the Resort Loan Parties for which there remains outstanding
Resort Loans on the applicable determination date (after giving pro forma effect
to any defeasance, release or substitution to be made pursuant to Section 2.3(b)
of this Agreement), as set forth in the financial statements provided to Lender
for the four Fiscal Quarters ending immediately prior to the applicable
determination date, to (y) the aggregate Annual Debt Service for the outstanding
Resort Loans (after giving pro forma effect to any defeasance, release or
substitution to be made pursuant to Section 2.3(b) of this Agreement).
"Default Rate" has the meaning given the term in the Note.
"Defeasance Date" is defined in Section 2.3(b)(v).
"Defeasance Deposit" is defined in Section 2.3(b)(v).
"Defeasance Notice" is defined in Section 2.3(b)(v).
"Defeasance Security Agreement" is defined in Section 2.3(b)(v).
"Effective Gross Income" means for a Resort Loan Party for the period
in question all income, including, but not limited to, initiation deposits and
fees, monthly dues, room revenue (if applicable), greens fees, cart rental
income, and other income (excluding
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investment income) derived from the Resort Property of such Resort Loan Party,
less cost of goods sold associated with such sources of income (all as
determined in accordance with GAAP consistently applied).
"Environmental Costs" is defined in Section 8.2(f).
"Environmental Indemnity" means, for each Resort Property, an
environmental indemnity, dated as of the Closing Date executed by the Resort
Loan Party that owns such Resort Property, in favor of Lender.
"Environmental Laws" means all federal, state, or local laws,
statutes, codes, ordinances, rules, regulations, standards, policies or other
governmental directives or requirements, as well as common law, including,
without limitation, any judgments or orders applicable to the Loan Parties or
the Real Properties, (whether now existing or hereafter enacted or promulgated),
pertaining to human health, to the environment, to any Hazardous Substances
(including, without limitation, the presence, discharge, generation, removal,
transportation, storage or handling of Hazardous Substances), to industrial
hygiene and/or to environmental conditions existing in, on, above, under, at,
from or about the Real Properties, including, without limitation: (1) the
Comprehensive Environmental Response, Compensation, and Liability Act of 1980,
as amended by the Superfund Amendments and Reauthorization Act of 1986 (as now
or hereafter amended, "CERCLA"), 42 U.S.C. (S)(S) 9601 et seq.; (2) the Solid
Waste Disposal Act, as amended by the Resource Conservation and Recovery Act, as
amended by the Hazardous and Solid Waste Amendments of 1984 (as now or hereafter
amended, "RCRA"), 42 U.S.C. (S)(S) 6901 et seq.; (3) the Toxic Substances
Control Act (as now or hereafter amended, "TSCA"), 15 U.S.C. (S)(S) 2601 et
seq.; (4) the Emergency Planning and Community Right-to-Know Act (as now or
hereafter amended, "EPCRA"), 42 U.S.C. (S)(S) 11001 et seq.; (5) the Federal
Water Pollution Control Act, also known as the Clean Water Act (as now or
hereafter amended, "CWA"), 33 U.S.C. (S)(S) 1251 et seq.; (6) the Clean Air Act,
as amended by the Clean Air Act Amendments (as now or hereafter amended, "CAA"),
42 U.S.C. (S)(S) 7401 et seq.; (7) the National Environmental Policy Act (as now
or hereafter amended, "NEPA"), 42 U.S.C. (S)(S) 4321, et seq.; (8) the
Endangered Species Act of 1973 (as now or hereafter amended), 16 U.S.C. (S)(S)
1531 et seq (9) the Occupational Safety and Health-Act (as now or hereafter
amended, "OSHA"), 29 U.S.C. (S)(S) 651 et seq.; (10) the Hazardous Material
Transportation Act (as now or hereafter amended), 49 U.S.C. (S)(S) 5101 et seq.;
(11) any corresponding applicable state laws of the states in which the Real
Properties are situated; and (12) all regulations, rules, guidelines, or
standards promulgated pursuant to such federal, state and local laws, as such
regulations, rules, guidelines, and standards may be amended from time to time,
including, but not limited to, any rules and/or regulations applicable to
jurisdictional wetlands:
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, and any successor statute. thereto, as interpreted by the rules and
regulations thereunder, all as the same may be in effect from time to time.
References to sections of ERISA shall be construed also to refer to any
successor sections.
"ERISA Affiliate" means an entity which is a member of a group which
includes any Loan Party and which is treated as a single employer under Sections
414(b) or (c) of the Code.
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"ERISA Event" means any of the following events: (i) with respect to
any Plan, the occurrence of a Reportable Event or the substantial cessation of
operations (within the meaning of Section 4062(e) of ERISA); (ii) the withdrawal
by any Loan Party or any ERISA Affiliate from a Multiple Employer Plan during a
Plan year in which it was a substantial employer (as such term is defined in
Section 4001(a)(2) of ERISA), or the termination of a Multiple Employer Plan;
(iii) the distribution of a notice of intent to terminate or the actual
termination of a Plan subject to Title IV of ERISA pursuant to Section
4041(a)(2) or 4041A of ERISA; (iv) the institution of proceedings to terminate
or the actual termination of a Plan by the PBGC under Section 4042 of ERISA; (v)
any event or condition which might constitute grounds under Section 4042 of
ERISA for the termination of, or the appointment of a trustee to administer, any
Plan; (vi) the complete or partial withdrawal of any Loan Party or any ERISA
Affiliate from a Multiemployer Plan; (vii) the conditions for imposition of a
lien under Section 302(f) of ERISA exist with respect to any Plan; or (viii) the
adoption of an amendment to any Plan requiring the provision of security to such
Plan pursuant to Section 307 of ERISA.
"Evasion Prepayment Premium" is defined in Section 2.3(b)(iv).
"Event of Default" is defined in Section 8.
"First Year Loan Period" is defined in Section 6.2(b).
"First Year Prorated Period" means the period of time from the Closing
Date through and including December 30, 2003.
"Fiscal Month" means a period of twenty-eight (28) consecutive
calendar days, commencing on the first day following the termination of the
prior Fiscal Month. The first Fiscal Month shall begin on the first day of the
Fiscal Year.
"Fiscal Quarter" means any one of four periods during a Fiscal Year,
the first three of which shall consist of three (3) Fiscal Months and the last
of which shall consist of four (4) Fiscal Months. The first Fiscal Quarter of
each Fiscal Year shall commence on the first day of the Fiscal Year and the last
Fiscal Quarter shall end on the last day of the Fiscal Year.
"Fiscal Week" means a period of seven (7) consecutive days, commencing
on the first day following the termination of the prior Fiscal Week. The first
Fiscal Week shall begin on the first day of the Fiscal Year.
"Fiscal Year" means a period commencing on the Wednesday following the
last Tuesday in December of each calendar year and ending on the last Tuesday of
the next following December.
"Foreclosed Property" is defined in Section 9.20(r).
"GAAP" means generally accepted accounting principles in the United
States of America as of the date of the applicable financial report.
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"Governmental Authority" means any federal, state, local or foreign
court, agency, authority, board, bureau, commission, department, office or
instrumentality of any nature whatsoever or any governmental or
quasi-governmental unit, whether now or hereafter in existence, or any officer
or official thereof, having jurisdiction over any Resort Loan Party or any
Resort Property.
"Guarantor" means CCI.
"Guaranty" means the Continuing, Limited Guaranty dated of even date
herewith by CCI as Guarantor in favor of Lender.
"Hazardous Substance" with respect to a Resort Property is defined in
the Mortgage encumbering such Resort Property.
"Homestead" means The Homestead, L.C., a Virginia limited liability
company.
"Homestead Contract Rate" means a per annum rate of interest equal to
6.610%.
"Homestead Loan" means the Resort Loan in the amount set forth on
Schedule II made by Lender to Homestead on the terms and conditions contained in
this Agreement and the other Loan Documents.
"Homestead Loan Maturity Date" means July 1, 2010.
"Homestead Property" means the real property described on Exhibit A,
and all Improvements located thereon and Personal Property related thereto.
"Impositions" means all taxes (including, without limitation, all ad
valorem, sales (including those imposed on lease rentals), use, single business,
gross receipts, value added, intangible transaction privilege, privilege or
license or similar taxes), assessments (including, without limitation, all
assessments for public improvements or benefits, whether or not commenced or
completed prior to the date hereof and whether or not commenced or completed
within the term of the applicable Mortgage), ground rents, water, sewer or other
rents and charges, excises, levies, fees (including, without limitation,
license, permit, inspection, authorization and similar fees), and all charges of
any Governmental Authority, in each case whether general or special, ordinary or
extraordinary, foreseen or unforeseen, of every character in respect of a Resort
Property (including all interest and penalties thereon), which at any time prior
to, during or in respect of the term hereof are assessed or imposed on, or in
respect of, or are or will be a lien upon (a) a Resort Loan Party (including,
without limitation, all franchise, single business or other taxes imposed on
such Resort Loan Party for the privilege of doing business in the jurisdiction
in which such Resort Loan Party's Resort Property, or any other Collateral
delivered or pledged to Lender in connection with the Resort Loan of such Resort
Loan Party, is located) or Lender, (b) a Resort Property, or any other
Collateral delivered or pledged to Lender in connection with the Loan, or any
part thereof or any Property Income therefrom or any estate, right, title or
interest therein, or (c) any occupancy, operation, use or possession of, or
sales from, or activity conducted on, or in connection with such Resort
Property or the leasing or use of such Resort Property or
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any part thereof. Notwithstanding the foregoing, Impositions shall not include
any federal or state or local taxes measured by income of and payable by Lender.
"Improvements" with respect to a Resort Property is defined in the
Mortgage encumbering such Resort Property.
"Indebtedness" means, with respect to any Person, without duplication,
(a) all obligations for borrowed money, (b) all obligations evidenced by bonds,
debentures, notes or similar instruments, (c) all obligations under conditional
sale or other title retention agreements relating to property or assets
purchased by such Person, (d) all obligations issued or assumed as the deferred
purchase price of property or services (excluding trade accounts payable in the
ordinary course of business), (e) all obligations secured by any lien on any
property or asset owned by such Person, whether or not the obligation secured
thereby shall have been assumed, (f) to the extent not otherwise included, all
Capital Lease Obligations of such Person, all obligations in respect to letters
of credit, bankers' acceptances and similar instruments, (g) any "withdrawal
liability" of such Person as such term is defined under Part I of Subtitle E of
Title IV of ERISA, (h) all redeemable stock, (i) the principal portion of all
obligations of such Person under any synthetic lease, and (j) any guaranty of
such Person of any obligation of another Person constituting obligations of a
type set forth above.
"Insurance Premium Deposit Account" is defined in Section 5.19(c).
"Insurance Proceeds" means amounts paid or payable with respect to a
particular Resort Property pursuant to any insurance policy maintained by the
Resort Loan Party that owns such Resort Property or the Tenants of such Resort
Property.
"Insurance Requirements" means with respect to a Resort Property all
provisions of the insurance policies covering or applicable to all or any part
of such Resort Property or the ownership, use, improvement, operation or
maintenance thereof, all requirements of the issuer of any of such insurance
policies and all orders, rules, regulations and other requirements of the
National Board of Fire Underwriters (or any other body exercising similar
functions, including, without limitation, any local board of fire underwriters)
applicable to such Resort Property.
"Intellectual Property" is defined in Section 4.20.
"Interest Determination' Date" is defined in the definition of LIBOR
Rate.
"Interest Period" means (i) the period beginning on the Closing Date
and ending on the last day of the calendar month in which the Closing Date
occurs, and (ii) each calendar month thereafter; provided, however, no Interest
Period for a Resort Loan shall extend beyond the Maturity Date applicable to
such Resort Loan.
