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Atlantic Gulf Communities Corporation Exhibit to the 1996 Form 10-K
Exhibit (c) 4. a. Second Amended and Restated Revolving Loan Agreement
dated as of September 30, 1996, as amended as of March 31, 1997
SECOND AMENDED AND RESTATED
REVOLVING LOAN AGREEMENT
DATED AS OF SEPTEMBER 30, 1996
BY AND AMONG
ATLANTIC GULF COMMUNITIES CORPORATION,
THE FINANCIAL INSTITUTIONS LISTED ON THE SIGNATURE PAGES HEREOF,
FOOTHILL CAPITAL CORPORATION,
AS AGENT
AND
FOOTHILL CAPITAL CORPORATION,
AS COLLATERAL AGENT
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SECOND AMENDED AND RESTATED
REVOLVING LOAN AGREEMENT
ATLANTIC GULF COMMUNITIES CORPORATION
TABLE OF CONTENTS
SECTION 1 DEFINITIONS.....................................................................................2
1.1 Certain Deferred Terms. ........................................................................2
1.2 Other Definitional Provisions..................................................................28
SECTION 2 AMOUNT AND TERMS OF COMMITMENTS................................................................28
2.1 Working Capital Loans..........................................................................28
2.2 Working Capital Notes..........................................................................29
2.3 Procedure for Working Capital Loan Borrowing...................................................30
2.4 Repayment of Working Capital Loans.............................................................30
2.5 Use of Proceeds of Working Capital Loans.......................................................31
2.6 Reducing Revolving Loans.......................................................................31
2.7 Reducing Revolving Notes.......................................................................31
2.8 Procedure for Reducing Revolving Loan Borrowing................................................32
2.9 Repayment of Reducing Revolving Loans..........................................................33
2.10 Use of Proceeds of Reducing Revolving Loans....................................................33
2.11 Mandatory Prepayments of Loans and Reduction of Reducing
Revolving Loan Commitments.....................................................................33
(a) Mandatory Prepayments of Loans........................................................33
(b) Mandatory Reductions of Reducing Revolving Loan
Commitments...........................................................................34
(c) Application of Mandatory Prepayment...................................................34
2.12 Optional Prepayments of Working Capital Loans; No Optional
Reductions of Working Capital Loan Commitments.................................................34
(a) Optional Prepayments of Working Capital Loan..........................................34
(b) No Optional Reduction of Working Capital Loan Commitments.............................34
2.13 Optional Prepayments of Reducing Revolving Loans and Optional
Termination or Reductions of Reducing Revolving Loan
Commitments....................................................................................34
(a) Optional Prepayments of Reducing Revolving Loans......................................34
(b) Optional Termination or Reduction of Reducing Revolving Loan
Commitment's..........................................................................35
2.14 Interest Rates and Payment Dates...............................................................35
(a) Rate of Interest......................................................................35
(b) Default Rate..........................................................................35
(c) Interest Payment Date.................................................................35
(d) Minimum Interest Rate.................................................................35
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2.15 Fees...........................................................................................36
(a) Unused Line Fees......................................................................36
(b) Activation Fees.......................................................................36
(c) [intentionally omitted]...............................................................36
(d) Financial Examination Fees............................................................36
(e) Servicing Fee.........................................................................36
2.16 Computation of Interest and Fees...............................................................37
2.17 Pro Rata Treatment and Payments................................................................37
(a) Apportionment of Payments.............................................................37
(b) Payments by Banks.....................................................................37
2.18 Requirements of Law............................................................................38
2.19 Taxes..........................................................................................38
(a) Payments to be Free and Clear; Gross-Up...............................................38
(b) Tax Certificates......................................................................39
2.20 [intentionally omitted]........................................................................39
2.21 Issuance of Letters of Credit and Banks' Purchase of Participations
Therein. ......................................................................................39
(a) Letters of Credit.....................................................................39
(b) Mechanics of Issuance.................................................................40
(c) Banks' Purchase of Participations in Letters of Credit................................41
(d) Letter of Credit Fees.................................................................41
(e) Drawings and Reimbursement of Amounts Drawn
Under Letters of Credit...............................................................42
(f) Payment by Banks of Unreimbursed Drawings Under
Letters of Credit 43
(g) Interest on Amounts Drawn Under Letters of Credit.....................................43
(h) Obligations Absolute..................................................................44
(i) Indemnification; Nature of Issuing Banks' Duties......................................45
(j) Nature of Issuing Banks' Duties.......................................................46
(k) Increased Costs and Taxes Relating to Letters of Credit...............................46
(l) L/C Guarantees........................................................................47
2.22 Early Termination by Company...................................................................48
SECTION 3 COLLATERAL ....................................................................................48
3.1 Liens in Subsidiary Stock, Contract Receivables, Real Property and Personal
Property.
3.2 Security Documents.............................................................................49
(a) Stock Pledge..........................................................................49
(b) Homesite Contracts Receivables and Commercial Receivables.............................49
(c) Real Property.........................................................................50
(d) Joint Venture Pledge..................................................................50
(e) Personal Property.....................................................................50
(f) Additional Acts.......................................................................51
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3.3 Section 365(j) Property........................................................................52
3.4 [intentionally omitted] .......................................................................52
3.5 Subordinations and Releases of Mortgage Liens..................................................52
3.6 Guarantees.....................................................................................53
3.7 [intentionally omitted]........................................................................53
SECTION 4 REPRESENTATIONS AND WARRANTIES.................................................................53
4.1 Financial Condition............................................................................53
4.2 No Material Adverse Change.....................................................................54
4.3 Corporate Existence; Compliance with Law.......................................................54
4.4 Corporate Power; Authorization; Enforceable Obligations........................................55
(a) Company...............................................................................55
(b) Subsidiaries..........................................................................55
4.5 No Legal Bar...................................................................................56
4.6 No Material Litigation.........................................................................56
4.7 No Default.....................................................................................56
4.8 Ownership of Property; Liens...................................................................56
4.9 Intellectual Property..........................................................................57
4.10 Taxes..........................................................................................57
4.11 Federal Regulations............................................................................57
4.12 ERISA..........................................................................................58
4.13 Investment Company Act; Other Regulations......................................................58
4.14 Subsidiaries and Joint Ventures................................................................59
4.15 Environmental Matters..........................................................................59
4.16 Indebtedness...................................................................................60
4.17 Contingent Obligations.........................................................................60
4.18 Restitution Program and Final Judgment.........................................................60
4.19 Certain Fees...................................................................................60
4.20 Disclosure.....................................................................................61
4.21 Insurance......................................................................................61
4.22 Total Real Property Matters....................................................................61
4.23 Reorganization Proceedings.....................................................................61
4.24 Excluded Subsidiaries; Unrestricted Subsidiaries...............................................62
4.26 Bank Accounts..................................................................................62
4.27 Utility Fund Trusts............................................................................63
4.28 Eligible Receivables and Eligible JV Receivables...............................................63
4.29 SPUD Subsidiaries..............................................................................63
4.30 DRI and Zoning Matters.........................................................................63
SECTION 5 CONDITIONS PRECEDENT...........................................................................63
5.1 Conditions to Effectiveness of this Agreement..................................................63
(a) Loan Documents........................................................................63
(b) Corporate Proceedings of Company......................................................64
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(c) Corporate Proceedings of the Subsidiaries.............................................64
(d) Corporate Documents...................................................................64
(e) Other Documents.......................................................................65
(f) No Violation..........................................................................65
(g) Consents, Authorizations, and Filings.................................................65
(h) Legal Opinions........................................................................65
(i) Certification as to Environmental Matters.............................................66
(j) Continued Perfection of Security Interests............................................66
(k) Real Property Matters.................................................................66
(l) Purchase Agreement....................................................................67
(m) Secured Floating Rate Note Agreement and Secured
Cash Flow Note Agreement..............................................................67
(n) Acknowledgment Agreement..............................................................67
(o) Evidence of Insurance.................................................................67
(p) No Material Adverse Effect............................................................67
(q) Intercreditor Agreement...............................................................67
(r) Fees..................................................................................68
(s) Recapitalization Transactions.........................................................68
(t) Change of Collateral Agent............................................................68
(u) Amendment of Certain Loan Documents...................................................68
(v) Other Matters.........................................................................68
5.2 Conditions to Each Loan and Issuance of Each Letter of Credit..................................68
(a) Representations and Warranties........................................................68
(b) No Default............................................................................69
(c) Additional Security Documents: Other Documents.......................................69
(d) Officer's Certificate.................................................................69
(e) Additional Matters....................................................................69
(f) Reducing Revolving Loans..............................................................69
5.3 Conditions Subsequent..........................................................................69
(a) Real Property Matters Regarding Unsold Designated Raw Land............................69
(b) Tax Servicing Contracts...............................................................70
(c) Company Operating Account Control Agreement...........................................70
SECTION 6 AFFIRMATIVE COVENANTS..........................................................................70
6.1 Financial Statements...........................................................................70
6.2 Certificates; Other Information................................................................72
6.3 Payment of Obligations.........................................................................74
6.4 Conduct of Business and Maintenance of Existence...............................................74
6.5 Maintenance of Property; Insurance.............................................................74
6.6 Inspection of Property; Books and Records; Appraisals..........................................74
6.7 Notices........................................................................................75
6.8 Environmental Laws.............................................................................75
6.9 Business Plan..................................................................................76
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6.10 [intentionally omitted]........................................................................76
6.11 Dividends from Subsidiaries....................................................................76
6.12 Supplemental Reports Regarding Real Property...................................................77
6.13 Compliance with Laws...........................................................................77
6.14 Other Notices..................................................................................77
6.15 Company Operating Account Control Agreement....................................................78
SECTION 7 NEGATIVE COVENANTS.............................................................................78
7.1 Maintenance of Consolidated Net Worth..........................................................78
7.2 Limitation of Indebtedness.....................................................................79
7.3 Limitation on Liens............................................................................80
7.4 Limitation on Guarantee Obligations............................................................82
7.5 Limitations on Fundamental Changes.............................................................82
7.6 Limitation on Sale of Assets...................................................................82
7.7 Limitation on Dividends........................................................................83
7.8 Limitation on Capital Expenditures.............................................................83
7.9 Limitation on Investments, Loans, and Advances.................................................84
7.10 Limitation on Optional Payments and Modifications of Debt Instruments..........................85
7.11 Transactions with Affiliates...................................................................85
7.12 Sale and Leaseback.............................................................................86
7.13 Fiscal Year....................................................................................86
7.14 Limitation on Negative Pledge Clauses..........................................................86
7.15 Deviation from Business Plan...................................................................86
7.16 Unsold Housing Inventory.......................................................................86
7.17 Limitation of Bank Accounts....................................................................86
7.18 Venture Subsidiaries and Joint Ventures........................................................87
7.19 [intentionally omitted]........................................................................87
7.20 [intentionally omitted]........................................................................87
7.21 [intentionally omitted]........................................................................87
SECTION 8 EVENTS OF DEFAULT; REMEDIES....................................................................87
8.1 Events of Default; Remedies....................................................................87
SECTION 9 AGENTS.........................................................................................91
9.1 Appointment of Agent...........................................................................91
9.2 Appointment of Collateral Agent................................................................92
9.3 [intentionally omitted]........................................................................92
9.4 Delegation of Duties...........................................................................92
9.5 Exculpatory Provisions.........................................................................93
9.6 Reliance by Agents.............................................................................93
9.7 Notice of Default..............................................................................94
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9.8 Non-Reliance on Agents and Other Banks.........................................................94
9.9 Indemnification................................................................................95
9.10 [intentionally omitted]........................................................................95
9.11 Agent in its Individual Capacity...............................................................95
9.12 Successor Agents...............................................................................95
SECTION 10 MISCELLANEOUS..................................................................................96
10.1 Amendments and Waivers.........................................................................96
10.2 Notices........................................................................................97
10.3 No Waiver: Cumulative Remedies................................................................98
10.4 Survival of Representations and Warranties.....................................................98
10.5 Payment of Expenses and Taxes..................................................................98
10.6 Successors and Assigns: Participations; Purchasing Banks......................................99
10.7 Adjustments; Set-Off..........................................................................101
10.8 Appointment of Agent as Company's Lawful Attorney.............................................102
10.9 Counterparts..................................................................................102
10.10 Severability..................................................................................103
10.11 Integration...................................................................................103
10.12 Governing Law.................................................................................103
10.13 Submission to Jurisdiction; Waivers...........................................................103
10.14 Acknowledgments...............................................................................104
10.15 Waivers of Any Jury Trial.....................................................................105
10.16 Confidentiality...............................................................................105
10.17 Controlling Agreement.........................................................................106
10.18 Counsel to Collateral Agent...................................................................106
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SCHEDULES
Schedule E-1 Excluded Subsidiaries
Schedule L-1 Letters of Credit Outstanding on the Effective Date
Schedule N-1 Net Cash Flow
Schedule N-2 Net Operating Cash Flow
Schedule P-1 Principal Raw Land
Schedule U-1 Unrestricted Subsidiaries
Schedule 2.1 Working Capital Loan Commitments of Banks
Schedule 2.6 Reducing Revolving Loan Commitments of Banks
Schedule 4.1 Additional Liabilities of Company; Purchases and
Dispositions by Company
Schedule 4.2 Material Adverse Effect
Schedule 4.4 Consents and Authorizations
Schedule 4.6 Litigation
Schedule 4.7 Defaults
Schedule 4.10 Tax
Schedule 4.12 ERISA
Schedule 4.14(A) Subsidiaries
Schedule 4.14(B) Joint Ventures
Schedule 4.15 Hazardous Materials
Schedule 4.16 Indebtedness
Schedule 4.17 Guarantees
Schedule 4.21 Insurance
Schedule 4.24 Unrestricted Subsidiaries' Assets and Businesses
Schedule 4.26 Bank Accounts
Schedule 4.29 SPUD Subsidiaries
Schedule 4.30 Representations and Warranties Regarding DRI and
Zoning Matters
Schedule 5.1(k) Real Property Matters to be Delivered by the
Effective Date
Schedule 7.3 Liens
Schedule 7.17 Restricted Bank Accounts
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EXHIBITS
Exhibit A-1 Form of Acknowledgment Agreement
Exhibit A-2 Form of Activation Notice
Exhibit D-1 Form of Deposit Account Security Agreement
Exhibit I-1 Form of Intercreditor Agreement
Exhibit J-1 Form of Joint Venture Pledge Agreement
Exhibit N-1 Form of Notice of Issuance of Letter of Credit
Exhibit P-1 Form of Personal Property Security Agreement
Exhibit S-1 Form of Stock Pledge Agreement
Exhibit S-2 Form of Subsidiary Guarantee
Exhibit 2.1 Form of Working Capital Note
Exhibit 2.7 Form of Reducing Revolving Note
Exhibit 5.1(h)-1 Form of Legal Opinion of Arent Fox Xxxxxxx Xxxxxxx &
Xxxx, Counsel to Company
Exhibit 5.1(h)-2 Form of Legal Opinion of Corporate Counsel to Company
Exhibit 5.1(h)-3 Form of Legal Opinion of Greenberg, Traurig,
Hoffman, Lipoff, Xxxxx & Xxxxxxx, P.A., special
Florida Counsel to Company
Exhibit 5.1(h)-4 Form of Legal Opinion of Xxxxxxxxx & Xxxxxx, Special
Tennessee Counsel to Company
Exhibit 5.1(h)-5 Form of Legal Opinion of Annis, Mitchell, Xxxxxx,
Xxxxxxx & Xxxxx, P.A., Special Florida Counsel to
Agent and Collateral Agent
Exhibit 10.6 Form of Commitment Transfer Supplement
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SECOND AMENDED AND RESTATED
REVOLVING LOAN AGREEMENT
ATLANTIC GULF COMMUNITIES CORPORATION
THIS SECOND AMENDED AND RESTATED REVOLVING LOAN
AGREEMENT (this "AGREEMENT") is dated as of September 30, 1996 and entered into
by and among ATLANTIC GULF COMMUNITIES CORPORATION, a Delaware corporation,
formerly known as General Development Corporation ("COMPANY"), THE FINANCIAL
INSTITUTIONS LISTED ON THE SIGNATURE PAGES HEREOF (together with each financial
institution that may become a party to this Agreement as herein provided,
referred to herein individually as a "BANK" and collectively as "BANKS"),
FOOTHILL CAPITAL CORPORATION, a California corporation, as successor to Chemical
Bank as agent for Banks (hereinafter, in such capacity, together with any
successors thereto in such capacity, referred to as "Agent"), and FOOTHILL
CAPITAL CORPORATION, a California corporation, as collateral agent for Banks
(hereinafter, in such capacity, together with any successors thereto in such
capacity, referred to as "COLLATERAL AGENT"). All capitalized terms not
otherwise defined herein have the meanings given such terms in Section 1.
R E C I T A L S
WHEREAS, Company, the Original Banks and Chase, as agent for
the Original Banks (the "ORIGINAL AGENT"), are parties to that certain Working
Capital and Term Loan Agreement, dated as of March 31, 1992 (as amended and
modified to the Old Effective Date, the "ORIGINAL LOAN AGREEMENT");
WHEREAS, pursuant to that certain Purchase Agreement, dated as
of September 21, 1994 (the "OLD PURCHASE AGREEMENT"), by and among Banks and the
Original Banks, the Original Banks assigned all right, title and interest in and
to the Original Loan Agreement and all other related loan documents to Banks;
WHEREAS, it was a condition to Banks entering into the Old
Purchase Agreement with the Original Banks that the Original Loan Agreement be
amended and restated as provided in the Existing Loan Agreement;
WHEREAS, pursuant to that certain Purchase Agreement, dated as
of even date herewith (the "PURCHASE AGREEMENT"), by and among Foothill, and the
holders of the Existing Secured Floating Rate Notes, such holders have assigned
all right, title and interest in and to the Existing Secured Floating Rate Note
Agreement, the Existing Secured Floating Rate Notes, and all other related
documents to Foothill, it being understood that no repayment of the Existing
Secured Floating Rate Notes is being effected thereby;
WHEREAS, concurrently herewith, Company is entering into the
Recapitalization Transactions;
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WHEREAS, it is a condition to Foothill entering into the
Purchase Agreement with the holders of the Existing Secured Floating Rate Notes
that the Existing Loan Agreement be amended and restated as provided in this
Agreement and that the Existing Secured Floating Rate Note Agreement be amended
and restated as provided in the Secured Floating Rate Note Agreement;
WHEREAS, Banks desire to appoint Foothill Capital Corporation
as Agent hereunder and under the Guarantees and to serve as Collateral Agent for
Banks under the Security Documents; and
WHEREAS, the parties hereto desire to amend and restate the
Existing Loan Agreement in its entirety as provided in this Agreement, it being
understood that no repayment of the obligations under the Existing Loan
Agreement is being effected hereby, but merely an amendment and restatement in
accordance with the terms hereof.
NOW THEREFORE, in consideration of the premises and the
agreements, provisions and covenants herein contained, Company, Banks, Agent and
Collateral Agent agree as follows:
SECTION 1
DEFINITIONS
1.1 CERTAIN DEFERRED TERMS.
The following terms used in this Agreement shall have the following
meanings:
"ACKNOWLEDGMENT AGREEMENT" means that certain Acknowledgment Agreement
regarding certain Security Documents, dated the Effective Date, executed by
Company and its Subsidiaries listed on the signature pages thereof,
substantially in the form of Exhibit A-1.
"ACTIVATED AMOUNT" means: (a) as of any date of determination on or
before December 31, 1996, the amount, not to exceed $25,000,000, designated by
Company as the "Activated Amount" (and representing the maximum aggregate amount
of Reducing Revolving Loans that Company desires the Banks to be obligated to
make, subject to the terms and conditions hereof, during the Reducing Revolving
Loan Commitment Period) pursuant to the then most recent Activation Notice
received by Agent prior to 5:00 p.m. (Boston time) on December 31, 1996; and (b)
as of any date of determination thereafter, the Activated Amount designated
pursuant to the last Activation Notice received by Agent prior to 5:00 p.m.
(Boston time) on December 31, 1996 or, if higher, the aggregate amount of all
Reducing Revolving Loans (together with all accrued but unpaid interest and fees
then accrued thereon) outstanding as of December 31, 1996 as determined by Agent
and such determination shall be conclusive absent manifest error.
2.
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"ACTIVATION NOTICE" means a written notice from Company to Agent, in
the form of Exhibit A-2, pursuant to which Company designates an amount known as
the "Activated Amount" representing the maximum aggregate amount of Reducing
Revolving Loans that Company then desires the Banks to be obligated to make,
subject to the terms and conditions hereof, during the Reducing Revolving Loan
Commitment Period.
"ADJUSTED BORROWING BASE AMOUNT" means, as of any date of
determination, the sum of (a) the Borrowing Base, plus (b) an amount up to
$5,000,000 equal to the amount of unrestricted cash subject to a first-priority
Lien in favor of Collateral Agent for the benefit of Banks and the holders of
the Secured Floating Rate Notes.
"ADMINISTRATIVE CLAIMS" has the meaning assigned that term in Article I
of the Reorganization Plan.
"AFFILIATE" with respect to any Person, means (a) any other Person
which is a Subsidiary of such Person, (b) any other Person (and each Subsidiary
thereof) of which such Person is a Subsidiary, and (c) any other Person which is
under common control with such Percent.
"AG ASIA" means Atlantic Gulf Asia Holdings N.V. a Netherlands Antilles
corporation.
"AGENT" has the meaning assigned that term in the introductory
paragraph to this Agreement.
"AGREEMENT" means this Second Amended and Restated Revolving Loan
Agreement, as it may be amended and restated, supplemented or otherwise modified
from time to time
"ANNUAL NET INCOME" means income as shown on the consolidated
statements of income provided by Company under Section 6.1, but in no event less
than 0.
"APPLICABLE MARGIN" means 2% in respect of Working Capital Loans and 4%
in respect of Reducing Revolving Loans.
"AVAILABLE CASH" has the meaning assigned that term in Article I of the
Reorganization Plan.
"AVERAGE UNUSED PORTION OF THE REDUCING REVOLVING LOAN COMMITMENTS"
means, for any month for which a determination is to be made, (a) the average
amount of the Reducing Revolving Loan Commitments during such month, less (b)
the average Reducing Revolving Facility Usage during such month.
"AVERAGE UNUSED PORTION OF THE WORKING CAPITAL LOAN COMMITMENTS" means,
for any month for which a determination is to be made, (a) the average amount of
the Working
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Capital Loan Commitments during such month, less (b) the average Working Capital
Facility Usage during such month.
"BANK ACCOUNTS" means any and all deposit accounts, money market
accounts and any other deposits and investments of Company or any Subsidiary
held in any bank or other financial institution, any brokerage firm or any other
Person and all money, instruments, securities, documents and other investments
held pursuant thereto, whether now existing or owned or hereafter created or
acquired (exclusive of all but the residual, remainder or beneficial interest of
Company and its Subsidiaries in the Reserve Accounts, the Claims Disbursement
Account and all other escrow, restricted, custodial and fiduciary accounts, the
pledge of which by Company or any Subsidiary is prohibited by agreements
existing on the Effective Date or by law, as set forth in Schedule 7.17, which
may be amended from time to time by written notice to Agent to include other
restricted accounts).
"BANKRUPTCY CODE" means Title 11 of the United States Code entitled
"Bankruptcy" from time to time in effect, or any successor statute.
"BANKRUPTCY COURT" means the United States Bankruptcy Court for the
Southern District of Florida, or in the event that such court ceases to exercise
jurisdiction over the Reorganization Proceedings, the court that exercises
jurisdiction over the Reorganization Proceedings in lieu of the United States
Bankruptcy Court for the Southern District of Florida.
"BANKS" has the meaning assigned that term in the introductory
paragraph to this Agreement.
"BEIGE BOOK" means the book prepared by Company dated December 1994,
setting forth the estimated fair market value of the Real Property of Company
and its Subsidiaries
"BOOK VALUE", with respect to a specified asset of a specified Person,
means the carrying value of the specified asset on the balance sheet of such
Person prepared in accordance with GAAP and delivered to Agent from time to time
pursuant to the Loan Documents.
