ATLANTIC GULF COMMUNITIES CORPORATION EXHIBIT TO THE MARCH 31, 1997 FORM 10-Q
EXHIBIT 10.1 UTILITY LOT TRUST AGREEMENT DATED AS OF DECEMBER 26, 1996.
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UTILITY LOT TRUST AGREEMENT
UTILITY LOT TRUST AGREEMENT, (this "Agreement) made and entered into as
of this 26th day of December, 1996, by and between ATLANTIC GULF COMMUNITIES
CORPORATION ("Atlantic Gulf" or the "Company") and the DIVISION OF FLORIDA LAND
SALES, CONDOMINIUMS, AND MOBILE HOMES (the "Division"), collectively the
"Parties", and shall be joined into by Peninsula State Title, a Florida Joint
Venture, as Trustee.
WITNESSETH:
WHEREAS, General Development Corporation ("GDC") was debtor and
debtor-in-possession in the proceeding for reorganization under Chapter 11 of
the United States Bankruptcy Code, 11 U.S.C. ss. 101, ET SEQ., filed in the
United States Bankruptcy Court for the Southern District of Florida (the
"Bankruptcy Court"), captioned IN RE GENERAL DEVELOPMENT CORPORATION, ET AL.,
Case No. 90-12231-BKC- AJC;
WHEREAS, the Restated Second Amended Joint Plan of Reorganization of
GDC, dated as of October 9, 1991, as modified on March 9, 1992 (the "Plan"), was
confirmed by the U.S. Bankruptcy Court for the Southern District of Florida on
March 27, 1992, and became effective on March 31, 1992;
WHEREAS, pursuant to the Plan, GDC has been renamed Atlantic Gulf
Communities Corporation;
WHEREAS, pursuant to the Homesite Purchaser Assurance Program and the
Class 14 Utility Service Program, Atlantic Gulf established, and the Division
approved the establishment of, the Homesite Program Utility Fund Trust, the
Class 14 Utility Fund Trust and the Division Class 14 Utility Fund Trust, all as
described in the Plan (the "Original Trusts"), all of which have been
consolidated into that certain Restated, Amended and Consolidated Trust
Agreement of even date herewith (the "Trust Agreement"). The funds and stock
held thereunder are collectively referred to herein as the "Utility Funds";
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WHEREAS, based upon the December 1996 "Review of Utility Reserve Pool
and Utility Reserve Funds" conducted by Milian, Xxxxx & Associates ("MSA"), the
assurance provided by the Utility Funds and the Lot Reserve provided in the
Original Trusts is no longer optimally structured;
WHEREAS, this Agreement is being entered into by the Company in
accordance with and to implement the utility service provisions of the Trust
Agreement;
WHEREAS, The Original Trusts have been consolidated and restated, and
thereby superseded and canceled into the Restated, Consolidated and Amended
Trust;
WHEREAS, the Company desires to establish this Agreement, as referenced
by the Trust Agreement as hereinbelow described, for the purposes set forth
below.
NOW, THEREFORE, in consideration of the mutual promises herein
contained the Parties agree as follows:
ARTICLE I
UTILITY LOT TRUST
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Section 1.1. THE TRUST. For all purposes of this Agreement the "Lot
Trust Assets" shall consist of the following assets, which assets shall be held
in trust by the Trustee (as hereafter defined) for the benefit of eligible
homesite purchasers as defined in the Trust Agreement, the Division and the
Company and all such assets shall be subject to the terms and conditions hereof
(the "Lot Trust"):
(a) the entire balance of utility satisfied lots from the existing Lot
Reserve Pool (1700 lots) as described in the Trust Agreement; and
(b) 4,300 additional utility satisfied lots transferred to the Lot
Trust by the Company.
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(c) said lots are referred to herein as the "Lots" or the "Lot Trust
Assets" and are more particularly described on Exhibit "A" attached.
Section 1.2. RELEASES, SUBSTITUTIONS AND WITHDRAWALS. The Trustee shall
deliver appropriate instruments to release or substitute Lots from this
Agreement and the lien created hereby and may withdraw lots from the Lot Trust,
within five (5) business days of the following:
(a) a lot owner, eligible to participate in the lot exchange program,
initiates an exchange request in accordance with, and satisfies all applicable
requirements of, the Class 14 Utility Service Program; or
(b) Upon delivery of the Company's certificate that the Lot to be
released is then under contract to be sold together with the Company's
designation of a substitute utility satisfied lot in the same community as the
Lot to be released which shall then be added to and encumbered by this
Agreement; or
(c) Upon delivery of the Company's certification to the Trustee
together with a copy of the Annual Evaluation or Quarterly Reports described in
Paragraph 3.1 or 3.2 hereof, confirming that there are excess Lots in the Lot
Trust, in which event the Company may withdraw such excess Lots so long as the
Lot Trust contains one lot for each remaining non-utility satisfied lot which is
eligible for exchange, provided the Company shall not make such request more
than quarterly; or
(d) Upon receipt of documentation from the Division consenting to the
withdrawal of additional Lots pursuant to the requirements of the Trust
Agreement.