"Lease(s)" means any and all leases, lettings, tenancies, occupancy
agreements and licenses (to the extent assignable) of a Resort Loan Party or
Resort Property or any part thereof now or hereafter entered into, and all
amendments, extensions, renewals and guarantees thereof, all security therefor,
and all moneys payable thereunder.
"Lender" means Pacific Life Insurance Company, a California
corporation.
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"LIBOR Business Day" means each day (i) other than a Saturday or
Sunday and other than any other day on which federally insured depository
institutions in New York State are authorized or obligated by law, governmental
decree or executive order to be closed, and (ii) on which banks are open for
dealing in foreign currency and exchange in London, England and New York, New
York.
"LIBOR Rate" means the 30-day London Interbank Offered Rate for United
States dollar deposits as of 11:00 a.m. (London time) on the date which is two
(2) LIBOR Business Days prior to the Closing Date (rounded to five decimal
places), and (ii) with respect to all other Interest Periods, the 30-day London
Interbank Offered Rate for United States dollar deposits as of 11:00 a.m.
(London time) on the date (the "Interest Determination Date") which is two (2)
LIBOR Business Days prior to the first day of such Interest Period (rounded to
five decimal places), in each case as quoted on Telerate page 3750 or on such
replacement system as is then customarily used to quote LIBOR as determined by
Lender. If two or more such rates appear on Telerate page 3750 or associated
pages, the rate in respect of such Interest Period shall be the arithmetic mean
of such offered rates (rounded to five decimal places).
"Lien" means any lien, mortgage, pledge, security interest or other
encumbrance of any nature upon any property of any Person, including, without
limitation, any mechanic's lien, materialmen's lien, conditional sale or other
title retention agreement or lease in the nature thereof.
"Loan" is defined in Recital B, and includes each of the Resort Loans.
"Loan Assignee" is defined in Section 9.1.
"Loan Commitment Letter" means that certain Mortgage Loan Application
dated January 31, 2003, as amended by letter dated March 6, 2003, executed by
each Loan Party, Lender and the Country Club Loan Parties (as defined in the
Country Club Loan Agreement).
"Loan Documents" means, collectively, this Agreement, the Note, the
Security Documents, the Environmental Indemnities, the Closing Certifications,
the Loan Commitment Letter, any side letter agreements or certificates executed
and delivered by any Resort Loan Party in connection with the Loan or any
disbursement of the proceeds thereof, and any other document, instrument or
agreement executed by any Resort Loan Party and delivered to Lender and
evidencing, securing or relating to the Loan, as any of the same may from time
to time be amended. "Loan Documents" also includes any document or agreement
hereinafter executed in connection with the Loan which specifies that it is a
Loan Document.
"Loan Indebtedness" means the indebtedness in the original principal
amount of the Loan evidenced by the Note, together with all other obligations
and liabilities due or to become due to Lender pursuant hereto, under the Note
or in accordance with any of the other Loan Documents, all amounts, sums and
expenses paid by or payable to Lender hereunder or pursuant to the Note or any
of the other Loan Documents, and all other
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covenants, obligations and liabilities of any Resort Loan Party hereunder or
pursuant to the Note or any of the other Loan Documents, together with all
interest thereon.
"Loan Parties" is defined in Recital B.
"Loan Sale Amount" is defined in Section 9.1.
"Loan Sale Notice" is defined in Section 9.1.
"Loan Sale Price" is defined in Section 9.1.
"Loan Transactions" is defined in Section 4.8.
"Loan Year" means each successive twelve month period beginning on the
Closing Date, if Closing occurs on the first day of a month, or on the first day
of the first month following the Closing Date, if Closing does not occur on the
first day of a month. In the latter case, the first Loan Year shall be the
period from the Closing Date to the end of the calendar month in which the
Closing Date occurs and the first full Loan Year shall be the twelve month
period commencing on the first day of the following month.
"Loss of Yield" is defined in Section 2.3(b)(ii).
"Loss Proceeds" means Insurance Proceeds and proceeds in respect of
any Taking.
"Management Agreement" means any one or more of the consulting or
centralized services agreements listed on Schedule 1.1A attached hereto to which
a Resort Loan Party is a party, and any substitute of any such Management
Agreement, or modification thereof, consented to by Lender pursuant to Section
5.20 hereof.
"Manager" means the consultant or service provider under each
Management Agreement approved by Lender, including any substitute Manager under
a substitute Management Agreement to which Lender has consented pursuant to
Section 5.20 hereof.
"Material Adverse Effect" means, on any date, a change in the facts or
circumstances applicable to any Resort Loan Party or the Resort Loan Parties
taken as a whole such as would cause a reasonable Person to conclude that, as a
result of such change, such Resort Loan Party's ability or the ability of all
the Resort Loan Parties taken as a whole to make payments on the Loan in
compliance with the terms of the Loan Documents will be jeopardized.
"Material Collateral Impairment" means, on any date of determination
thereof, any fact or circumstance in respect of the Collateral which, singly or
when aggregated with any other facts or circumstances if uncured, could
reasonably be expected to (i) result in the imposition of liability on Lender,
or (ii) materially impair the value or use of any Resort Property and/or other
Collateral, or (iii) materially impair the legality of any Resort Property or
any business operations thereon.
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"Maturity Date" means the Barton Creek Loan Maturity Date, Homestead
Loan Maturity Date and/or Pinehurst Loan Maturity Date, as applicable.
"Maximum Lawful Rate" is defined in Section 9.2.
"Moody's" means Moody's Investors Service, Inc., or any successor or
assignee of the business of such company in the business of rating securities.
"Mortgage" means any mortgage, deed of trust, assignment of rents,
security agreement and fixture filing, or similar instrument executed by a
Resort Loan Party in favor of Lender, for a Resort Property, and delivered to
Lender in accordance with this Agreement, as the same may be hereafter amended
from time to time.
"Multiemployer Plan" means a Plan which is a "multiemployer plan" as
defined in Sections 3(37) or 4001(a)(3) of ERISA.
"Multiple Employer Plan" means a Plan (other than a Multiemployer
Plan) which any Resort Loan Party or any ERISA Affiliate and at least one
employer other than any ERISA Affiliate are contributing sponsors.
"Net Operating Income" means for a Resort Loan Party the amount by
which such Resort Loan Party's Effective Gross Income for the period in question
exceeds such Resort Loan Party's Total Expenses for the same period.
"No Prepayment Period" is defined in Section 2.3(b)(iv).
"Non-Defeasing Resort Loan Parties" is defined in Section 2.3(b)(v).
"Non-Releasing Resort Loan-Parties" is defined in Section 2.3(b)(vi).
"Non-Substituting Resort Loan Parties" is defined in Section
2.3(b)(vii).
"Note" means that certain Secured Promissory Note (Resort Loans) of
even date herewith, made by the Resort Loan Parties, jointly and severally, in
favor of Lender in the original principal amount of the Loan.
"Operating Statement" is defined in Section 5.3.
"Option Consideration" is defined in Section 9.1.
"Original Property" is defined in Section 2.3(b)(vii).
"Parent" is defined in the definition of Subsidiary.
"PBGC" means the Pension Benefit Guaranty Corporation established
pursuant to Subtitle A of Title IV of ERISA and any successor thereof.
"Permitted Encumbrances" means (i) the Liens created by the Loan
Documents, and (ii) with respect to any Resort Property (A) any covenants,
conditions, Liens, restrictions, rights of way, easements and other matters,
whether or not of public
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record, approved by Lender in writing prior to the Closing Date, (B) any Leases
in effect on the Closing Date, and (C) any future Leases that are not prohibited
by the Mortgage encumbering such Resort Property.
"Person" means any individual, corporation, limited liability company,
partnership, joint venture, estate, association, joint stock company, trust,
unincorporated organization, or government or any agency or political
subdivision thereof and any fiduciary acting in such capacity on behalf of any
of the foregoing.
"Personal Property" means any portion of the Resort Properties that is
not real property.
"Personal Property Lease" means any lease or sublease affecting any
portion of the Personal Property.
"Pinehurst" means Pinehurst, Inc., dba Pinehurst Resort & Country
Club, a North Carolina corporation.
"Pinehurst Contract Rate" means a per annum rate of interest equal to
7.226%.
"Pinehurst Loan" means the Resort Loan in the amount set forth on
Schedule II made by Lender to Pinehurst on the terms and conditions contained in
this Agreement and the other Loan Documents.
"Pinehurst Loan Maturity Date" means July 1, 2013.
"Pinehurst Property" means the real property described on Exhibit A,
and all Improvements located thereon and Personal Property related thereto.
"Plan" means any employee benefit plan (as defined in Section 3(3) of
ERISA) which is covered by ERISA and with respect to which any Resort Loan Party
or any ERISA Affiliate is (or, if such plan were terminated at such time, would
under Section 4069 of ERISA be deemed to be) an "employer" within the meaning of
Section 3(5) of ERISA.
"Post-Closing Due Date" is defined in Section 5.24.
"Post-Closing Item" is defined in Section 5.24.
"Post-Closing Items List" is defined in Section 5.24.
"Potential Default" means an event or condition which, but for the
lapse of time or the giving of notice, or both, would, unless cured or waived,
constitute an Event of Default.
"Prepayment Premium" is defined in Section 2.3(b)(ii).
"Pretax Net Income" is defined in Section 6.5.
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"Principal Indebtedness" means with respect to a Resort Loan, the
outstanding principal balance of such Resort Loan, and with respect to the Loan,
the outstanding principal balance of the Loan, in each case at the date of
determination.
"Property Income" means with respect to a Resort Property, all rents,
income, issues, profits, security deposits (but only upon (i) forfeiture thereof
by the applicable Tenant or (ii) the Resort Loan Party otherwise becoming
entitled thereto pursuant to the terms of the applicable Lease) and other
benefits to which the Resort Loan Party may now or hereafter be entitled from
such Resort Property or under or in connection with the Leases, including,
without limitation, all income received from Tenants and all Tenant expense
reimbursement income received by such Resort Loan Party pursuant to the Leases.
"Quarterly Compliance Certificate" is defined in Section 5.4(b)(iv).
"Quarterly Reporting Date" is defined in Section 5.4(b).
"Real Properties" is defined in Section 4.25(a).
"Real Property Lease" means any lease or sublease affecting any
portion of the real property or leasehold estate that makes up any Resort
Property or any portion thereof.
"Related Person" means, with respect to any specified Person, any
other Person that is an Affiliate of the specified Person or any partner of the
specified Person (if such Person is a partnership) or any shareholder of the
specified Person (if such Person is a corporation) or any member of the
specified Person (if such Person is a limited liability company).
"Release Date" is defined in Section 2.3(b)(vi).
"Release Notice" is defined in Section 2.3(b)(vi).
"Report" has the meaning set forth in Section 3.2(a)(xxviii).
"Requirements of Law" means, as to any Person or any property of such
Person, (i) the corporate charter and by-laws (in the case of a corporation),
partnership agreement and certificate or statement of partnership (in the case
of a partnership), operating agreement and articles of organization (in the case
of a limited liability company), or other organizational or governing documents
of such Person, (ii) any law, treaty, rule or regulation (including, without
limitation, Environmental Laws, the Americans with Disabilities Act and Uniting
and Strengthening America by Providing Appropriate Tools Required to Intercept
and Obstruct Terrorism (USA Patriot Act) Act of 2001, adopted as Public Law
107-56), or final and binding determination of an arbitrator, or determination
of any Governmental Authority applicable to or binding upon such Person or any
of its property or to which such Person or any of its property is subject or
(iii) any recorded deed of restriction, declaration, covenant running with the
land or otherwise, now or hereafter in force (including, without limitation, any
such deed, declaration or covenant which constitutes a Permitted Encumbrance).
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"Resort Loan" is defined in Recital B.