"BORROWING BASE" means the result of:
(i) an amount up to 75% of the principal amount of Eligible
Homesite Contract Receivables and Eligible Commercial Receivables;
plus
(ii) the lesser of:
(A) $27,500,000; and
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(B) the sum of (without duplication):
(1) an amount up to 40% of the Company's or
a Subsidiary's Book Value of Real Property consisting of
subdivision homesites;
plus
(2) an amount up to 26% (i.e., 40% of the
relevant Venture Subsidiary's 65% Joint Venture interest in
Sunset Lakes; such interest to be proportionately reduced if
such Subsidiary's Joint Venture interest in Sunset Lakes is
reduced) of Sunset Lakes' Book Value of JV Real Property of
Sunset Lakes; plus an amount up to 26% (i.e., 40% of the
relevant Venture Subsidiary's 65 % Joint Venture interest in
Sunset Lakes; such interest to be proportionately reduced if
such Subsidiary's Joint Venture interest in Sunset Lakes is
reduced) of the principal amount of Eligible JV Receivables of
Sunset Lakes;
plus
(3) an amount up to 8% (i.e., 40% of the
relevant Venture Subsidiary's 20% Joint Venture interest in
Country Lakes; such interest to be proportionately reduced if
such Subsidiary's Joint Venture interest in Country Lakes is
reduced) of Country Lakes' Book Value of JV Real Property of
Country Lakes; S an amount up to 8% (i.e., 40% of the relevant
Venture Subsidiary's 20% Joint Venture interest in Country
Lakes; such interest to be proportionately reduced if such
Subsidiary's Joint Venture interest in Country Lakes is
reduced) of the principal amount of Eligible JV Receivables of
Country Lakes;
(4) an amount up to 40% of the Company's
Book-Value of Real Property consisting of the Regency
Development;
plus
(5) an amount up to 40% of the Company's
Book Value of the aggregate Joint Venture interests of all
Venture Subsidiaries in the Borrowing Base Joint Ventures
(other than Sunset Lakes and Country Lakes); S an amount up to
40% of the principal amount of eligible JV Receivables of such
Borrowing Base Joint Ventures;
plus
5.
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(iii) an amount up to 40% of the Company's or any Subsidiary's
Book Value of Real Property consisting of scattered homesites;
(iv) an amount up to 50% of the Company's or any Subsidiary's
Book Value of Real Property consisting of raw tract land;
less
(v) the aggregate amount of reserves, if any, established by
Agent in Agent's reasonable credit judgment in respect of Homesite
Contract Receivables, Commercial Receivables, JV Receivables, Real
Property, and JV Real Property. Without limiting the generality of the
foregoing, Agent may create reserves against Homesite Contract
Receivables and JV Receivables for cancellations, reserves against JV
Receivables, Homesite Contract Receivables, and Commercial Receivables
for valuation discounts, and reserves against Real Property and JV Real
Property in respect of the contents or status of items disclosed in
surveys and environmental reports or in respect of the failure of
Company to deliver (or cause the relevant Venture Subsidiary or Joint
Venture to deliver) such surveys and environmental reports required
hereunder.
Anything to the contrary notwithstanding, the Borrowing Base shall not include,
directly or indirectly, either any asset of any Unrestricted Subsidiary, or any
of the following: (a) any Homesite Contract Receivable, Commercial Receivable,
or JV Receivable to the extent the same is sold or discounted; or (b) any Real
Property or JV Real Property to the extent the same is sold or otherwise
disposed of; or (c) any Borrowing Base Joint Venture interest to the extent the
same (or any underlying JV Real Property of the relevant Borrowing Base Joint
Venture) is sold or otherwise disposed of; in each case, whether pursuant to
Section 7.6 or otherwise.
"BORROWING BASE JOINT VENTURES" means, collectively, Sunset Lakes,
Country Lakes, and any other Joint Venture owning JV Real Property that Agent
agrees in writing that such Joint Venture shall constitute a Borrowing Base
Joint Venture under and for all purposes of this Agreement and the other Loan
Documents, and "Borrowing Base Joint Venture" means any one of them.
"BUSINESS DAY" means any day excluding Saturday, Sunday and any day
which either is a legal holiday under the laws of the State of California or is
a day on which banking institutions located in the State of California are
authorized or required by law or other governmental action to close.
"BUSINESS PLAN" means as of the Effective Date and until a new Business
Plan is delivered to Banks in accordance with Section 6.9, the business plan of
Company and its Subsidiaries dated September, 1996, and thereafter the business
plan of Company and its Subsidiaries delivered to and approved by Required Banks
in December of each year in accordance with Section 6.9.
6.
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"CAPITAL STOCK" means, with respect to any Person, any and all shares,
interests, participations or other equivalents (however designated) of capital
stock of a corporation any and all equivalent ownership interests in a Person
(other than a corporation) and any and all warrants or options to purchase any
of the foregoing.
"CASH COLLATERAL ACCOUNTS" means any and all accounts that Collateral
Agent, for the benefit of Banks and the holders of the Secured Floating Rate
Notes, may from time to time require to be established and maintained with
financial institutions reasonably satisfactory to Collateral Agent and pledged
to Collateral Agent pursuant to cash collateral account agreements in form and
substance reasonably satisfactory to Collateral Agent.
"CASH EQUIVALENTS" means (a) securities issued or directly and fully
guaranteed or insured by the United States Government or any agency or
instrumentality thereof having maturities of not more than 90 days from the date
of acquisition, (b) time deposits and certificates of deposit having maturities
of not more than 90 days from the date of acquisition issued by any domestic
commercial bank, or non-domestic commercial bank provided that such non-domestic
commercial bank shall have offices in the United States, having capital and
surplus in excess of $500,000,000, (c) repurchase obligations with a term of not
more than 30 days for underlying securities of the types described in clauses
(a) and (b) entered into with any bank meeting the qualifications specified in
clause (b) above, and (d) commercial paper rated at least A-1 or the equivalent
thereof by Standard & Poor's Corporation or P-1 or the equivalent thereof by
Xxxxx'x Investors Service, Inc. or which is issued by any domestic commercial
bank having capital and surplus in excess of $500,000,000 (or any holding
company thereof) and, in any such case, maturing within 90 days after the date
of acquisition.
"CASH FLOW AGENT" means Chase, as agent for the banks who are parties
to, and as defined in, the Secured Cash Flow Note Agreement.
"CHASE" means The Chase Manhattan Bank, formerly known as Chemical
Bank, as successor by merger to Manufacturers Hanover Trust Company.
"CLAIMS DISBURSEMENT ACCOUNT" means the segregated account established
for purposes of holding funds borrowed pursuant to the DIP Loan to pay
Administrative Claims, Priority Claims and Convenience Class Claims pursuant to
Sections 3.2.4 and 8.1.1 of the Reorganization Plan.
"CODE" means the Internal Revenue Code of 1986, as amended from time to
time.
"COLLATERAL" has the meaning assigned that term in Section 3.1.
"COLLATERAL AGENT" means Foothill Capital Corporation solely in its
capacity as collateral agent for Banks under the Security Documents pursuant to
the terms of this Agreement and the Security Documents.
7.
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"COLLECTIONS" means all cash, checks, notes, instruments, and other
items of payment (including, insurance proceeds, proceeds of cash sales, rental
proceeds, and tax refunds).
"COMMERCIAL REAL ESTATE" means all Real Property of Company and its
Subsidiaries (including condominium and cooperative units), other than Real
Property reserved for sale as single residential homes or lots.
"COMMERCIAL RECEIVABLES" means all promissory notes and mortgages and
deeds of trust payable to, or held by, Company or any Subsidiary, and all other
documents, instruments and agreements executed in connection therewith, whether
currently existing or hereafter created or acquired, arising from the sale of
single family homesites or arising from the sale of other Real Property and all
cash and non-cash proceeds thereof.
"COMMITMENT TRANSFER SUPPLEMENT" has the meaning assigned that term in
Section 10.6.
"COMMITMENTS" means, collectively, the Working Capital Loan Commitments
and the Reducing Revolving Loan Commitments.
"COMMONLY CONTROLLED ENTITY" means an entity, whether or not
incorporated, which is under common control with Company within the meaning of
Section 4001 of ERISA or is part of a group which includes Company and which is
treated as a single employer under Section 414 of the Code.
"COMPANY OPERATING ACCOUNT" means that certain deposit account number
6189189013641 maintained by Company with Sun Trust Bank, Miami, N.A. or such
other deposit account maintained by Company at a financial institution
reasonably satisfactory to Collateral Agent.
"COMPANY OPERATING ACCOUNT CONTROL AGREEMENT" means a written agreement
among Company, Foothill (in its capacity as Collateral Agent hereunder and in
its capacity as the "Collateral Agent" under the Secured Floating Rate Note
Agreement), and Operating Account Bank, with respect to the Company Operating
Account, in form and substance reasonably satisfactory to Foothill, pursuant to
which Operating Account Bank acknowledges the security interests granted by
Company to Foothill in the Company Operating Account, waives rights of setoff
with respect to the Company Operating Account, and agrees to act upon the
instructions of Foothill with respect to the disposition of funds in the Company
Operating Account should Operating Account Bank receive such instructions from
Foothill.
"CONDEMNATION AWARDS" means any and all proceeds (including proceeds in
the form of promissory notes or other agreements for the payment of proceeds)
from (a) the taking by eminent domain, condemnation or otherwise, or acquisition
pursuant to contract, of any property of Company or any Subsidiary by the United
States of America, the State of Florida or any political subdivision thereof, or
any agency, department, bureau, board, commission or instrumentality of any of
them,
8.
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including any awards and/or other compensation awarded to, or received by, the
Company or GDU, whether as a result of litigation, arbitration, settlement or
otherwise, arising from the Utility Condemnation Proceedings or (b) any sale by
Company or any Subsidiary of a water and utility system to a Person, whether now
owned or hereafter created or acquired.
"CONFIRMATION ORDER" means the order issued on March 27, 1992 by the
Bankruptcy Court, confirming the Reorganization Plan.
"CONSOLIDATED NET WORTH" means, at any particular date, all amounts
which, in accordance with GAAP, would be included as Shareholders' Equity on a
consolidated balance sheet of Company and its consolidated Subsidiaries at such
date.
"CONTRACTUAL OBLIGATION" means, with respect to any Person, any
provision of any security issued by that Person or of any agreement, instrument
or other undertaking to which that Person is a party or by which it or any of
its property is bound.
"CONVENIENCE CLASS CLAIMS" has the meaning assigned that term in
Section 2.13 of the Reorganization Plan.
"COUNTRY LAKES" means Country Lakes, LP, a Virginia limited partnership
in which the Subsidiary, AGC CL-Limited Partner, Inc., a Florida corporation, is
a limited partner.
"CREDITORS COMMITTEE" has the meaning assigned that term in Article 1
of the Reorganization Plan.
"DEEDS OF TRUST" means the Deeds of Trust executed from time to time
between Company or a Subsidiary and Collateral Agent substantially in the form
of the Deeds of Trust in existence as of the Effective Date, as the same be
amended, supplemented or otherwise modified from time to time (including any
amendments or modifications made in connection with this Agreement), pursuant to
which Company and Subsidiaries grant a security interest in the Real Property
located in Tennessee (and in such other jurisdictions where "deeds of trust" are
used to encumber real property) and related Personal Property of Company or
Subsidiaries to Collateral Agent, for the benefit of Banks, as required by this
Agreement.
"DEFAULT" means any of the events specified in Section 8, whether or
not any requirement for the giving of notice, the lapse of time, or both, or any
other condition, has been satisfied.
"DEFAULT RATE" has the meaning assigned to that term in Section 2.14.
"DEPOSIT ACCOUNT SECURITY AGREEMENT" means the Deposit Account Security
Agreement, dated of even date herewith, substantially in the form of Exhibit
D-1, executed by
9.
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Company and each of its Subsidiaries in favor of Collateral Agent, for the
benefit of Banks, as the same may be amended, supplemented or otherwise modified
from time to time.
"DESIGNATED RAW LAND" means Real Property of the Company and its
Subsidiaries consisting of raw land that Company or any Subsidiary has committed
(in writing) to be sold on or before December 31, 1996.
"DOLLARS" and the sign "$" means the lawful money of the United States
of America.
"EFFECTIVE DATE" means the date, on or before October 11, 1996, upon
which all of the conditions set forth in Section 5 of this Agreement have been
met or waived by the Banks in their sole discretion and this Agreement becomes
effective.
"ELIGIBLE COMMERCIAL RECEIVABLES" means those Commercial Receivables
that comply with each and all of the representations and warranties respecting
Commercial Receivables made by Company or any Subsidiary to Agent in the Loan
Documents, and that are and at all times continue to be acceptable to Agent in
all respects; provided, however, that standards of eligibility may be fixed and
revised from time to time by Agent in Agent's reasonable credit judgment.
Eligible Commercial Receivables shall not include any of the following: (i)
Commercial Receivables that are in material default; (ii) Commercial Receivables
with respect to which the obligor is an employee, Affiliate, or agent of Company
or of any Subsidiary; (iii) Commercial Receivables with respect to which the
obligor is a creditor of Company or any Subsidiary, has or has asserted a right
of setoff, or has disputed its liability or made any claim with respect to the
Commercial Receivable; provided, however, that such Commercial Receivables only
shall be deemed ineligible under this clause to the extent of the actual or
likely offsetting amount as determined by Agent, in its reasonable credit
judgment, unless Agent believes that the dispute or claim will jeopardize the
repayment of all or substantially all of the Commercial Receivable in a timely
manner; (iv) Commercial Receivables that the obligor has failed to pay within 90
days of due date; (v) Commercial Receivables with respect to which the obligor
is the subject of any Insolvency Proceeding, or becomes insolvent; and (vi)
Commercial Receivables the collection of which Agent, in its reasonable credit
judgment, believes to be doubtful by reason of the obligor's financial
condition.
"ELIGIBLE HOMESITE CONTRACT RECEIVABLES" means those Homesite Contract
Receivables that comply with each and all of the representations and warranties
respecting Homesite Contract Receivables made by Company or any Subsidiary to
Agent in the Loan Documents, and that are and at all times continue to be
acceptable to Agent in all respects; provided, however, that standards of
eligibility may be fixed and revised from time to time by Agent in Agent's
reasonable credit judgment. Eligible Homesite Contract Receivables shall not
include any of the following: (i) Homesite Contract Receivables that are in
material default; (ii) Homesite Contract Receivables with respect to which the
obligor is an employee, Affiliate, or agent of Company or of any Subsidiary;
(iii) Homesite Contract Receivables with respect to which the obligor is a
creditor of Company or any Subsidiary, has or has asserted a right of setoff, or
has disputed its liability or made any claim with respect to the Homesite
Contract Receivable; provided, however, that such Homesite Contract
10.
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Receivables only shall be deemed ineligible under this clause to the extent of
the actual or likely offsetting amount as determined by Agent, in its reasonable
credit judgment, unless Agent believes that the dispute or claim will jeopardize
the repayment of all or substantially all of the Homesite Contract Receivable in
a timely manner; (iv) Homesite Contract Receivables that the obligor has failed
to pay within 90 days of due date; (v) Homesite Contract Receivables with
respect to which the obligor is the subject of any Insolvency Proceeding, or
becomes insolvent; and (vi) Homesite Contract Receivables the collection of
which Agent, in its reasonable credit judgment, believes to be doubtful by
reason of the obligor's financial condition.
"ELIGIBLE JV RECEIVABLES" means those JV Receivables that comply with
each and all of the representations and warranties respecting JV Receivables
made by Company or the relevant Venture Subsidiary to Agent in the Loan
Documents, and that are and at all times continue to be acceptable to Agent in
all respects; provided, however, that standards of eligibility may be fixed and
revised from time to time by Agent in Agent's reasonable credit judgment.
Eligible JV Receivables shall not include any of the following: (i) JV
Receivables that are in material default; (ii) JV Receivables with respect to
which the obligor is an employee, Affiliate, or agent of Company or of any
Subsidiary or of the relevant Borrowing Base Joint Venture (or any other
investor therein); (iii) JV Receivables with respect to which the obligor is a
creditor of Company or any Subsidiary or of the relevant Borrowing Base Joint
Venture (or any other investor therein), has or has asserted a right of setoff,
or has disputed its liability or made any claim with respect to the JV
Receivable; provided, however, that such JV Receivables only shall be deemed
ineligible under this clause to the extent of the actual or likely offsetting
amount as determined by Agent, in its reasonable credit judgment, unless Agent
believes that the dispute or claim will jeopardize the repayment of all or
substantially all of the JV Receivable in a timely manner; (iv) JV Receivables
that the obligor has failed to pay within 90 days of due date; (v) JV
Receivables with respect to which the obligor is the subject of any Insolvency
Proceeding, or becomes insolvent; and (vi) JV Receivables the collection of
which Agent, in its reasonable credit judgment, believes to be doubtful by
reason of the obligor's financial condition.
"ELIGIBLE RECEIVABLES" shall mean, collectively, Eligible Commercial
Receivables and Eligible Homesite Contract Receivables.
"ENVIRONMENTAL LAWS" means any and all applicable Federal, state, local
or municipal laws, rules, orders, regulations, statutes, ordinances, codes,
decrees or requirements of any Governmental Authority regulating, relating to,
or imposing liability or standards of conduct concerning, environmental
protection matters, including Hazardous Materials, as now or may at any time
hereafter be in effect.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time and any successor statute.
11.
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"ESCROW AGENT" means Chase, in its individual trust capacity, and not
in its capacity as one of the holders of the Existing Secured Floating Rate
Notes (or the agent for such holders), nor in its capacity as one of the holders
of the Secured Cash Flow Notes (or the agent for such holders).
"ESCROW AGREEMENT" means an escrow agreement, in form and substance
satisfactory to each of Foothill, Escrow Agent, the holders of the Existing
Secured Floating Rate Notes, Chase, as agent for the holders of the Existing
Secured Floating Rate Notes, the holders of the Secured Cash Flow Notes, and
Cash Flow Agent, relative to the receipt and application of all funds required
to effectuate the Recapitalization Transactions.
"EVENT OF DEFAULT" means any of the events specified in Section 8;
provided that any requirement for the giving of notice, the lapse of time, or
both, or any other condition, has been satisfied.
"EXCLUDED PROPERTY" means (a) the Capital Stock of General Development
Acceptance Corporation and GDV Financial Corporation, (b) 34% of the Capital
Stock of AG Asia, (c) all money or property now or hereafter deposited into a
Reserve Account pursuant to the Reorganization Plan (exclusive of the residual,
remainder or beneficial interests of Company and its Subsidiaries therein), (d)
any portions of payments made on Homesite Contracts Receivable which are, as a
matter of law or pursuant to such Homesite Contracts Receivable, required to be
placed in a restricted account for the payment of utility charges or paid toward
provisions of this Agreement shall utilize accounting principles and policies in
conformity with those used to prepare the financial statements referred to in
Section 4.1.
"GDC" means General Development Corporation, a Delaware corporation,
under which name Company was formerly known.
"GDU" means the Company's Subsidiary, General Development Utilities,
Inc., a Florida corporation.
"GOVERNMENT ACTS" has the meaning assigned that term in Section
2.21(i).
"GOVERNMENTAL AUTHORITY" means any nation or government, state, local
or other political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of, or pertaining
to, government.
"GUARANTEE OBLIGATION" means, as to any Person (the "guaranteeing
person"), any obligation of (a) the guaranteeing person or (b) another Person
(including any bank under any letter of credit) to induce the creation of which
obligation the guaranteeing person has issued a reimbursement, counter indemnity
or similar obligation, in either case guaranteeing or in effect guaranteeing any
Indebtedness, leases, dividends or other obligations (the "primary obligations")
of any other third Person (the "primary obligor") in any manner, whether
directly or indirectly, including any obligation of the guaranteeing person,
whether or not contingent, (i) to purchase any such
12.
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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 any such primary
obligation against loss in respect thereof; provided, however, that, as used
herein, the term "Guarantee Obligation" shall neither include endorsements of
instruments for deposit or collection in the ordinary course of business, nor
constitute Indebtedness. The amount of any Guarantee Obligation of any
guaranteeing person shall be deemed to be the lower of (a) an amount equal to
the stated or determinable amount of the primary obligation in respect of which
such Guarantee Obligation is made and (b) the maximum amount for which such
guaranteeing person may be liable pursuant to the terms of the instrument
embodying such Guarantee Obligation, unless such primary obligation and the
maximum amount for which such guaranteeing person may be liable are not stated
or determinable, in which case the amount of such Guarantee Obligation shall be
such guaranteeing person's maximum reasonably anticipated liability in respect
thereof as reasonably determined by Company in good faith.
"GUARANTEES" means, collectively, the guarantees of the Obligations,
made by the Subsidiaries pursuant to the Subsidiary Guarantees.
"HAZARDOUS MATERIALS" means any hazardous materials, hazardous waste,
hazardous constituents, hazardous or toxic substances, petroleum products
(including crude oil or any fraction thereof), defined or regulated as such in
or under any Environmental Law.
"HOMESITE CONTRACTS RECEIVABLES" means all contracts for deed,
promissory notes, mortgages, deeds of trust and other agreements, currently
existing or hereafter created or acquired, pursuant to which Company or any
Subsidiary has the right to receive payment in any form whatsoever for the sale
of single-family homesites (excluding Commercial Receivables), including any and
all accounts, contract rights, chattel paper, general intangibles and unpaid
seller's rights, relating to the foregoing or arising therefrom, reserves and
credit balances arising thereunder and cash and non-cash proceeds of any and all
of the foregoing.
"HOMESITE PROGRAM" has the meaning assigned that term in Article I of
the Reorganization Plan.
"HOUSING INVENTORY" means, as at any date, the amount that would be set
forth under "housing units completed or under construction" or other similar
entry in the notes to a consolidated balance sheet of Company and its
Subsidiaries prepared at such date in accordance with GAAP
"INDEBTEDNESS" means, of any Person at any date, (a) all indebtedness
of such Person for borrowed money or for the deferred purchase price of property
or services (other than incurred in the ordinary course of business and payable
in accordance with customary practices) or which is
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23
evidenced by a note, bond, debenture or similar instrument, (b) all obligations
(contingent or otherwise) of such Person arising out of letters of credit issued
for the account or upon the application of such Person, (c) all obligations of
such Person under Financing Leases, (d) all obligations of such Person in
respect of acceptances issued or created for the account of such Person, (e) all
liabilities secured by any Lien on any property owned by such Person even though
such Person may have not assumed or otherwise become liable for the payment
thereof, and (f) the Public Debt Securities. As used herein, the term
"Indebtedness" shall not include Guarantee Obligations.
"INSOLVENCY", means, with respect to any Multiemployer Plan, the
condition that such plan is insolvent within the meaning of Section 4245 of
ERISA.
"INSOLVENCY PROCEEDING" means any proceeding commenced by or against
any Person under any provision of the Bankruptcy Code or under any other
bankruptcy or insolvency law, assignments for the benefit of creditors, formal
or informal moratoria, compositions, extensions generally with creditors, or
proceedings seeking reorganization, arrangement, or other similar relief.
"INSOLVENT" means pertaining to a condition of Insolvency.
"INTELLECTUAL PROPERTY" has the meaning assigned that term in Section
4.9.
"INTERCREDITOR AGREEMENT" means that certain Intercreditor Agreement of
even date herewith by and between Agent, Banks, Collateral Agent, and the
holders of the Secured Floating Rate Notes, substantially in the form of Exhibit
I-1, as such agreement may be supplemented, amended or otherwise modified from
time to time.
"INTEREST PAYMENT DATE" means, as to any Loan, the last day of each
calendar month to occur while such Loan is outstanding.
"INVESTMENTS" means any and all promissory notes, Capital Stock (other
than Subsidiary Stock), bonds, debentures and securities, held by Company or any
Subsidiary, whether now owned or hereafter acquired.
"ISSUING BANK" means, with respect to any Letter of Credit, Foothill or
its designee.
"JOINT VENTURES" means, collectively, (a) the joint ventures identified
on Schedule 4.14(B), and (b) any other partnership, joint venture, limited
liability company, or other entity in which a Subsidiary acquires, after the
Effective Date and as permitted under Section 7.9(g) and 7.18, equity interests
therein representing 50% or less of such entity's contributed capital; and
"Joint Venture" means any one of them.