ARTICLE II
TRUSTEE
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Section 2.1. DESIGNATION. Peninsula State Title, a Florida Joint
Venture, shall serve as Trustee for this Agreement.
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Section 2.2. COMPENSATION TO TRUSTEE. Trustee shall receive such
compensation as the Company may elect to pay by separate agreement for its
services in accepting this Trust Agreement.
Section 2.3. LIMITATION ON DUTIES. The Trustee undertakes to perform
only such duties as are expressly set forth herein, and no implied duties or
obligations shall be read into this Agreement against the Trustee.
Section 2.4. RELIANCE. The Trustee may act in reliance upon any writing
or instrument or signature which it, in good faith, believes to be genuine, may
assume the validity and accuracy of any statement or assertion contained in such
a writing or instrument and may assume that any person purporting to give any
writing, notice, advice, or instruction in connection with the provisions hereof
has been duly authorized to do so. The Trustee shall not be liable in any manner
for the sufficiency or correctness as to form, manner and execution, or validity
of any instrument deposited in this Trust, nor as to the identity, authority, or
right of any person executing the same; and its duties herein shall be limited
to the safekeeping of the Trust corpus and for the disposition of the same in
accordance with the terms of this Agreement.
Section 2.5. TRUSTEE'S RESPONSIBILITY TO MAKE ADVANCES OR INCUR OR PAY
EXPENSES. The Company shall be responsible for the payment of ad valorem taxes
or assessments for each Lot in the Lot Trust.
Section 2.6. TRUSTEE'S ADDITIONAL RESPONSIBILITY. The Company shall be
responsible for maintaining all lots in the Lot Trust free and clear from all
liens, mortgages, or other instruments or interests that would affect the
marketability of Lots in accordance with the terms of the lot exchange program
approved pursuant to the Plan.
Section 2.7. RESIGNATION OF TRUSTEE; SUCCESSOR TRUSTEE. Trustee may at
any time resign as Trustee and from its duties under this Trust Agreement by
giving at least thirty days's prior written notice to both Atlantic Gulf and the
Division, such resignation to be effective on the acceptance of appointment by a
successor Trustee selected by Atlantic Gulf. In addition, Atlantic Gulf may at
any time remove Trustee with or without cause by giving written notice to
Trustee, such removal to be effective upon the acceptance of appointment by a
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successor Trustee selected by Atlantic Gulf. If a successor Trustee shall not
have been appointed within thirty days of written notice of resignation or
removal, Trustee may apply to any court of competent jurisdiction to appoint a
successor Trustee to act until such time, in any, as a successor shall have been
selected and appointed by Atlantic Gulf. Any successor Trustee shall execute and
deliver to the predecessor Trustee an instrument accepting such appointment, a
copy of which shall also be delivered to Atlantic Gulf and the Division, and
thereupon such successor Trustee, without further act, shall become bound by the
terms of the Trust Agreement and be vested with all the estates, properties,
rights, powers, duties, and trusts of the predecessor Trustee; and such
predecessor Trustee shall duly assign, transfer, deliver, and pay over to such
successor Trustee all moneys and other property then held by such predecessor
Trustee under this Trust Agreement. Prior to the proposed successor Trustee's
execution and delivery of an instrument accepting appointment as successor
Trustee, Atlantic Gulf shall consult with the Division in respect of its
selection of a successor Trustee. Upon appointment, a memorandum of appointment
of successor trustee shall be recorded in the public record of every county in
which the trust assents are located.
Section 2.8. TRUSTEE'S RESPONSIBILITY WITH RESPECT TO LEGAL
PROCEEDINGS. Trustee shall be under no duty to take any action, to pay any money
or to incur any expenses in regard to any legal proceeding involving this Trust
Agreement or the Trust Assets unless it shall elect, in its absolute discretion,
to do so and be furnished with sufficient funds or be indemnified to its
satisfaction by Atlantic Gulf. If the Trustee is served with process or notice
of legal proceedings or of any other matters concerning this Trust Agreement or
the Trust Assets, the sole duty of the Trustee shall be to forward the process
or notice to Atlantic Gulf. In such case, Atlantic Gulf may defend said action
in the name of the Trustee with counsel reasonably acceptable to the Trustee;
provided, however, that the Trustee may at any time resign as such under this
Trust Agreement (but only in accordance with the provision of Section 2.7
hereof) or personally appear in said proceeding.