"Resort Loan Party" means each of Homestead, Pinehurst and Barton
Creek.
"Resort Loan Party Account" is defined in Section 3.2(c).
"Resort Loan Party Account Control Agreement" is defined in Section
3.2(c).
"Resort Loan Party Bank" is defined in Section 3.2(c).
"Resort Property" means each of the Barton Creek Property, the
Pinehurst Property and the Homestead Property.
"Restructuring Charges" is defined in Section 6.5.
"S&P" means Standard & Poor's Ratings Group, a division of The McGraw
Hill Companies, Inc., or any successor or assignee of the business of such
division in the business of rating securities.
"Scheduled Defeasance Payments" is defined in Section 2.3(b)(v).
"Scheduled Prepayment Date" is defined in Section 2.3(b)(iv).
"Security Agreement" means any security agreement executed by a Resort
Loan Party or an Affiliate or Related Person and delivered to Lender covering
any and all Personal Property of such Resort Loan Party or such Affiliate or
Related Person, including any and all Intellectual Property.
"Security Documents" means, collectively, (i) the Mortgages, (ii) the
UCC-1 Financing Statements, (iii) the Security Agreements, and (iv) such
additional financing statements, documents, instruments and agreements as Lender
may receive or cause to be executed pursuant to any Security Document, as all
of the foregoing may be amended from time to time.
"Subsidiary" means, as to any Person, a corporation, partnership,
limited liability company or other entity of which shares of stock or other
ownership interests having ordinary voting power (other than stock or such other
ownership interests having such power only by reason of the happening of a
contingency) to elect a majority of the board directors or other managers of
such corporation, partnership or other entity are at the time owned, or the
management of which is otherwise controlled, directly or indirectly through one
or more intermediaries, or both, by such Person ("Parent").
"Substitute Property" is defined in Section 2.3(b)(vii).
"Substitute Resort Loan Party" is defined in Section 2.3(b)(vii).
"Substitution" is defined in Section 2.3(b)(vii).
"Substitution Date" is defined in Section 2.3(b)(vii).
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"Substitution Request" is defined in Section 2.3(b)(vii).
"Successor Loan Party" is defined in Section 2.3(b)(v).
"Survey" is defined in Section 3.2(a)(i).
"Taking" means a taking of a Resort Property or any part thereof in or
by condemnation or other eminent domain proceedings pursuant to any law, general
or special, or by reason of the temporary requisition of the use or occupancy of
such Resort Property, or any part thereof, by any Governmental Authority.
"TCMP" is defined in Section 2.3(b)(ii).
"Tenants" means all tenants, lessees, sublessees, licensees and other
persons occupying space at any Resort Property.
"Texas UCC" means the Uniform Commercial Code in effect in Texas, as
it may be amended from time to time.
"Title Company" means LandAmerica.
"Title Insurance Amount" means with respect to each Resort Property
the amount set forth on Schedule 1.1B attached hereto.
"Total Expenses" means for a Resort Loan Party for the period in
question the total actual or deemed expenses relating to the operation,
maintenance, leasing and management of the Resort Property of such Resort Loan
Party actually or deemed to have been incurred or accrued during such period,
other than total debt service for such period, depreciation of improvements, and
capital items, provided that all such exclusions for the period in question are
evidenced by an operating statement prepared in accordance with GAAP
consistently applied and delivered to Lender. Total Expenses will include ground
rent, if any, a property management fee equal to the greater of the actual
management fees charged or three percent (3%) of Effective Gross Income, and
reserves or expenditures for Capital Expenditures (including payment of Capital
Lease Obligations) equal to four percent (4%) of Effective Gross Income.
"Triggering Aggregate Lien Amount" is defined in Section 8.1(b).
"UCC-1 Financing Statements" means each and all of the UCC-1 Financing
Statements to be filed in the Appropriate Filing Offices in connection with the
funding of the Resort Loans, to evidence and/or perfect Lender's Lien on
portions of the subject Resort Property in which a Lien may be created or
perfected by the filing of UCC-1 Financing Statements, and any amendments to
such UCC-1 Financing Statements from time to time.
"UCC Search" means a search of the records of the Appropriate Filing
Offices for UCC-1 Financing Statements.
"Unrestricted" is defined in the definition of Unrestricted Cash.
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"Unrestricted Cash" is defined in Section 6.5.
"U.S. Obligations" is defined in Section 2.3(b)(v).
"Welfare Plan" is defined in Section 4.17(g).
1.2 Certain Terms. Unless the context indicates otherwise, all accounting
terms are used herein as defined under GAAP. All Section references are to
Sections of this Agreement unless otherwise specified. The definitions of terms
herein shall apply equally to the singular and plural forms of the terms
defined; provided that if such definition of a term in the singular form
contains a reference to more than one person or thing, whether tangible or
intangible, the plural form of such term shall be a reference to two or more of
the persons or things composing such definition. Whenever the context may
require, any pronoun shall include the corresponding masculine, feminine and
neuter forms. The words "include", "includes" and "including" shall be deemed to
be followed by the phrase "without limitation". The word "will" shall be
construed to have the same meaning and effect as the word "shall". Unless the
context requires otherwise (a) any definition of or reference to any agreement,
instrument or other document herein shall be construed as referring to such
agreement, instrument or other document as from time to time amended, replaced,
substituted, supplemented or otherwise modified (subject to any restrictions on
such amendments, replacements, substitutions, supplements or modifications set
forth herein), (b) any reference herein to any Person shall be construed to
include such Person's successors and assigns, (c) the words "herein", "hereof"
and "hereunder", and words of similar import, shall be construed to refer to
this Agreement in its entirety and not to any particular provision hereof, and
(d) all references herein to Articles, Sections, Exhibits and Schedules shall be
construed to refer to Articles and Sections of, and Exhibits and Schedules to,
this Agreement.
Section 2. The Loan.
2.1 Agreement to Lend. In reliance upon the representations and warranties
contained in Section 4 of this Agreement and in the Closing Certifications,
Lender hereby agrees on the terms and conditions set forth herein and in the
other Loan Documents to loan to each Resort Loan Party an amount not to exceed
the amount of such Resort Loan Party's respective Resort Loan set forth in
Schedule II attached hereto.
2.2 Interest on the Principal Indebtedness. Interest on the Principal
Indebtedness shall accrue at the rate and be payable in the manner and at the
times set forth in this Section 2.2:
(a) Contract Rate. The Principal Indebtedness of each Resort Loan
shall bear interest at the following interest rates:
(i) Barton Creek Loan. The Principal Indebtedness on the Barton
Creek Loan from time to time outstanding shall bear interest at the Barton Creek
Contract Rate.
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(ii) Homestead Loan. The Principal Indebtedness on the Homestead
Loan from time to time outstanding shall bear interest at the Homestead Contract
Rate.
(iii) Pinehurst Loan. The Principal Indebtedness on the Pinehurst
Loan from time to time outstanding shall bear interest at the Pinehurst Contract
Rate.
(b) Computation of Interest. Interest on the Principal Indebtedness
shall be computed as follows:
(i) Barton Creek Contract Rate. Interest at the Barton Creek
Contract Rate shall be computed on the basis of a year of three hundred sixty
(360) days for the actual number of days occurring in the period for which such
interest is payable.
(ii) Homestead Contract Rate and Pinehurst Contract Rate.
Interest at the Homestead Contract Rate and the Pinehurst Contract Rate shall be
computed on the basis of a year of three hundred sixty (360) days and a month of
thirty (30) days.
(c) Accrual of Interest. Interest shall commence to accrue on the Loan
on the earlier to occur of the date on which (x) Lender disburses the proceeds
of the Loan to or at the direction of the Loan Parties, or (y) Lender disburses
the proceeds of the Loan into an escrow established by Lender to effectuate the
disbursement of the proceeds of the Loan to the Loan Parties.
(d) Default Rate. Following the maturity of a Resort Loan, whether by
acceleration or otherwise, or following the occurrence of an Event of Default
and during the continuance thereof, the unpaid principal balance of such Resort
Loan, and all. accrued and unpaid interest thereon and other charges in
connection therewith, will thereafter bear interest at a rate equal to the
lesser of the Contract Rate for such Resort Loan plus 6% per annum or the
Maximum Lawful Rate and will be payable on demand.
(e) Late Charge. In addition to the payments otherwise specified in
this Agreement, the Note or any other Loan Document, if Lender does not receive
any installment in full on the date such installment payment is due and
payable, there shall be paid to Lender (without provision for any grace or cure
period) a late charge equal to four percent (4%) of the amount of such
delinquent payment to compensate Lender for such default and the additional
costs and administrative efforts required by reason of such default.
2.3 Payment of Principal and Interest.
(a) Periodic Payments of Principal and Interest. The Principal
Indebtedness and interest accruing thereon shall be paid as follows:
(i) Barton Creek Loan. There shall be due and payable on the
Closing Date interest on the Principal Indebtedness outstanding on the Closing
Date for the Barton Creek Loan from the Closing Date through the last day of the
first Interest Period, and there shall be due and payable on the first day of
each Interest Period commencing with the first day of the third Interest Period
(x) interest on the Principal Indebtedness of the Barton Creek Loan that has
accrued during the Interest Period preceding the date on which
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payment is to be made as provided in this Section 2.3(a)(i), and (y) a portion
of the Principal Indebtedness of the Barton Creek Loan computed by amortizing
the Principal Indebtedness outstanding on such payment date over a period of
Twenty Five (25) years at the Barton Creek Contract Rate applicable to the
Barton Creek Loan at the commencement of the Interest Period for which payment
is being made. All outstanding Principal Indebtedness on the Barton Creek Loan,
together with all accrued and unpaid interest thereon, shall be due and payable
on the Barton Creek Loan Maturity Date.
(ii) Homestead Loan and Pinehurst Loan. There shall be due and
payable on the Closing Date interest on the Principal Indebtedness outstanding
on the Closing Date for the Homestead Loan and the Pinehurst Loan from the
Closing Date through the last day of the first Interest Period, and there shall
be due and payable on the first day of each Interest Period commencing with the
first day of the third Interest Period (x) interest on the Principal
Indebtedness of each of the Homestead Loan and the Pinehurst Loan that has
accrued during the preceding Interest Period, and (y) a portion of the Principal
Indebtedness of each of the Homestead Loan and Pinehurst Loan computed by
amortizing the Principal Indebtedness outstanding on the Closing Date over a
period of Twenty Five (25) years at the Contract Rate applicable to the
Homestead Loan and Pinehurst Loan, respectively. All outstanding Principal
Indebtedness on the Homestead Loan, together with all accrued and unpaid
interest thereon, shall be due and payable on the Homestead Loan Maturity Date.
All outstanding Principal Indebtedness on the Pinehurst Loan, together with all
accrued and unpaid interest thereon, shall be due and payable on the Pinehurst
Loan Maturity Date.
(b) Restrictions on Prepayment.
(i) Barton Creek Loan. Barton Creek shall have no right to prepay
any portion of the Principal Indebtedness of the Barton Creek Loan from time to
time outstanding prior to and including the second (2nd) anniversary of the
Closing Date. From and after the day following the second (2nd) anniversary of
the Closing Date, Barton Creek may prepay, in whole but not in part, the
outstanding Principal Indebtedness of the Barton Creek Loan upon thirty (30)
days' prior written notice sent to and received by Lender at Lender's address as
provided and in the manner specified in this Agreement; provided that any such
prepayment is accompanied by the payment of (x) all accrued and unpaid interest,
and (y) any other amounts due and unpaid under the Loan Documents. Any
prepayment permitted by this Section 2.3(b)(i) shall be made on the first day of
the Interest Period following the expiration of the thirty (30) day period after
Lender receives the written notice required by this Section 2.3(b)(i).
(ii) Homestead Loan and Pinehurst Loan.