"JOINT VENTURE PLEDGE AGREEMENT" means the Consolidated, Amended and
Restated Assignment of Partnership Interests, dated of even date herewith,
substantially in the form of Exhibit J-1, among each of the Venture Subsidiaries
and Collateral Agent, as the same may be amended,
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supplemented or otherwise modified from time to time, pursuant to which the
Venture Subsidiaries pledge all of their right, title, and interest in and to
the Joint Ventures to Collateral Agent for the benefit of Banks.
"JV REAL PROPERTY" means any and all real property and fixtures and
interests in real property and fixtures now owned or hereafter acquired by any
Joint Venture.
"JV RECEIVABLES" means all contracts for deed, promissory notes,
mortgages, deeds of trust and other agreements, currently existing or hereafter
created or acquired, pursuant to which any Borrowing Base Joint Venture has the
right to receive payment in any form whatsoever for the sale of JV Real
Property, and cash and non-cash proceeds of any and all of the foregoing.
"L/C GUARANTEE" means a guarantee of payment with respect to a letter
of credit issued by an issuing bank for the account of Company.
"LETTER OF CREDIT" or "Letters of Credit" means Standby Letters of
Credit or L/C Guarantees issued or to be issued by Issuing Bank for the account
of Company pursuant to Section 2.21.
"LETTER OF CREDIT USAGE" means, as at any date of determination, the
sum of (a) the maximum aggregate amount which is or at any time thereafter may
become available for drawing under all Letters of Credit then outstanding X (b)
the aggregate amount of all drawings under Letters of Credit honored by Issuing
Bank and not theretofore reimbursed by Company (whether by means of the proceeds
of Working Capital Loans pursuant to Section 2.21(e)(ii) or otherwise).
"LIEN" means any mortgage, security interest, pledge, hypothecation,
assignment, deposit arrangement, encumbrance, lien (statutory or other), or
preference, priority or other security agreement or preferential arrangement of
any kind or nature whatsoever (including any conditional sale or other title
retention agreement, any Financing Lease having substantially the same economic
effect as any of the foregoing, and the filing of any financing statement under
the Uniform Commercial Code or comparable law of any jurisdiction in respect of
any of the foregoing).
"LOAN BORROWING DATE" means a Working Capital Loan Borrowing Date or a
Reducing Revolving Loan Borrowing Date, as the case may be.
"LOANS" means the collective reference to the Working Capital Loans and
the Reducing Revolving Loans.
"LOAN DOCUMENTS" means this Agreement, the Notes, the Letters of Credit
(and any applications for or other documents or certificates executed by Company
in favor of Issuing Bank), the Subsidiary Guarantees, the Security Documents and
the Acknowledgment Agreement, and the Tax Servicing Contracts.
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"MATERIAL ADVERSE EFFECT" means a material adverse effect upon (a) the
business, operations, property or condition (financial or otherwise) or
prospects of Company and its Subsidiaries taken as a whole, (b) the ability of
Company to perform its obligations under this Agreement, the Notes, the Security
Documents or other Loan Documents, or (c) the validity or enforceability of this
Agreement, the Notes, the Security Documents or other Loan Documents or the
rights or remedies of Agent, Collateral Agent or Banks hereunder or thereunder.
"MORTGAGES" means the Mortgage and Security Agreements executed from
time to time by Company or a Subsidiary in favor of Collateral Agent,
substantially in the form of the Mortgages in existence as of the Effective
Date, as the same may be amended, supplemented, consolidated or otherwise
modified from time to time (including any amendments or modifications made in
connection with this Agreement), pursuant to which Company and Subsidiaries
grant a security interest in the Real Property located in Florida (or in such
other jurisdictions where "mortgages" are used to encumber real property) and
related Personal Property of Company or Subsidiaries to Collateral Agent, for
the benefit of Banks.
"MULTIEMPLOYER PLAN" means a Plan which is a multiemployer plan as
defined in Section 4001(a) (3) of ERISA.
"NET CASH PROCEEDS" means with respect to any sale of assets all cash
payments (including any cash received by way of deferred payment pursuant to, or
monetization of, a note receivable or otherwise, but only as and when and so
received) received from such sale net of bona fide direct costs of sale.
"NET CASH FLOW" means, with respect to any fiscal period of a Person,
on a consolidated basis, the actual consolidated pre-mc net cash flow as
determined on the basis set forth in Schedule N-1.
"NET OPERATING CASH FLOW" means, with respect to any Person for any
applicable fiscal period, the actual consolidated pre-tax net operating cash
flow as determined on the basis set forth in Schedule N-2.
"NOTES" means, collectively, the Working Capital Notes and the Reducing
Revolving Notes.
"NOTICE OF ISSUANCE OF LETTER OF CREDIT" means a notice substantially
in the form of Exhibit N-1 delivered by Company to Agent pursuant to Section
2.21(b)(i) with respect to the proposed issuance of a Letter of Credit.
"NOTIFICATION DATE" has the meaning assigned that term in Section
2.21(a) (iii).
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26
"OBLIGATIONS" means all obligations of every nature of Company from
time to time owed to Agent, Banks, Issuing Bank or Collateral Agent or any of
them under the Loan Documents, whether for principal, interest, reimbursement of
amounts drawn under Letters of Credit, fees, costs, expenses, indemnification or
otherwise.
"OFFICIAL UNSECURED CREDITORS COMMITTEE" means the official committee
of creditors appointed by the United States Trustee in the Reorganization
Proceedings.
"OLD EFFECTIVE DATE" means September 21, 1994.
"OLD PURCHASE AGREEMENT" has the meaning assigned to that term in the
Recitals to this Agreement.
"OPERATING ACCOUNT BANK" means Sun Trust Bank, Miami, N.A. or such
other financial institution reasonably satisfactory to Foothill.
"ORIGINAL AGENT" has the meaning assigned that term in the Recitals to
this Agreement.
"ORIGINAL BANKS" means the banks or other financial institutions party
to the Original Loan Agreement immediately prior to the Old Effective Date.
"ORIGINAL EFFECTIVE DATE" means March 31, 1992.
"ORIGINAL LOAN AGREEMENT" has the meaning assigned that term in the
Recitals to this Agreement.
"PBGC" means the Pension Benefit Guaranty Corporation established
pursuant to Subtitle A of Title IV of ERISA or any successor thereto.
"PERMITTED SALE ASSET" has the meaning assigned that term in Section
7.6.
"PERSON" means an individual, partnership, corporation, business trust,
joint stock company, trust, unincorporated association, joint venture,
Governmental Authority or other entity of whatever nature.
"PERSONAL PROPERTY" means the following personal property of Company or
any Subsidiary (exclusive of Homesite Contracts Receivable and Commercial
Receivables of Company or any Subsidiary):
(a) the Bank Accounts;
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27
(b) the Investments;
(c) any and all accounts, contract rights, chattel
paper, instruments and documents, including any right to payment for
goods sold or leased or services rendered, whether now owned or
hereafter acquired;
(d) any and all machinery, apparatus, equipment,
fittings, furniture, fixtures, motor vehicles and other tangible
personal property of every kind and description, whether now owned or
hereafter acquired, and wherever located, and all parts, accessories
and special tools and replacements therefor;
(e) any and all general intangibles, whether now
owned or hereafter created or acquired, including all choses in action,
causes of action, rights in and to any and all Condemnation Awards,
corporate or other business records, deposit accounts, inventions,
designs, patents, patent applications, trademarks, trade names, trade
secrets, goodwill, copyrights, registrations, licenses, franchises,
customer lists, tax refund claims, computer programs, any other
Intellectual Property, all claims under guaranties, security interests
or other security to secure payment of any accounts by an account
debtor, all rights to indemnification and all other intangible property
of every kind and nature, including (i) the interests, if any, of
Company or any Subsidiary in payments, proceeds, residuals and
remainders from, or as a beneficiary of, the Reserve Accounts, Claims
Disbursement Account, or other such accounts, (ii) any and all
beneficial interests in the trusts pursuant to which title to the Trust
Property is held and (iii) any and all other proceeds or choses in
action with respect to, or rights to receive proceeds from, any
condemnation of any Real Property or Personal Property of Company or
any Subsidiary, whether now in existence or hereafter created or
acquired.
(f) any and all goods which are, or may at any time
be, goods held for sale or lease or furnished under contracts of
service or raw materials, work-in-process or materials used or consumed
in business, wheresoever located and whether now owned or hereafter
created or acquired, including all such property the sale or other
disposition of which has given rise to accounts and which has been
returned to or repossessed or stopped in transit;
(g) all monies, cash, residues and property of any
kind, now or at any time hereafter in the possession or under the
control of Agent, Collateral Agent or any Bank or any agent or bailee
of Agent, Collateral Agent or any Bank;
(h) all accessions to, all substitutions for, and all
replacements, products and proceeds of, the foregoing, including
proceeds of insurance policies insuring the aforesaid property and
documents covering the aforesaid property, all property received wholly
or partly in trade or exchange for such property, and all rents,
revenues, issues, profits and proceeds arising from the sale, lease,
license, encumbrance, correction or any other temporary
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or permanent disposition of such items or any interest therein whether
or not they constitute "proceeds" as defined in the Uniform Commercial
Code; and
(i) all books, records, documents and ledger receipts
pertaining to any of the foregoing, including customer lists, credit
files, computer records, computer programs, storage media and computer
software used or acquired in connection with generating, processing and
storing such books and records or otherwise used or acquired in
connection with documenting information pertaining to the aforesaid
property.
"PERSONAL PROPERTY SECURITY AGREEMENT" means the Consolidated, Amended,
and Restated Personal Property Security Agreement, dated of even date herewith,
substantially in the form of Exhibit P-1, executed by Company and the
Subsidiaries now or hereafter party thereto in favor of Collateral Agent, for
the benefit of Banks, as the same may be amended, supplemented or otherwise
modified from time to time.
"PLAN" means, at a particular time, any employee benefit plan which is
covered by ERISA and in respect of which Company or a Commonly Controlled Entity
is (or, if such plan were terminated at such time, would under Section 4069 of
ERISA be deemed to be) an "employer" as defined in Section 3(5) of ERISA.
"PRINCIPAL RAW LAND" means the parcels of Real Property of Company and
its Subsidiaries identified on Schedule P-1. Parcels of Designated Raw Land
constituting Principal Raw Land shall be marked on such schedule with an
asterisk (*).
"PRIORITY CLAIMS" has the meaning assigned that term in Article I of
the Reorganization Plan.
"PRO RATA SHARE" means, with respect to each Bank the percentage
obtained by dividing (a) the aggregate Commitments of such Bank by (b) the
aggregate Commitments of all Banks, as such percentage may be adjusted by
assignments permitted pursuant to Section 10.6.
"PUBLIC DEBT SECURITIES" means, collectively, the Unsecured 12% Notes
and Unsecured Cash Flow Notes.
"PURCHASE AGREEMENT" has the meaning assigned to that term in the
Recitals to this Agreement.
"REAL PROPERTY" means any and all real property and fixtures and
interests in real property and fixtures now owned or hereafter acquired by
Company or any Subsidiary.
"REAL PROPERTY SALE" means the sale, assignment or other transfer for
value of any Real Property by Company or any Subsidiary.
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"RECAPITALIZATION TRANSACTIONS" means: (a)(i) the transfer by Chase to
Escrow Agent for the benefit of Company of (y) all Net Cash Proceeds from the
Julington Creek transaction held as cash collateral under that certain Cash
Collateral Account Agreement, dated as of June 7, 1996, between Company and
Chase (as Cash Flow Agent and as agent for the holders of the Existing Secured
Floating Rate Notes), and (z) all Net Cash Proceeds from the Harbourton Capital
transaction held as cash collateral under that certain Cash Collateral Account
Agreement, dated as of June 21, 1996, between Company and Chase (as Cash Flow
Agent and as agent for the holders of the Existing Secured Floating Rate Notes);
(ii) the use by Company of all of the Net Cash Proceeds in respect of clause
(a)(i) of this definition together with unrestricted and unencumbered cash of
Company, in each case, in accordance with the Funds Flow Memo, to finance, in
part, clause (c) of this definition; (b)(i) the purchase by Foothill and/or its
designees of all of the Existing Secured Floating Rate Notes from the holders
thereof pursuant to the Purchase Agreement for a purchase price (the "Purchase
Price") equal to 100% of the principal amount thereof outstanding, plus all
accrued and unpaid interest thereon, plus all fees and costs payable with
respect thereto; (ii) the purchase by Foothill and/or its designees from Company
of additional Existing Secured Floating Rate Notes in the aggregate principal
amount equal to (y) $40,000,000, less (z) the Purchase Price; (iii) the
amendment and restatement in full of the Existing Secured Floating Rate Note
Agreement and all Existing Secured Floating Rate Notes pursuant to the Secured
Floating Rate Note Agreement and the Secured Floating Rate Notes, respectively;
and (iv) the use by Company of all of the Net Cash Proceeds in respect of clause
(b)(ii) of this definition and of the proceeds of a Working Capital Loan on the
Effective Date, in an aggregate amount not greater than $20,000,000 and of the
proceeds of a Reducing Revolving Loan on the Effective Date, in each case, in
accordance with the Funds Flow Memo, to finance the balance of clause (c) of
this definition; and (c) (i) the retirement (by prepayment) by Company of all of
the outstanding Secured Cash Flow Notes for an aggregate amount not greater than
$40,000,000 in cash and 1,500,000 warrants to purchase the common stock of
Company and (ii) the termination of all Liens securing the Secured Cash Flow
Notes.
"REDUCING REVOLVING FACILITY AVAILABILITY" means, at any time, the
result of: (a) the lesser of (i) the Borrowing Base, less the Working Capital
Facility. Usage, u the aggregate outstanding balance of all Secured Floating
Rate Notes, and (ii) the Reducing Revolving Loan Commitments; minus (b) the
Reducing Revolving Facility Usage.
"REDUCING REVOLVING FACILITY USAGE" means, as of any date of
determination, the aggregate outstanding balance of all Reducing Revolving
Loans.
"REDUCING REVOLVING LOAN BORROWING DATE" means any Business Day
specified in a notice pursuant to Section 2.8 as a date on which Company
requests Banks to make Reducing Revolving Loans hereunder.
"REDUCING REVOLVING LOAN COMMITMENT" means, as to any Bank, the
obligation of such Bank, if any, to make Reducing Revolving Loans to Company
hereunder in an aggregate principal amount at any one time outstanding not to
exceed the amount set forth opposite such Bank's name on Schedule 2.6, as such
amount may be reduced from time to time in accordance with
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30
Section 2.11(b) or 2.13(b); the Reducing Revolving Loan Commitments of all
Banks, are collectively referred to herein as the "Reducing Revolving Loan
Commitments." Anything herein to the contrary notwithstanding, the extensions of
credit under the Reducing Revolving Loan Commitments shall be subject to the
limitation that in no event shall Reducing Revolving Facility Usage exceed the
Reducing Revolving Loan Commitments then in effect.
"REDUCING REVOLVING LOAN COMMITMENT PERIOD" means the period from and
including the Effective Date to but not including the Reducing Revolving Loan
Maturity Date or such earlier date on which the Reducing Revolving Loan
Commitments shall terminate as provided herein. Anything herein to the contrary
notwithstanding, the Reducing Revolving Loan Commitments automatically shall
terminate on December 31, 1996 if Agent fails to receive any Activation Notice
on or before such date.
"REDUCING REVOLVING LOAN DESIGNATED PURPOSES" has the meaning assigned
that term in Section 2.10.
"REDUCING REVOLVING LOAN MATURITY DATE" means June 30, 1998.
"REDUCING REVOLVING LOANS" has the meaning assigned that term in
Section 2.6.
"REDUCING REVOLVING NOTE" has the meaning assigned that term in Section
2.7.
"REFERENCE RATE" means the variable rate of interest, per annum, most
recently announced by Norwest Bank Minnesota, N.A., or any successor to such
institution (or such successor), as its "base rate" irrespective of whether such
announced rate is the best rate available from such financial institution.
"REGENCY DEVELOPMENT" means all Real Property and Personal Property now
owned or hereafter acquired by Company, relating to its condominium project
located in St. Lucie County, Florida, commonly known as the Regency Condominium
at Island Dunes.
"REIMBURSEMENT DATE" has the meaning assigned such term in Section
2.21(e)(ii).
"REORGANIZATION" means, with respect to any Multiemployer Plan, the
condition that such plan is in reorganization within the meaning of Section 4241
of ERISA
"REORGANIZATION DEBT" means, collectively, the Secured Floating Rate
Notes and the Public Debt Securities.
"REORGANIZATION PLAN" means the Restated Second Amended Joint Plan of
Reorganization of General Development Corporation jointly proposed in the
Reorganization Proceedings by Company and the Official Unsecured Creditors
Committee, filed on October 9, 1991 with the Clerk of the Bankruptcy Court, as
modified by Modification filed March 9, 1992.
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31
"REORGANIZATION PROCEEDINGS" means the cases commenced on April 6 and
April 12, 1990 under Chapter 11 of Title 11 of the United States Code in the
Bankruptcy Court by GDC (Case No. 90-12231-BKC-AJC), General Development
Financial Services, Inc. (Case No. 90-12232-BKC-AJC), General Development
Resorts, Inc. (Case No. 90-12233 BKC-AJC), Town & Country II, Inc. (formerly
Florida Residential Communities, Inc.) (Case No. 9012234-BKC-AJC), Five Star
Homes Group, Inc. (Case No. 90-12235-BKC-AJC), Five Star Homes, Inc. (Case No.
90-12338-BKC-AJC), GDV Financial Corporation (Case No. 90-12236-BKC-MC) and
Environmental Quality Laboratory, Incorporated (Case No. 90-12237-BKC-AJC).
"REPORTABLE EVENT" means any of the events set forth in Section 4043(b)
of ERISA, other than those events as to which the thirty day notice period is
waived under subsections .13, .14, .16, .18, .19 or .20 of PBGC Reg. ss.2615.
"REQUIRED BANKS" means Banks holding at least 51% of the aggregate
amount of the Commitments.
"REQUIREMENT OF LAW" means, as to any Person, the certificate or
articles of incorporation and bylaws or other organizational or governing
documents of such Person, and any law, treaty, rule or regulation, or
determination of an arbitrator or a court or other Governmental Authority, in
each case applicable to or binding upon such Person or any of its property or to
which such Person or any of its property is subject.
"RESERVE ACCOUNTS" means the Disbursement Account (as defined in
Section 8.4 of the Reorganization Plan); the Disputed Claims Reserve Account (as
defined in Section 8.7 of the Reorganization Plan); any reserve of securities,
utility-satisfied lots, cash or other assets that is established pursuant to the
Reorganization Plan, the Homesite Program, or any agreement resolving a claim of
the State of Florida in the Reorganization Proceedings, to satisfy requests for
utility service; and any reserve of securities or cash established to fund road
or other improvements pursuant to any agreement resolving a claim of the State
of Florida in the Reorganization Proceedings, including the Division Class 14
Utility Fund Trust Agreement and the Improvement Fund Trust Agreement, executed
by and among the State of Florida, Department of Business Regulation, Division
of Florida Land Sales, Condominiums and Mobile Homes, Company and the trustee
thereunder, the Class 14 Utility Fund Trust Agreement and the Homesite Program
and Utility Fund Trust Agreement, executed by and between Company and the
trustee thereunder, the Class 14 Utility Lot Trust Agreement, executed by and
between Company and the trustee thereunder, as described in Section 7.6 of the
Reorganization Plan, if any.
"RESPONSIBLE OFFICER" means the chief executive officer and the
president of Company, or with respect to corporate proceedings, the secretary or
any assistant secretary of Company, or, with respect to financial matters, the
chief financial officer or treasurer of Company.
"REVERSE STOCK SPLIT" means the proposal to amend Company's restated
certificate of incorporation to effect, if subsequently determined by Company's
board of directors, a reverse
22.
32
stock split of Company's outstanding common stock as of 5:00 p.m. (Florida time)
on the effective date of the amendment (the "Reverse Split Effective Date"),
pursuant to which each 100 shares or 200 shares (as determined by the Company's
board of directors in its discretion) then outstanding will be converted into
one share (the "Reverse Stock Split"), and to effect a forward split of the
Company's common stock as of 6:00 a.m. (Florida time) on the day following the
Reverse Split Effective Date, pursuant to which each share of common stock then
outstanding as of such date will be converted into the number of shares of the
Company's common stock that each share represented immediately prior to the
Reverse Split Effective Date, all as set forth in the Company's proxy statement
dated April 22, 1996, provided that the only funds the Company uses to pay for
the less than whole shares of its common stock resulting from consummation of
the Reverse Stock Split are the net proceeds from the sale by the Company of its
common stock.
"SALE AND LEASEBACK" means any arrangement with any Person providing
for the leasing by Company or any Subsidiary of real or personal property which
has been or is to be sold or transferred by Company or such Subsidiary to such
Person or to any other Person to whom funds have been or are to be advanced by
such Person on the security of such property or rental obligations of Company or
Subsidiary
"SECTION 365(J) PROPERTY" means the property now or hereafter made
subject to substitute Liens in favor of Homesite Purchasers (as defined in the
Reorganization Plan) pursuant to Section 5.2.2 of the Reorganization Plan.
"SECURED CASH FLOW NOTE AGREEMENT" means that certain Amended and
Restated Secured Cash Flow Note Agreement, dated as of September 21, 1994,
executed by and among Company, Chase, NationsBank of Florida, N.A., NationsBank
of Georgia, N.A., Midland Bank PLC, New York Branch, Lehman Government
Securities, Inc., and Berliner Handels-Und Frankfurter Bank and Cash Flow Agent,
as modified from time to time.
"SECURED CASH FLOW NOTES" means the Secured Cash Flow Notes issued by
Company pursuant to the Secured Cash Flow Note Agreement.
"SECURED DEBT" means all Obligations.
"SECURED FLOATING RATE NOTE AGREEMENT" means that certain Second
Amended and Restated Secured Floating Rate Note Agreement, dated as of even date
herewith, executed by and among Company, the purchasers identified therein and
other Persons from time to time party thereto, and Foothill, as agent, as
modified from time to time.
"SECURED FLOATING RATE NOTES" means the secured floating rate notes
issued by Company pursuant to the Secured Floating Rate Note Agreement.
"SECURITY AGREEMENTS" means the Personal Property Security Agreement,
the Deposit Account Security Agreement, and any other security agreements,
between Company and/or
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a Subsidiary and Agent or Collateral Agent, as the same may be amended
supplemented or otherwise modified from time to time (including as amended by
the Acknowledgment Agreement), pursuant to which Company and Subsidiaries assign
and grant a security interest in Homesite Contracts Receivables and Commercial
Receivables and Personal Property of Company or Subsidiaries to Agent or
Collateral Agent, for the benefit of Banks, as required by this Agreement.
"SECURITY DOCUMENTS" means the Stock Pledge Agreement, the Joint
Venture Pledge Agreement, the Security Agreements, the Mortgages, the Deeds of
Trust, the Company Operating Account Control Agreement, any cash collateral
account agreements, and any and all other agreements, instruments, documents,
financing statements, assignments, notices, mortgages and other written matter
necessary or reasonably required by Agent or Collateral Agent at any time to
create, perfect, maintain or continue Agent's and Collateral Agent's Lien in the
Collateral, together with all amendments, modifications, extensions,
substitutions and renewals thereof.
"SHAREHOLDERS' EQUITY" means, as to any corporation, an amount equal to
the excess of the assets of such corporation over its liabilities (including
minority interests), determined in accordance with GAAP and as shown on the most
recently prepared applicable balance sheet of such corporation.
"SINGLE EMPLOYER PLAN" means any Plan which is covered by Title IV of
ERISA, but which is not a Multiemployer Plan.
"SPUD SUBSIDIARY" has the meaning assigned that term in Section 7.2(h).
