CASH MANAGEMENT AGREEMENT (this "Agreement") dated as of July
2, 1998 among PELICAN STRAND, LTD., having an address at c/o Golf Communities of
America 000 Xxxxx Xxxxxx Xxxxxx Firstate Tower, Suite 1515 Xxxxxxx, Xxxxxxx
00000 (the "Borrower"), U.S. GOLF MANAGEMENT, INC. x/x Xxxx Xxxxxxxxxxx xx
Xxxxxxx 000 Xxxxx Xxxxxx Avenue Firstate Tower, Suite 1515 Xxxxxxx, Xxxxxxx
00000 (the "Manager"), and CREDIT SUISSE FIRST BOSTON MORTGAGE CAPITAL LLC 00
Xxxxxxx Xxxxxx Xxx Xxxx, Xxx Xxxx 00000 (the "Lender")
WHEREAS, pursuant to the Loan Agreement of even date herewith
(the "Loan Agreement") by and between the Lender and the Borrower, the Lender
has provided financing (the "Loan") to the Borrower secured by the property or
properties owned by the Borrower and described in the Loan Agreement
(collectively, the "Property");
WHEREAS, in connection therewith, Lender, Borrower and the
banks maintaining the operating account or accounts of Borrower (each a
"Property Account"; each such bank, as more particularly defined herein, being a
"Clearing Bank") are simultaneously herewith executing a Clearing Bank
Instruction Letter in the form attached as Exhibit A hereto (together with any
modifications, amendments or replacements thereof, the "Instruction Letter"),
which provides that all Receipts (as defined in the Loan Agreement) from the
Property (as defined in the Loan Agreement) owned by Borrower shall be deposited
in the account named therein (as more particularly defined herein, the "Clearing
Account") and swept periodically into the accounts established hereunder;
NOW THEREFORE, in consideration of the mutual premises
contained herein and for other good and valuable consideration the sufficiency
of which is hereby acknowledged, the parties hereto agree as follows:
Section 1. Defined Terms.
(a) As used herein the following capitalized terms shall have
the respective meanings set forth below:
"Approved Budget" shall have the meaning ascribed to such term
in the Loan Agreement.
"Budgeted Expenses" shall mean for any period, the Operating
Expenses for the Property to the extent set forth in an Approved Budget and
actually incurred by Borrower minus payments into the Tax and Insurance Escrow
Account and the Replacement Reserve Account. Budgeted Expenses shall not include
any management fees payable to affiliates of Borrower.
"Business Day" shall have the meaning ascribed to such term in
the Loan Agreement.
"Cash Collateral Account" shall have the meaning ascribed to
such term in Section 2(a) hereof.
"Clearing Account" shall mean the Eligible Account designated
as the Clearing Account in an Instruction Letter into which all Receipts shall
be deposited in accordance herewith.
"Clearing Bank" shall mean the Eligible Bank at which the
Clearing Account is maintained pursuant to an Instruction Letter executed by
Lender, Borrower and such Eligible Bank.
"Collateral" shall mean the Cash Collateral Account, the Tax
and Insurance Impound Fund Account, all Permitted Investments and any and all
proceeds and products thereof.
"Collection Period" with respect to any Payment Date, shall
mean the period of days from the first day of the calendar month immediately
preceding the Payment Date to the last day of such calendar month. With respect
to the first Payment Date, the Collection Period shall commence on and include
the date hereof and end on and include the last day of the calendar month
immediately preceding the first Payment Date.
"Deposit Bank" shall mean the bank or banks selected by the
Lender to maintain the Cash Collateral Account.
"Eligible Account": Either (i) an account or accounts
maintained with an Eligible Bank or (ii) a segregated trust account maintained
by a corporate trust department of a federal depository institution or a state
chartered depository institution subject to regulations regarding fiduciary
funds on deposit similar to Title 12 of the Code of Federal Regulations *9.10(B)
which has corporate trust powers and is acting in its fiduciary capacity.
"Eligible Bank" shall mean a bank that (i) satisfies the
Rating Criteria and (ii) insures deposits held by such bank through the Federal
Deposit Insurance Corporation.
"Extraordinary Expense" shall mean an extraordinary operating
expense or capital expense not set forth in the Approved Budget or allotted for
in the Replacement Reserve Account.
"Instruction Letter" shall have the meaning ascribed to such
term in the Recitals.
"Loan" shall have the meaning ascribed to such term in the
Recitals.
"Loan Agreement" shall have the meaning ascribed to such term
in the Recitals.
"Loan Documents" shall have the meaning ascribed to such term
in the Loan Agreement.
"Lockbox" shall mean the post office box address established
by a Clearing Bank pursuant to the Instruction Letter for the receipt of all
revenues in the form of checks, money orders and similar instruments.