(1) Neither Homestead nor Pinehurst shall have a right to
prepay any portion of the Principal Indebtedness of their respective Resort
Loans prior to and including the second (2nd) anniversary of the Closing Date.
From and after the day following the second anniversary of the Closing Date,
Homestead and Pinehurst may prepay, in whole but not in part, the outstanding
Principal Indebtedness of their respective Resort Loans upon ninety (90) days'
prior written notice sent to and received by Lender at Lender's address as
provided and in the manner specified in this Agreement; provided that
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any prepayment shall be accompanied by the payment of (A) all accrued and unpaid
interest, (B) any other amounts due and unpaid under the Loan Documents, and (C)
the Prepayment Premium. Any prepayment permitted by this Section 2.3(b)(ii)
shall be made on the first day of the month following the expiration of the
ninety (90) day period after Lender receives the written notice required by this
Section 2.3(b)(ii).
(2) The term "Prepayment Premium" means an amount equal to
the greater of (A) one percent (1%) of the outstanding Principal Indebtedness
being prepaid, and (B) the Loss of Yield.
(3) The term "Loss of Yield" means the excess, if any, of
(A) the net present value of the monthly payments from the date of prepayment
through and including the Maturity Date of the Resort Loan being prepaid
pursuant to this Section 2.3(b)(ii), and the residual principal balance of such
Resort Loan, using a discount rate of the TCMP for the most current week prior
to the prepayment having a term most equal to the number of years remaining in
the term for such Resort Loan, over (B) the outstanding Principal Indebtedness
for such Resort Loan at the time of prepayment.
FOR EXAMPLE: Assume for purposes of this example that the original loan balance
for a Resort Loan being prepaid was $10,000,000 with a fixed monthly payment of
$91,473.93. Assume further for purposes of this example only that the term of
such Resort Loan is five (5) years. The outstanding principal balance, after the
43rd monthly principal and interest payment, is $9,793,615, the Contract Rate is
10.5% and there are 17 months remaining before the Maturity Date of such Resort
Loan. Assume further that there is a payment for the entire indebtedness on
Wednesday, January 27. If the average Treasury Constant Maturities Percentage
(the "TCMP") as reported in Federal Reserve Statistical Release H.15 (519) for
the most current week prior to the prepayment (the week ending Friday, January
22) for Treasuries maturing in one year is 7.5% and in two years is 8.0%, then
the Loss of Yield would be calculated as follows:
Original Principal Balance $10,000,000.00
Fixed Original Monthly Payment 91,473.93
Outstanding Principal Indebtedness $ 9,793,615.00
Balance At Maturity $ 9,688,170.00
The net present value of the remaining payment stream (including the residual
principal balance) using the Discount Rate of 7.5% for the remaining 17 months
would be:
HPl2c calculation:
a) $9,688,170 FV (Principal Indebtedness at Maturity Date)
b) $91,473.93 PMT (monthly payment on original Principal Indebtedness)
c) 17 n (months to maturity)
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d) 7.50 gi (discount rate or TCMP)
e) PV = $10,185,424 CHS
f) Less $ 9,793,615 (Principal Indebtedness at date of prepayment)
= $ 391,809 (Loss of Yield)
(iii) Notice of Prepayment Irrevocable. Any written notice of an
intended prepayment permitted under any clause of this Section 2.3(b) shall be
final and irrevocable. The failure to prepay pursuant to such prepayment notice
on the date specified in the relevant clause of this Section 2.3(b) shall
constitute an Event of Default under this Agreement.
(iv) Prepayment During No Prepayment Period. The period of time
set forth in clauses (i) and (ii) of this Section 2.3(b) during which a Resort
Loan Party shall have no right to prepay any portion of such Resort Loan Party's
Resort Loan shall be referred to herein as the "No Prepayment Period." (1) Any
prepayment of the whole or any part of the outstanding Principal Indebtedness of
any Resort Loan prior to the end of the applicable No Prepayment Period, whether
voluntary or involuntary, including, without limitation, upon an Event of
Default under this Agreement or under any Mortgage or a default by any Resort
Loan Party under any of the other Loan Documents, and the acceleration of the
Maturity Date of any portion of the Loan by Lender, and the subsequent tender of
payment of the amount necessary to satisfy the entire Indebtedness hereof made
at any time by any one or more of the Resort Loan Parties, or by anyone on
behalf of any of the Resort Loan Parties when not permitted as provided in this
Section 2.3(b), or (2) any prepayment of the whole or any part of the
outstanding Principal Indebtedness of any Resort Loan after the end of the
applicable No Prepayment Period on other than the date set forth in clauses (i)
or (ii), as applicable (each such date being referred to herein as a "Scheduled
Prepayment Date"), whether voluntary or involuntary, shall constitute an evasion
of the prepayment terms of this Agreement and shall be deemed to be a voluntary
prepayment of the entire Loan, and to the extent permitted by law, any such
prepayment shall include an amount equal to five percent (5%) of the then
outstanding Principal Indebtedness (after deducting from such outstanding
Principal Indebtedness any amounts which Lender applies thereto from any CERA if
Lender takes possession thereof following such Event of Default or default)(the
"Evasion Prepayment Premium"); provided, however, that any prepayment in whole
or in part of the outstanding Principal Indebtedness of the Loan resulting from
application thereto of any Loss Proceeds required by Lender pursuant to the
provisions of this Agreement or any of the Mortgages shall not include an
Evasion Prepayment Premium, unless the events or circumstances leading up to,
and/or including, the event which causes such Loss Proceeds to be available are.
the result of any bad faith act or omission of any Resort Loan Party.
Notwithstanding anything contained in this Section 2.3 to the contrary, it is
expressly understood and agreed that the agreement by each Resort Loan Party (i)
not to prepay any Resort Loan prior to the end of the applicable No Prepayment
Period or on other than a Scheduled Prepayment Date, and (ii) to pay the Evasion
Prepayment Premium set forth herein for any such prepayment of the Principal
Indebtedness of the Loan prior to the
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end of the applicable No Prepayment Period or on other than a regularly
Scheduled Prepayment Date constitute bargained-for consideration. It is further
understood and agreed that the Evasion Prepayment Premium imposed herein shall
be construed, interpreted and enforced in such a manner as to give effect to the
Evasion Prepayment Premium required to be paid hereunder to the fullest extent
possible and permitted by law, with any portion of the Evasion Prepayment
Premium that may be unlawful or unenforceable being waived and automatically
stricken or otherwise changed to cause the Evasion Prepayment Premium, as
revised, to be otherwise enforceable. It is the express intent of the parties
hereto that under no circumstances shall the Principal Indebtedness of any
Resort Loan be prepaid by anyone prior to the end of the No Prepayment Period or
on other than a Scheduled Prepayment Date, except upon the required application
of any Loss Proceeds pursuant to the terms of this Agreement and the Mortgages,
without paying to Lender the Evasion Prepayment Premium required herein and
allowed by applicable law whether or not such prepayment occurs prior to or as a
result of a foreclosure sale. Acceptance of the Evasion Prepayment Premium shall
not prevent Lender from exercising any of its other rights and remedies under
the Loan Documents or otherwise.
/s/ Illegible
---------------------------------------------------------------
Initials of Authorized Representative of Each Resort Loan Party
BY INITIALING BELOW, EACH RESORT LOAN PARTY HEREBY EXPRESSLY ACKNOWLEDGES
AND UNDERSTANDS THAT, PURSUANT TO THE FOREGOING PROVISIONS OF THIS AGREEMENT AND
THE PROVISIONS OF EACH MORTGAGE, EACH RESORT LOAN PARTY HAS AGREED THAT NEITHER
SUCH RESORT LOAN PARTY NOR ANYONE ELSE HAS A RIGHT TO PREPAY THE OUTSTANDING
PRINCIPAL INDEBTEDNESS OF ANY RESORT LOAN IN WHOLE OR IN PART PRIOR TO THE END
OF THE APPLICABLE NO PREPAYMENT PERIOD OR ON OTHER THAN A SCHEDULED PREPAYMENT
DATE AND OTHERWISE IN STRICT COMPLIANCE WITH THIS SECTION 2.3(b), EXCEPT BY
REQUIRED APPLICATION OF ANY LOSS PROCEEDS PURSUANT TO THE PROVISIONS OF THIS
AGREEMENT AND THE MORTGAGES, WITHOUT PAYMENT OF A PREMIUM, AND THAT SUCH RESORT
LOAN PARTY, OR ANYONE ELSE MAKING SUCH PREPAYMENT, SHALL BE LIABLE FOR THE
PAYMENT OF THE EVASION PREPAYMENT PREMIUM, WHETHER SUCH PREPAYMENT IS VOLUNTARY
OR INVOLUNTARY OR RESULTS FROM THE ACCELERATION OF THE MATURITY HEREOF PRIOR TO
THE END OF THE NO PREPAYMENT PERIOD DUE TO SUCH RESORT LOAN PARTY'S DEFAULT OR
AN EVENT OF DEFAULT, INCLUDING, BUT NOT LIMITED TO, A TRANSFER OR FURTHER
ENCUMBRANCE OF ANY RESORT PROPERTY, OR OTHERWISE, AND WHETHER OR NOT SUCH
PREPAYMENT OCCURS PRIOR TO OR AS A RESULT OF A FORECLOSURE SALE. FURTHERMORE, BY
INITIALING BELOW, EACH RESORT LOAN PARTY HEREBY EXPRESSLY ACKNOWLEDGES AND
UNDERSTANDS THAT LENDER HAS MADE THE LOAN IN RELIANCE UPON SAID AGREEMENTS BY
EACH RESORT LOAN PARTY AND THAT LENDER WOULD NOT HAVE MADE THE LOAN WITHOUT
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SUCH AGREEMENTS BY EACH RESORT LOAN PARTY.
/s/ Illegible
----------------------------------------------------------------
Initials of Authorized Representative of Each Resort Loan Party.
(v) Defeasance of Barton Creek Resort Loan. Neither Homestead nor
Pinehurst shall have the right to defease any portion of the Principal
Indebtedness from time to time outstanding under their respective Resort Loans.
Barton Creek shall have no right to defease any portion of the Principal
Indebtedness from time to time outstanding under the Barton Creek Loan prior to
and including the second (2nd) anniversary of the Closing Date. From and after
the day following the second (2nd) anniversary of the Closing Date, Barton Creek
may defease, in whole but not in part, the outstanding Principal Indebtedness of
the Barton Creek Loan upon ninety (90) days' prior written notice (the
"Defeasance Notice") sent to and received by Lender at Lender's address as
provided in and in the manner specified in this Agreement, and Lender shall
cause the lien of the Mortgage encumbering the Barton Creek Property to be
released upon fulfillment of the following conditions precedent on or before the
first day of the Interest Period (the "Defeasance Date") immediately following
the ninetieth (90th) day after receipt by Lender of the Defeasance Notice:
(A) No Event of Default or Potential Default shall have
occurred and be continuing either at the time Lender receives the Defeasance
Notice or on the Defeasance Date;
(B) The Defeasance Date shall be no earlier than the later
to occur of (x) the first Business Day following the second (2nd) anniversary of
the Closing Date, or (y) the ninetieth (90th) day after receipt by Lender of the
Defeasance Notice;
(C) The DCR on the Defeasance Date for the Resort Loans
other than the Barton Creek Loan shall be no less than the greater of (i) the
DCR for the Resort Loans including the Barton Creek Loan immediately prior to
the Defeasance Date, or (ii) those set forth in the following table:
If Principal Indebtedness of the Resort
Loans other than the Barton Creek Loan
on the Defeasance Date Is Equal to or Less
Than DCR Shall Be no Less Than:
------------------------------------------ --------------------------
$125,000,000 2.00X
$175,000,000 1.85X
$250,000,000 1.75X
<PAGE>
(D) Lender shall have received interest accrued and unpaid
on the Principal Indebtedness of the Barton Creek Loan to and including the
Defeasance Date;
(E) Lender shall have received payment of all other sums due
under this Agreement with respect to the Barton Creek Loan, the Mortgage
securing the Barton Creek Loan (the "Barton Creek Mortgage") and the other Loan
Documents as they relate to the Barton Creek Loan;
(F) Lender shall have received the Defeasance Deposit; and
(G) Lender shall have received:
(I) a security agreement, in form and substance
satisfactory to Lender, creating a first priority lien on the Defeasance Deposit
and the U.S. Obligations (hereinafter defined) purchased on behalf of Barton
Creek with the Defeasance Deposit in accordance with the provisions of this
Section 2.3(b)(v) (the "Defeasance Security Agreement");
(II) a release of the Resort Property from the lien of
the Barton Creek Mortgage (for execution by Lender) in a form appropriate for
the jurisdiction in which the Barton Creek Property is located;
(III) a certificate executed by an Appropriate Officer
of CCI and Barton Creek, certifying that the requirements set forth in this
Section 2.3(b)(v) have been satisfied;
(IV) an opinion of counsel for Barton Creek in form
satisfactory to Lender stating, among other things, that Lender has a perfected
first priority security interest in the Defeasance Deposit and the. U.S.