"STANDBY LETTER OF CREDIT" means any standby letter of credit or
similar instrument issued for the purpose of supporting (a) workers'
compensation liabilities of Company or any of its Subsidiaries, (b) the
obligations of third party insurers of Company or any of its Subsidiaries
arising by virtue of the laws of any jurisdiction requiring third party
insurers, (c) obligations with respect to capital leases or operating leases of
Company or any of its Subsidiaries, (d) performance, payment, deposit or surety
obligations of Company or any of its Subsidiaries, in any case if required by
law or governmental rule or regulation or in accordance with custom and practice
in the industry, and (e) obligations of Company and its Subsidiaries otherwise
permitted to be incurred hereunder; provided that Standby Letters of Credit may
not be issued for the purpose of supporting (i) trade payables or (ii)
Indebtedness constituting "antecedent debt" (as that term is used in Section 547
of the Bankruptcy Code).
"STOCK PLEDGE AGREEMENT" means the Second Amended and Restated Stock
Pledge Agreement, dated of even date herewith, substantially in the form of
Exhibit S-1, among Company, each of its Subsidiaries and Collateral Agent, as
the same may be amended, supplemented or otherwise modified from time to time,
pursuant to which Company and Subsidiaries pledge Subsidiary Stock to Collateral
Agent for the benefit of Banks.
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"SUBSIDIARY" means, as to any Person, a corporation, partnership, trust
(exclusive of any trust created in connection with a Reserve Account) or other
entity of which shares of stock, partnership interests, beneficial interests 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 of directors or other managers of
such corporation, partnership, trust (exclusive of any trust created in
connection with a Reserve Account) 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. Unless otherwise qualified, all
references to a "Subsidiary" or to "Subsidiaries" in this Agreement shall refer
to a Subsidiary or Subsidiaries of Company. Unless otherwise indicated, all
references to a Subsidiary or Subsidiaries of Company shall not mean, include,
or refer to the Unrestricted Subsidiaries, the Excluded Subsidiaries, or the
Joint Ventures.
"SUBSIDIARY GUARANTEE" means the Consolidated Second Amended and
Restated Subsidiary Guarantee, dated of even date herewith, substantially in the
form of Exhibit S-2, executed by Company and each of its Subsidiaries in favor
of Agent, for the benefit of Banks, as the same may be amended, supplemented or
otherwise modified from time to time.
"SUBSIDIARY PROPERTY UNDER DEVELOPMENT" means, collectively, the Real
Property of any Subsidiary which is acquired for the purpose of being developed,
or which is in the process of being improved or developed, either by the
construction of roads, curb cuts, sewer and water facilities or other
improvements, or by the construction of residential units and appurtenances
thereto.
"SUBSIDIARY STOCK" means the Capital Stock of any and all Subsidiaries
(including the Excluded Subsidiaries and the Unrestricted Subsidiaries).
"SUNSET LAKES" means Sunset Lakes Associates, a Florida general
partnership in which the Subsidiary, Sunset Lakes Development Corporation, a
Florida corporation, is a partner.
"TAX SERVICING CONTRACTS" means, collectively, the tax servicing
contracts required to be delivered under Section 5.3, and all amendments,
modifications, extensions, substitutions and renewals thereof.
"TOTAL REAL PROPERTY" means, collectively, the Real Property and the JV
Real Property.
"TOTAL USAGE" means, as of any date of determination, the sum of (i)
the Working Capital Facility Usage, plus (ii) the Reducing Revolving Facility
Usage, plus (iii) the aggregate outstanding balance of all Secured Floating Rate
Notes.
"TRUST PROPERTY" means the real property held in trust pursuant to (a)
Trust Agreement No. 06-01-009-6082101, dated as of January 17,1991, by and
between NCNB National Bank of Florida, as Trustee for the benefit of Company,
the Beneficiary; (b) Trust Agreement No.
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06-01-009-6081954, dated as of January 17,1991, by and between NCNB National
Bank of Florida, as Trustee for the benefit of Company, the Beneficiary; (c)
Trust Agreement No. 06-01-009-6082655, dated as of January 17, 1991, by and
between NCNB National Bank of Florida, as Trustee for the benefit of Company and
General Development Financial Services, Inc., the Beneficiaries; and (d) Trust
Agreement No. 2, dated as of May 31, 1991, by and between Xxxx Xxxxxx, Esq., as
successor Trustee for the benefit of Company and Cumberland Cove, Inc., the
Beneficiaries.
"UNRESTRICTED SUBSIDIARIES" means, collectively, (a) the direct or
indirect subsidiaries of Company listed on Schedule U-1, and (b) any other
direct or indirect Subsidiary of Company that is formed or acquired after the
Effective Date, that does not have or make any investment in any Joint Venture
(nor was formed or acquired for the purpose of having or making any such
investment), and that Agent agrees in writing that such entity shall constitute
an Unrestricted Subsidiary under and for all purposes of this Agreement and the
other Loan Documents, upon which Schedule U-1 automatically shall be deemed to
be amended to reflect the inclusion on such schedule of such new Unrestricted
Subsidiary; and "Unrestricted Subsidiary" means any one of them.
"UNSECURED CASH FLOW NOTES" means the "New Unsecured Cash Flow Notes"
as defined in Article I of the Reorganization Plan.
"UNSECURED 12% NOTES" means the "New Unsecured 12% Notes" as defined in
Article I of the Reorganization Plan.
"UNSOLD HOUSING INVENTORY" means, as at any date, all Housing Inventory
applicable to Unsold Residential Dwelling Units.
"UNSOLD RESIDENTIAL DWELLING UNITS" means single-family dwelling units
(whether detached or included within a townhouse, villa or cluster containing
more than one such unit) or condominium units (excluding timeshare units)
completed or under construction by Company or any Subsidiary that are not
subject to a contract for sale to any third-party purchaser.
"VENTURE SUBSIDIARY" means any Subsidiary whose sole asset is its
equity interest in a Joint Venture and whose sole revenues are derived from such
sole asset.
"WORKING CAPITAL EXIT FEE" means, in connection with the termination by
Company of this Agreement, a fee in an amount equal to (i) if such termination
occurs before the date that is one year prior to the Working Capital Loan
Maturity Date, $400,000, and (ii) if such termination occurs during the period
commencing on the date that is one year prior to the Working Capital Loan
Maturity Date and ending on the date immediately preceding the Working Capital
Loan Maturity Date, $200,000.
"WORKING CAPITAL FACILITY AVAILABILITY" means, at any time, the result
of: (a) the lesser of (i) the Borrowing Base, less the Reducing Revolving
Facility Usage, less the aggregate
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outstanding balance of all Secured Floating Rate Notes, and (ii) the Working
Capital Loan Commitments; minus (b) the Working Capital Facility Usage.
"WORKING CAPITAL FACILITY USAGE" means, as at any date of
determination, the sum of (a) the aggregate principal amount of all outstanding
Working Capital Loans (other than Working Capital Loans made for the purpose of
reimbursing the Issuing Bank for any amount drawn under any Letter of Credit but
not yet so applied) plus (b) the Letter of Credit Usage.
"WORKING CAPITAL LOAN BORROWING DATE" means any Business Day specified
in a notice pursuant to Section 2.3 as a date on which Company requests Banks to
make Working Capital Loans hereunder.
"WORKING CAPITAL LOAN COMMITMENT" means, as to any Bank, the obligation
of such Bank, if any, to make Working Capital Loans to Company hereunder in an
aggregate principal amount at any one time outstanding not to exceed the amount
set forth opposite such Bank's name on Schedule 2.1; the Working Capital Loan
Commitments of all Banks, are collectively referred to herein as the "Working
Capital Loan Commitments." Anything herein to the contrary notwithstanding, the
extensions of credit under the Working Capital Loan Commitments shall be subject
to the limitation that in no event shall Working Capital Facility Usage exceed
the Working Capital Loan Commitments then in effect.
"WORKING CAPITAL LOAN COMMITMENT PERIOD" means the period from and
including the Original Effective Date to but not including the Working Capital
Loan Maturity Date or such earlier date on which the Working Capital Loan
Commitments shall terminate as provided herein.
"WORKING CAPITAL LOAN MATURITY DATE" means December 1, 1998 or, if the
Working Capital Maturity Extension is effected timely by Banks, December 1,
2000.
"WORKING CAPITAL LOANS" has the meaning assigned that term in Section
2.1.
"WORKING CAPITAL MATURITY EXTENSION" means the extension by Banks, in
their sole discretion, of the Working Capital Loan Maturity Date to December 1,
2000 pursuant to a written notice delivered by Agent on behalf of Banks to
Company on or before July 15, 1998. "Working Capital Note" has the meaning
assigned that term in Section 2.2.
"WORKING CAPITAL RESERVES" has the meaning assigned that term in
Article I of the Reorganization Plan.
1.2 OTHER DEFINITIONAL PROVISIONS.
(a) Unless otherwise specified therein, all terms defined in this
Agreement shall have such defined meanings when used in the Notes or any
certificate or other document made or delivered pursuant hereto.
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37
(b) As used herein and in the Notes, and any certificate or other
document made or delivered pursuant hereto, accounting terms relating to Company
and its Subsidiaries not defined in Section 1.1 and accounting terms partly
defined in Section 1 .1, to the extent not defined, shall have the respective
meanings given to them under GAAP.
(c) The words "hereof", "herein" and "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement.
(d) The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.
(e) References to "Sections", "subsections", Exhibits and Schedules are
to Sections, Sections, Exhibits and Schedules, respectively, of this Agreement
unless otherwise specifically provided.
(f) Unless the context of this Agreement clearly requires otherwise,
the term "including" is not limiting.
SECTION 2
AMOUNT AND TERMS OF COMMITMENTS
2.1 WORKING CAPITAL LOANS.
Subject to the terms and conditions hereof, each Bank having a Working
Capital Loan Commitment severally agrees to make working capital loans ("WORKING
CAPITAL LOANS") to Company from time to time during the Working Capital Loan
Commitment Period; provided that the aggregate outstanding principal balances of
the Working Capital Loans made by each such Bank shall not exceed an amount
which is equal to the Working Capital Loan Commitment of such Bank set forth on
Schedule 2.1. On the Effective Date, all Working Capital Loans outstanding under
the Existing Loan Agreement (the "EXISTING WORKING CAPITAL LOANS") shall be
converted into Working Capital Loans hereunder, it being understood that no
repayment of the Existing Working Capital Loans is being effected hereby, but
merely an amendment and restatement in accordance with the terms hereof. Subject
to the terms and conditions hereof, amounts prepaid or repaid on account of the
Working Capital Loans may be reborrowed during the Working Capital Loan
Commitment Period. All Working Capital Loans shall be made by Banks
simultaneously, it being understood that no Bank shall be responsible for any
default by any other Bank in the other Bank's obligations to make Working
Capital Loans hereunder nor shall the Working Capital Loan Commitment of any
Bank be increased as a result of the default by any other Bank in that Bank's
obligation to make Working Capital Loans hereunder. The default by any Bank in
its obligations to make Working Capital Loans shall not excuse any other Bank
from its obligations to make Working Capital Loans.
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Anything herein to the contrary notwithstanding, the extensions of
credit under the Working Capital Loan Commitments shall be subject to the
following limitations:
(a) in no event shall Working Capital Facility Usage at any time
exceed the Working Capital Loan Commitments then in effect; and
(b) in no event shall Total Usage at any time exceed the Borrowing
Base then in effect
2.2 WORKING CAPITAL NOTES.
The Working Capital Loans made by each Bank shall be evidenced by a
second amended and restated renewal promissory note of Company, substantially in
the form of Exhibit 2.2 with appropriate insertions as to payee, date and
principal amount (a "Working Capital Note"), payable to the order of such Bank,
in each case in the face amount of the Working Capital Loan Commitment of each
Bank. Each Bank is hereby authorized to record the date and amount of each
Working Capital Loan made by such Bank and the date and amount of each payment
or prepayment of principal thereof or of an advance of a Working Capital Loan on
the schedule annexed to and constituting a part of its Working Capital Note, and
any such recordation shall constitute prima facie evidence of the accuracy of
the information so recorded. Each Working Capital Note shall (a) be dated the
Effective Date, (b) be stated to mature as provided in Section 2.4 and (c)
provide for the computation and payment of interest in accordance with Sections
2.14 and 2.16.
2.3 PROCEDURE FOR WORKING CAPITAL LOAN BORROWING.
Company may borrow under the Working Capital Loan Commitments during
the Working Capital Loan Commitment Period on any Business Day in amounts not
less than $1,000,000 and subject to the conditions set forth in this Agreement;
provided that Company shall give Agent irrevocable notice (which notice must be
received by Agent prior to 11:00 a.m., California time two Business Days prior
to the requested Working Capital Loan Borrowing Date), specifying (a) the amount
to be borrowed and (b) the requested Working Capital Loan Borrowing Date. Upon
receipt of any such notice from Company, Agent shall promptly (and in any event
on the same Business Day) notify each Bank having a Working Capital Loan
Commitment thereof. Each notice of a request for borrowing by Company shall be
accompanied by a certificate of a Responsible Officer of Company (a) indicating
that the amount of cash or Cash Equivalents available to Company (including cash
available to Company from any Subsidiary but not including any cash in the
Claims Disbursement Account or Reserve Accounts or any account set forth on
Schedule 7.17) will be less than or equal to $5,000,000 after giving effect to
the requested borrowing and the payments to be made by Company (whether by check
or otherwise) on the Working Capital Loan Borrowing Date, (b) representing and
warranting that the purpose for which the requested borrowing is to be used is
permitted by, and is in accordance with, the terms and conditions of this
Agreement, and (c) representing and warranting as to compliance with the
limitations set forth in clauses (a) and (b) of Section 2.1. Each Bank having a
Working Capital Loan Commitment shall make the amount of its
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Pro Rata Share of each borrowing available to Agent for the account of Company
at the office of Agent specified on the signature pages hereof prior to 10:00
a.m., California time, on the Working Capital Loan Borrowing Date requested by
Company in funds immediately available to Agent. Such borrowing will then be
made available to Company by Agent crediting the Company Operating Account (or
such other deposit account as Company may designate in writing to Agent from
time to time) with the aggregate of the amounts made available to Agent by Banks
and in like funds as received by Agent; provided, however, if, following Agent's
receipt of funds for such borrowing from Banks, but prior to 11:00 a.m.,
California time, on such Working Capital Loan Borrowing Date, Agent shall have
received written notice from Banks having 50% or greater of the total Working
Capital Loan Commitments that any condition precedent to such borrowing has not
been met and that such Banks, therefore, have elected to stop such funding,
Agent shall not make such borrowing available to Company.
2.4 REPAYMENT OF WORKING CAPITAL LOANS.
On the Working Capital Loan Maturity Date, the aggregate principal
amount of the Working Capital Loans then outstanding shall be repaid (together
with all accrued and unpaid interest and fees then accrued thereon) without
demand. Anything herein to the contrary notwithstanding, any and all repayments
or prepayments of the Loans (irrespective of whether made by or on behalf of
Company, from Collections received, or from the proceeds of the sale or other
disposition of Collateral, or otherwise) shall be applied, first, to outstanding
Reducing Revolving Loans until the Reducing Revolving Facility Usage equals zero
and, then, to outstanding Working Capital Loans.
2.5 USE OF PROCEEDS OF WORKING CAPITAL LOANS.
The proceeds of the Working Capital Loans shall be used by Company or
its Subsidiaries, consistent with the terms and conditions. hereof, only for
lawful and permitted corporate purposes relating to Company's domestic
businesses as described in the Business Plan.
2.6 REDUCING REVOLVING LOANS.
Subject to the terms and conditions hereof, each Bank having a Reducing
Revolving Loan Commitment severally agrees to make reducing revolving loans
("Reducing Revolving Loans") to Company from time to time during the Reducing
Revolving Loan Commitment Period; provided that the aggregate outstanding
principal balances of the Reducing Revolving Loans made by each such Bank shall
not exceed an amount which is equal to the Reducing Revolving Loan Commitment of
such Bank set forth on Schedule 2.6, as reduced by any ratable reductions of the
Reducing Revolving Loan Commitment of such Bank pursuant to Sections 2.11 and
2.13. Subject to the terms and conditions hereof, amounts prepaid or repaid on
account of the Reducing Revolving Loans may be reborrowed during the Reducing
Revolving Loan Commitment Period. All Reducing Revolving Loans shall be made by
Banks simultaneously, it being understood that no Bank shall be responsible for
any default by any other Bank in the other Bank's obligations to make Reducing
Revolving Loans
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hereunder nor shall the Reducing Revolving Loan Commitment of any Bank be
increased as a result of the default by any other Bank in that Bank's obligation
to make Reducing Revolving Loans hereunder. The default by any Bank in its
obligations to make Reducing Revolving Loans shall not excuse any other Bank
from its obligations to make Reducing Revolving Loans.
Anything herein to the contrary notwithstanding, the extensions of
credit under the Reducing Revolving Loan Commitments shall be subject to the
following limitations:
(a) in no event shall the outstanding balance of all Reducing
Revolving Loans at any time exceed the Reducing Revolving Loan Commitments
then in effect;
(b) in no event shall Total Usage at any time exceed the
Borrowing Base; and
(c) in no event shall any Reducing Revolving Loan be made at any
time, and to the extent, that Working Capital Facility Availability exists.
2.7 REDUCING REVOLVING NOTES.
The Reducing Revolving Loans made by each Bank shall be evidenced by a
promissory note of Company, substantially in the form of Exhibit 2.7 with
appropriate insertions as to payee, date and principal amount (a "Reducing
Revolving Note"), payable to the order of such Bank, in each case in the face
amount of the Reducing Revolving Loan Commitment of each Bank. Each Bank is
hereby authorized to record the date and amount of each Reducing Revolving Loan
made by such Bank and the date and amount of each payment or prepayment of
principal thereof or of an advance of a Reducing Revolving Loan on the schedule
annexed to and constituting a part of its Reducing Revolving Note, and any such
recordation shall constitute prima facie evidence of the accuracy of the
information so recorded. Each Reducing Revolving Note shall (a) be dated the
Effective Date, (b) be stated to mature as provided in Section 2.4 and (c)
provide for the computation and payment of interest in accordance with Sections
2.14 and 2.16.
2.8 PROCEDURE FOR REDUCING REVOLVING LOAN BORROWING.
Company may borrow under the Reducing Revolving Loan Commitments during
the Reducing Revolving Loan Commitment Period on any Business Day in amounts not
less than $1,000,000 subject to the conditions set forth in this Agreement;
provided that Company shall give Agent irrevocable notice (which notice must be
received by Agent prior to 11:00 a.m., California time 5 Business Days prior to
the requested Reducing Revolving Loan Borrowing Date), specifying (a) the amount
to be borrowed and (b) the requested Reducing Revolving Loan Borrowing Date.
Upon receipt of any such notice from Company, Agent shall promptly (and in any
event on the same Business Day) notify each Bank having a Reducing Revolving
Loan Commitment thereof. Each notice of a request for borrowing by Company shall
be accompanied by a certificate of a Responsible Officer of Company (a)
indicating that the amount of cash or Cash Equivalents available to Company
(including cash available to Company from any Subsidiary but not including any
cash in the Claims
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Disbursement Account or Reserve Accounts or any account set forth on Schedule
7.17) will be less than or equal to $5,000,000 after giving effect to the
requested borrowing and the payments to be made by Company (whether by check or
otherwise) on the Reducing Revolving Loan Borrowing Date, (b) representing and
warranting that the purpose for which the requested borrowing is to be used is
permitted by, and is in accordance with, the terms and conditions of this
Agreement, and (c) representing and warranting as to compliance with the
limitations set forth in clauses (a), (b), and (c) of Section 2.6. Each Bank
having a Reducing Revolving Loan Commitment shall make the amount of its Pro
Rata Share of each borrowing available to Agent for the account of Company at
the office of Agent specified on the signature pages hereof prior to 10:00 a.m.,
California time, on the Reducing Revolving Loan Borrowing Date requested by
Company in funds immediately available to Agent. Such borrowing will then be
made available to Company by Agent crediting the Company Operating Account (or
such other deposit account as Company may designate from time to time) with the
aggregate of the amounts made available to Agent by Banks and in like funds as
received by Agent; provided, however, if, following Agent's receipt of funds for
such borrowing from Banks, but prior to 11:00 a.m., California time, on such
Reducing Revolving Loan Borrowing Date, Agent shall have received written notice
from Banks having 50% or greater of the total Reducing Revolving Loan
Commitments that any condition precedent to such borrowing has not been met and
that such Banks, therefore, have elected to stop such funding, Agent shall not
make such borrowing available to Company.
2.9 REPAYMENT OF REDUCING REVOLVING LOANS.
To the extent that the Reducing Revolving Facility Usage at the time of
any reduction of the Reducing Revolving Loan Commitments hereunder exceeds the
Reducing Revolving Loan Commitments as so reduced, the Reducing Revolving Loans
shall be repaid in the amount of any such excess in accordance with Section 2.
11. On the Reducing Revolving Loan Maturity Date, the aggregate principal amount
of the Reducing Revolving Loans then outstanding shall be repaid (together with
all accrued and unpaid interest and fees then accrued thereon) without demand.
2.10 USE OF PROCEEDS OF REDUCING REVOLVING LOANS.
The proceeds of the Reducing Revolving Loans shall be used by Company
or its Subsidiaries for the following purposes only: (a) on the Effective Date,
to finance a portion of the Recapitalization Transactions (as described in, and
only to the extent set forth in, such definition); and (b) thereafter, to
complete the repayment in full of Company's outstanding Public Debt Securities
that are due and payable in 1996, to the extent that Net Cash Proceeds from
sales of assets permitted hereunder are not sufficient to pay the same
(collectively, the "Reducing Revolving Loan Designated Purposes"); provided,
however, that Reducing Revolving Loans may be used also for lawful and permitted
corporate purposes relating to Company's domestic businesses as described in the
Business Plan solely to the extent that all Working Capital Loans and all
Reducing Revolving Loans outstanding that are used for such corporate purposes
(but not for the Reducing Revolving Loan Designated Purposes) do not exceed the
Working Capital Loan Commitments.
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2.11 MANDATORY PREPAYMENTS OF LOANS AND REDUCTION OF REDUCING
REVOLVING LOAN COMMITMENTS.
(A) MANDATORY PREPAYMENTS OF LOANS. Company shall make the
following mandatory prepayments of the Loans:
(i) If, at any time, the Working Capital Facility
Usage exceeds the lower of (y) the Adjusted Borrowing Base Amount, u
the Reducing Revolving Facility Usage, u the aggregate outstanding
balance of all Secured Floating Rate Notes, and (z) the Working Capital
Loan Commitments then in effect, Company shall immediately repay the
Working Capital Loans in an amount equal to such excess.
(ii) If at any time, the Reducing Revolving Facility
Usage exceeds the lower of (y) the Adjusted Borrowing Base Amount, less
the Working Capital Facility Usage, less the aggregate outstanding
balance of all Secured Floating Rate Notes, and (z) the Reducing
Revolving Loan Commitments then in effect, Company shall immediately
repay the Reducing Revolving Loans in an amount equal to such excess.
(iii) If at any time, the amount of cash or Cash
Equivalents held by Company and its Subsidiaries exceeds $5,000,000
(less any checks outstanding to the extent such checks have been
written to pay current expenses and not to prepay expenses except for
expenses to be incurred in the immediately subsequent three-month
period and consistent with past practices), Company shall repay
outstanding Loans in an amount equal to the excess.
(B) MANDATORY REDUCTIONS OF REDUCING REVOLVING LOAN
COMMITMENTS. The Reducing Revolving Loan Commitments automatically and ratably
shall be permanently reduced: (i) on June 30, 1997, to an amount equal to
two-thirds (2/3) of the Activated Amount; (ii) on December 31, 1997, to an
amount equal to one-third (1/3) of the Activated Amount; and (iii) on the
Reducing Revolving Loan Maturity Date, to zero.
(C) APPLICATION OF MANDATORY PREPAYMENTS. All prepayments
shall include payment of accrued interest on the principal amount prepaid and
shall be applied to the payment of interest and fees then due with respect to
the Loans prepaid before application to principal.
2.12 OPTIONAL PREPAYMENTS OF WORKING CAPITAL LOANS; NO OPTIONAL
REDUCTIONS OF WORKING CAPITAL LOAN COMMITMENTS.