"Mortgage Subaccounts" shall have the meaning ascribed to such
term in Section 2(c).
"Note" shall have the meaning ascribed to such term in the
Loan Agreement.
"Obligations" shall mean any and all debt, liabilities and
obligations of the Borrower to the Lender pursuant to or in connection with the
Loan, whether now or hereafter existing, including without limiting the
generality of the foregoing, the indebtedness evidenced by the Note, all
interest accruing thereon, and any and all debt, liabilities and obligations of
the Borrower under the Loan Documents.
"Operating Account" shall have the meaning ascribed to such
term in Section 3(b)(iv) hereof.
"Payment Date" shall have the meaning ascribed to such term in
the Note.
"Payment Direction Letter" shall mean a letter in the form of
Exhibit B or Exhibit C annexed hereto, as the case may be.
"Permitted Investments" shall mean any investment suitable for
the investment of escrows and reserves established under mortgage loans included
in a Securitization in which some or all of the Securities issued are rated
"AAA" (or the equivalent rating) by the Rating Agencies, as the standards
therefor are established from time to time, or such investments which are
otherwise acceptable to the Lender.
"Person" shall have the meaning ascribed to such term in the
Loan Agreement.
"Property" shall have the meaning ascribed to such term in the
Recitals.
"Property Account" shall have the meaning ascribed to such
term in the Recitals.
"Rating Agencies" shall mean (i) any nationally-recognized
statistical rating organizations that provide a rating on any Securities on the
date of issuance of such Securities or (ii) prior to the issuance of the
Securities, S&P and any other nationally-recognized statistical rating
organizations that have been designated by the Lender in its sole discretion.
"Rating Criteria" with respect to any Person, shall mean that
(i) the short-term unsecured debt obligations of such Person are rated at least
"A-1" by S&P and, if rated by another Rating Agency, are rated in a
substantially equivalent category by such other Rating Agency, if deposits are
held by such Person for a period of less than 30 days, or (ii) the long-term
unsecured debt obligations of such Person are rated at least "AA-" by S&P and,
if rated by another Rating Agency, are rated in a substantially equivalent
category by such other Rating Agency, if deposits are held by such Person for a
period of 30 days or more.
"Receipts" shall have the meaning ascribed to such term in the
Loan Agreement.
"S&P" shall mean Standard & Poor's Ratings Services, a
division of The XxXxxx-Xxxx Companies, Inc.
"Securities" shall have the meaning ascribed to such term in
the Loan Agreement.
"Securitization" shall have the meaning ascribed to such term
in the Loan Agreement.
"Servicer" shall have the meaning ascribed to such term in the
Loan Agreement.
"Tax and Insurance Impound Fund Account" shall have the
meaning ascribed to such term in Section 2(e) hereof.
(b) The meanings given to capitalized terms defined herein
shall be equally applicable in both singular and plural forms of such terms.
(c) Capitalized terms used and not defined herein shall have
the respective meanings given to such terms in the Loan Agreement.
Section 2. Establishment of the Cash Collateral Account and
Tax and Insurance Impound Fund Account.
(a) The Lender has established and will maintain while the
Loan is outstanding a cash collateral account (which may be a book-entry
sub-account of an Eligible Account) (the "Cash Collateral Account") which shall
be entitled "Credit Suisse First Boston Mortgage Capital LLC as Mortgagee of
Pelican Strand Cash Collateral Account". In connection with a Securitization,
the Lender shall have the right to change the title of the Cash Collateral
Account in its reasonable discretion to reflect such Securitization. The Lender
shall, or shall cause the Servicer to, cause the Deposit Bank to deposit into
the Cash Collateral Account, all Receipts and other amounts transferred to the
Deposit Bank by a Clearing Bank from a Clearing Account.
(b) The Cash Collateral Account shall be an interest bearing
account. The interest rate with respect to funds held in the Cash Collateral
Account shall be the rate for such deposits as is customarily paid by the
Deposit Bank or Servicer, as applicable. All interest income or other earnings
on funds, if any, remaining in the Cash Collateral Account (other than the Tax
and Insurance Impound Fund Account, if such account is established as a
sub-account thereof) shall be for the benefit of the Borrower and credited to
the Cash Collateral Account. The Cash Collateral Account (other than the Tax and
Insurance Impound Fund Account, if such account is established as a sub-account
thereof) shall be assigned the federal tax identification number of the
Borrower, which number is set forth on Exhibit D hereto. Borrower shall provide
Lender or the Deposit Bank, at any time upon request of Lender, with a Form W-8
or W-9 to evidence Borrower is not subject to any back-up withholding under the
United States Internal Revenue Code. Prior to application in accordance with the
terms hereof, all amounts in the Cash Collateral Account shall remain an asset
of Borrower, subject to the lien and security interest granted Lender hereunder,
and subject to all of the terms and conditions of this Agreement and the other
Loan Documents.