Obligations purchased by Lender on behalf of Barton Creek;
(V) such endorsements to the ALTA Title Policies as
Lender may reasonably require ensuring the continuing first priority of the
Liens of the Mortgages securing the Resort Loans of the Non-Defeasing Resort
Loan Parties following the defeasance of the Barton Creek Mortgage; and
(VI) such other certificates, documents or instruments
as Lender may reasonably require;
(H) Barton Creek shall appoint Lender as its agent and
attorney-in-fact (said appointment being coupled with an interest) for the
purpose of using the Defeasance Deposit to purchase U.S. Obligations which
provide payments on or prior to, but as close as possible to, all successive
scheduled payment dates after the Defeasance Date upon which interest and
principal payments are required under this Agreement with respect to the Barton
Creek Loan (including the amounts due on the Barton Creek Loan Maturity Date)
and in amounts equal to the scheduled payments due on such dates and on such
Barton Creek Loan Maturity Date under this Agreement (the "Scheduled Defeasance
Payments").
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Barton Creek, pursuant to the Defeasance Security Agreement or other appropriate
documents, shall authorize and direct that the payments received from the U.S.
Obligations may be made directly to Lender and applied to satisfy the
obligations of Barton Creek under this Agreement and under the other Loan
Documents;
(I) Upon compliance with the requirements of this Section
2.3(b)(v), the Barton Creek Property shall be released from the lien of the
Barton Creek Mortgage and the pledged U.S. Obligations shall be substituted as
part of the Collateral securing obligations theretofore secured by the Barton
Creek Mortgage. Any portion of the Defeasance Deposit in excess of the amount
necessary to purchase the U.S. Obligations required pursuant to this Section
2.3(b)(v) shall be remitted to Barton Creek together with the release of the
Barton Creek Property from the lien of the Barton Creek Mortgage. In connection
with such release, Lender shall establish or designate a successor entity (the
"Successor Loan Party"), and Barton Creek shall transfer, delegate and assign
all obligations, rights and duties of Barton Creek under and to this Agreement
and all other Loan Documents together with the pledged U.S. Obligations to such
Successor Loan Party. Such Successor Loan Party shall assume the obligations of
Barton Creek under this Agreement and under the Defeasance Security Agreement
and Barton Creek shall be relieved of its obligations hereunder and thereunder.
Barton Creek shall pay to any such Successor Loan Party any consideration
required by such Successor Loan Party for assuming the obligations under this
Agreement and the Defeasance Security Agreement, but in any event at least
$1000.00. Barton Creek shall pay all costs and expenses incurred by Lender,
including Lender's attorneys' fees and expenses, in connection with the
defeasance of the Barton Creek Loan; and
(J) As used in this Agreement, the following terms shall
have the following meanings:
(I) "Defeasance Deposit" means an amount equal to the
remaining Principal Indebtedness on the Barton Creek Loan immediately prior to
the Defeasance Date, the Loss of Yield over the remainder of the term of the
Barton Creek Loan from the Defeasance Date to the Barton Creek Loan Maturity
Date, any costs and expenses incurred or to be incurred in the purchase of U.S.
Obligations necessary to meet the Scheduled Defeasance Payments and any revenue,
documentary stamp or intangible taxes or any other tax or charge due in
connection with the transfer of the obligations of Barton Creek or otherwise
required to accomplish the agreements of this Section 2.3(b)(v); and
(II) "U.S. Obligations" means direct non-callable
obligations of the United States of America; and
(III) In calculating DCR and Annual Debt Service for
purposes of this Section 2.3(b)(v), (a) the applicable determination date shall
be the Defeasance Date, (b) Net Operating Income shall be calculated for all
Resort Loan Parties, other than Barton Creek, for which there remains
outstanding a Resort Loan on the Defeasance Date (collectively, the
"Non-Defeasing Resort Loan Parties"), which Net. Operating Income shall be for
the four Fiscal Quarters ending immediately prior to the Defeasance Date and
shall be as set forth in the financial statements provided to Lender for
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<PAGE>
such four Fiscal Quarters, and (c) Annual Debt Service shall be calculated based
on the Resort Loans of the Non-Defeasing Resort Loan Parties.
(vi) Release of Barton Creek Mortgage. From and after the day
following the second (2nd) anniversary of the Closing Date, Barton Creek may
obtain a release of the Barton Creek Mortgage upon ninety (90) days' prior
written notice (the "Release Notice") sent to and received by Lender at Lender's
address as provided in and in the manner specified in this Agreement, and Lender
shall cause the lien of the Barton Creek Mortgage to be released upon
fulfillment of the following conditions precedent on or before the first day of
the Interest Period (the "Release Date") immediately following the ninetieth
(90th) day after receipt by Lender of the Release Notice:
(A) Barton Creek shall have paid Lender the outstanding
Principal Indebtedness of the Barton Creek Loan plus (x) all accrued and unpaid
interest thereon, and (y) all other sums due under this Agreement with respect
to the Barton Creek Loan, the Barton Creek Mortgage and the other Loan Documents
as they relate to the Barton Creek Loan;
(B) The Release Date shall be no earlier than the later to
occur of (x) the first Business Day following the second (2nd) anniversary of
the Closing Date, or (y) the ninetieth (90th) day after receipt by Lender of the
Release Notice;
(C) No Event of Default or Potential Default shall have
occurred and be continuing either at the time Lender receives the Release Notice
or on the Release Date;
(D) Lender shall have received evidence that the DCR for the
Resort Loans other than the Barton Creek Loan shall be no less than the greater
of (i) the DCR for the Resort Loans including the Barton Creek Loan immediately
prior to the Release Date, or (ii) those set forth in the following table:
If Principal Indebtedness of the Resort Loans
other than the Barton Creek Loan on the
Release Date Is Equal to or Less Than DCR Shall Be no Less Than:
--------------------------------------------- --------------------------
$125,000,000 2.00X
$175,000,000 1.85X
$250,000,000 1.75X
(E) Lender shall have received such endorsements to the ALTA
Title Policies as Lender may reasonably require ensuring the continuing first
priority of the Liens of the Mortgages securing the Resort Loans of the
Non-Releasing Resort Loan Parties following the release of the Barton Creek
Mortgage; and
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(F) Lender shall have received such other certificates,
documents or instruments as Lender may reasonably request.
(G) In calculating DCR and Annual Debt Service for purposes
of this Section 2.3(b)(vi), (a) the applicable determination date shall be the
Release Date, (b) Net Operating Income shall be calculated for all Resort Loan
Parties, other than Barton Creek, for which there remains outstanding a Resort
Loan on the Release Date (collectively, the "Non-Releasing Resort Loan
Parties"), which Net Operating Income shall be for the four Fiscal Quarters
ending immediately prior to the Release Date and shall be as set forth in the
financial statements provided to Lender for such four Fiscal Quarters, and (c)
Annual Debt Service shall be calculated based on the Resort Loans of the
Non-Releasing Resort Loan Parties.
(vii) Substitution of Barton Creek Property. Barton Creek may
request in a writing delivered to Lender at any time ("Substitution Request")
that a different property (a "Substitute Property") be substituted (a
"Substitution") for the Barton Creek Property (the "Original Property"). Lender
may in its sole discretion, but shall have no obligation to, approve such
Substitution Request; provided that Lender shall only consider a Substitution
Request upon fulfillment of the following conditions precedent:
(A) No Event of Default or Potential Default shall have
occurred and be continuing either at the time Lender receives the Substitution
Request or on the date the Substitution takes place as determined by Lender
("Substitution Date");
(B) Lender shall have received evidence that the DCR for the
Resort Loans (including the Substitute Property on a pro forma basis) after
giving effect to the Substitution shall be no less than those set forth in the
following table:
If Principal Indebtedness of the Resort Loans
immediately after Substitution Is Equal to or
Less Than DCR Shall Be no Less Than:
--------------------------------------------- --------------------------
$125,000,000 2.00X
$175,000,000 1.85X
$250,000,000 1.75X
(C) The appraised value of the Substitute Property on the
Substitution Date (as set forth in an MAI appraisal of the Substitute Property
approved by Lender in its sole discretion and dated as of the Substitution Date
(the "Approved Substitute Property MAI Appraisal")) shall be not less than both
(i) the appraised value of the Original Property as set forth in the appraisal
of the Original Property approved by Lender at the Closing of the Loan (the
"Approved Original Property Closing Date Appraisal"), and (b) One Hundred Ten
Percent (110%) of the appraised value of the Original Property on the
Substitution Date, as set forth in an MAI appraisal of the Original
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Property approved by Lender in its sole discretion and dated as of the
Substitution Date (the "Approved Original Property Substitution Date
Appraisal");
(D) The Net Operating Income for the Substitute Property
shall be equal to or greater than the historical Net Operating Income for the
Original Property, all as determined by Lender in its discretion;
(E) There shall be funded a reserve for capital expenditures
with respect to the Substitute Property in the amounts and at the times required
by Lender in its sole discretion;
(F) Lender shall have received:
(I) a release of the Original Property from the lien of
the Barton Creek Mortgage (for execution by Lender) in a form appropriate for
the jurisdiction in which the Original Property is located;
(II) a certificate executed by an Appropriate Officer
of CCI, Barton Creek and the owner of the Substitute Property (the "Substitute
Resort Loan Party"), certifying that the requirements set forth in this Section
2.3(b)(vii) have been satisfied;
(III) a Mortgage, in form and substance satisfactory to
Lender, creating a first priority lien in favor of Lender on the Substitute
Property to secure all the obligations of the Resort Loan Parties and the
Substitute Resort Loan Party under this Agreement, the Note and all other Loan
Documents;
(IV) an environmental indemnity agreement covering the
Substitute Property executed by the Substitute Resort Loan Party as Indemntior
in favor of Lender, in substantially the same form as the Environmental
Indemnities;
(V) an opinion of counsel for Barton Creek and for the
Substitute Resort Loan Party in form satisfactory to Lender and its counsel
covering such matters as Lender and its counsel may require in their sole
discretion;
(VI) such endorsements to the ALTA Title Policies as
Lender may reasonably require ensuring the first priority of the Lien of the
Mortgage on the Substitute Property and ensuring the continuing first priority
of the Liens of the Mortgages on each Resort Property of each Resort Loan Party,
other than Barton Creek, for which there remains outstanding a Resort Loan on
and after the date of the Substitution (collectively, the "Non-Substituting
Resort Loan Parties"); and
(VII) such other certificates, documents or instruments
as Lender may require, including, without limitation, an assumption of the
obligations of Barton Creek by the Substitute Resort Loan Party under all the
Loan Documents and such amendments to the Loan Documents as Lender may require
as a condition to Lender's consent to the Substitution, which consent may be
given or withheld by Lender for any reason or no reason in Lender's sole and
absolute discretion.