A) OPTIONAL PREPAYMENTS OF WORKING CAPITAL LOANS. Company
may at any time and from time to time, so long as no Reducing Revolving Loan are
then outstanding, prepay the Working Capital Loans, in whole or in part, without
premium or penalty, upon at least one Business Day irrevocable notice to Agent,
specifying the date and amount of prepayment. Upon receipt of any such notice
Agent shall promptly (and in any event on the same Business Day) notify each
Bank having Working Capital Loan Commitments thereof. If any such notice is
given, the amount specified
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in such notice shall be due and payable on the date specified therein, together
with accrued interest and fees to such date on the amount prepaid. Partial
optional prepayments shall be in an aggregate principal amount of at least
$500,000. Optional prepayments made pursuant to this Section shall be applied
first to accrued and unpaid interest and fees due on or in connection with the
Working Capital Loans and second to repayment of the principal of the Working
Capital Loans.
(B) NO OPTIONAL REDUCTION OF WORKING CAPITAL LOAN COMMITMENTS.
Company shall not have the right to reduce the amount of the Working Capital
Loan Commitments.
2.13 OPTIONAL PREPAYMENTS OF REDUCING REVOLVING LOANS AND OPTIONAL
TERMINATION OR REDUCTIONS OF REDUCING REVOLVING LOAN COMMITMENTS.
(A) OPTIONAL PREPAYMENTS OF REDUCING REVOLVING LOANS. Company
may at any time and from time to time prepay the Reducing Revolving Loans, in
whole or in part, without premium or penalty, upon at least one Business Day
irrevocable notice to Agent, specifying the date and amount of prepayment. Upon
receipt of any such notice Agent shall promptly (and in any event on the same
Business Day) notify each Bank having Reducing Revolving Loan Commitments
thereof. If any such notice is given, the amount specified in such notice shall
be due and payable on the date specified therein, together with accrued interest
and fees to such date on the amount prepaid. Partial optional prepayments shall
be in an aggregate principal amount of at least $500,000. Optional prepayments
made pursuant to this Section shall be applied first to accrued and unpaid
interest and fees due on or in connection with the Reducing Revolving Loans and
second to repayment of the principal of the Reducing Revolving Loans.
(B) OPTIONAL TERMINATION OR REDUCTION OF REDUCING REVOLVING
LOAN COMMITMENT'S. Company shall have the right, upon not less than five
Business Days notice to Agent and Banks having Reducing Revolving Loan
Commitments, to terminate the Reducing Revolving Loan Commitments or, from time
to time, to reduce the amount of the Reducing Revolving Loan Commitments;
provided that upon such termination or reduction of the Reducing Revolving Loan
Commitments, Company shall prepay the amount of the Reducing Revolving Loans in
an amount equal to the excess, if any, of the Reducing Revolving Facility Usage
over the reduced Reducing Revolving Loan Commitments. Any such reduction shall
be in an amount of $500,000, or a whole multiple thereof, and shall reduce
permanently the amount of the Reducing Revolving Loan Commitments then in
effect.
2.14 INTEREST RATES AND PAYMENT DATES.
(A) RATE OF INTEREST. Each Loan shall bear interest at a rate
per annum equal to the Reference Rate plus the Applicable Margin.
(B) DEFAULT RATE. All Obligations (other than Letters of
Credit) shall bear interest, from and after the occurrence and during the
continuance of an Event of Default, at a per annum rate equal to the rate that
would otherwise be applicable to such Obligations pursuant to paragraph (a)
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or (d), as applicable, of this Section plus four (4.0) percentage points (the
"Default Rate"), in each case from the date of such Event of Default until such
Event of Default is cured or waived in writing. From and after the occurrence
and during the continuance of an Event of Default, the fee provided in Section
2.21(d)(i)(y) in respect of Letters of Credit shall be increased by four (4.0)
percentage points until such Event of Default is cured or waived in writing.
(C) INTEREST PAYMENT DATES. Interest shall be payable in arrears on
each Interest Payment Date; provided that interest accruing pursuant to
paragraph (b) of this Section also shall be payable on demand.
(D) MINIMUM INTEREST RATE. (i) In no event shall the rate of interest
chargeable hereunder in respect of Working Capital Loans be less than eight
percent (8.0%) per annum. To the extent that interest accrued hereunder in
respect of Working Capital Loans at the rate set forth in paragraph (a) above is
less than the foregoing minimum rate, the interest rate chargeable hereunder in
respect of Working Capital Loans for the month in question automatically shall
be deemed increased to such minimum rate of interest.
(ii) In no event shall the rate of interest chargeable hereunder
in respect of Reducing Revolving Loans be less than ten percent (10.0%) per
annum. To the extent that interest accrued hereunder in respect of Reducing
Revolving Loans at the rate set forth in paragraph (a) above is less than the
foregoing minimum rate, the interest rate chargeable hereunder in respect of
Reducing Revolving Loans for the month in question automatically shall he deemed
increased to such minimum rate of interest.
2.15 FEES.
(A) UNUSED LINE FEES. Company shall pay to Agent for the ratable
benefit of the Banks unused line fees on the last day of each month and during
the term of this Agreement, in arrears, in an amount equal to: (i) with respect
to the Working Capital Loan Commitments, one-half of one percent per annum times
the Average Unused Portion of the Working Capital Loan Commitments; and (ii)
with respect to the Reducing Revolving Loan Commitments, commencing with the
making of the initial Reducing Revolving Loan, one-half of one percent per annum
times the Average Unused Portion of the Reducing Revolving Loan Commitments.
(B) ACTIVATION FEES. Up to December 31, 1996, Company shall pay to
Agent for the ratable benefit of the Banks, concurrently with the delivery of
the initial Activation Notice on the Effective Date and the delivery of each
subsequent Activation Notice designating a new Activated Amount greater than the
previous Activated Amount, a fee (an "Activation Fee") in an amount equal to one
and one-half percent times the Activated Amount (or, if less, the increase in
the Activated Amount from the previous Activated Amount); provided, however,
that the total of all Activation Fees shall not exceed $375,000.
(c) [intentionally omitted]
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(D) FINANCIAL EXAMINATION FEES. Company shall pay to Agent: (i) a fee
of Six Hundred Fifty Dollars ($650) per day per examiner, plus reasonable
out-of-pocket expenses for each financial analysis and examination of Company or
its Subsidiaries performed by Agent or Banks or their agents: (ii) a fee of
Seven Hundred Fifty Dollars ($750) per day per appraiser, plus out-of-pocket
expenses for each appraisal of the Collateral performed by Agent or Banks or
their agents; (iii) the actual charges paid or incurred by Agent if it elects to
employ the services of one or more non-Affiliates to perform such financial
analyses and examinations (i.e., audits) of Company or to appraise the
Collateral; and (iv) for the sole and separate account of Agent, on each
anniversary of the Effective Date, a fee of One Thousand Dollars ($1,000) per
year for Agent's loan documentation review.
(E) SERVICING FEE. Company shall pay to Agent for the sole and
separate account of Agent, on the first day of each month and during the term of
this Agreement, and thereafter so long as any Obligations are outstanding, a
servicing fee, in arrears, in an amount equal to Five Thousand Dollars ($5,000)
per month; provided, however, that so long as any Indebtedness of Company is
outstanding under the Secured Floating Rate Notes, the servicing fee payable by
Company to Agent shall equal Fifteen Thousand Dollars ($15,000) per month.
2.16 COMPUTATION OF INTEREST AND FEES.
(a) Interest on Loans and fees shall be calculated on the basis of a
360-day year and the actual days elapsed. Any change in the interest rate on a
Loan resulting from a change in the Reference Rate shall become effective as of
the opening of business on the day on which such change in the Reference Rate is
announced. Each determination of an interest rate by Agent pursuant to any
provision of this Agreement shall be conclusive and binding on Company and Banks
in the absence of manifest error.
(b) Company hereby authorizes Agent, at its option, without prior
notice to Company, to charge all interest, fees, costs, expenses (as and when
incurred), and all other payments due under this Agreement or any other Loan
Document to Company's loan account, which amounts thereafter shall accrue
interest at the rate then applicable hereunder.
2.17 PRO RATA TREATMENT AND PAYMENTS.
(A) APPORTIONMENT OF PAYMENTS. Each borrowing by Company from Banks
hereunder, each payment by Company on account of any fee hereunder and each
reduction of the Working Capital Loan Commitments or the Reducing Revolving Loan
Commitments, as the case may be, shall be made pro rata according to the
respective Working Capital Loan Commitments or the respective Reducing Revolving
Loan Commitments, as the case may be, of Banks. Each payment (including each
prepayment) by Company on account of principal of and interest on the Loans
shall be made pro rata according to the effective outstanding principal amounts
of the Loans then held by Banks. All payments (including prepayments) to be made
by Company hereunder and under the Notes, whether on account of principal,
interest, fees or otherwise, shall be made without set off or
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counterclaim and shall be made prior to 9:00 a.m., California time, on the due
date thereof, to Agent, for the account of Banks in accordance with their
interests, at Agent's office specified on the appropriate signature page hereof,
in Dollars and in immediately available funds. Agent shall distribute such
payments to Banks in accordance with their pro rata interests promptly upon
receipt in like funds as received. If any payment hereunder becomes due and
payable on a day other than a Business Day, such payment shall be extended to
the next succeeding Business Day, and, with respect to payments of principal,
interest thereon shall be payable at the then applicable rate during such
extension.
(B) PAYMENTS BY BANKS. Unless Agent shall have been notified in
writing by any Bank having a Commitment prior to a Loan Borrowing Date that such
Bank will not make the amount that would constitute its Pro Rata Share of the
Working Capital Loan borrowing or Reducing Revolving Loan borrowing, as the case
may be, on such date available to Agent, Agent may assume that such Bank has
made such amount available to Agent on such Loan Borrowing Date, and Agent may,
it its sole discretion, but shall not be obligated to, in reliance upon such
assumption, to make available to Company a corresponding amount. If such
corresponding amount is not made available to Agent on the Loan Borrowing Date,
Agent shall be entitled to recover such corresponding amount from such Bank,
together with interest thereon, for each day from such Loan Borrowing Date until
the date such amount is paid to Agent, at the customary rate set by Agent for
correction of errors among banks for three Business Days and thereafter at the
Reference Rate. A certificate of Agent submitted to any Bank with respect to any
amounts owing under this Section shall be conclusive in the absence of manifest
error. If such Bank does not pay such corresponding amount to Agent forthwith
upon demand, Agent shall promptly notify Company and Company shall immediately
pay such corresponding amount to Agent with interest thereon, for each day from
the Loan Borrowing Date until the date such amount is paid to Agent, at the rate
payable under this Agreement for Working Capital Loans or Reducing Revolving
Loans, as the case may be.
2.18 REQUIREMENTS OF LAW.
If any Bank shall have determined that any change in any Requirement of
Law regarding capital adequacy or in the interpretation or application thereof
or compliance by such Bank or any corporation controlling such Bank with any
request or directive regarding capital adequacy (whether or not having the force
of law) from any Governmental Authority made subsequent to the date hereof does
or shall have the effect of reducing the rate of return on such Bank's or such
corporation's capital as a consequence of its obligations hereunder to a level
below that which such Bank or such corporation could have achieved but for such
change or compliance (taking into consideration such Bank's or such
corporation's policies with respect to capital adequacy) by an amount deemed by
such Bank to be material, then from time to time, after submission by such Bank
to Company (with a copy to Agent) of a written request therefor, Company shall
pay to such Bank such additional amount or amounts as will compensate such Bank
for such reduction. The agreements in this Section shall survive the payment of
the Notes and all other amounts due hereunder.
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2.19 TAXES.
(A) PAYMENTS TO BE FREE AND CLEAR; GROSS-UP. All payments made by
Company under this Agreement and the Notes shall be made free and clear of, and
without deduction or withholding for or on account of, any present or future
taxes, levies, imposts, duties, charges, fees, deductions or withholdings, now
or hereafter imposed, levied, collected, withheld or assessed by any
Governmental Authority, excluding, (i) in the case of Agent and each Bank, net
income taxes and franchise taxes (imposed in lieu of net income taxes) imposed
on Agent or such Bank, as the case may be, as a result of a present or former
connection between the jurisdiction of the government or taxing authority
imposing such tax and Agent or such Bank (excluding a connection arising solely
from Agent or such Bank having executed, delivered or performed its obligations
or received a payment under, or enforced, this Agreement, the Notes or any other
Loan Document) or any political subdivision or taxing authority thereof or
therein and (ii) in the case of each Bank organized under the laws of a
jurisdiction outside the United States, United States federal withholding tax
payable with respect to payments by Company that would not have been imposed had
such Bank, to the extent then required thereunder, delivered to Company and
Agent the forms prescribed by Section 2.19(b) (all such non-excluded taxes,
levies, imposts, duties, charges, fees, deductions and withholdings being
hereinafter called "Taxes"). If any Taxes are required by law to be withheld
from any amounts payable to Agent or any Bank hereunder or under the Notes, the
amounts so payable to Agent or such Bank shall be increased to the extent
necessary to yield to Agent or such Bank (after payment of all Taxes) interest
or any such other amounts payable hereunder at the rates or in the amounts
specified in this Agreement and the Notes. If Company fails to pay any Taxes
when due to the appropriate taxing authority, Company shall indemnify Agent and
Banks for any incremental taxes, interest or penalties that may become payable
by Agent or any Bank as a result of any such failure. The agreements in this
Section shall survive the termination of this Agreement and the payment of the
Notes and all other amounts payable hereunder.
(B) TAX CERTIFICATES. Each Bank that is not organized under the laws
of the United States of America or a state thereof agrees that it will deliver
to Company and Agent (i) two duly completed copies of United States Internal
Revenue Service Form 1001 or 4224 or successor applicable form, as the case may
be, and (ii) an Internal Revenue Service Form W-8 or W-9 or successor applicable
form. Each such Bank also agrees to deliver to Company and Agent two further
copies of the said Form 1001 or 4224 and Form W-8 or W-9, or successor
applicable forms, or other manner of certification, as the case may be, on or
before the date that any such form expires or becomes obsolete or after the
occurrence of any event requiring a change in the most recent form previously
delivered by it to Company, and such extensions or renewals thereof as may
reasonably be requested by Company or Agent, unless in any such case any change
in treaty, law or regulation has occurred prior to the date on which any such
delivery would otherwise be required which renders all such forms inapplicable
or which would prevent such Bank from duly completing and delivering any such
form with respect to it and such Bank so advises Company and Agent. Such Bank
shall certify (i) in the case of a Form 1001 or 4224, that it is entitled to
receive payments under this Agreement without deduction or withholding of any
United States federal income taxes and (ii) in
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the case of a Form W-8 or W-9, that it is entitled to an exemption from United
States backup withholding tax.
2.20 [INTENTIONALLY OMITTED].
2.21 ISSUANCE OF LETTERS OF CREDIT AND BANKS' PURCHASE OF PARTICIPATIONS
THEREIN.
(A) LETTERS OF CREDIT. In addition to Company requesting that
Banks make Working Capital Loans pursuant to Section 2.1, Company may request,
in accordance with the provisions of this Section 2.21, from time to time during
the period from the Effective Date to but excluding the Working Capital Loan
Maturity Date, that Issuing Bank issue Letters of Credit for the account of
Company for the purposes specified in the definition of Standby Letters of
Credit. On the Effective Date, any and all Letters of Credit set forth on
Schedule L-1 shall be deemed issued under this Section 2.21(a). Subject to the
terms and conditions of this Agreement and in reliance upon the representations
and warranties of Company herein set forth, Issuing Bank shall issue Letters of
Credit in accordance with the provisions of this Section 2.21; provided that
Company shall not request that Issuing Bank to issue (and Issuing Bank shall not
issue):
(i) any Letter of Credit if, after giving effect to such
issuance, the Working Capital Facility Usage would exceed the Working
Capital Loan Commitments then in effect;
(ii) any Letter of Credit if, after giving effect to such
issuance, the Letter of Credit Usage would exceed $5,000,000;
(iii) any Letter of Credit having an expiration date later
than the earlier of (a) the Working Capital Loan Maturity Date and (b)
the date which is one year from the date of issuance of such Letter of
Credit; provided that the immediately preceding clause (b) shall not
prevent Issuing Bank from agreeing that a Letter of Credit will
automatically be extended for one or more successive periods not to
exceed one year each unless Issuing Bank elects not to extend for any
such additional period; provided further that Issuing Bank shall
deliver a written notice to Agent setting forth the last day on which
Issuing Bank may give notice that it will not extend such Letter of
Credit (the "Notification Date" with respect to such Letter of Credit)
at least ten Business Days prior to such Notification Date; and
provided, further that, unless Required Banks otherwise consent,
Issuing Bank shall give notice that it will not extend such Letter of
Credit if it has knowledge that an Event of Default has occurred and is
continuing on such Notification Date; or
(iv) any Letter of Credit denominated in a currency other than
Dollars.
(B) MECHANICS OF ISSUANCE.
(i) Notice of Issuance. Whenever Company desires the issuance
of a Letter of Credit, it shall deliver to Issuing Bank (with a copy to
Agent if Agent is not Issuing Bank)
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a Notice of Issuance of Letter of Credit no later than 10:00 a.m.
(California time) at least four Business Days or in such shorter period
as may be agreed to by the Issuing Bank in any particular instance, in
advance of the proposed date of issuance. The Notice of Issuance of
Letter of Credit shall specify (i) the proposed date of issuance (which
shall be a Business Day), (ii) the face amount of the Letter of Credit,
(iii) the expiration date of the Letter of Credit, (iv) the name and
address of the beneficiary, and (v) the verbatim text of the proposed
Letter of Credit or the proposed terms and conditions thereof,
including a precise description of any documents and the verbatim text
of any certificates to be presented by the beneficiary which, if
presented by the beneficiary prior to the expiration date of the Letter
of Credit would require the Issuing Bank to make payment under the
Letter of Credit; provided that Issuing Bank in its reasonable
discretion, may require changes in the text of the proposed Letter of
Credit or any such documents or certificates, including that such
Letter of Credit be governed by the Uniform Customs and Practices
publication number 500; and provided further that no Letter of Credit
shall require payment against a conforming draft to be made earlier
than the third Business Day after such draft is presented.
Company shall notify Issuing Bank (and Agent, if
Agent is not such Issuing Bank) prior to the issuance of any Letter of
Credit if any of the matters to which Company is required to certify in
the applicable Notice of Issuance of Letter of Credit is no longer true
and correct as of the proposed date of issuance of such Letter of
Credit, and upon the issuance of any Letter of Credit Company shall be
deemed to have recertified, as of the date of such issuance, as to the
matters to which Company is required to certify in the applicable
Notice of Issuance of Letter of Credit.
(ii) Notification to Banks. Promptly after receipt of
a Notice of Issuance of Letter of Credit (i) Agent shall notify each
Bank of the proposed issuance of such Letter of Credit and the amount
of such Bank's respective participation therein, determined in
accordance with Section 2.21(c) and (ii) Agent shall deliver to each
other Bank a copy of such Notice of Issuance of Letter of Credit.
(iii)Issuance of Letter of Credit. Upon satisfaction
or waiver (in accordance with Section 10.1) of the conditions set forth
in Section 5.2, Issuing Bank shall issue the requested Letter of Credit
in accordance with the Issuing Bank's standard operating procedures,
and upon its issuance of such Letter of Credit Issuing Bank shall
promptly notify Agent and each Bank of such issuance, which notice
shall be accompanied by a copy of such Letter of Credit.
(iv) Reports to Banks. Within 15 days after the end
of each calendar quarter ending after the Effective Date, so long as
any Letter of Credit shall have been outstanding during such calendar
quarter, Issuing Bank shall deliver to each other Bank a report setting
forth the average for such calendar quarter of the daily maximum amount
available to be drawn under the Letters of Credit issued by Issuing
Bank that were outstanding during such calendar quarter.
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(C) BANKS' PURCHASE OF PARTICIPATIONS IN LETTERS OF
CREDIT. Immediately upon the issuance of each Letter of Credit, each Bank shall
be deemed to, and hereby agrees to, have irrevocably purchased from Issuing Bank
a participation in such Letter of Credit and drawings thereunder in an amount
equal to such Bank's Pro Rata Share of the maximum amount which is or at any
time may become available to be drawn thereunder.
(D) LETTER OF CREDIT FEES. Company agrees to pay the
following amounts to Issuing Bank or Agent, as the case may be, with respect to
Letters of Credit issued by it:
(i) with respect to each Letter of Credit, (y) a
letter of credit fee to Agent equal to 1.25% per annum of the average
daily maximum amount available to be drawn under such Letter of Credit,
in each case payable in arrears on and through the last day of each
month and (z) to the extent Agent causes a third party to become
Issuing Bank, any and all service charges, commissions, fees and costs
to Agent in connection with the issuance by such Issuing Bank of such
Letter of Credit;
(ii) with respect to the issuance, amendment or
transfer of each Letter of Credit and each drawing made thereunder
(without duplication of the fees payable under clause (i) above),
documentary and processing charges in accordance with Issuing Bank's
standard schedule for such charges in effect at the time of such
issuance, amendment, transfer or drawing, as the case may be.
Promptly upon receipt by Issuing Bank of any amount described in clause
(i)(y) of this Section 2.21(d), Issuing Bank shall distribute to each
other Bank its Pro Rata Share of such amount.
(E) DRAWINGS AND REIMBURSEMENT OF AMOUNTS DRAWN UNDER
LETTERS OF CREDIT.
(i) Responsibility of Issuing Bank With Respect to
Requests For Drawings. In determining whether to honor any request for
drawing under any Letter of Credit by the beneficiary thereof, Issuing
Bank shall be responsible only to determine that the documents and
certificates required to be delivered under such Letter of Credit have
been delivered and that they comply on their face with the requirements
of such Letter of Credit.
(ii) Reimbursement by Company of Amounts Drawn Under
Letters of Credit. If Issuing Bank has determined to honor a request
for drawing under a Letter of Credit issued by it, Issuing Bank shall
immediately notify Company and Agent, and Company shall reimburse
Issuing Bank on or before the Business Day immediately following the
date on which such drawing is honored (the "Reimbursement Date") in an
amount in same day funds equal to the amount of such drawing; provided
that, anything contained in this Agreement to the contrary
notwithstanding, (y) unless Company shall have notified Agent and
Issuing Bank (if Agent is not Issuing Bank) prior to 10:00 a.m.
(California time) on the date of such
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drawing that Company intends to reimburse Issuing Bank for the amount
of such drawing with funds other than the proceeds of Working Capital
Loans, Company shall be deemed to have given a timely notice of
borrowing to Agent requesting Banks to make Working Capital Loans on
the Reimbursement Date in an amount equal to the amount of such
drawing, and (z) subject to satisfaction or waiver of the conditions
specified in Section 5.2, Banks shall, on the Reimbursement Date, make
Working Capital Loans in the amount of such drawing, the proceeds of
which shall be applied directly by Agent to reimburse Issuing Bank for
the amount of such drawing; and provided, further that if for any
reason proceeds of Working Capital Loans are not received by Issuing
Bank on the Reimbursement Date in an amount equal to the amount of such
drawing, Company shall reimburse Issuing Bank, on demand, in an amount
in same day funds equal to the excess of the amount of such drawing
over the aggregate amount of such Working Capital Loans, if any, which
are so received. Nothing in this Section 2.21(e) shall be deemed to
relieve any Bank from its obligation to make Working Capital Loans on
the terms and conditions set forth in this Agreement.
(F) PAYMENT BY BANKS OF UNREIMBURSED DRAWINGS UNDER
LETTERS OF CREDIT.
(i) Payment by Banks. If Company shall fail for any
reason to reimburse Issuing Bank as provided in Section 2.21(e) in an
amount equal to the amount of any drawing honored by Issuing Bank under
a Letter of Credit, Issuing Bank shall promptly notify each other Bank
of the unreimbursed amount of such drawing and of such other Bank's
respective participation therein based on such Bank's Pro Rata Share.