(c) The following sub-accounts (collectively, the "Mortgage
Subaccounts") of the Cash Collateral Account shall be maintained on a
ledger-entry basis:
(i) "Tax and Insurance Impound Fund Subaccount";
(ii) "Replacement Escrow Fund Subaccount";
(iii) "Operating Expense Subaccount";
(iv) "Monthly Debt Service Subaccount";
(v) "Casualty and Condemnation Proceeds Subaccount";
(vi) "Extraordinary Receipts Subaccount"; and
(vii) "Borrower Remainder Subaccount".
Amounts allocated to the Mortgage Subaccounts shall be
disbursed in accordance with the terms of this Agreement and the Loan Agreement.
(d) (i) The bank, bank location or account number of the
Property Account shall not be changed without Lender's consent, which shall not
be unreasonably withheld, conditioned or delayed, provided that Borrower shall
have furnished to Lender an executed replacement Instruction Letter with respect
to the new bank, bank location and/or account. If any Clearing Bank shall
request any changes, modifications or supplements to any Instruction Letter to
conform to such Clearing Bank's customary practice or requirements, as the same
may change from time to time, then if such changes, modifications or supplements
are acceptable to Lender, Borrower shall execute and deliver to Lender such
instruments as the Clearing Bank shall reasonably request to effectuate such
modifications or changes. In the event the Borrower fails to execute an
Instruction Letter as provided above, Borrower hereby appoints the Lender as its
attorney-in-fact with full authority to enter into replacement Instruction
Letter(s) and to execute on behalf of the Borrower any new modified Instruction
Letter acceptable to the proposed Clearing Bank. All costs and expenses incurred
by the Lender to negotiate and execute any modified Instruction Letter shall be
paid by the Borrower.
(ii) Upon request of Lender from time to time, Borrower shall,
within ten (10) Business Days, establish a new Clearing Account at a
bank selected by the Lender and shall cause all funds in the existing
Clearing Account to be transferred to the new Clearing Account and any
future Receipts to be deposited in such new Clearing Account.
(e) The Lender may establish and maintain while the Loan is
outstanding at the Deposit Bank one or more accounts (which may be a sub-account
of the Cash Collateral Account) (the "Tax and Insurance Impound Fund Account")
which shall be entitled "Credit Suisse First Boston Mortgage Capital LLC as
Mortgagee of Golf Communities Tax and Insurance Impound Fund Account". Amounts
on deposit in the Tax and Insurance Impound Fund Account shall be disbursed at
the direction of the Lender in accordance with the Loan Agreement. The Tax and
Insurance Impound Fund Account shall be assigned the federal tax identification
number of the Lender.
(f) The Lender or the Servicer may (but shall not be obligated
to) direct the Deposit Bank to invest amounts allocated to the Cash Collateral
Account and Tax and Insurance Impound Fund Account in Permitted Investments
selected by the Lender. All earnings on such Permitted Investments (net, to the
extent applicable, of any interest income payable to Borrower as provided
herein) shall be for the benefit of the Servicer as additional servicing
compensation. If the Lender or Servicer elects to invest funds in such accounts
in Permitted Investments, then the Lender or Servicer, as applicable, shall have
liability for any loss in investments of funds that are invested in Permitted
Investments but no such loss or liability shall affect Borrower's obligations to
make all payments and deposits required to be made by Borrower under the Loan
Documents.
(g) It is the intention of the parties hereto that the entire
amounts deposited in the Cash Collateral Account and the Tax and Insurance
Impound Fund Account (or as much thereof as the Lender may reasonably arrange to
invest) may be invested in Permitted Investments, and, in such event, that such
accounts shall be so-called "zero balance" accounts. All funds in such Accounts
that are invested in a Permitted Investment are deemed to be held in such
Accounts for all purposes of the Loan Agreement and the other Loan Documents.
(h) In order to further secure the performance by the Borrower
of the Obligations and as a material inducement for the Lender to make the Loan
in accordance with the terms of the Loan Documents, the Borrower hereby (i)
requests that the Cash Collateral Account and the Tax and Insurance Impound Fund
Account be established on its behalf at the Deposit Bank in the names set forth
above and (ii) acknowledges that (A) the Cash Collateral Account and the Tax and
Insurance Impound Fund Account will be subject to the sole dominion, control and
discretion of the Lender (which may be exercised through the Servicer), subject
to the terms, covenants and conditions of this Agreement and the Loan Agreement,
(B) the Lender shall have the sole right to make withdrawals or transfers of
funds from the Cash Collateral Account and the Tax and Insurance Impound Fund
Account, (C) neither the Borrower nor any other Person claiming on behalf of or
through the Borrower shall have any right or authority, whether express or
implied, to make use of, or withdraw any funds, investments or other properties
from, the Cash Collateral Account or the Tax and Insurance Impound Fund Account,
or to give any instructions with respect to the Cash Collateral Account or the
Tax and Insurance Impound Fund Account.