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<PAGE>
2.4 Manner of and Place of Payment. All payments made hereunder, under the
Note or under any other Loan Document shall be made in accordance with the
provisions hereof or thereof without setoff or counterclaim as against Lender,
in lawful money of the United States of America, free and clear of and without
deduction for any taxes, fees or other charges of any nature whatsoever imposed
by any taxing authority. All payments made hereunder, under the Note or under
any other Loan Document must be received by 11:00 a.m., California time and made
to Lender at its offices located at 700 Newport Center Drive, Newport Beach,
California 92660, Attention: Loan Services, or as Lender may designate from time
to time by notice. If a payment is received after the time specified above, the
payment shall be deemed received by Lender on the following Business Day. If any
payment is due and payable on other than a Business Day, that payment shall be
payable on the next succeeding Business Day.
2.5 Legal Tender. All amounts payable hereunder, under the Note or under
any other Loan Document are payable in lawful money or legal tender of the
United States of America.
Section 3. Disbursement of Loan Proceeds.
3.1 Funding of Loan.
(a) Upon the fulfillment of all the conditions set forth in this
Section 3 to the disbursement of the proceeds of the Loan, or the waiver of any
such conditions in writing, Lender shall disburse to or at the direction of each
Resort Loan Party the amount of the Resort Loan set forth for such Resort Loan
Party on Schedule II.
(b) If requested by CCI and the Resort Loan Parties, Lender shall fund
the proceeds of the Loan required to be funded by Lender pursuant to this
Agreement through an escrow. If funding is to take place through an escrow,
conditions denominated conditions precedent in this Agreement, other than
conditions that are by their terms, to be fulfilled no later than a specified
number of days before the Closing Date, may be fulfilled simultaneously with
such funding through escrow.
(c) Each Resort Loan Party and Lender hereby acknowledge and agree
that on the date of the execution and delivery of this Agreement by Lender, all
of the conditions to funding set forth in this Section 3 have been fulflled, and
that on such date, Lender is unconditionally obligated to fund the Loan.
3.2 Conditions Precedent to Funding of Loan. In addition to the
requirements, conditions and limitations set forth in Section 3.1, the
obligation of Lender to make the Loan shall be subject to fulfillment of the
following conditions precedent:
(a) The Loan Parties shall have provided, at their expense, to Lender
not more than thirty (30) days after the date of the Loan Commitment Letter nor
less than fifteen (15) days prior to the Closing Date (unless a different time
for delivery is otherwise indicated), the following items, each of which must
be prepared by parties reasonably approved by Lender, and must be in form and
content satisfactory to Lender in all respects:
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(i) With respect to each Resort Property, a current survey (a
"Survey") by a licensed surveyor reasonably satisfactory to Lender and in any
event complying with the requirements of the Title Company and any reinsurers,
which Survey shall include a legal description of such Resort Property, the
square footage of the land and Improvements (together with an indication as to
whether or not any portion of the Resort Property is located in a flood risk
zone), and certification to Lender and to the Title Company in a form reasonably
satisfactory to Lender. Lender may request that the Survey comply with the
current Minimum Standard Detail Requirements for ALTA/ACSM Land Title Surveys
(such a Survey being referred to herein as an "ALTA Survey") for any portion of
Barton Creek Property (but not for the Homestead Property and the Pinehurst
Property), but only if either (x) the preparation of such a Survey would not
delay the Closing of the Loan beyond June 3, 2003 or (y) Lender reasonably
determines that such a Survey is required to assure Lender that there are no
material issues concerning the location of Improvements on the Barton Creek
Property and the relation of such Improvements to the boundaries of the Barton
Creek Property and any easements or other Improvements located on the Barton
Creek Property.
(ii) With respect to each Resort Property, an ALTA Title Policy
together with (A) legible photocopies of all recorded title exceptions and a
full-size copy of all recorded subdivision, tract or plat maps of such Resort
Property approved (to the extent required by any Requirements of Law) by all
Governmental Authorities, if applicable, and (B) such endorsements as Lender may
require, including, without limitation, a zoning endorsement and endorsements
insuring against encroachments except those approved by Lender prior to Closing,
and endorsements insuring that the golf course and all other Improvements are
located within the legal descriptions attached to the Mortgages and insured
under such policy, in each case regardless of whether there is for the property
covered by the policy an ALTA Survey. The Title Company shall reinsure its
liability under such policy with such reinsurers and in such amounts as Lender
may require in its discretion.
(iii) With respect to each Loan Party, a current UCC Search
together with copies of any filed UCC-1 Financing Statements.
(iv) With respect to each Loan Party, searches of ownership of,
and Liens on, Intellectual Property in the appropriate governmental offices.
(v) With respect to each Loan Party, such
patent/trademark/copyright filings, duly executed and acknowledged where
required, as are reasonably requested by Lender in order to perfect Lender's
security interest in the Intellectual Property of such Loan Party.
(vi) With respect to each Resort Property, evidence of the
insurance coverage set forth in the Mortgage encumbering such Resort Property.
(vii) With respect to each Resort Property, evidence of terrorism
insurance fulfilling the requirements of Section 5.19 hereof.
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<PAGE>
(viii) Duplicate originals (or copies certified by the relevant
Resort Loan Party and the lessee thereto as being true copies of such originals)
of all Real Property Leases affecting each Resort Property as of the Closing
Date, together with (x) a subordination, nondisturbance and attornment agreement
signed by each lessee party to such Real Property Lease, and (y) current
estoppel certificates from all such lessees in occupancy at the time of Closing
on any portion of the Resort Property on forms prepared by Lender's counsel.
(ix) Duplicate originals (or copies certified by the relevant
Resort Loan Party and the lessor thereto as being true copies of such
originals), of all golf cart leases affecting any Resort Property or any
business located thereon as of the Closing Date.
(x) With respect to each Resort Property, a detailed operating
statement certified by an Appropriate Officer of the Resort Loan Party owning
such Resort Property and of CCI showing actual Fiscal Month totals of amounts
collected and expended for such Resort Property for 2002.
(xi) With respect to each Resort Property, a schedule of greens
fees in effect as of the Closing Date for non-members certified by an
Appropriate Officer of the Resort Loan Party owning such Resort Property.
(xii) With respect to each Resort Property, a club membership
roll (including a maturity report) dated not earlier than ten (10) days prior to
the Closing Date showing members' names, types of memberships, amount of
initiation deposits and initiation fees (and due dates), effective dates and all
membership dues, certified by an Appropriate Officer of the Resort Loan Party
owning such Resort Property as being accurate and complete in all material
respects.
(xiii) With respect to each Resort Property, copies of the most
recent bill for real property taxes and any other taxes constituting a lien on
such Resort Property, or other evidence that the Resort Property is segregated
on the tax rolls from all other property.
(xiv) A closing certification (each, a "Closing Certification")
executed by an Appropriate Officer of each Resort Loan Party covering such
matters as Lender may request, including, but not limited to, a representation
that there is no litigation pending against such Resort Loan Party or the Resort
Property owned by such Resort Loan Party and encumbered by a Mortgage.
(xv) With respect to any Resort Property that is part of a larger
parcel of land, evidence that the lien of the Mortgage on, or a foreclosure of
such lien and conveyance of the Resort Property of less than the entire parcel
will not violate any subdivision or lot split rules, regulations or ordinances
applicable to the Resort Property or the parcel of which the Resort Property is
a part.
(xvi) With respect to each Resort Property, a copy of any
reciprocal easement agreement or operating agreement affecting such Resort
Property together with a current estoppel certificate in form satisfactory to
Lender from the parties to any such agreement.
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<PAGE>
(xvii) With respect to each Resort Property, a copy of the
Management Agreement and of any other management or consulting agreement
covering all or any part of such Resort Property or any business conducted
thereon, together with one or more agreements, in form and substance
satisfactory to Lender executed by the Manager under the Management Agreement
and the managers and consultants under any of such other management or
consultant agreements, subordinating their rights to the payment of management
and consultant fees, waiving lien rights and agreeing to continue or terminate
performance, upon certain events specified therein.
(xviii) An opinion of counsel of each Loan Party satisfactory to
Lender covering such matters as Lender or its counsel may reasonably request.
(xix) With respect to each Resort Property, a copy of the
permanent certificate of occupancy or its equivalent for any hotel, restaurant,
clubhouse, any other outbuilding or any other Improvement issued by the
appropriate Governmental Authority.
(xx) An M.A.I. appraisal for each Resort Property prepared by an
appraiser reasonably satisfactory to Lender and otherwise in form and substance
and prepared as of a date reasonably satisfactory to Lender. The M.A.I
appraisals for all the Resort Properties shall support a value of not less than
Four Hundred Fifty Seven Million Ninety Thousand Dollars ($457,090,000.00) in
the aggregate.
(xxi) With respect to each Resort Property (other than the
Pinehurst Property), an inventory of all personal property with a market value
equal to or greater than $3,000 located on or used in connection with the Resort
Property or in which the Resort Loan Party that owns such Resort Property has an
interest; with respect to the Pinehurst Property, an inventory of all personal
property with a market value equal to or greater than $5,000 located on or used
in connection with the Pinehurst Property or in which Pinehurst has an interest.
(xxii) With respect to each Resort Property, copies of all
operating licenses and permits issued by Governmental Authorities having
jurisdiction over such Resort Property.
(xxiii) With respect to each Resort Property, a zoning compliance
letter issued by the Governmental Authority having jurisdiction over the Resort
Property for zoning purposes.
(xxiv) With respect to each Resort Property, a property condition
report in form and substance and prepared by a Person satisfactory to Lender.
(xxv) With respect to each Resort Property, at least 20 days
prior to Closing, a report acceptable to Lender evidencing the continued
availability of water to such Resort Property in quantities sufficient to
maintain the continuous operation of the golf course, hotel, restaurant,
swimming pools, fountains, water features and/or any other business or
businesses located on such Resort Property.
(xxvi) With respect to each Resort Property, evidence of the
availability, adequacy and status of connection of all utilities required for
the operation of
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such Resort Property other than water, including specifically, gas, electricity,
storm water, sewer and telephone services.
(xxvii) With respect to each Resort Property, at least 20 days
prior to Closing, if available, duplicate copies in reproducible form of final
"design" plans and specifications (including soils reports, supporting
engineering calculations and any related shop, fabrication and erection
drawings) approved by the Governmental Authority having jurisdiction over the
Resort Property and used in the construction of the Improvements located
thereon. Lender further shall have the right to make such inspections of each
Resort Property as it deems necessary to determine, to Lender's satisfaction,
that the Improvements were constructed and completed in accordance with the
plans and specifications and are structurally sound and in good physical
condition. Any review or approval by Lender of the plans and specifications and
any inspection by Lender of the Improvements on any Resort Property shall not
constitute an assumption of liability, a warranty or a representation by Lender
or any of its agents to any Person concerning any Resort Property or any
Improvements thereon.