Section 2.9. TAXES AND TAX RETURNS. Atlantic Gulf shall prepare and
file returns and reports and pay all real estate and all other taxes or charges
payable with respect to the Trust Assets and to the earnings, avails and
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proceeds of the Trust Assets or based on its interest under this Trust
Agreement. If Atlantic Gulf fails to prepare and file returns and reports and/or
fails to pay taxes or charges with regard to the Trust Assets as required by
law, the Trustee shall have the right but not the obligation to file any tax
return or pay taxes relating to the Trust Assets which it, in its absolute
discretion, deems should be filed an/or paid by it. If the Trustee does file a
tax return, Atlantic Gulf will cooperate with the Trustee in providing such
information as is necessary for the proper and correct preparation of such
return and Atlantic Gulf will promptly pay to the Trustee the amount of said
taxes.
Section 2.10. TRUSTEE NOT REQUIRED TO GIVE WARRANTY. The Trustee shall
not be required to execute any instrument containing any covenants of warranty
that would result in liability to the Trustee in regard to the execution of any
such instrument.
Section 2.11. TRUSTEE NOT INDIVIDUALLY LIABLE. The Trustee shall have
no individual liability or obligation whatsoever with respect to any act done or
contract entered into or indebtedness incurred by it in dealing with the Trust
Assets or in otherwise acting under this Trust Agreement except to the extent of
the Trust Assets and any trust funds in the actual possession of the Trustee
which shall be applicable to the payment and discharge of such liability or
obligation. By way of illustration and not by way of limitation, the Trustee
shall be under no duty whatsoever to execute or enter into any instrument or
agreement which does not contain language acceptable to the Trustee providing
the Trustee shall have no personal liability whatsoever and that the liability
of the Trustee shall be limited solely to any Trust Assets that the Trustee
holds under this Trust Agreement.
ARTICLE III
DIVISION REVIEW
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Section 3.1. QUARTERLY REPORTS. The Company shall provide the Division
a quarterly report on or before 30 days following the end of each calendar
quarter detailing Sales Activity of all lots.
Section 3.2. ANNUAL EVALUATIONS. The Company shall on or before March 1
of each year provide the Division an annual report as of December 31, 1997, and
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each December 31 thereafter, of the prior year's activity in the lot exchange
program and the Lot Trust. At a minimum, this report shall identify:
(a) the beginning and ending balances of the Lot Trust;
(b) the beginning and ending number of non-utility satisfied lots which
remain eligible for the lot exchange program;
(c) the mechanisms by which utility satisfied lots not within the Lot
Trust were created and the number of utility satisfied lots created by each such
mechanism identified; and
(d) the above information shall be provided by specific lot number in
the form set forth in Exhibit "B."
Section 3.3. ANNUAL REVIEW. Based upon the information contained in the
Annual Evaluation, the Company and the Division shall annually review the
adequacy of the Lot Trust Assets. This review shall also consider any of the
Utility Funds and the extent of any remaining obligation to eligible lot owners.
As a result of this review, the Company and the Division may agree to:
(a) the free withdrawal of additional Lots from the Lot Trust;
(b) the free withdrawal of cash, securities or other assets from the
Trust Agreement.
(c) a reevaluation of the terms of this Agreement or the Trust
Agreement.
ARTICLE IV
MISCELLANEOUS
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Section 4.1. LAW GOVERNING. This Trust Agreement shall be construed in
accordance with, and governed by, the laws of the State of Florida.
Section 4.2. NOTICES. All notices or other writings required or
permitted to be given by either party to this Trust Agreement shall be in
writing, and shall be (a) hand delivered, (b) sent by certified or registered
mail, return receipt requested, or (c) sent by overnight courier service to the
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address set forth on the signature page hereof, and if delivered to Atlantic
Gulf, deliver a copy to Atlantic Gulf's legal department at the same address.
Such notice shall be deemed to be given in the case of hand delivery or
overnight courier, when received, and in the case of mailing by certified or
registered mail, return receipt requested, five days after said notice has been
deposited in the United States Mail, postage prepaid. Either party may change
its address to which said notices are to be sent by giving notice of same to the
other party in accordance with the provisions hereof.
Section 4.3 NO OTHER BENEFICIARIES. This Trust Agreement is solely for
the benefit of the Division, eligible homesite purchasers, and Atlantic Gulf. No
other person or persons shall have any rights or privileges under this Agreement
either as a third-party beneficiary or otherwise.
Section 4.4 TERM. This Agreement shall terminate upon the earlier of:
(a) full disbursement of the Lot Trust Assets;
(b) execution of a joint letter of direction to the Trustee executed by
the Division and the Atlantic Gulf declaring that the Lot Trust Assets are no
longer required to satisfy the Company's obligation under the Trust Agreement,
revoking the Lot Trust and terminating this Agreement and directing the return
of any remaining Lot Trust Assets to the Company;
Otherwise, this "Utility Lot Trust Agreement" shall be irrevocable during its
term.