Each Bank shall make available to Issuing Bank an amount equal to its
respective participation, in same day funds, at the office of Issuing
Bank specified in such notice, not later than 11:00 a.m. (California
time) on the first Business Day after the date notified by Issuing Bank
or Agent. If any Bank fails to make available to Issuing Bank on such
Business Day the amount of such Bank's participation in such Letter of
Credit as provided in this Section 2.21(f), Issuing Bank shall be
entitled to recover such amount on demand from such Bank together with
interest thereon at the rate customarily used by Issuing Bank for the
correction of errors among banks for three Business Days and thereafter
at the Reference Rate. Nothing in this Section 2.21(f) shall be deemed
to prejudice the right of any Bank to recover from Issuing Bank any
amounts made available by such Bank to Issuing Bank pursuant to this
Section 2.21(f) if it is determined by the final judgment of a court of
competent jurisdiction that the payment with respect to a Letter of
Credit by Issuing Bank in respect of which payment was made by such
Bank constituted gross negligence or willful misconduct on the part of
Issuing Bank.
(ii) Distribution to Banks of Reimbursements Received
From Company. If Issuing Bank shall have been reimbursed by other Banks
pursuant to Section 2.21(f) for all or any portion of any drawing
honored by Issuing Bank under a Letter of Credit issued by it, Issuing
Bank shall distribute to each other Bank which has paid all amounts
payable by it under Section 2.21(f) with respect to such drawing such
other Bank's Pro Rata Share of all payments subsequently received by
Issuing Bank from Company in reimbursement of such drawing when such
payments are received. Any such distribution shall be made to a Bank at
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its primary address set forth below its name on the appropriate
signature page hereof or at such other address as such Bank may
request.
(G) INTEREST ON AMOUNTS DRAWN UNDER LETTERS OF CREDIT.
(i) Payment of Interest by Company. Company agrees to
pay to Issuing Bank, with respect to drawings made under any Letters of
Credit issued by it, interest on the amount paid by Issuing Bank in
respect of each such drawing from the date of such drawing to but
excluding the date such amount is reimbursed by Company (including any
such reimbursement out of the proceeds of Working Capital Loans
pursuant to Section 2.21(e)(ii)) at a rate equal to (a) for the period
from the date of such drawing to but excluding the Reimbursement Date,
the rate then in effect under this Agreement with respect to Working
Capital Loans and (b) thereafter, a rate which is 2% per annum in
excess of the rate of interest otherwise payable under this Agreement
with respect to Working Capital Loans. Interest payable pursuant to
this Section 2.21(g) shall be computed on the basis of a 360-day year
for the actual number of days elapsed in the period during which it
accrues and shall be payable on demand or, if no demand is made, on the
date on which the related drawing under a Letter of Credit is
reimbursed in full.
(ii) Distribution of Interest Payments by Issuing
Bank. Promptly upon receipt by Issuing Bank of any payment of interest
pursuant to Section 2.21(g)(i), (y) Issuing Bank shall distribute to
each other Bank, out of the interest received by Issuing Bank in
respect of the period from the date of the applicable drawing under a
Letter of Credit issued by Issuing Bank to but excluding the date on
which Issuing Bank is reimbursed for the amount of such drawing
(including any such reimbursement out of the proceeds of Working
Capital Loans pursuant to Section 2.21(e)(ii), the amount that such
other Bank would have been entitled to receive in respect of the letter
of credit fee that would have been payable in respect of such Letter of
Credit for such period pursuant to Section 2.21(d)(i)(z) if no drawing
had been made under such Letter of Credit, and (z) if Issuing Bank
shall have been reimbursed by other Banks pursuant to Section 2.21(f)
for all or any portion of such drawing, Issuing Bank shall distribute
to each other Bank which has paid all amounts payable by it under
Section 2.21(f) with respect to such drawing such other Bank's Pro Rata
Share of any interest received by Issuing Bank in respect of that
portion of such drawing so reimbursed by other Banks for the period
from the date on which Issuing Bank was so reimbursed by other Banks to
and including the date on which such portion of such drawing is
reimbursed by Company. Any such distribution shall be made to a Bank at
its primary address set forth below its name on the appropriate
signature page hereof or at such other address as such Bank may
request.
(H) OBLIGATIONS ABSOLUTE. The obligation of Company to
reimburse Issuing Bank for drawings made under the Letters of Credit issued by
it and to repay any Working Capital Loans made by Banks pursuant to Section
2.21(e) and the obligations of Banks under Section 2.21(f) shall be
unconditional and irrevocable and shall be paid strictly in accordance with the
terms of this Agreement under all circumstances including the following
circumstances:
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(i) any lack of validity or enforceability of any
Letter of Credit;
(ii) the existence of any claim, set-off, defense or
other right which Company or any Bank may have at any time against a
beneficiary or any transferee of any Letter of Credit (or any Persons
for whom any such transferee may be acting), Issuing Bank or other Bank
or any other Person or, in the case of a Bank, against Company, whether
in connection with this Agreement, the transactions contemplated herein
or any unrelated transaction (including any underlying transaction
between Company or one of its Subsidiaries and the beneficiary for
which any Letter of Credit was procured);
(iii) any draft, demand, certificate or other
document presented under any Letter of Credit proving to be forged,
fraudulent, invalid or insufficient in any respect or any statement
therein being untrue or inaccurate in any respect;
(iv) payment by Issuing Bank under any Letter of
Credit against presentation of a demand, draft or certificate or other
document which does not comply with the terms of such Letter of Credit:
(v) any adverse change in the business, operations,
properties, assets, condition (financial or otherwise) or prospects of
Company or any of its Subsidiaries;
(vi) any breach of this Agreement or any other Loan
Document by any party thereto;
(vii) any other circumstance or happening whatsoever,
whether or not similar to any of the foregoing; or
(viii) the fact that an Event of Default or a Default
shall have occurred and be continuing;
provided, in each case, that payment by Issuing Bank under the applicable Letter
of Credit shall not have constituted gross negligence or willful misconduct of
Issuing Bank under the circumstances in question (as determined by a final
judgment of a court of competent jurisdiction).
(I) INDEMNIFICATION; NATURE OF ISSUING BANKS' DUTIES. In
addition to other amounts payable as provided in this Section 2.21, Company
hereby agrees to protect, indemnify, pay and save harmless Issuing Bank from and
against any and all claims, demands, liabilities, damages, losses, costs,
charges and expenses (including reasonable fees, expenses and disbursements of
counsel and allocated costs of internal counsel) which Issuing Bank may incur or
be subject to as a consequence, direct or indirect, of (i) the issuance of any
Letter of Credit by Issuing Bank, other than as a result of (x) the gross
negligence or willful misconduct of Issuing Bank as determined by a final
judgment of a court of competent jurisdiction or (y) subject to the following
clause (ii), the wrongful dishonor by Issuing Bank of a proper demand for
payment made under any Letter of Credit issued
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by it or (ii) the failure of Issuing Bank to honor a drawing under any such
Letter of Credit as a result of any act or omission, whether rightful or
wrongful, of any present or future de jure or de facto government or
governmental authority (all such acts or omissions herein called "Governmental
Acts").
(J) NATURE OF ISSUING BANKS' DUTIES. As between Company and
Issuing Bank, Company assumes all risks of the acts and omissions of, or misuse
of the Letters of Credit issued by Issuing Bank by, the respective beneficiaries
of such Letters of Credit. In furtherance and not in limitation of the
foregoing, Issuing Bank shall not be responsible for: (i) the form, validity,
sufficiency, accuracy, genuineness or legal effect of any document submitted by
any party in connection with the application for and issuance of any such Letter
of Credit, even if it should in fact prove to be in any or all respects invalid,
insufficient, inaccurate, fraudulent or forged; (ii) the validity or sufficiency
of any instrument transferring or assigning or purporting to transfer or assign
any such Letter of Credit or the rights or benefits thereunder or proceeds
thereof, in whole or in part, which may prove to be invalid or ineffective for
any reason; (iii) failure of the beneficiary of any such Letter of Credit to
comply fully with any conditions required in order to draw upon such Letter of
Credit; (iv) errors, omissions, interruptions or delays in transmission or
delivery of any messages, by mail, cable, telegraph, telex or otherwise, whether
or not they be in cipher; (v) errors in interpretation of technical terms; (vi)
any loss or delay in the transmission or otherwise of any document required in
order to make a drawing under any such Letter of Credit or of the proceeds
thereof; (vii) the misapplication by the beneficiary of any such Letter of
Credit of the proceeds of any drawing under such Letter of Credit; or (viii) any
consequences arising from causes beyond the control of Issuing Bank, including
any Governmental Acts, and none of the above shall affect or impair, or prevent
the vesting of, any of Issuing Bank's rights or powers hereunder.
In furtherance and extension and not in limitation of the
specific provisions set forth in the first paragraph of this Section 2.21(j),
any action taken or omitted by Issuing Bank under or in connection with the
Letters of Credit issued by it or any documents and certificates delivered
thereunder, if taken or omitted in good faith, shall not put Issuing Bank under
any resulting liability to Company.
Anything to the contrary contained in this Section 2.21(j)
notwithstanding, Company shall retain any and all rights it may have against
Issuing Bank for any liability arising solely out of the gross negligence or
willful misconduct of Issuing Bank, as determined by a final judgment of a court
of competent jurisdiction.
(K) INCREASED COSTS AND TAXES RELATING TO LETTERS OF CREDIT.
If Issuing Bank or any Bank shall determine (which determination shall, absent
manifest error, be final and conclusive and binding upon all parties hereto)
that any law, treaty or governmental rule, regulation or order, or any change
therein or in the interpretation, administration or application thereof
(including the introduction of any new law, treaty or governmental rule,
regulation or order), or any determination of a court or governmental authority,
in each case that becomes effective after the date hereof, or compliance by
Issuing Bank or any Bank with any guideline, request or directive issued or made
after
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the date hereof by any central bank or other governmental or quasi-governmental
authority (whether or not having the force of law):
(i) subjects Issuing Bank or any Bank (or its
applicable lending or letter of credit office) to any additional tax
(other than any tax on the overall net income of Issuing Bank or Bank)
with respect to the issuing or maintaining of any Letters of Credit or
the purchasing or maintaining of any participations therein or any
other obligations under this Section 2.21, whether directly or by such
being imposed on or suffered by Issuing Bank;
(ii) imposes, modifies or holds applicable any
reserve (including any marginal, emergency, supplemental, special or
other reserve), special deposit, compulsory loan, FDIC insurance or
similar requirement in respect of any Letters of Credit issued by
Issuing Bank or participations therein purchased by any Bank; or
(iii)imposes any other condition on or affecting
Issuing Bank or any Bank (or its applicable lending or letter of credit
office) regarding this Section 2.21 or any Letter of Credit or any
participation therein;
and the result of any of the foregoing is to increase the cost to Issuing Bank
or any Bank of agreeing to issue, issuing or maintaining any Letter of Credit or
agreeing to purchase, purchasing or maintaining any participation therein or to
reduce any amount received or receivable by Issuing Bank or Bank (or its
applicable lending or letter of credit office) with respect thereto; then, in
any case, Company shall promptly pay to Issuing Bank or any such Bank, upon
receipt of the statement referred to in the next sentence, such additional
amount or amounts as may be necessary to compensate Issuing Bank or such Bank
for any such increased cost or reduction in amounts received or receivable
hereunder. Issuing Bank or any such Bank shall deliver to Company a written
statement, setting forth in reasonable detail the basis for calculating the
additional amounts owed to Issuing Bank or such Bank under this Section 2.21(k),
which statement shall be conclusive and binding upon all parties hereto absent
manifest error.
(L) L/C GUARANTEES.
(i) Company expressly understands and agrees that
Issuing Bank shall have no obligation to arrange for the issuance by
other issuing banks of the letters of credit that are to be the subject
of L/C Guarantees.
(ii) Company agrees to be bound by the other issuing
bank' s regulations and interpretations of any letters of credit
guarantied by Issuing Bank pursuant to an LIC Guarantee and opened to
or for Company's account or by Issuing Bank's interpretations of any
letter of credit issued by Issuing Bank to or for Company's account,
even though this interpretation may be different from Company's own,
and Company understands and agrees that Issuing Bank shall not be
liable for any error, negligence, or mistake, whether of omission or
commission, in following Company's instructions or those contained in
the Letter of Credit
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or any modifications, amendments, or supplements thereto. Company
understands that the L/C Guarantees may require Issuing Bank to
indemnify the other issuing bank for certain costs or liabilities
arising out of claims by Company against such other issuing bank.
Company hereby agrees to indemnify, save, defend, and hold Issuing Bank
harmless with respect to any loss, cost, expense (including reasonable
attorneys fees), or liability incurred by Issuing Bank under any L/C
Guaranty as a result of Issuing Bank's indemnification of any such
other issuing bank.
(iii) Company hereby authorizes and directs any other
bank that issues a letter of credit guaranteed by Issuing Bank to
deliver to Issuing Bank all instruments, documents, and other writings
and property received by the other issuing bank pursuant to such letter
of credit, and to accept and rely upon Issuing Bank's instructions and
agreements with respect to all matters arising in connection with such
letter of credit and the related application. Company may or may not be
the "applicant" or "account party" with respect to such letter of
credit.
(iv) Any and all charges, commissions, fees, and
costs incurred by Issuing Bank relating to the letters of credit
guaranteed by Issuing Bank shall be considered Obligations for purposes
of this Agreement and immediately shall be reimbursable by Company to
Issuing Bank.
2.22 EARLY TERMINATION BY COMPANY. Anything herein to the contrary
notwithstanding, Company has the option, at any time upon 30 days prior written
notice to Agent, to terminate this Agreement and all, but not less than all, of
the Commitments by paying to Agent, in cash, the Obligations (including an
amount equal to the full amount of the Letter of Credit Usage); provided,
however, that as a condition to the effectiveness of Company's exercise of such
option, all Indebtedness of the Company outstanding under the Secured Floating
Rate Notes shall have been previously or concurrently paid in full in cash.
SECTION 3
COLLATERAL
3.1 LIENS IN SUBSIDIARY STOCK, CONTRACT RECEIVABLES, REAL
PROPERTY AND PERSONAL PROPERTY.
To secure the prompt payment to Banks of the Secured Debt,
including the Loans, together with all costs, expenses and fees payable by
Company hereunder, Company has granted, and caused each Subsidiary to grant, to
Collateral Agent, for the benefit of Banks, a continuing Lien in and to all of
the following property and interests in property of Company and the
Subsidiaries, except the Excluded Property, whether now owned or existing or
hereafter acquired or arising, or in which Company and Subsidiaries now or
hereafter have any rights, and wherever located, and all proceeds thereof
("Collateral"):
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(a) the Subsidiary Stock;
(b) the Homesite Contracts Receivable;
(c) the Commercial Receivables;
(d) the Real Property; and
(e) the Personal Property.
At such times as any Excluded Property is freed of contractual or legal
restrictions against becoming subject to a Lien to secure the Secured Debt and
upon the distribution of any Trust Property to Company or a Subsidiary, such
property shall, automatically, become subject to the Liens created by the
Security Documents, and Company shall notify Agent in writing of such event and
take such further actions as may be required by Agent and/or Collateral Agent to
evidence and perfect such Liens; provided that, in no event, shall a Lien be
granted on any assets required to be placed in a Reserve Account pursuant to the
Reorganization Plan or the Homesite Program.
3.2 SECURITY DOCUMENTS.
To evidence and perfect the Liens of Collateral Agent and
Agent in the Collateral in accordance with applicable law, Company has executed
and delivered and will execute and deliver and has caused the Subsidiaries to
execute and deliver and will cause the Subsidiaries to execute and deliver to
Collateral Agent the Security Documents, which Security Documents have been or
will be filed and recorded, and Company has delivered and will deliver and has
caused the Subsidiaries to deliver and will cause the Subsidiaries to deliver to
Collateral Agent any Collateral if the perfection of a Lien against such
Collateral requires possession thereof for purposes of perfecting such Liens,
all at the cost and expense of Company. Specifically, but without limiting the
generality of the foregoing, Company has or will, and has caused or will cause
the Subsidiaries to. do the following:
(A) STOCK PLEDGE. To evidence and perfect the Liens of
Collateral Agent in the Subsidiary Stock, Company and the Subsidiaries owning
other Subsidiaries, Excluded Subsidiaries, or Unrestricted Subsidiaries have
executed and delivered the Stock Pledge Agreement and have executed and
delivered and will execute and deliver related undated stock powers executed in
blank and have delivered and will deliver the original certificates representing
the Subsidiary Stock to Collateral Agent and have caused and will cause all
issuers of Subsidiary Stock to execute and deliver pledge acknowledgments
pursuant to the Stock Pledge Agreement.
(B) HOMESITE CONTRACTS RECEIVABLES AND COMMERCIAL RECEIVABLES.
To evidence and perfect the Liens of Collateral Agent in the Homesite Contracts
Receivable and Commercial Receivables, Company and Subsidiaries have executed
and delivered, and will execute and deliver, to Collateral Agent the Security
Agreements, together with related financing statements, which have been or will
be filed and recorded in accordance with applicable law, and Company and
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Subsidiaries have duly endorsed, and will duly endorse, any and all promissory
notes included in the Homesite Contracts Receivable and Commercial Receivables
to the order of Collateral Agent and have delivered, and will deliver, such
promissory notes and the related mortgages or deeds of trust to Collateral Agent
or its designee, and have executed and delivered, and will deliver, assignments
of promissory notes and mortgages or deeds of trust, filed and recorded in
accordance with applicable law, and, as to Commercial Receivables acquired
following the Original Effective Date, accompanied by ALTA title insurance
policies naming Collateral Agent as the insured mortgagee thereunder.
(C) REAL PROPERTY. To evidence and perfect the liens of
Collateral Agent in the Real Property, Company and Subsidiaries have executed
and delivered, and will execute and deliver, to Collateral Agent the Mortgages
and Deeds of Trust and related financing statements encumbering such Real
Property, which have been or will be filed and recorded in accordance with
applicable law, accompanied by ALTA title insurance policies (if required)
insuring Collateral Agent's Lien represented thereby, and, if requested by
Agent, surveys of such Real Property.
(D) JOINT VENTURE PLEDGE. To evidence and perfect the Liens of
Collateral Agent in the interests of the Venture Subsidiaries in the Joint
Ventures, Company has caused, and will cause, the Venture Subsidiaries to
execute and deliver the Joint Venture Pledge Agreement and all requisite
consents in respect of such Liens.
(E) PERSONAL PROPERTY. To evidence and perfect the Liens of
Collateral Agent or Agent in the Personal Property, Company and Subsidiaries
have executed and delivered, and will execute and deliver, to Collateral Agent
the Security Agreements, together with related financing statements, which have
been or will be filed and recorded in accordance with applicable law. To the
extent that the Personal Property comprised Investments or Bank Accounts,
Company and Subsidiaries shall take the following actions:
(i) with respect to any Investment or Bank Account
which is or becomes evidenced by an agreement, instrument, certificate
or document, including promissory notes, stock certificates, bonds,
debentures, securities and certificates of deposit, Company shall
deliver, or shall cause such Subsidiary to deliver, the original
thereof to Collateral Agent, together with appropriate assignments and
endorsements or other specific evidence of assignment thereof to
Collateral Agent, in form and substance acceptable to Collateral Agent;
(ii) with respect to any Investment or Bank Account
which is not certificated or otherwise evidence as described in clause
(i) above, including uncertificated securities and depository and other
accounts maintained with financial institutions and any other Persons,
Company shall notify Agent thereof and take, or cause such Subsidiary
to take, any and all steps which are required by Agent for purposes of
perfecting Collateral Agent's Lien therein;
(iii) Company shall keep Agent and Banks informed of
any and all Bank Accounts maintained by Company or any Subsidiary with
any financial institution or other Person and, if requested by Agent or
Required Banks, Company or such Subsidiary shall
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execute a cash collateral account agreement in form and substance
satisfactory to Agent, pursuant to which the Lien of Collateral Agent
in such Bank Accounts is perfected and preserved; and
iv) if deemed by Agent or Required Banks, in its or
their sole discretion, to be necessary for purposes of perfecting the
Lien of Collateral Agent in any Bank Account, Company shall transfer to
and maintain in a cash collateral account and shall cause the
Subsidiaries to transfer to and maintain in a cash collateral account,
the funds in each such Bank Account and if deemed necessary by Agent
shall cause such Subsidiary to become party to a cash collateral
account agreement in form and substance reasonably satisfactory to
Collateral Agent, pursuant to which the Lien of Collateral Agent in
such Bank Account shall be perfected and preserved; provided, however,
Company shall not be required to deposit the residual, remainder or
beneficial interest of Company and its Subsidiaries in the Reserve
Accounts, the Claims Disbursement Accounts and other escrow,
restricted, custodial and fiduciary accounts until such time as all
amounts required to be disbursed to the intended beneficiaries thereof
have been disbursed and the residual and remainder is available to
Company or any of its Subsidiaries for deposit in an unrestricted
account.
(F) ADDITIONAL ACTS. Company shall, and shall cause the
Subsidiaries to take all actions and execute all documents deemed necessary by
Agent or Collateral Agent to ensure that upon the consummation of the
transactions contemplated by the Purchase Agreement, Agent or Collateral Agent,
for the benefits of Banks, shall have a first priority security interest in the
Collateral granted by the Security Documents. In the event that the perfection
or recordation of Collateral Agent's or Agent's Lien pursuant hereto upon any
Collateral acquired hereafter by Company or any Subsidiary requires any
additional act of possession or filing or recordation of any Security Document,
Company shall notify Agent of the acquisition of such Collateral and at Agent's
request Company shall execute and deliver and shall cause the Subsidiaries to
execute and deliver such Security Documents for filing or recordation and
deliver such items of Collateral as Agent and Collateral Agent may reasonably
request for purposes thereof and Company shall pay the cost of any such Security
Documents and the filing and recordation thereof. Without limiting the
generality of the foregoing, Company agrees to, and to cause each Subsidiary
(other than with respect to property required to be released pursuant to Section
3.5) to notify Agent upon the acquisition of any Real Property acquired after
the date hereof, except as provided by Section 3.5, and upon request of Agent,
to provide to Agent an appraisal and an environmental report (each in form and
substance satisfactory to Agent) covering such property, and to cause such Real
Property to be subjected to a first priority Mortgage or Deed of Trust in favor
of Collateral Agent for the benefit of Banks. With respect to any such Mortgages
or Deeds of Trust, Company or such Subsidiary shall deliver to Agent the
following, all in form and substance satisfactory to Agent: (i) executed
Mortgages or Deeds of Trust and financing statements encumbering such property
and (ii) ALTA lenders' extended coverage policies of title insurance on such
property, in liability, amount and form and issued by a title company
satisfactory to Agent showing the Mortgage or Deed of Trust as a first lien upon
the property, subject only to Liens permitted pursuant to Section 7.3 and such
other exceptions as may be approved by
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Agent in writing, together with endorsements reasonably required by Agent and
affirmative assurances that the improvements are wholly located within the
boundaries of the insured land.
3.3 SECTION 365(J) PROPERTY.
Pursuant to the Reorganization Plan and the Confirmation
Order, Company has designated certain property which comprises the Section
365(1) Property, which property had a value, as appraised pursuant to Company's
land plan book dated May, 1991, no greater than 120% of the value of the Section
365(j) liens established pursuant to, and as defined in, the Reorganization
Plan. The Liens granted to Collateral Agent pursuant hereto in the Section
365(j) Property shall be subordinate to such Section 365(j) liens and Collateral
Agent shall not be permitted to exercise its rights or remedies of foreclosure
against such property or exercise any other rights with respect to such property
until such time as such Section 365(j) liens have been satisfied or have been
transferred to other property acceptable to the Bankruptcy Court.
3.4 [INTENTIONALLY OMITTED] .
3.5 SUBORDINATIONS AND RELEASES OF MORTGAGE LIENS.
(a) [intentionally omitted]
(b) At such times as Liens are granted by Company or any
Subsidiary, as permitted pursuant to Section 7.3(n), so long as no Default or
Event of Default has occurred and is continuing or would result therefrom and
provided Agent has received a certificate of a Responsible Officer certifying
and demonstrating that all of the conditions set forth in Section 7.3(n) have
been satisfied, Agent shall instruct Collateral Agent to and Collateral Agent
shall execute documentation subordinating the Lien of the Mortgages to such
Liens, in form and substance satisfactory to Collateral Agent, unless such Real
Property qualifies for the release provisions set forth in Section 3.5(c), in
which event the provisions of Section 3.5(c) shall apply.