(xxviii) With respect to each Resort Property, at least 45 days
prior to Closing, a preliminary site assessment report (each, a "Report") with
respect to Hazardous Substances covering such Resort Property prepared by a
qualified state registered professional environmental auditor. Each Report shall
include, but not be limited to: (i) past uses of the site, (ii) a determination
of the existence, identity, location and amount of asbestos, PCBs, petroleum and
petroleum products, and other Hazardous Substances, (iii) a mold assessment,
(iv) a determination of the existence at any time of any underground storage
tanks which may have contained Hazardous Substances, including petroleum or
petroleum products, (v) a determination of the likelihood of soil or groundwater
contamination on or under such Resort Property or from such Resort Property
under or onto neighboring property or from neighboring property onto or under
such Resort Property, (vi) an estimation of the cost of remediation of any
Hazardous Substances located on or under such Resort Property or released in
connection therewith and the health and safety risks resulting from the presence
of any Hazardous Substances on or under such Resort Property, and (vii)
disclosure of inclusion or potential inclusion of such Resort Property or
neighboring properties on any state or Federal listing of environmental problem
sites. Based upon Lender's review of a Report for a Resort Property or Lender's
inspection of such Resort Property, Lender may require as a further condition to
Closing the relevant Loan Party to provide further information or a detailed
environmental report or site characterization (which may include soil,
groundwater and mold sampling and testing), an update of the Report and/or a
Phase II environmental report.
(xxix) With respect to the Barton Creek Loan, (i) evidence
satisfactory to Lender that Barton Creek has entered into a Cap Agreement with a
Counterparty reasonably acceptable to Lender with a protected interest rate cap.
at or below 500 basis points over 30-Day LIBOR on the Closing Date, and (ii) an
assignment by Barton Creek to Lender of its interest in the Cap Agreement,
together with a written consent of the Counterparty to the Cap Agreement to such
assignment and to payment to Lender of all sums owing to Barton Creek under the
Cap Agreement without offset or deduction of any kind, except as expressly
provided in the Cap Agreement, on a form satisfactory to Lender. (a "Consent to
Assignment"). The Cap Agreement will be effective beginning with the
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first day of the calendar month following the Closing Date (or with the Closing
Date if the Closing Date shall occur on the first day of a calendar month) and
the term of the Cap will be for a minimum of two (2) years. The notional amount
for the Cap Agreement shall be the principal amount of the Barton Creek Loan and
all payment terms, including the Interest Determination Date and the Interest
Period, shall match the payment terms of the Barton Creek Loan.
(xxx) All of the Loan Documents and the Guaranty, each (except
the UCC-1 Financing Statements) to be duly executed by all of the parties
thereto (other than Lender).
(xxxi) Such documents and certificates as Lender or its counsel
may reasonably request relating to the organization, existence and good standing
of each Loan Party, the authorization of the Loan and the transactions
contemplated by the Loan Documents and any other legal matters relating to the
Loan Parties, the Loan Documents or the transactions contemplated thereby, all
in form and substance satisfactory to Lender and its counsel, including, without
limitation, the federal tax identification number of each Loan Party and such
certificates of existence, certificates of good standing, certified copies of
operating agreements, articles of incorporation, bylaws, board resolutions and
member authorizations including any amendments or restatements thereof and other
certificates or documents as Lender may require to evidence the authority of
each Loan Party to transact business from all appropriate state authorities, all
dated no more than thirty (30) days prior to the Closing Date.
(xxxii) With respect to each Resort Property, evidence that such
Resort Property is not located within any flood plain or special flood hazard
area, or evidence that the Resort Loan Party that owns such Resort Property has
applied for and received the flood insurance covering such Resort Property as
required by the Mortgage covering such Resort Property.
(xxxiii) With respect to each Resort Property, evidence that all
the streets furnishing access to such Resort Property have been dedicated to
public use and installed and accepted by applicable Governmental Authorities or
that such access is otherwise available pursuant to nonforfeitable easement
rights.
(xxxiv)With respect to each Loan Party, Lender shall have
received a certificate executed by an Appropriate Officer of such Loan Party, in
form and substance satisfactory to Lender, regarding the financial condition,
solvency and related matters of each of such Loan Parties.
(xxxv) Such other instruments, evidence or certificates as Lender
may reasonably request.
(b) Each Resort Loan Party shall have established a deposit account
with an Approved Financial Institution (individually and collectively referred
to herein as a "CERA"). Each Resort Loan Party shall have delivered to Lender a
control agreement satisfactory in form and substance to Lender and duly executed
by the Approved Financial Institution at which its respective CERA is
established (the "CERA Depository Bank"),
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and such other documents and instruments necessary to perfect a first priority
security interest in favor of Lender in such CERA. The Resort Loan Parties may
establish a single CERA.
(c) Each Resort Loan Party shall have delivered to Lender (i) a
control agreement (each a "Resort Loan Party Account Control Agreement" and
collectively the "Resort Loan Party Account Control Agreements") satisfactory in
form and substance to Lender and duly executed by such Resort Loan Party and its
respective Manager and by the approved Financial Institution (each a "Resort
Loan Party Bank" and collectively the "Resort Loan Party Bank") at which such
Resort Loan Party has established a bank account (each a "Resort Loan Party
Account"), and (ii) such other documents and instruments necessary to perfect a
first priority security interest in favor of Lender in such Resort Loan Party
Account. Lender shall have the right to direct the Resort Loan Party Bank to
remit sums in the Resort Loan Party Accounts to Lender upon the occurrence of an
Event of Default or pursuant to the provisions of Section 6.4 of this Agreement.
(d) Lender shall have been paid by the Loan Parties all fees and costs
incurred by Lender in connection with the Closing, including reasonable legal
fees, appraisal fees, inspection fees, and analysis costs.
(e) The representations and warranties made by each Loan Party, as
contained in this Agreement and in all other Loan, Documents and the Guaranty
shall be true and correct in all material respects as of the Closing Date.
(f) The covenants made by each Loan Party, as contained in this
Agreement and in all other Loan Documents, shall have been fully complied with
in all material respects.
(g) The Improvements located on each Resort Property shall not have
been materially injured, damaged or destroyed by fire or other casualty, nor
shall any material part of any Resort Property be subject to condemnation
proceedings or negotiations for sale in lieu thereof.
(h) There shall exist no Event of Default or Potential Default under
any of the Loan Documents.
(i) All conditions to the funding of the loans from Lender to each of
the Country Club Loan Parties that are party to that certain Loan Agreement
(Country Club Loans), dated of even date herewith, between Lender and each of
the Country Club Loan Parties named therein (as defined therein) shall have been
fulfilled (the "Country Club Loan Agreement").
(j) Lender shall have approved in its sole and absolute discretion the
restructuring by CCI and each of its consolidated Subsidiaries of any and all
unsecured Indebtedness of CCI or any such Subsidiaries.
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Section 4. Representations and Warranties of Each Resort Loan Party. As an
inducement to Lender to enter into the Loan Documents and to make the Loan as
provided herein, each Resort Loan Party represents and warrants to Lender that
as of the date hereof, and as of the Closing Date, each of the following
representations and warranties is and shall be true and correct in all material
respects:
4.1 Due Authorization; Organizational Documents.
(a) Each of Pinehurst and Barton Creek (i) is a corporation duly
formed, validly existing, in good standing and is qualified to do business under
the laws of the State of its incorporation, and is in good standing and
qualified to do business under the laws of the State where the Resort Property
owned by it is located, (ii) has the authority to own its respective Resort
Property, to enter into the Loan Documents and to consummate the transactions
contemplated thereby, and (iii) is qualified to do business in each jurisdiction
where it is required to be qualified in order to conduct its business.
(b) Homestead (i) is a limited liability company duly formed, validly
existing, in good standing and qualified to do business under the laws of the
State of its formation, and is in good standing and qualified to do business
under the laws of the State where the Resort Property owned by it is located,
(ii) has the authority to own its Resort Property, to enter into the Loan
Documents and to consummate the transactions contemplated thereby, and (iii) is
qualified to do business in each jurisdiction where it is required to be
qualified in order to conduct its business.
(c) True, correct and complete copies of the organizational documents
of each Resort Loan Party, including any and all amendments thereto, have been
delivered by the Resort Loan Parties to Lender.
(d) Each of the Resort Loan Parties has the corporate or other
necessary power and authority to make, deliver and perform the Loan Documents to
which it is a party, and to obtain extensions of credit hereunder, and has taken
all necessary corporate or other necessary action to authorize the borrowings
and other extensions of credit on the terms and conditions of this Agreement and
to authorize the execution, delivery and performance of the Loan Documents to
which it is a party.
4.2 Restricted Activities. Each Resort Loan Party is engaging only in the
following business activities: To (a) acquire, hold, own, manage, operate,
lease, improve, develop and dispose of ownership interests in such Resort Loan
Party's respective Resort Property, including appurtenances, improvements and
incidental tangible and intangible personal property; (b) conduct the businesses
operating on such Resort Property on the date hereof; and (c) conduct such
other activities incidental to the foregoing as such Resort Loan Party may
determine to be necessary or desirable.
4.3 No Default. No Resort Loan Party is in default in any respect under any
contract, lease, loan agreement, indenture, mortgage, security agreement or
other agreement or obligation to which it is a party or by which any of its
properties is bound which default could reasonably be expected to have a
Material Adverse Effect.
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4.4 Ownership. Each Resort Loan Party is the owner of, and has good and
marketable or indefeasible title to, all of its respective assets and none of
such assets is subject to any Lien other than Permitted Encumbrances.
4.5 Transactions with Affiliates. With the exception of the Management
Agreement relating to the Resort Property owned by a Resort Loan Party and
transactions expressly contemplated thereunder, each Resort Loan Party has not
purchased, acquired or leased any property from, or sold, transferred or leased
any property to, or loaned or advanced any money to, or borrowed any money from,
or guaranteed any obligation of, or acquired any stock, obligations, or
securities of, or entered into any merger or consolidation agreement, or any
management or similar agreement with, any Affiliate of such Resort Loan Party,
or entered into any other transaction or arrangement or made any payment to
(including, without limitation, on account of any management fees, services
fees, office charges, consulting fees, technical services charges or tax sharing
charges) or otherwise dealt with, in the ordinary course of business or
otherwise, any Affiliate of such Resort Loan Party on terms other than
arm's-length commercially reasonable terms.
4.6 No Violation. With respect to each Resort Loan Party, the execution,
delivery and performance of the Loan Documents to which such Resort Loan Party
is a party, such Resort Loan Party's obligations thereunder, the creation of the
security interests and Liens provided for in this Agreement and the other Loan
Documents relating to such Resort Loan Party's Resort Property and the
consummation of the transactions contemplated hereby (a) have been duly
authorized by all requisite action on the part of such Resort Loan Party and all
Related Persons, (b) do not violate the organizational documents of such Resort
Loan Party or such other Related Persons, (c) do not in any manner violate,
conflict with or constitute a default under any agreement, instrument or
document to which such Resort Loan Party is a party or any material agreement by
which it or such Resort Loan Party's Resort Property is bound, or violate any
Requirements of Law to which such Resort Loan Party or any of its Resort
Property is subject, and (d) do not result in the imposition of a Lien on any of
the Resort Properties other than Permitted Encumbrances.
4.7 Consents. With respect to each Resort Loan Party, except for the filing
of the UCC-1 Financing Statements and the recordation of the Mortgages, no
consents, approvals, filings, permits or notices of, from, with or to any Person
are required on the part of such Resort Loan Party in connection with the
execution of this Agreement or the performance any of the transactions
contemplated hereby that have not been duly obtained, made or given, as the case
may be.
4.8 Solvency. None of the transactions contemplated by this Agreement and
the other Loan Documents (collectively, the "Loan Transactions") and none of the
restructurings of any of the unsecured Indebtedness of CCI or any of its
consolidated Subsidiaries will be or have been made with an actual intent to
hinder, delay or defraud any present or future creditors of any Resort Loan
Party, and after giving effect to the Loan Transactions, the fair saleable value
of each of the Resort Loan Party's assets exceeds and will, immediately
following the closing of the Loan Transactions, exceed such Resort Loan Party's
total liabilities, including without limitation subordinated, unliquidated and
disputed liabilities and Contingent Obligations. Each Resort Loan Party was
generally paying its debts as they became due prior to the execution of this
Agreement, unless such debts were
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the subject of a bona fide dispute, and such Resort Loan Party believes that it
will be able to continue paying its debts as they become due following the Loan
Transactions, including Contingent Obligations reasonably likely to become due.