Section 3. Allocation and Disbursement of Funds in the Cash
Collateral Account.
(a) Commencing on the first Business Day of each Collection
Period, the Lender or the Servicer shall, provided that no Event of Default
shall exist, allocate amounts deposited in the Cash Collateral Account from time
to time during such Collection Period in the following order and priority:
(A) IF THE BALANCE IN THE INTEREST RESERVE ACCOUNT SHALL BE AT
LEAST EQUAL TO THE INTEREST DUE UNDER THE NOTE ON THE NEXT PAYMENT DATE:
(i) First, to the Tax and Insurance Impound Fund Subaccount
until the amount on deposit therein is equal to the amount required to
be deposited in the Tax and Insurance Escrow Account on the next
Payment Date in accordance with Section 8.1 of the Loan Agreement;
(ii) Second, to the Replacement Escrow Fund Subaccount until
the amount on deposit therein is equal to the amount required to be
deposited in the Replacement Reserve Account on the next Payment Date
in accordance with Section 8.2 of the Loan Agreement;
(iii) Third, to the Operating Expense Subaccount until the
amount on deposit therein is equal to (x) the Budgeted Expenses, other
than management fees payable to affiliates of Borrower, and (y)
Extraordinary Expenses approved by Lender, such approval not to be
unreasonably withheld, conditioned or delayed, for the month in which
such Collection Period ends;
(iv) Fourth, to the Monthly Debt Service Subaccount until the
amount on deposit therein is equal to the interest due under the Note
on the next Payment Date;
(v) Fifth, to the Borrower Remainder Subaccount until the
amount on deposit therein is equal to the greater of (x) the amount, if
any, by which the Net Sales Proceeds shall exceed the Release Prices
for all Lots and Release Parcels released from the lien of the Mortgage
during the month in which such Collection Period ends pursuant to
Section 8.7 of the Loan Agreement and (y) the sum of $20,000 plus the
total of all such amounts that were required to be deposited under this
paragraph in any prior Collection Period to the extent that such
amounts were not previously deposited, until the aggregate amount of
such amounts deposited under this clause (y) shall equal $711,000;
(vi) Sixth, to the Monthly Debt Service Subaccount until the
amount on deposit therein is equal to the outstanding Indebtedness; and
(vii) Lastly, to the Borrower Remainder Subaccount.
(B) IF THE BALANCE IN THE INTEREST RESERVE ACCOUNT SHALL BE
LESS THAN THE INTEREST DUE UNDER THE NOTE ON THE NEXT PAYMENT DATE:
(i) First, to the Monthly Debt Service Subaccount until the
amount on deposit therein is equal to the interest due under the Note
on the next Payment Date; and
(ii) Second, to the Tax and Insurance Impound Fund Subaccount
until the amount on deposit therein is equal to the amount required to
be deposited in the Tax and Insurance Escrow Account (as defined in the
Loan Agreement) on the next Payment Date in accordance with Section 8.1
of the Loan Agreement;
(iii) Third, to the Replacement Escrow Fund Subaccount until
the amount on deposit therein is equal to the amount required to be
deposited in the Replacement Reserve Account (as defined in the Loan
Agreement) on the next Payment Date in accordance with Section 8.3 of
the Loan Agreement;
(iv) Fourth, to the Operating Expense Subaccount until the
amount on deposit therein is equal to (x) the Budgeted Expenses, other
than management fees payable to affiliates of Borrower, and (y)
Extraordinary Expenses approved by Lender, such approval not to be
unreasonably withheld, conditioned or delayed, for the month in which
such Collection Period ends;
(v) Fifth, to the Borrower Remainder Subaccount until the
amount on deposit therein is equal to the amount, if any, by which the
Net Sales Proceeds shall exceed the Release Prices for all Lots and
Release Parcels released from the lien of the Mortgage during the month
in which such Collection Period ends pursuant to Section 8.7 of the
Loan Agreement;
(vi) Sixth, to the Monthly Debt Service Subaccount until the
amount on deposit therein is equal to the outstanding Indebtedness; and
(vii) Lastly, to the Borrower Remainder Subaccount.