(c) At such time as Liens are granted by any Subsidiary, as
permitted by Section 7.3(n), so long as no Default or Event of Default has
occurred and is continuing or would result therefrom and provided Agent has
received a certificate of a Responsible Officer certifying and demonstrating
that all of the conditions set forth in Section 7.3(n) have been satisfied,
Agent shall instruct Collateral Agent to and Collateral Agent shall release the
Lien of the Mortgages on any Subsidiary Property Under Development if (i) (x)
such Real Property is financed under the acquisition and project financing
provisions of Section 7.2(e) or (h) and (y) the terms of such financing prohibit
subordinate Liens upon such Real Property or (ii) such Real Property is
contributed by Company to a Subsidiary pursuant to Section 7.9(g). Company shall
use reasonable efforts to cause any lender/seller providing the acquisition
and/or project financing on Subsidiary Property Under Development to permit the
subordination of Collateral Agent's Liens on such Subsidiary Property Under
Development, and thereby to eliminate the need for Collateral Agent to release
its Liens on such Subsidiary Property Under Development. In connection with the
release of any Liens on
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Subsidiary Property Under Development pursuant to this Section 3.5(c), upon the
request of Company, Agent shall instruct Collateral Agent to, and Collateral
Agent shall, release any Liens upon any Personal Property related to and used or
held for the use on the Real Property being released; provided that Company
provides a detailed list of such Personal Property to be released in form and
substance satisfactory to Agent. If such lender/seller will permit such
subordination, then, notwithstanding the foregoing provisions of this Section
3.5(c), Collateral Agent's Liens on such Subsidiary Property Under Development
will not be released and will become subordinate Liens pursuant to documentation
in form and substance satisfactory to Agent.
(d) [intentionally omitted]
3.6 GUARANTEES.
The payment and performance by Company of its obligations
under this Agreement, including the repayment of all Obligations by Company, and
any and all other liabilities of Company to Banks, Issuing Bank, Agent, and
Collateral Agent whether now existing or hereafter created or acquired, shall be
guaranteed by any and all Subsidiaries, which shall be evidenced by guarantees
in the form of the Subsidiary Guarantees.
3.7 [INTENTIONALLY OMITTED].
SECTION 4
REPRESENTATIONS AND WARRANTIES
To induce Banks to enter into this Agreement and to make the
Loans and Issuing Bank to issue Letters of Credit, Company hereby represents and
warrants to Agent and each Rank that
4.1 FINANCIAL CONDITION.
(a) The consolidated balance sheets of Company and its
consolidated Subsidiaries as at December 31, 1995 and the related consolidated
statements of income and of cash flows for the fiscal year ended on such date,
reported on by Ernst & Young, copies of which have been or will be furnished to
each Bank, fairly and accurately present the consolidated financial condition of
Company and its consolidated Subsidiaries as at such date, and the consolidated
results of their operations and their consolidated cash flows for she fiscal
year then ended.
(b) [intentionally omitted]
(c) All such financial statements described in clause (a)
above, including the related schedules and notes thereto, have been prepared in
accordance with GAAP applied consistently throughout the periods involved
(except for such inconsistencies as approved by such
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accountants or Responsible Officer, as the case may be, and as disclosed
therein). Neither Company nor any of its consolidated Subsidiaries had, at the
date of the most recent balance sheet referred to above, any material Guarantee
Obligation, contingent liability or liability for taxes, or any long-term lease
or unusual forward or long-term commitment, including any interest rate or
foreign currency swap or exchange transaction, which is not reflected in the
foregoing statements or in the notes thereto or in Schedule 4.1. During the
period from June 30, 1996 to and including the date hereof there has been no
sale, transfer or other disposition or agreement therefor by Company or any of
its consolidated Subsidiaries of any material part of its business or property
and no purchase or other acquisition of any business or property (including any
capital stock of any other Person) which is material in relation to the
consolidated financial condition of Company and its consolidated Subsidiaries at
June 30, 1996, except as described in Schedule 4 1.
4.2 NO MATERIAL ADVERSE CHANGE.
Since June 30, 1996, (a) there has been no development or
event nor any prospective development or event, which has had or could
reasonably be expected to have a Material Adverse Effect, except such
developments or events or prospective developments or events as have been
disclosed by Company in filings with the Securities and Exchange Commission made
prior to the date hereof and true and correct copies of which have been
delivered to Banks or as set forth on Schedule 4.2, and (b) no dividends or
other distributions have been declared, paid or made upon the Capital Stock of
Company nor has any of the Capital Stock of Company been redeemed, retired,
purchased or otherwise acquired for value by Company or any of its Subsidiaries.
As of the date hereof and the Effective Date, no motion for the conversion of
the case, appointment of a trustee, or dismissal is pending or has been denied,
the reversal of which on appeal would affect the validity of this Agreement and
no appeal has been taken from the entry of the Confirmation Order in the
Reorganization Proceedings, the reversal, modification, or affirmance of which
will affect the validity or enforceability, or change the provisions, of this
Agreement.
4.3 CORPORATE EXISTENCE; COMPLIANCE WITH LAW.
Each of Company and its Subsidiaries (a) is duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
organization, except, in the case of any such Subsidiary, where all such
failures to be in good standing are not reasonably likely, in the aggregate, to
have a Material Adverse Effect, (b) has the corporate power and authority, and
the legal right, to own and operate its property, to lease the property it
operates as lessee and to conduct the business in which it is currently engaged,
(c) is duly qualified as a foreign corporation and in good standing under the
laws of each jurisdiction where its ownership, lease or operation of property or
the conduct of its business requires such qualification, except to the extent
that all such failures to be so qualified and in good standing are not
reasonably likely, in the aggregate, to have a Material Adverse Effect, and (d)
is in compliance with all Requirements of Law except to the extent that any
failures to comply therewith is not reasonably likely, in the aggregate, to have
a Material Adverse Effect.
4.4 CORPORATE POWER; AUTHORIZATION; ENFORCEABLE OBLIGATIONS.
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(A) COMPANY. Company has the corporate power and authority,
and the legal right, to make, deliver and perform this Agreement, the Notes and
other Loan Documents, and to borrow hereunder and has taken all necessary
corporate action to authorize the borrowings on the terms and conditions of this
Agreement, and the Notes and to authorize the execution, delivery and
performance of this Agreement, the Notes and other Loan Documents. Except as set
forth on Schedule 4.4, no consent or authorization of, filing with or other act
by or in respect of, any Governmental Authority or any other Person is required
in connection with the borrowings hereunder or with the execution, delivery,
performance, validity or enforceability of this Agreement, the Notes or the
other Loan Documents, except such consents, authorizations, filings or other
acts as have been obtained, made or performed, as the case may be, prior to the
Original Effective Date and as remain in full force and effect or which the
failure to obtain, make or perform, as the case may be, could not reasonably be
expected to have a Material Adverse Effect. This Agreement and the other Loan
Documents to which Company is party have been or will be, duly executed and
delivered on behalf of Company. This Agreement, and each other Loan Document
executed and delivered constitutes, or when executed and delivered will
constitute, a legal, valid and binding obligation of Company enforceable against
Company in accordance with its terms, except as enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium, or similar laws
affecting the enforcement of creditors rights generally and by general equitable
principles (whether enforcement is sought by proceedings in equity or at law).
(B) SUBSIDIARIES. Each of the Subsidiaries (including
Unrestricted Subsidiaries) party to the Loan Documents has the corporate power
and authority, and the legal right, to make, deliver and perform the Loan
Documents to which it is a party and has taken all necessary corporate action to
authorize the execution, delivery and performance of the Loan Documents to which
it is a party. Except as set forth on Schedule 4.4, no consent or authorization
of, filing with or other act by or in respect of, any Governmental Authority or
any other Person is required in connection with the execution, delivery,
performance, validity or enforceability of the Loan Documents to which it is a
party, except such consents, authorizations, filings or other acts as have been
obtained, made or performed, as the case may be, prior to the Original Effective
Date and as remain in full force and effect or which the failure to obtain, make
or perform, as the case may be, could not reasonably be expected to have a
Material Adverse Effect. Each Loan Document to which any Subsidiary (including
Unrestricted Subsidiaries) is a party has been or will be duly executed and
delivered on behalf of each such Subsidiary. Each Loan Document to which any
Subsidiary (including Unrestricted Subsidiaries) is a party, executed and
delivered constitutes, or when executed and delivered will constitute, a legal,
valid and binding obligation of each such Subsidiary, enforceable against each
such Subsidiary in accordance with its terms, except as enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium, or
similar laws affecting the enforcement of creditors rights generally and by
general equitable principles (whether enforcement is sought by proceedings in
equity or at law).
4.5 NO LEGAL BAR.
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The execution, delivery and performance of this Agreement, the
Notes, the Guarantees and the other Loan Documents, the borrowings hereunder and
the use of the proceeds thereof will not violate any Requirement of Law or
Contractual Obligation of Company or of any of its Subsidiaries, the violation
of which could reasonably be expected to have a Material Adverse Effect and will
not result in, or require, the creation or imposition of any Lien on any of its
or their respective properties or revenues pursuant to any such Requirement of
Law or Contractual Obligation.
4.6 NO MATERIAL LITIGATION.
As of the Effective Date, no litigation, investigation or
proceeding of or before any arbitrator or Governmental Authority is pending or,
to the knowledge of Company, threatened by or against Company or any of its
Subsidiaries or against any of its or their respective properties or revenues
(a) with respect to this Agreement, the Notes or other Loan Documents or any of
the transactions contemplated hereby or thereby or (b) which is reasonably
likely to have a Material Adverse Effect, which has not been disclosed
(including, estimates of the Dollar amounts involved) in Company' s filings with
the Securities and Exchange Commission made prior to the Effective Date, true
and correct copies of which have been delivered to Banks or on Schedule 4.6
hereto.
4.7 NO DEFAULT.
As of the Effective Date, neither Company nor any of its
Subsidiaries is in default under or with respect to any of its Contractual
Obligations in any respect which is reasonably likely to have a Material Adverse
Effect, except as disclosed, including estimates of the Dollar amounts involved,
in Company's filings with the Securities and Exchange Commission, true and
correct copies of which have been delivered to Banks or on Schedule 4 7. As of
the Effective Date, no Default or Event of Default has occurred and is
continuing. As of the Effective Date, no default has occurred and is continuing
under the Secured Cash Flow Note Agreement, the Secured Floating Rate Note
Agreement, or the indentures governing the Public Debt Securities.
4.8 OWNERSHIP OF PROPERTY; LIENS.
As of the Effective Date, each of Company and its
Subsidiaries, as the case may be, has good record and marketable title in fee
simple to, or a valid leasehold interest in, all of the Collateral and all its
other real property, and good title to all its other property necessary for the
operation of its business, and none of such property of Company or such
Subsidiaries is subject to any Lien except as permitted by Section 7.3.
4.9 INTELLECTUAL PROPERTY.
As of the Effective Date, Company and each of its Subsidiaries
owns, or is licensed to use, all trademarks, tradenames, copyrights, technology,
know-how and processes necessary for the conduct of its business as currently
conducted except for those the failure to own or license which
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is not reasonably likely to have a Material Adverse Effect (the "Intellectual
Property"). 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 Company know of any
valid basis for any such claim. The use of such Intellectual Property by Company
and its Subsidiaries does not infringe on the rights of any Person, except for
such claims and infringements that, in the aggregate, do not have a Material
Adverse Effect. To the knowledge of Company, there exists no infringement upon
the Intellectual Property rights of Company and Subsidiaries by any other
Person.
4.10 TAXES.
As of the Effective Date, each of Company and its Subsidiaries
(including Unrestricted Subsidiaries and Joint Ventures) has filed or caused to
be filed all tax returns which, to the knowledge of Company, are required to be
filed and has paid all taxes shown to be due and payable on said returns or on
any assessments made against it or any of its property and all other taxes, fees
or other charges imposed on it or any of its property by any Governmental
Authority (other than any taxes, fees or other charges the amount or validity of
which are currently being contested in good faith by appropriate proceedings and
with respect to which reserves in conformity with GAAP have been provided on the
books of Company or its Subsidiaries (including Unrestricted Subsidiaries and
Joint Ventures), as the case may be) except tax claims which are to be paid on a
deferred basis pursuant to the Reorganization Plan; no tax Lien has been filed,
and, to the knowledge of Company, no claim is being asserted, with respect to
any such tax, fee or other charge, except as disclosed on Schedule 4.10.
4.11 FEDERAL REGULATIONS.
No part of the proceeds of any Loans will be used for
"purchasing" or "carrying" any "margin stock" within the respective meanings of
each of the quoted terms under Regulation G, T, U or X of the Board of Governors
of the Federal Reserve System as now and from time to time hereafter in effect
or for any purpose which violates the provisions of the Regulations of such
Board of Governors.
4.12 ERISA.
Except as disclosed on Schedule 4.12 or by letter to Agent
with copies to each Bank in accordance with Section 6.7(d), no Reportable Event
has occurred during the five-year period prior to the date on which this
representation is made or deemed made with respect to any Plan. Company and each
Commonly Controlled Entity are in substantial compliance with the applicable
provisions of ERISA with respect to each Plan. The present value of all accrued
benefits under each Single Employer Plan (based on the reasonable assumptions
used by the independent actuary for such Plan for purposes of establishing the
minimum funding requirements under Section 412 of the Code) did not, as of the
last annual valuation date prior to the date on which this representation is
made or deemed made, exceed the value of the assets of such Plan allocable to
such accrued benefits,
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individually or in the aggregate for all Single Employer Plans (excluding for
purposes of such computation any Single Employer Plans with respect to which the
value of the assets exceed the present value of the accrued benefits), by more
than $4,600,000. Neither Company nor any Commonly Controlled Entity is liable
under Title IV of ERISA by reason of the termination of a Single Employer Plan
or the withdrawal from a Single Employer Plan in which it was a "substantial
employer" within the meaning of Section 4001(a)(2) of ERISA. Each Plan intended
to be qualified under Section 401(a) of the Code, including each Single Employer
Plan, is qualified in operation under Section 401(a) of the Code and is
qualified in form under Section 401(a) of the Code, except with respect to any
required amendments with respect to which the remedial amendment period under
Section 401(b) of the Code has not expired. Neither Company nor any Commonly
Controlled Entity has had a complete or partial withdrawal from any
Multiemployer Plan and neither Company nor any Commonly Controlled Entity would
become subject to any liability under ERISA if Company or any such Commonly
Controlled Entity were to withdraw from all Multiemployer Plans in complete
withdrawals within the meaning of Section 4203 of ERISA as of the valuation
dates for such plans most closely preceding the date on which this
representation is made or deemed made. No Multiemployer Plan is in
Reorganization or Insolvent. Neither the Company nor any Commonly Controlled
Entity is liable for fines, penalties, taxes or related charges under Chapter 43
of the Code or under Sections 409, 502(c), 502(i), 502(1) or 4071 of ERISA in an
amount exceeding $50,000 in the aggregate at any time. There are no material
claims (other than routine claims for benefits) against any Plan (other than a
Multiemployer Plan) or against Company or any Commonly Controlled Entity in
connection with any such Plan. Neither Company nor any Commonly Controlled
Entity is liable for post retirement benefits to be provided to their current
and former employees under Plans which are welfare benefit plans (as defined in
Section 3(1) of ERISA) except as required by Section 4980B of the Code and
Section 601 of ERISA.
4.13 INVESTMENT COMPANY ACT; OTHER REGULATIONS.
Company is not an "investment company>" or a company
"controlled" by an "investment company" within the meaning of the Investment
Company Act of 1940, as amended. Company is not subject to regulation under any
Federal or state statute or regulation which limits its ability to incur
Indebtedness.
4.14 SUBSIDIARIES AND JOINT VENTURES.
As of the Effective Date, (a) the Subsidiaries listed on
Schedule 4.14(A) constitute all of the Subsidiaries and such schedule identifies
the shareholders of such Subsidiary, (b) the Joint Ventures listed on Schedule
4.14(B? constitute all of the Joint Ventures and such schedule identifies all
owners of the Joint Venture interests thereof and the percentage equity
ownership of such owners, and (c) neither Company nor any Subsidiary other than
a Venture Subsidiary owns any Joint Venture interest.
4.15 ENVIRONMENTAL MATTERS.
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Each of the representations and warranties set forth in
paragraphs (a) through (g) of this Section is true and correct, except as
disclosed on Schedule 4.15 or in the certificate regarding environmental matters
required pursuant to Section 5.1 (i) or to the extent that the facts and
circumstances giving rise to any such failure to be so true and correct is not
reasonably likely to have a Material Adverse Effect:
(a) The Total Real Property does not contain, and has not
previously contained, therein, thereon, or thereunder, including the soil and
groundwater thereunder, any Hazardous Materials in violation of any
Environmental Law.
(b) Company, its Subsidiaries, the Borrowing Base Joint
Ventures, the Total Real Property, and all operations and facilities at the
Total Real Property, are in compliance with all Environmental Laws, and there
are no Hazardous Materials or violations of any Environmental Law which could
interfere with the continued operation of any of the Total Real Property or
impair the fair saleable value of any thereof.
(c) Neither Company nor any of its Subsidiaries nor any of the
Borrowing Base Joint Ventures has received any complaint or any notice of
violation, alleged violation or investigation or of potential liability or
designating any of such Persons as a potentially responsible party under any
Environmental Law regarding environmental protection matters or environmental
permit compliance with regard to the Total Real Property, nor is Company aware
that any Governmental Authority is contemplating delivering to Company or any of
its Subsidiaries or any of the Borrowing Base Joint Ventures any such notice.
Neither Company nor any of its Subsidiaries nor any of the Borrowing Base Joint
Ventures has reported any releases of Hazardous Materials to any Governmental
Authority.
(d) Hazardous Materials have not been generated, treated,
stored or disposed of, at, on or under any of the Total Real Property in
violation of any Environmental Law, nor have any Hazardous Materials been
transferred from the Total Real Property to any other location in violation of
any Environmental Law nor have there been any treatment, storage or disposal
operations on any of the Total Real Property requiring any approval or permit
from any Governmental Authority. Neither Company nor any of its Subsidiaries nor
any of the Borrowing Base Joint Ventures has ever owned or operated or currently
owns or operates any waste disposal or storage facilities, underground storage
tanks or surface impoundments.
(e) There are no governmental or administrative actions or
judicial proceedings pending or, to the knowledge of Company, contemplated under
any Environmental Laws to which Company or any of its Subsidiaries or any of the
Borrowing Base Joint Ventures is or, to the knowledge of Company, will be named
as a party with respect to the Total Real Property, nor are there any consent
decrees or other decrees, consent orders, administrative orders or other orders,
or other administrative or judicial requirements outstanding under any
Environmental Law with respect to Company or any of its Subsidiaries or any of
the Borrowing Base Joint Ventures or to any of the Total Real Property.
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(f) There is no environmental condition associated with any of
the Total Real Property which would impede the development thereof, including
the presence of endangered or threatened species, or ecologically sensitive
habitat or water rights or quality issues.
(g) Copies of all permits, authorizations and environmental
reports for or with respect to the Total Real Property have been made available
to Agent.
4.16 INDEBTEDNESS.
Schedule 4.16 lists all Indebtedness (including available
commitments) of Company and its Subsidiaries as existing on the Effective Date.
4.17 CONTINGENT OBLIGATIONS.
Schedule 4.17 lists all guarantees by Company and all
guarantees by any of its Subsidiaries.
4.18 RESTITUTION PROGRAM AND FINAL JUDGMENT.
As of the Effective Date, Company and its Subsidiaries are in
compliance with the "Restitution Program" and the "Final Judgment," as defined
in the Reorganization Plan.
4.19 CERTAIN FEES.
No broker's or finder's fee or commission will be payable with
respect to this Agreement or any of the transactions contemplated hereby, and
Company hereby indemnifies Banks against, and agrees that it will hold Banks
harmless from, any claim, demand or liability for any such broker's or finder's
fees alleged to have been incurred in connection herewith or therewith and any
expenses (including reasonable fees, expenses and disbursements of counsel)
arising in connection with any such claim, demand or liability.
4.20 DISCLOSURE.
No representation or warranty of Company or any of its
Subsidiaries contained in any Loan Document or in any other document,
certificate or written statement furnished to Banks by or on behalf of Company
or any of its Subsidiaries for use in connection with the transactions
contemplated by this Agreement contains any untrue statement of a material fact
or omits to state a material fact (known to Company in the case of any document
not furnished by it) necessary in order to make the statements contained herein
or therein not misleading in light of the circumstances in which the same were
made. Any projections and pro forma financial information contained in such
materials are based upon good faith estimates and assumptions believed by
Company to be reasonable at the time made, it being recognized by Banks that
such projections as to future events are not to be viewed as facts and that
actual results during the period or periods covered by any such projections
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may differ from the projected results. There are no facts known (or which should
upon the reasonable exercise of diligence be known) to Company (other than
matters of an economic nature) that, individually or in the aggregate, could
reasonably be expected to result in a Material Adverse Effect and have not been
disclosed herein or in such other written documents, certificates and statements
furnished to Banks for use in connection with the transactions contemplated
hereby.
4.21 INSURANCE.
Company and each of its Subsidiaries maintain, with
financially sound and reputable insurers, insurance with respect to its
properties and business and the properties and business of its Subsidiaries,
against loss and damage of the kinds customarily insured against by corporations
of established reputation engaged in the same or similar business of such types
and in such amounts as are customarily carried under similar circumstances by
such other corporations. Attached as Schedule 4.21 is a complete and accurate
description of all policies of insurance that will be in effect as of the
Effective Date for Company and each of its Subsidiaries.
4.22 TOTAL REAL PROPERTY MATTERS.
Company and each of its Subsidiaries (including the Joint
Ventures) is in compliance with all development orders obtained by Company and
its Subsidiaries (including the Joint Ventures) with respect to any Total Real
Property, except to the extent noncompliance could not reasonably be expected to
have a Material Adverse Effect.
4.23 REORGANIZATION PROCEEDINGS.
Company has delivered to Agent and Banks true, correct and
complete copies of the Reorganization Plan and Confirmation Order, together with
copies of any modifications thereto or subsequent proceedings with the
Bankruptcy Court.
4.24 EXCLUDED SUBSIDIARIES; UNRESTRICTED SUBSIDIARIES.
(a) The Excluded Subsidiaries do not have, nor are they
anticipated to have, any assets or revenues. The Excluded Subsidiaries do not
currently conduct, nor are they anticipated to begin to conduct, any business.
(b) The Unrestricted Subsidiaries do not have, nor are they
anticipated to have, any asset or revenues other than the assets disclosed on
Schedule 4.24 as being owned by them and the revenues arising therefrom. The
Unrestricted Subsidiaries do not currently conduct, nor are they anticipated to
begin to conduct, any business other than the businesses disclosed on Schedule
4.24 as being conducted by them.
4.25 ORIGINAL BANKS COMPLIANCE WITH LOAN AGREEMENTS; BANKS
COMPLIANCE WITH EXISTING LOAN AGREEMENT.
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At all times prior to the Old Effective Date, the Original
Banks and the Original Agent have (a) performed and complied in all material
respects with all obligations required to be performed or complied with by them
under the Loan Agreements (as defined in the Original Loan Agreement), (b) have
acted in a commercially reasonable manner, in good faith and consistent with
obligations of fair dealing with Company and Subsidiaries with respect to the
Loan Documents (as defined in the Original Loan Agreement), and (c) have not
engaged in any acts, conduct or omissions that could give rise to a defense of
Company or the Subsidiaries to any of their respective obligations under the
Loan Documents (as defined in the Original Loan Agreement) or result in any such
obligations being avoided reduced, impaired, subordinated or disallowed.