After giving effect to the Loan Transactions, each Resort Loan Party will not be
left with an unreasonably small capital for the business or transactions in
which it is engaged or about to be engaged.
4.9 No Bankruptcy Filing. No Resort Loan Party is contemplating either the
filing of a petition by it under any state or federal bankruptcy or insolvency
laws or the liquidation of all or a major portion of its assets or property, and
each Resort Loan Party has no knowledge of any Person contemplating the filing
of any such petition against it or against any other Resort Loan Party.
4.10 Tax Filing. Each Resort Loan Party has paid or made adequate provision
for the payment of all federal, state and local taxes, charges and assessments
payable by such Resort Loan Party, if any. Each Resort Loan Party believes that
its tax returns properly reflect the income and credits and losses of such
Resort Loan Party for the periods covered thereby, subject only to reasonable
adjustments required by the Internal Revenue Service or other applicable tax
authority upon audit.
4.11 Not Foreign Person. No Resort Loan Party is a "foreign person" within
the meaning of (S) 1445(f)(3) of the Code.
4.12 Defenses. The Loan Documents are not subject to any valid right of
rescission, setoff, abatement, diminution, counterclaim or defense as against
Lender and its successors and assigns in interest, including the defense of
usury, and the operation of any of the terms of the Loan Documents, or the
exercise of any right thereunder, will not render the Loan unenforceable, in
whole or in part, or subject to any right of rescission, setoff, abatement,
diminution, counterclaim or defense, including the defense of usury, and no
Resort Loan Party has taken any action which would give rise to the assertion of
any of the foregoing and no such right of rescission, setoff, abatement,
diminution, counterclaim or defense, including the defense of usury, has been
asserted with respect thereto.
4.13 Insurance. Each Resort Property is covered by insurance of the type
and in the amounts and provided by the carriers required by the Mortgage
encumbering such Resort Property.
4.14 Other Debt. No Resort Loan Party is obligated for any Indebtedness
other than the Loan, Indebtedness for trade payables, operating expenses
incurred in the ordinary course of business, and Capital Lease Obligations or
Indebtedness in connection with the purchase of Personal Property that do not
exceed the amount (both in terms of aggregate principal amount or the amount of
all capital lease payments, as the case may be, and in terms of the aggregate
amount of each periodic payment of both Capital Lease Obligations and purchase
money indebtedness) that is reasonable and customary for a business operation of
the type that is conducted on the Resort Property of such Resort Loan Party.
4.15 Enforceability. The Loan Documents executed by each Resort Loan Party
have been duly and validly authorized, executed and delivered by such Resort
Loan Party, and are valid, legal, binding and enforceable obligations of such
Resort Loan Party, subject
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to enforcement of bankruptcy, insolvency or other similar laws of general
application affecting the enforcement of creditor's rights and to general
principles of equity limiting the availability of equitable remedies, to the
extent the effect of such laws and principles are not waivable under law or in
equity.
4.16 Litigation. No litigation, investigation or proceeding before any
court, arbitrator or governmental authority, agency or subdivision is pending or
threatened against any Resort Loan Party other than those set forth on Schedule
4.16, none of which such proceedings would result in a Material Adverse Effect
if determined adversely to any such Resort Loan Party.
4.17 ERISA.
(a) During the five-year period ending on the Closing Date, with
respect to each Loan Party: (i) no ERISA Event has occurred, and no event or
condition has occurred or exists as a result of which it is probable any ERISA
Event would occur within the next year, with respect to any Plan; (ii) no
"accumulated funding deficiency," as such term is defined in Section 302 of
ERISA and Section 412 of the Code, whether or not waived, has occurred with
respect to any Plan; (iii) each Plan has been maintained, operated, and funded
in compliance with its own terms and in material compliance with the provisions
of ERISA, the Code, and any other applicable Federal or state laws; and (iv) no
lien in favor of the PBGC or a Plan has arisen or is reasonably likely to arise
on account of any Plan which could have a Material Adverse Effect.
(b) With respect to each Loan Party, except for liabilities set forth
in the financial statements delivered to Lender on or before the Closing Date,
the actuarial present value of all "benefit liabilities" (as defined in Section
4001(a)(16) of ERISA), whether or not vested, under each Plan subject to Title
IV of ERISA, as of the last annual valuation date prior to the date on which
this representation is made or deemed made (determined, in each case, in
accordance with Financial Accounting Standards Board Statement 87, utilizing the
actuarial assumptions used in such Plan's most recent actuarial valuation
report), did not materially exceed as of such valuation date the fair market
value of the assets of such Plan.
(c) Neither any Loan Party nor any ERISA Affiliate has incurred, or
could be reasonably expected to incur, any withdrawal liability under ERISA to
any Multiemployer Plan or Multiple Employer Plan. Neither any Loan Party nor any
ERISA Affiliate would become subject to any withdrawal liability under ERISA if
any Loan Party or any ERISA Affiliate were to withdraw completely from all
Multiemployer Plans and Multiple Employer Plans as of the valuation date most
closely preceding the date on which this representation is made or deemed made.
Neither any Loan Party nor any ERISA Affiliate has received any notification
that any Multiemployer Plan is in reorganization (within the meaning of Section
4241 of ERISA), is insolvent (within the meaning of Section 4245 of ERISA), or
has been terminated (within the meaning of Title IV of ERISA), and no
Multiemployer Plan is reasonably expected to be in reorganization, insolvent, or
terminated.
(d) Neither the officers of the Loan Parties nor the Loan Parties have
engaged in any prohibited transaction (within the meaning of Section 406 of
ERISA or Section 4975 of the Code) or breach of fiduciary responsibility that
would have a Material
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Adverse Effect, and no prohibited transaction or breach of fiduciary
responsibility has occurred with respect to a Plan which has subjected or may
subject any Loan Party or any ERISA Affiliate to any liability under Sections
406, 409, 502(i), or 502(l) of ERISA or Section 4975 of the Code that would have
a Material Adverse Effect, or under any agreement or other instrument pursuant
to which any Loan Party or any ERISA Affiliate has agreed or is required to
indemnify any Person against any such liability.
(e) Except for liabilities set forth in the financial statements
delivered to Lender on or before the Closing Date, neither any Loan Party nor
any ERISA Affiliate has any material liability with respect to "expected
post-retirement benefit obligations" within the meaning of the Financial
Accounting Standards Board Statement 106.
(f) To the best of any Loan Party's knowledge, neither the execution
and delivery of this Agreement nor the consummation of the Loan Transactions
will cause any Loan Party or any ERISA Affiliate to violate Sections 404, 406 or
407 of ERISA or result in the imposition of any tax pursuant to Section 4975 of
the Code.
(g) No employee welfare benefit plan (as defined in Section 3(1) of
ERISA ("Welfare Plan")) which any Loan Party or any ERISA Affiliate maintains,
sponsors, contributes to or is obligated to contribute to, provides benefits,
including, without limitation, death or medical benefits (whether or not
insured), with respect to any current or former employee of any such Loan Party
beyond their retirement or other termination of service other than (a) coverage
mandated by applicable law, (b) retirement or death benefits under any Plan or
(c) disability benefits under any Welfare Plan that have been fully provided for
by insurance or otherwise.
4.18 Investment Company. No Resort Loan Party is (i) an "investment
company", or a company "controlled" by "investment company", within the meaning
of the Investment Company Act of 1940, as amended, (ii) a "holding company" as
defined in, or otherwise subject to regulation under, the Public Utility Holding
Company Act of 1935, as amended or (iii) subject to regulation under any other
Federal or State statute or regulation or other Requirements of Law which limit
such Resort Loan Party's ability to incur the Indebtedness specifically
contemplated by this Agreement.
4.19 Financial Information. All historical financial data concerning each
Resort Loan Party, Related Persons and each Resort Property that has been
prepared and delivered to Lender is true, complete and correct in all material
respects and fairly presents the financial condition of the Persons covered
thereby and the Resort Properties as of the date of such reports. Since the
delivery of such data, except as otherwise disclosed in writing to Lender, there
has been no Material Adverse Change in the assets, liabilities or financial
position of any Resort Loan Party or such other Persons or the Resort
Properties, or in the results of operations of any Resort Loan Party. No Resort
Loan Party has incurred any obligation or liability, contingent or otherwise,
not reflected in such financial data.
4.20 Intellectual Property. Each Resort Loan Party owns, or has the right
to use, all trademarks, tradenames, copyrights, technology, know-how and
processes (the "Intellectual Property") necessary for each of them to conduct
its business as currently conducted. Set forth on Schedule 4.20 is a list of all
Intellectual Property registered with the
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United States Copyright Office or the United States Patent and Trademark Office
and owned by each Resort Loan Party or that any Resort Loan Party has the right
to use. Except as provided on Schedule 4.20, no claim has been asserted and is
pending by any Person challenging or questioning the use of any such
Intellectual Property or the validity or effectiveness of any such Intellectual
Property, nor does any Resort Loan Party know of any such claim, and the use of
such Intellectual Property by any Resort Loan Party does not infringe on the
rights of any Person. CCI neither owns nor has an interest in any Intellectual
Property other than software licenses.
4.21 Disclosure. Neither this Agreement nor any financial statements
delivered to Lender nor any other document, certificate or statement furnished
to Lender by or on behalf of any Resort Loan Party in connection with the
transactions contemplated hereby contains any untrue statement of a material
fact or omits to state a material fact necessary in order to make the statements
contained therein or herein not misleading.
4.22 No Burdensome Restrictions. No Resort Loan Party is a party to any
agreement or instrument or subject to any other obligation or any charter or
corporate restriction or any provision of any applicable law, rule or regulation
which, individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect.
4.23 Broker's Fees. No Resort Loan Party has any obligation to any Person
in respect of any finder's, broker's, investment banking or other similar fees
in connection with any of the Loan Transactions.
4.24 Labor Matters. Except as disclosed and described in Schedule 4.24
attached hereto, there are no collective bargaining agreements or Multiemployer
Plans covering the employees of a Loan Party as of the Closing Date and none of
the Loan Parties has suffered any strikes, walkouts or work stoppages within the
five years preceding the Closing Date.
4.25 Compliance with Environmental Laws. Except as disclosed and described
in Schedule 4.25 attached hereto:
(a) Each of the facilities and properties owned, leased or operated by
the Loan Parties, including, without limitation, the Resort Properties (the
"Real Properties") and all operations at the Real Properties (the "Businesses")
are in compliance with all applicable Environmental Laws, and there are no
conditions relating to the Real Properties or the Businesses that could give
rise to liability under any applicable Environmental Laws.
(b) None of the Real Properties contains, or has previously contained,
any Hazardous Substances at, on or under the Real Properties in amounts or
concentrations that constitute or constituted a violation of, or could give rise
to liability under, Environmental Laws.
(c) No Loan Party has received any written or verbal notice of, or
inquiry from any Governmental Authority regarding, any violation, alleged
violation, non-compliance, liability or potential liability regarding
environmental matters or compliance with Environmental Laws with regard to any
of the Real Properties or the Businesses, nor does any Loan Party have knowledge
or reason to believe that any such notice will be received or is being
threatened.
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(d) Hazardous Substances have not been transported or disposed of from
the Real Properties, or generated, treated, stored or disposed of at, on or
under any of the Real Properties or any other location, in violation of, or in a
manner that could give rise to liability under, any applicable Environmental
Law.
(e) No judicial proceeding or governmental or administrative action is
pending or threatened under any Environmental Law to which any Loan Party is or
will be named as a party or any of the Real Properties will be subject, nor
are there any consent decrees or other decrees, consent orders,