Section 4.5 AMENDMENT.
(a) This Agreement may only be amended by an instrument signed by the
Company and Division. Notwithstanding the foregoing, the Trustee shall not be
obligated to execute any amendment hereof that it believes may result in it
incurring liability or that would delete any protection provided to it
hereunder.
(b) In the event the Division or the Company withholds approval of a
proposed amendment, the Amendment shall not become effective until the
requesting party obtains an order from a court of competent jurisdiction
approving the amendment.
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Section 4.6. OTHER TERMS. The captions for the paragraphs contained
herein are solely for the convenience of the Parties and do not, in themselves,
have any legal significance. Time is of the essence in this Agreement. In this
Agreement, the plural includes the singular and vice versa. This Agreement
constitutes the complete agreement between the Parties and there are no
representation, agreements, or understandings other than as set forth herein.
This Agreement may not be amended, changed, or modified except by a writing
signed by both Parties to this Agreement and in accordance with the procedures
set forth in section 4.5 hereof.
Section 4.7 INTERPRETATION. If either of the Parties hereto shall be in
disagreement about the interpretation of this Trust Agreement, or about the
rights and obligation of or the propriety of any action contemplated by Trustee
hereunder, such Party may (but need not), at its sole discretion, file a motion
in the Bankruptcy Court to resolve said disagreement. The Division and the
Company shall each bear its own expenses under this Agreement; provided,
however, that if either seeks Bankruptcy Court intervention as a result of
egregious conduct on the part of the other, the movant may seek to have the
Bankruptcy Court assess attorney's fees and costs against the party whose action
necessitated such proceeding.
Section 4.8. BANKRUPTCY COURT JURISDICTION. The Lot Trust Agreement,
and all assets of the trust created thereby, shall remain subject to the
continuing jurisdiciton of the Bnakruptcy Court pursuant to paragraph 3(f) of
The Final Decree of GDC, IN RE GENERAL DEVELOPMENT CORPORATION, ET AL., Case No.
90-12231-BKC-AJC (Bankr. S.D. Fla. Mar. 15, 1995), and Trustee shall comply with
the orders of the Bankruptcy Court. In the absence of an order of the Bankruptcy
Court to the contrary, Trustee shall have no affirmative duty to seek further
authority from the Bankruptcy Court to take any actions necessary under and
pursuant to this Agreement.
Section 4.9. LIEN OF DIVISION ON "LOT TRUST ASSETS". The Company
covenants that the Lot Trust Assets are not subject to any interest, direct or
subordinated, of either the Reducing Revolving Loan Agreement (dated as of
October 1, 1996) lender or the Secured Floating Rate Note Agreement (dated as of
October 1, 1996) note holders, and will not be subjected to any loan agreement
or mortgage, liens and the Lot Trust Assets as described on Exhibit "A" shall
remain free and clear from all liens other than real estate taxes and
assessments for the current year and other plats, easements, restrictions,
reservations or matters of record, and the Company hereby grants to the Division
security interest in the Lot Trust Assets described on Exhibit "A" which shall
be evidenced by the recordation of a Memorandum of this Agreement in form and
content acceptable to the Parties to be recorded in every county where the Lot
Trust Assets are located.
Section 4.10. ENTIRE AGREEMENT. This Agreement, together with the Trust
Agreement constitutes the entire agreement between the Parties.
Section 4.11. DISCLOSURE. The Division freely acknowledges that
Atlantic Gulf has advised that Peninsula State Title is a Florida joint venture,
the sole partners of which are (a) AG Title, Inc., a wholly owned subsidiary of
Atlantic Gulf, and (b) PST, Inc., a Florida corporation which is totally owned
by several attorneys licensed to practice law in Florida, none of whom are
Atlantic Gulf employees.
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IN WITNESS WHEREOF, the Parties hereto have executed this Trust
Agreement as of the day and year first above written.
ATLANTIC GULF COMMUNITIES CORPORATION
By: /s/ XXXXXX X. XXXXXXX
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Xxxxxx X. Xxxxxxx
Vice President - CFO
0000 Xxxxx Xxxxxxxx Xxxxx
Xxxxx, Xxxxxxx 00000
STATE OF FLORIDA, DEPARTMENT OF BUSINESS
AND PROFESSIONAL REGULATION, DIVISION OF
FLORIDA LAND SALES, CONDOMINIUMS AND
MOBILE HOMES
By: /s/ XXXXXX XXXXXX
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Xxxxxx Xxxxxx
Director, Division of Florida Land
Sales, Condominiums and Mobile
Homes
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxx 00000-0000
PENINSULA STATE TITLE, AS TRUSTEE
By: /s/ C. XXX XXXXXX
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C. Xxx Xxxxxx
00000 Xxxxxxx Xxxxxx, Xxxxx X
Xxxx Xxxxxxxxx, XX 00000
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