(C) NOTWITHSTANDING THE FOREGOING, PROCEEDS FROM THE SALE OF A
RELEASE PARCEL OR LOT IN AN AMOUNT EQUAL TO THE RELEASE PRICE FOR SUCH RELEASE
PARCEL OR LOT SHALL, UPON DEPOSIT IN THE CASH COLLATERAL ACCOUNT, BE
SPECIFICALLY ALLOCATED TO THE MONTHLY DEBT SERVICE ACCOUNT AND SUCH AMOUNT
SHALL, AT THE OPTION OF LENDER, EITHER, (I) BE APPLIED TO THE INDEBTEDNESS IN
ACCORDANCE WITH SECTION 8.7.3(a) OF THE LOAN AGREEMENT OR (II) BE APPLIED TO THE
SATISFACTION OF BORROWER'S OBLIGATION UNDER SECTION 8.12 OF THE LOAN AGREEMENT.
(b) The Lender or the Servicer shall, provided that no Event
of Default shall exist, disburse:
(i) Amounts allocated to the Tax and Insurance Impound Fund
Subaccount to the Tax and Insurance Escrow Account on each Payment Date
for further disbursement therefrom as set forth in the Loan Agreement;
(ii) Amounts allocated to the Replacement Escrow Fund
Subaccount to the Replacement Reserve Account on each Payment Date for
further disbursement therefrom as set forth in the Loan Agreement;
(iii) Amounts allocated to the Monthly Debt Service Subaccount
to the Lender on each Payment Date to pay amounts due under the Note
and the Loan Agreement;
(iv) Amounts allocated to the Operating Expense Subaccount on
the last Business Day of each week to the Operating Account set forth
on Exhibit D annexed hereto.
(v) Amounts allocated to the Borrower Remainder Subaccount on
each Payment Date to the account set forth on Exhibit D annexed hereto.
Section 4. Fees.
(a) The Borrower shall pay the fees of the Deposit Bank in
accordance with the customary fees charged by the Deposit Bank for the services
described herein, as such fees are established from time to time.
(b) Upon the request of the Borrower, the Lender shall direct
the Deposit Bank to include their fees in an account analysis statement.
Section 5. Termination.
(a) The Lender may replace the Deposit Bank with a new Deposit
Bank upon ten (10) days' notice to the Borrower. The Borrower hereby agrees that
it shall take all reasonable action necessary to facilitate the transfer of the
respective obligations, duties and rights of the Deposit Bank to the successor
thereof selected by the Lender in its sole discretion.
(b) The Lender shall terminate this Agreement upon the
satisfaction in full of the Obligations and return to Borrower all monies then
held in the Cash Collateral Account and the Tax and Insurance Impound Fund
Account after liquidating all Permitted Investments.
Section 6. Certain Rights and Obligations of Borrower.
(a) Lender may, at its option, require one or more of the
following at any time or from time to time:
(i) Borrower or the Manager shall immediately execute and
deliver to each of the credit card companies with which the Borrower or
the Manager has entered into merchant's or other credit card agreements
with respect to the Property a Payment Direction Letter in the form of
Exhibit B hereto directing that all Receipts payable with respect to
the Property in accordance with such merchant's agreements or otherwise
shall be transferred instead by wire transfer or the Automated
Clearinghouse System to the Clearing Bank for deposit in the Clearing
Account.
(ii) Borrower or the Manager shall immediately instruct all
Persons from whom Borrower shall receive regularly recurring payments
and that presently or hereafter maintain open accounts with Borrower or
the Manager with respect to the Property or with whom the Manager or
the Borrower presently or hereafter do business on an "accounts
receivable" basis with respect to the Property to deliver all such
regularly recurring payments due under such accounts to the Lockbox
established by the Clearing Bank pursuant to the Instruction Letter in
the form of cashier's checks or equivalent instruments for the payment
of money. Neither the Borrower nor the Manager shall direct any such
Person to make payments due under such accounts in any other manner.
(iii) Borrower or the Manager shall immediately execute and
deliver to any present or future tenant of the Property a Payment
Direction Letter in the form of Exhibit C hereto directing such tenant
to send all payments, whether in the form of checks, cash, drafts,
money orders or any other type of payment whatsoever, and whether of
rent or any other item payable to the Borrower, directly to the
Lockbox. The foregoing requirements need not be satisfied with respect
to any lease executed after the date hereof to the extent the terms and
conditions of the Payment Direction Letter are incorporated in such
lease.
(iv) If notwithstanding the provisions of this Section 6(a),
Borrower or Manager (or any affiliate thereof) receives any Receipts
then (x) Borrower or Manager (or such affiliate) shall be deemed to
hold such Receipts in trust for Lender and (y) the Borrower and the
Manager shall deposit with the Clearing Bank within one Business Day of
receipt all such Receipts received by the Borrower or the Manager (or
such affiliate).
(b) Upon request of Lender, Borrower shall deliver to Lender
such evidence as Lender may reasonably request to evidence that Borrower is
complying with the provisions of this Section 6(a). Without the prior written
consent of the Lender, neither the Borrower nor the Manager shall (i) terminate,
amend, revoke or modify any Payment Direction Letter in any manner or (ii)
direct or cause any credit card company or any tenant to pay any amount in any
manner other than as provided specifically in the related Payment Direction
Letter, respectively.
(c) The Borrower hereby pledges, transfers and assigns to the
Lender, and grants to the Lender, as additional security for the payment and
performance of the Obligations, a continuing perfected first priority security
interest in and to, and a first lien upon,
(i) the Cash Collateral Account, the Clearing Account, the Tax
and Insurance Impound Fund Account, the Property Account and all of the
Borrower's right, title and interest in and to all cash, property or
rights transferred to or deposited therein from time to time,
(ii) all earnings, investments and securities held in the Cash
Collateral Account and the Tax and Insurance Impound Fund Account in
accordance with this Agreement and
(iii) any and all proceeds of the foregoing. This Agreement
and the pledge, assignment and grant of security interest made hereby
shall secure payment of all amounts payable by the Borrower to the
Lender under the Note and the other Obligations. The Borrower
acknowledges that the Servicer, Clearing Bank and Deposit Bank are
acting as the agent of, and at the direction of, the Lender in
connection with the subject matter of this Agreement. The Borrower
further agrees to execute, acknowledge, deliver, file or do at its sole
cost and expense, all other acts, assignments, notices, agreements or
other instruments as the Lender may reasonably require in order to
effectuate, assure, secure, assign, transfer and convey unto the Lender
any of the rights granted by this Agreement and to more fully perfect
and protect any lien or security interest granted hereby.
(d) In its sole discretion, the Borrower may, from time to
time deposit amounts into the Cash Collateral Account in respect of any Mortgage
Subaccount from sources of the Borrower other than those received by the
Clearing Bank with respect to the then-current Collection Period; provided, that
if the Borrower deposits such amounts, the amounts deposited shall be subject to
all of the terms hereof as if not separately deposited by the Borrower, and may
not be withdrawn except as otherwise provided for in this Agreement. Nothing
contained herein shall impair or otherwise limit Borrower's obligations to
timely make the payments (including, without limitation, interest and principal)
required by the Note, the Loan Agreement and the other Loan Documents, it being
understood that such payments shall be so timely made in accordance with the
Loan Documents regardless of the amounts on deposit in the Clearing Account,
Cash Collateral Account and/or Tax and Insurance Impound Fund Account.
(e) Borrower shall use amounts allocated to the Operating
Expense Subaccount with respect to the payment of operating expenses or capital
expenditures only for payment of checks made by the Borrower for the payment of
expenses incurred in the ordinary course of business of the ownership and
operation of the Property or for the payment of expenditures approved by the
Lender whether in an Approved Budget or otherwise.
(f) If the actual Operating Expenses paid during any
Collection Period are less than the amount transferred to the Operating Account
during such Collection Period, the amount of such difference shall promptly be
deposited by Borrower back into the Cash Collateral Account, in any event no
later than thirty (30) days after the end of the applicable Collection Period,
such amount to be applied in accordance with Section 3 hereof when such sum is
redeposited into the Cash Collateral Account. Within thirty (30) days after the
end of each Collection Period, Borrower shall prepare and deliver to Lender a
financial statement in form and substance satisfactory to Lender in all material
respects setting forth all amounts expended for Operating Expenses during such
Collection Period, including showing variances from budget and setting forth a
short explanation of any variance in excess of ten percent (10%) of the budget
line item in question and identifying any payment made to an affiliate and the
reasons therefor. Each such financial statement shall be certified by an officer
of Borrower as being true, correct and complete in all material respects and
include a certification that all amounts transferred to the Operating Account
pursuant to this Agreement were expended for Operating Expenses or capital
expenditures in accordance with this Agreement or have been or are being
returned to the Cash Collateral Account as provided above. Borrower shall
promptly deliver to Lender such further documentation (including, without
limitation, invoices, canceled checks or copies of contracts) and information as
Lender may reasonably request regarding any payments described in Borrower's
financial statements. If Borrower shall fail to deposit any excess funds in the
Cash Collateral Account or provide its required financial statements or, after
written request of Lender, evidence of expenditures, in each case, within the
time periods provided in the preceding sentences and such failure continues for
ten (10) or more days after written notice of such failure, then in addition to
any other remedies which Lender may have with respect thereto, Lender may elect
not to fund the Operating Expense Subaccount from monies in the Cash Collateral
Account or Lender may continue to hold the funds in the Operating Expense
Subaccount until such failure is cured.
Section 7. Certain Rights of Lender.
(a) The parties agree that the Deposit Bank shall pay over to
the Lender all amounts deposited in any account maintained hereunder on demand,
without notice to the Borrower, provided, that in making such demand, the Lender
gives notice to the Deposit Bank, in writing, signed by the Lender or an
authorized agent thereof, that an Event of Default under the Loan Agreement has
occurred and is continuing. Lender shall give to Borrower a copy of any such
notice given to Deposit Bank, provided that failure to give any such copy shall
not affect any such notice to Deposit Bank. Notwithstanding the foregoing, the
Borrower shall not be deemed to have waived any rights the Borrower may have
against the Lender if it is determined that the Lender acted improperly.
(b) Lender may exercise in respect of the Collateral all
rights and remedies available to Lender hereunder or under the other Loan
Documents or otherwise available at law or in equity. Without limiting the
generality of the foregoing or the provisions of paragraph (a) above, upon the
occurrence and during the continuance of an Event of Default, Borrower
acknowledges and agrees that it will have no further right to request or
otherwise require Lender to disburse funds from the Clearing Account, the Cash
Collateral Account or the Tax and Insurance Impound Fund Account in accordance
with the terms of this Agreement, it being agreed that Lender may, at its
option,
(i) direct the Deposit Bank to continue to hold the funds in
the Cash Collateral Account and the Tax and Insurance Impound Fund
Account and/or
(ii) continue from time to time to apply all or any portion of
the funds held in the Cash Collateral Account or Tax and Insurance
Impound Fund Account to any payment(s) which such funds could have been
applied to prior to such Event of Default (or to pay Operating Expenses
directly), to the extent and in such order and manner as Lender in its
sole discretion may determine, and/or
(iii) direct that the Deposit Bank or Clearing Bank from time
to time disburse all or any portion of the funds held in the Cash
Collateral Account or the Tax and Insurance Impound Fund Account or
other Collateral then or thereafter held by the Deposit Bank or
Clearing Bank, as applicable, to Lender, in which event Lender may
apply the funds held in the Cash Collateral Account, the Tax and
Insurance Impound Fund Account or other Collateral to the Obligations
in any order and in such manner as Lender may determine in its sole
discretion.
(c) Upon the occurrence and during the continuance of any
Event of Default, Lender may, at any time or from time to time, collect,
appropriate, redeem, realize upon or otherwise enforce its rights with respect
to the Collateral, without notice to Borrower and without the need to institute
any legal action, make demand, exhaust any other remedies or otherwise proceed
to enforce its rights.
(d) No failure on the part of Lender to exercise, and no delay
in exercising, any right under this Agreement or the Loan Agreement shall
operate as a waiver thereof; nor shall any single or partial exercise of any
such right preclude any other or further exercise thereof or the exercise of any
other right under this Agreement or the other Loan Documents. The remedies
provided in this Agreement, the Note, the Loan Agreement and the other Loan
Documents are cumulative and not exclusive of any remedies provided at law or in
equity.
Section 8. Casualty and Condemnation Proceeds Subaccount;
Extraordinary Receipts Subaccount.
Notwithstanding anything to the contrary contained herein, the
following items of Receipts shall be deposited and held in the Mortgage
Subaccounts described below and shall be applied in the order of priority set
forth in this Section 8, and Borrower shall advise Lender at the time of receipt
thereof of the nature of such Receipt so that Lender shall have sufficient time
to instruct the Deposit Bank to deposit and hold such amounts in the appropriate
Mortgage Subaccount:
(a) Proceeds of any insurance, including, without limitation,
business interruption insurance, which amounts shall be deposited in the
Casualty and Condemnation Proceeds Subaccount and shall be applied (by
instructions of Lender or Servicer to the Deposit Bank) in accordance with the
provisions of the Loan Agreement applicable thereto.
(b) Condemnation awards, which amounts shall be deposited in
the Casualty and Condemnation Proceeds Subaccount and shall be applied (by
instructions of Lender or Servicer to the Deposit Bank) in accordance with the
provisions of the Loan Agreement applicable thereto.
(c) Real estate tax refunds (net of any reasonable and
customary fees and disbursements of tax certiorari counsel deducted from such
refund to pay such counsel's fee), which amount shall be deposited in the
Extraordinary Receipts Subaccount and shall thereafter be transferred (by
instructions of Lender to the Deposit Bank) to the Property Account to the
extent required to pay refunds due to any tenants of the Property (based on a
certificate of Borrower as to the tenants entitled to receive such refunds and
the amounts thereof), except Lender reserves the right to pay (or have the
Servicer pay) any such tenant directly using monies so deposited in the
Extraordinary Receipts Subaccount, in lieu of transferring such monies to the
Operating Account for such payment. Lender or Servicer shall apply any excess,
after the aforesaid payment, as if ordinary Receipts deposited in the Cash
Collateral Account. If the fees and disbursements of tax certiorari counsel
described in this paragraph (c) above shall not have been deducted from the real
estate tax refunds by such counsel prior to payment of such refunds to Borrower,
then such fees and disbursements may be paid as part of Budgeted Expenses,
provided such fees and disbursements are commercially reasonable.
(d) Damages or other payments in settlement of claims by
Borrower against third parties in connection with the Property, sums paid with
respect to a modification of any Lease or otherwise paid in connection with
Borrower taking any action under any Lease (e.g., granting a consent) or waiving
any provision thereof, and any other extraordinary event pursuant to which
Borrower receives payments or income (in whatever form) derived from or
generated by the use, ownership or operation of the Property, shall be deposited
in the Extraordinary Receipts Subaccount. With respect to any monies deposited
in the Extraordinary Receipts Subaccount pursuant to this paragraph (d), Lender
shall direct Deposit Bank to transfer such amounts to the Clearing Account and
to apply the amount so deposited as if ordinary Receipts to be applied in
accordance with the terms of this Agreement, provided that if any such payment
described in this paragraph (d) exceeds $100,000, such amounts shall be
transferred to the Clearing Account and applied as if ordinary Receipts only to
the extent that the funds in the Clearing Account for such month shall be
insufficient to make all payments to be made for such month prior to the
disbursement to the Borrower Remainder Subaccount.
Section 9. Successors and Assigns; Assignments; Agents.
(a) This Agreement shall bind and inure to the benefit of and
be enforceable by the Borrower, the Lender and the Manager and their respective
successors and assigns.
(b) The Lender shall have the right to assign or transfer
rights and obligations under this Agreement without limitation to any assignee
or transferee of the Loan and the Loan Documents. Any assignee or transferee
shall be entitled to all the benefits afforded the Lender under this Agreement;
provided, that such assignee or transferee shall upon written request deliver to
the other parties hereto written confirmation that such assignee or transferee
agrees to be bound by the terms of this Agreement and is also the assignee or
transferee of the Note and the other Loan Documents.
(c) The Borrower shall have the right to assign and transfer
its rights and obligations hereunder only with the prior written consent of the
Lender.
(d) Any duties or actions of the Lender hereunder may be
performed by the Lender or its agent(s), including without limitation, any
Servicer or trustee in a Securitization, which includes the Loan.
Section 10. Amendment.
This Agreement may be amended from time to time in writing by
all parties hereto. All amendments to this Agreement shall be in writing.
Section 11. Notices.
Notices to the parties hereto shall be addressed and delivered
in the manner set forth in the Loan Agreement. Unless otherwise expressly
provided herein, all such notices, to be effective, shall be in writing
(including by facsimile), and shall be deemed to have been duly given or made
(a) when delivered by hand or by nationally recognized overnight carrier, (b)
upon receipt after being deposited in the mail, certified mail and postage
prepaid or (c) in the case of facsimile notice, when sent and electronically
confirmed, addressed as set forth above.
Section 12. Limitation on Liability.
Lender shall not be liable for any acts, omissions, errors in
judgment or mistakes of fact or law, including, without limitation, acts,
omissions, errors or mistakes with respect to the Collateral, except for those
arising as a result of Lender's gross negligence or willful misconduct. Without
limiting the generality of the foregoing, except as otherwise expressly provided
for herein or as required by applicable law, Lender shall have no duty as to any
Collateral, as to ascertaining or taking action with respect to calls,
conversions, exchanges, maturities, tenders or other matters relative to any
Collateral, whether or not Lender has or is deemed to have knowledge of such
matters, or as to the taking of any necessary steps to preserve rights against
any parties or any other right pertaining to any Collateral. Lender is hereby
authorized by Borrower to act on any written instruction believed by Lender in
good faith to have been given or sent by Borrower.
Section 13. Mortgagee-in-Possession.
Borrower hereby confirms and agrees that notwithstanding the
provisions of this Agreement, Borrower retains sole control of the operation and
maintenance of the Property, subject to the obligations of Borrower under the
Loan Agreement, the Assignment of Leases and Rents and the other Loan Documents,
and Lender is not and shall not be deemed to be a mortgagee in possession.
Section 14. Governing Law.
THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK. IN WITNESS WHEREOF, the
parties hereto have executed this CASH MANAGEMENT AGREEMENT in several
counterparts (each of which shall be deemed an original) as of the date first
above written.
LENDER:
CREDIT SUISSE FIRST BOSTON MORTGAGE CAPITAL LLC,
a Delaware limited liability company
By:______________________________________
Name:
Title:
MANAGER:
U.S. GOLF MANAGEMENT, INC.
By: /s/ Xxxxxx Xxxxxxxxx
Name: Xxxxxx Xxxxxxxxx
Title: President
BORROWER:
PELICAN STRAND, LTD.,
a Florida limited partnership
By: Pelican Strand Development Corporation, its General Partner
By: /s/ Xxxxxx Xxxxxxxxx
Name: Xxxxxx Xxxxxxxxx
Title: President