At all times prior to the Effective Date, the Banks and the
Agent have (a) performed and complied in all material respects with all
obligations required to be performed or complied with by them under the Existing
Loan Agreements, (b) have acted in a commercially reasonable manner, in good
faith and consistent with obligations of fair dealing with Company and
Subsidiaries with respect to the Loan Documents (as defined in the Existing Loan
Agreement), and (c) have not engaged in any acts, conduct or omissions that
could give rise to a defense of Company or the Subsidiaries to any of their
respective obligations under the Loan Documents (as defined in the Existing Loan
Agreement) or result in any such obligations being avoided reduced, impaired,
subordinated or disallowed.
4.26 BANK ACCOUNTS.
Schedule 4 26 (as amended from time to time by written notice
to Agent) is a true and correct list of all Bank Accounts of Company and its
Subsidiaries.
4.27 UTILITY FUND TRUSTS.
All of Company's obligations under each of the Class 14
Utility Fund Trust Agreement and the Homesite Program Utility Fund Trust
Agreement, each dated December 8, 1992, and entered into by and between Company
and First Union National Bank of Florida as Trustee have been fully funded in
the amount of $10,000,000.
4.28 ELIGIBLE RECEIVABLES AND ELIGIBLE JV RECEIVABLES.
(a) The Eligible Receivables are bona fide existing
obligations created by the sale and delivery of Real Property in the ordinary
course of Company's or any of its Subsidiary's business, unconditionally owed to
Company or such Subsidiary without defenses, disputes, offsets, counterclaims,
or rights of cancellation. Neither Company nor any such Subsidiary has received
notice of any actual or imminent Insolvency Proceeding or material impairment of
the financial condition of any obligor regarding any Eligible Receivable.
(b) The Eligible JV Receivables are bona fide existing
obligations created by the sale and delivery of JV Real Property in the ordinary
course of the relevant Borrowing Base Joint
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Venture's business, unconditionally owed to such Borrowing Base Joint Venture
without defenses, disputes, offsets, counterclaims, or rights of cancellation.
Neither Company nor the relevant Venture Subsidiary nor the relevant Borrowing
Base Joint Venture has received notice of any actual or imminent Insolvency
Proceeding or material impairment of the financial condition of any obligor
regarding any Eligible JV Receivable.
4.29 SPUD SUBSIDIARIES. Except as disclosed on Schedule 4.29, no
Subsidiary is a SPUD Subsidiary.
4.30 DRI AND ZONING MATTERS. The representations and warranties set
forth in Schedule 4.30 are by this reference incorporated herein as though fully
set forth and made in this Section 4.30.
SECTION 5
CONDITIONS PRECEDENT
The effectiveness of this Agreement and the obligations of Banks to
make Loans and Issuing Bank to issue Letters of Credit hereunder are subject to
the prior or concurrent satisfaction of all the following conditions:
5.1 CONDITIONS TO EFFECTIVENESS OF THIS AGREEMENT.
(A) LOAN DOCUMENTS. Agent shall have received (i) this
Agreement, executed and delivered by a duly authorized officer of Company, with
a counterpart for each Bank, (ii) for the account of each Bank, a Working
Capital Note and a Reducing Revolving Note, (iii) each other Loan Document,
required to be delivered hereunder, conforming to the requirements hereof and
executed and delivered by a duly authorized officer of Company or each of its
Subsidiaries (including, the Unrestricted Subsidiaries and the Excluded
Subsidiaries, in each case as to their respective acknowledgments under the
Stock Pledge Agreement), as the case may be, which are parties to such Loan
Document, with a counterpart for each Bank, (iv) the Escrow Agreement, executed
and delivered by a duly authorized officer of each party thereto, and (v)
copies, certified as true and correct copies by a Responsible Officer, of the
Security Documents, as amended through the Effective Date listed in Schedule I
to the Acknowledgment Agreement.
Agent and Collateral Agent shall have received (vi) in form
and substance satisfactory to Agent and Collateral Agent, a duly executed
agreement with Annis, Mitchell, Xxxxxx, Xxxxxxx & Xxxxx, P.A. of Tampa, Florida
with respect to certain services to be provided thereby to Agent and Collateral
Agent, respectively, and (vii) the Funds Flow Memo.
(B) CORPORATE PROCEEDINGS OF COMPANY. Agent shall have
received, with a counterpart for each Bank, a copy of the resolutions, in form
and substance satisfactory to Agent, of the Board of Directors of Company
authorizing the execution, delivery and performance of this Agreement, the Notes
and the other Loan Documents to which it is a party, certified by the Secretary
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or an Assistant Secretary of the Company as of the Effective Date, which
certificate shall state that the resolutions thereby certified have not been
amended, modified, revoked or rescinded and are in full force and effect and
shall be in form and substance satisfactory to Agent.
(C) CORPORATE PROCEEDINGS OF THE SUBSIDIARIES. Agent shall
have received, with a counterpart for each Bank, a copy of the resolutions, in
form and substance satisfactory to Agent, of the Board of Directors of each
Subsidiary of Company which is a party to any Loan Document authorizing the
execution, delivery and performance of the Loan Documents to which it is a
party, certified by the secretary or an assistant secretary of each Subsidiary
as of the Effective Date, which certificate shall state that the resolutions
thereby certified have not been amended, modified, revoked or rescinded and are
in full force and effect.
(D) CORPORATE DOCUMENTS. Agent shall have received, with a
counterpart for each Bank, true and complete copies of (i) the certificate or
articles of incorporation of the Company and each of its Subsidiaries which is a
party to any Loan Document certified by the Secretary of State of their
respective jurisdictions of incorporation as of a recent date prior to the
Effective Date, (ii) the Bylaws of the Company and each of its Subsidiaries
which is a party to any Loan Document certified as of the Effective Date by its
secretary or an assistant secretary, (iii) good standing certificates,
including, in states which provide such certificates, certification of tax
status, of the Company and each of its Subsidiaries which is a party to any Loan
Document certified by the Secretary of State of their respective jurisdictions
of incorporation and of each jurisdiction in which they are qualified to do
business as a foreign corporation dated as of a recent date prior to the
Effective Date and (iv) incumbency and signature certificates for Company and
each Subsidiary executing any Loan Documents as of the Effective Date
(E) OTHER DOCUMENTS. Agent shall have received, with a
counterpart for each Bank, copies, certified as true and correct by a
Responsible Officer, of (i) the indentures relating to the Public Debt
Securities as amended through the Effective Date, and (ii) the Business Plan and
the Beige Book.
(F) NO VIOLATION. The consummation of the transactions
contemplated hereby and by the other Loan Documents shall not contravene,
violate or conflict with, nor involve Agent or any Bank in any violation of, any
Requirement of Law.
(G) CONSENTS, AUTHORIZATIONS, AND FILINGS. Agent shall have
received, with a counterpart for each Bank, a certificate of a Responsible
Officer (i) attaching copies of all consents, authorizations, and filings
referred to in Section 4.4 and in any similar provision of any of the other Loan
Documents, and (ii) stating that such consents, authorizations, and filings are
in full force and effect and each such consent, authorization, and filing shall
be in form and substance satisfactory to Agent.
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(H) LEGAL OPINIONS. Agent shall have received, with a
counterpart for each Bank, the following executed legal opinions dated as of the
Effective Date in form and substance satisfactory to Agent and addressed to
Agent and Banks:
(i) the executed legal opinion of Arent Fox Xxxxxxx
Xxxxxxx & Xxxx, counsel to Company, substantially in the form of
Exhibit 5.1(h)-1;
(ii) the executed legal opinion of corporate counsel
to Company, substantially in the form of Exhibit 5.1(h)-2;
(iii) the executed legal opinion of Greenberg,
Traurig, Hoffman, Lipoff, Xxxxx & Quentel, P.A., special Florida
counsel to Company, substantially in the form of Exhibit 5.1(h)-3; and
(iv) the executed legal opinion of Xxxxxxxxx &
Xxxxxx, special Tennessee counsel to Company, substantially in the form
of Exhibit 5.1(h)-4.
Each such legal opinion shall cover such other matters incident to the
transactions contemplated by this Agreement as Agent may reasonably require.
Collateral Agent and Agent shall have received, with a
counterpart for each Bank, the following executed legal opinion dated as of the
Effective Date in form and substance satisfactory to Collateral Agent and Agent
and addressed to Collateral Agent, Agent, Banks:
(v) the executed legal opinion of Annis, Mitchell,
Xxxxxx, Xxxxxxx & Xxxxx, P.A., special Florida counsel to Agent and
Collateral Agent, substantially in the form of Exhibit 5-1(h)-5.
Such legal opinion shall cover such other matters incident to the transactions
contemplated by this Agreement as Collateral Agent and Agent may reasonably
require.
(I) CERTIFICATION AS TO ENVIRONMENTAL MATTERS. Agent
shall have received, with a counterpart for each Bank, a certificate of a
Responsible Officer (i) stating that Company is not aware of any environmental
matters in connection with any of the Total Real Property which could reasonably
be expected to result in a liability to Company or any Subsidiary or any
Borrowing Base Joint Venture in excess of $200,000 except as listed on a
schedule attached to such certificate and (ii) certifying that Company has made,
and agreeing that Company will continue to make, available to Agent copies all
notices, citations, requests for information and reports from the Environmental
Protection Agency, Florida Department of Environmental Regulation or other
Federal, state or local environmental regulatory agency having jurisdiction over
any of the Total Real Property, and any report or audit prepared by a private
company with respect thereto.
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(J) CONTINUED PERFECTION OF SECURITY INTERESTS. Company and
its Subsidiaries party to any of the Security Documents shall have taken or
cause to be taken all such actions deemed necessary or desirable by Collateral
Agent to ensure that Collateral Agent or Agent has and continues to have a valid
and perfected first priority security interest in the Collateral granted by the
Security Documents subject to the Liens permitted pursuant to this Agreement and
the Security Documents (and Agent and Collateral Agent shall have received
satisfactory evidence thereof). Such action shall include: (i) the delivery by
Company pursuant to the Stock Pledge Agreement of certificates (which
certificates shall be registered in the name of Collateral Agent or properly
endorsed in blank for transfer or accompanied by irrevocable undated stock
powers duly endorsed in blank, all in form and substance satisfactory to
Collateral Agent and Agent) representing all Subsidiary Stock; (ii) the delivery
to Collateral Agent of Uniform Commercial Code financing statements, executed by
each of Company and each of its Subsidiaries as to the Collateral granted by
each such party for all jurisdictions as may be necessary or desirable to
perfect or continue the perfection of Collateral Agent's security interest in
such Collateral; and (iii) evidence reasonably satisfactory to Collateral Agent
and Agent that all other filings, recordings and other actions Collateral Agent
and Agent deems necessary or advisable to establish, preserve and perfect the
Liens and the priority thereof granted to Collateral Agent and Agent hereunder
shall have been made.
(K) REAL PROPERTY MATTERS. Agent shall have received: (i) such
new Mortgages and Deeds of Trust or such amendments to the existing Mortgages
and Deeds of Trust as may be requested by Agent, in each case in form and
substance satisfactory to Agent and its local counsel, to protect and preserve
the Lien and priority of the Mortgages and Deeds of Trust as they secure the
Loans and other amounts due hereunder, together with new ALTA lender's extended
coverage policies of title insurance or amendments of the existing ALTA lender's
extended coverage policies of title insurance on the Real Property encumbered by
the Mortgages and Deeds of Trusts in liability, amount and form issued by a
title company satisfactory to Agent showing the Mortgages and Deeds of Trust as
first Liens upon the respective Real Property, subject only to Liens permitted
hereunder and thereunder and such other exceptions or exclusions as may be
approved by Agent in its sole discretion, together with any endorsements
reasonably required by Agent, and affirmative assurance that the improvements
are fully located within the boundaries of the insured land; and (ii) in respect
of the Total Real Property listed on Schedule 5.1(k) and subject to Section
5.3(a), copies of such appraisals, surveys, environmental audit reports,
satisfactory evidence of entitlements (including so-called "zoning letters"),
and other documents as Agent may request, each as specified or contemplated on
Schedule 5.1(k).
(L) PURCHASE AGREEMENT. All conditions precedent to the
closing of the purchase transaction contemplated by the Purchase Agreement shall
have been satisfied and the transactions contemplated by the Purchase Agreement
shall have been consummated.
(M) SECURED FLOATING RATE NOTE AGREEMENT AND SECURED CASH
FLOW NOTE AGREEMENT. (i) The Secured Floating Rate Note Agreement shall have
been entered into and such agreements and any other documentation entered into
connection therewith shall be in form and
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substance satisfactory to Agent and Banks and true and correct copies thereof
shall have been delivered to Agent and each Bank.
(ii) The Secured Cash Flow Notes shall have been
prepaid in their entirety by Company for an aggregate amount not to exceed
$40,000,000 in cash and 1,500,000 warrants to purchase the common stock of
Company, such Secured Cash Flow Notes shall have been canceled by Company, and
the Secured Cash Flow Note Agreement and any other documentation entered into,
or Liens securing the Secured Cash Flow Notes granted, in connection therewith
shall have been terminated pursuant to termination documents in form and
substance satisfactory to Agent and Banks, and true and correct copies thereof
shall have been delivered to Agent and each Bank.
(N) ACKNOWLEDGMENT AGREEMENT. Agent shall have received,
with an executed counterpart for each Bank, duly executed copies of the
Acknowledgment Agreement.
(O) EVIDENCE OF INSURANCE. Company shall have delivered
to Agent certificates of insurance naming Collateral Agent on behalf of Banks as
loss payee under the casualty and surety policies required pursuant to Section
6.5.
(P) NO MATERIAL ADVERSE EFFECT. On the Effective Date,
Agent shall have received an officer's certificate executed by a Responsible
Officer stating that no Material Adverse Effect has occurred since June 30,
1996, except as disclosed in Company's Form 10-Q for the quarter ended as of
June 30, 1996.
(Q) INTERCREDITOR AGREEMENT. The Intercreditor Agreement
shall have been executed and delivered by each of the parties thereto, and Agent
shall have received a fully executed copy thereof in form and substance
satisfactory to Agent.
(R) FEES, COSTS, AND EXPENSES. As of the Effective Date,
Company shall have paid: (i) to the Agent all interest and fees accrued under
the Existing Loan Agreement on or before the Effective Date and shall have paid
to Agent and Banks all fees and expenses due and payable under the Existing Loan
Agreement as of the Effective Date; (ii) to the Agent all fees, costs, and
expenses of Agent and its counsel incurred in connection with the preparation,
negotiation, and execution of this Agreement, the Secured Floating Rate Note
Agreement, the Intercreditor Agreement, and any other documents executed in
connection herewith and therewith; and (iii) to the Collateral Agent all fees,
costs, and expenses of Collateral Agent and its counsel incurred in connection
with the preparation, negotiation, and execution of this Agreement, the Secured
Floating Rate Note Agreement, the Intercreditor Agreement, and any other
documents executed in connection herewith and therewith.
(S) RECAPITALIZATION TRANSACTIONS. Each of the
Recapitalization Transactions shall have been consummated in accordance with all
applicable law, the underlying transaction documents, and the Escrow Agreement,
and Agent shall have received evidence of such consummation satisfactory to
Agent.
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(T) CHANGE OF COLLATERAL AGENT. Agent and the agent for
the holders of the Secured Floating Rate Notes shall have received the written
resignation of Chase as collateral agent under the Existing Agreement and the
Existing Secured Floating Rate Note Agreement, in form and substance
satisfactory to Agent and the agent for the holders of the Secured Floating Rate
Notes.
(U) AMENDMENT OF CERTAIN LOAN DOCUMENTS. The Security
Documents and other Loan Documents shall have been amended in form and substance
satisfactory to Agent.
(V) OTHER MATTERS. Company shall have made available to
Agent and Banks such other documents and information, or taken such other
actions, as Agent and Banks may reasonably request.
5.2 CONDITIONS TO EACH LOAN AND ISSUANCE OF EACH LETTER OF CREDIT.
The effectiveness of this Agreement and the agreement of each
Bank to make any Loan requested to be made by it on any Loan Borrowing Date, and
of Issuing Bank to issue Letters of Credit is subject to the satisfaction of the
further conditions precedent:
(A) REPRESENTATIONS AND WARRANTIES. Each of the
representations and warranties made by Company and its Subsidiaries in or
pursuant to each of the Loan Documents shall be true, correct and complete in
all material respects on and as of the date of such extension of credit, with
such exceptions, amendments or modifications as may be approved in writing by
Agent. For the purposes hereof with respect to any request for a Loan or
issuance of Letter of Credit, any and all representations and warranties made by
Company or any of its Subsidiaries which are made "as of the Effective Date"
shall be required to be true and correct "as of the Loan Borrowing Date," or
date of issuance of the Letter of Credit rather than "as of the Effective Date."
(B) NO DEFAULT. No Default or Event of Default shall
have occurred and be continuing as of the date of such extension of credit, as
the case may be, after giving effect to the Loans requested to be made on such
date.
(C) ADDITIONAL SECURITY DOCUMENTS: OTHER DOCUMENTS.
Agent shall have received each additional Security Document as may be required
pursuant to Section 3.2 and each additional Guarantee required by Section 3.6,
in each case with a counterpart for each Bank, and each additional document,
instrument, legal opinion or item of information reasonably requested by it or
the Required Banks, with a counterpart for each Bank, including a copy of any
debt instrument, security agreement or other material contract to which Company
may be a party.
(D) OFFICER'S CERTIFICATE. In the case of any Loan
requested by Company, Agent shall have received the certificate required by
Section 2.3 or 2.8, as the case may be, with a counterpart for each Bank having
an applicable Commitment.
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(E) ADDITIONAL MATTERS. All corporate and other proceedings,
and all documents, instruments and other legal matters in connection with the
transactions contemplated by this Agreement and the other Loan Documents shall
be satisfactory in form and substance to Agent, and Agent shall have received
such other documents and legal opinions in respect of any aspect or consequence
of the transactions contemplated hereby or thereby as it or the Required Banks
shall reasonably request, with a counterpart for each Bank.
(F) REDUCING REVOLVING LOANS. The agreement of each Bank to
make any Reducing Revolving Loan requested to be made by it on any Reducing
Revolving Loan Borrowing Date is subject to the satisfaction of the further
condition precedent that there shall not be any Working Capital Facility
Availability as of the date of the making of such Reducing Revolving Loan.
Each borrowing by Company or issuance of Letter of Credit hereunder shall
constitute a representation and warranty by Company, as of the date of such
borrowing or issuance of Letter of Credit. that the conditions contained in this
Section 5.2 have been satisfied.
5.3 CONDITIONS SUBSEQUENT.
As a condition subsequent to the making of the Loans and
Letters of Credit, Company shall perform or cause to be performed the following
(and the failure by Company to so perform or so cause to be performed shall
constitute an Event of Default):
(A) REAL PROPERTY MATTERS REGARDING UNSOLD DESIGNATED RAW
LAND. No later than March 3, 1997, Agent shall have received such title
insurance, surveys, environmental audit reports, satisfactory evidence of
entitlements, and other documents as Agent reasonably may request, in respect of
all Designated Raw Land constituting Principal Raw Land not sold on or before
December 31, 1996, in each case that, but for Agent's agreement that the same
may be delivered on or before March 3, 1997, were required to be delivered under
Section 5.1(k).
(B) TAX SERVICING CONTRACTS. (i) No later than 60 days after
the Effective Date, Agent and Collateral Agent shall have received a tax
servicing contract in respect of such portion of the Total Real Property located
in Florida as shall be satisfactory to Agent and Collateral Agent, in form and
substance satisfactory to Agent and Collateral Agent, among Company, Agent,
Collateral Agent, and a tax servicing firm satisfactory to Agent and Collateral
Agent.
(ii) No later than 90 days after the Effective Date,
Agent and Collateral Agent shall have received a tax servicing contract in
respect of the Real Property located in Tennessee, in form and substance
satisfactory to Agent and Collateral Agent, among Company, Agent, Collateral
Agent, and a tax servicing firm satisfactory to Agent and Collateral Agent,
unless all or substantially all of such Total Real Property shall have been sold
prior to such date.
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(C) COMPANY OPERATING ACCOUNT CONTROL AGREEMENT. Within
30 days following the Effective Date, Company, Collateral Agent, and Operating
Account Bank shall have executed and delivered the Company Operating Account
Control Agreement.
SECTION 6
AFFIRMATIVE COVENANTS
Company hereby agrees that, so long as the Commitments remain
in effect or any Note remains outstanding and unpaid or any other amount is
owing to any Bank or Agent hereunder, Company shall, and shall cause each of its
Subsidiaries to:
6.1 FINANCIAL STATEMENTS.
Furnish to each Bank:
(a) as soon as available, but in any event not later than 90
days after the end of each fiscal year of Company, a copy of the consolidated
balance sheet of Company and its consolidated Subsidiaries (including
Unrestricted Subsidiaries) as at the and of such year and the related
consolidated statements of income and retained earnings and of cash flows for
such year, setting forth in each case in comparative form the figures for the
previous year, reported on without a "going concern" or like qualification or
exception, or qualification arising out of the scope of the audit, by Ernst &
Young or other independent certified public accountants of nationally recognized
standing acceptable to the Required Banks;
(b) as soon as available, but in any event not later than 90
days after the end of each fiscal year of Company, a copy of the consolidating
balance sheet of Company and its consolidated Subsidiaries (including
Unrestricted Subsidiaries) as at the end of such year and the related
consolidating statements of income and retained earnings and of cash flows for
such year, setting forth in each case in comparative form the figures for the
previous year, certified by a Responsible Officer as being fairly stated in all
material respects;
(c) as soon as available, but in any event not later than 45
days after the end of each of the first three quarterly periods of each fiscal
year of Company, the unaudited consolidated and consolidating balance sheet of
Company and its consolidated Subsidiaries (including Unrestricted Subsidiaries)
as at the end of such quarter and the related unaudited consolidated and
consolidating statements of income and retained earnings and of cash flows of
Company and its consolidated Subsidiaries (including Unrestricted Subsidiaries)
for such quarter and the portion of the fiscal year through the end of such
quarter, setting forth in each case in comparative form the figures for the
previous year, certified by a Responsible Officer as being fairly stated in all
material respects when considered in relation to the consolidated and
consolidating financial statements of Company and its consolidated Subsidiaries
(subject to normal year-end audit adjustments);
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(d) as soon as available, but in any event not later than 30
days after the end of each calendar month, the unaudited consolidated balance
sheet of Company and its consolidated Subsidiaries (including Unrestricted
Subsidiaries) as at the end of such month and the related unaudited consolidated
statements of income and retained earnings and of cash flows of Company and its
consolidated Subsidiaries (including Unrestricted Subsidiaries) for such month,
setting forth in each case in comparative form the figures for such month as set
forth on the Business Plan and, beginning in fiscal year 1996, with a comparison
to the same calendar month of the preceding fiscal year, certified by a
Responsible Officer as being fairly stated in all material respects when
considered in relation to the consolidated financial statements of Company and
its consolidated Subsidiaries (including Unrestricted Subsidiaries) (subject to
nominal year-end audit adjustments); and
(e) as soon as available, but in any event not later than 45
days after the end of each fiscal quarter, projections by Company of the
operating cash flow budget of Company and its Subsidiaries for (i) the following
two fiscal quarters, prepared on a monthly basis and (ii) the two fiscal
quarters thereafter, prepared on a quarterly basis, certified by a Responsible
Officer as being prepared in good faith on the basis of the assumptions stated
therein, which assumptions were reasonable in light of conditions existing at
the time of delivery thereof and represented, at the time of delivery, Company's
best estimate of its future financial performance;
all such financial statements to be complete and correct in all material
respects and to be prepared in reasonable detail and in accordance with GAAP
applied consistently throughout the periods reflected therein and with prior
periods (except as approved by such accountants or officer, as the case may be,
and disclosed therein).
Furnish, or cause each Subsidiary with an investment in a
Borrowing Base Joint Venture to furnish, to each Bank:
(f) as soon as available, but in any event not later than 90
days after the end of each fiscal year of the relevant Borrowing Base Joint
Venture, a copy of the balance sheet of such Borrowing Base Joint Venture as at
the end of such year and the related consolidated statements of income and
retained earnings and of cash flows for such year, setting forth in each case in
comparative form the figures for the previous year; if such financial statements
are required under the relevant Borrowing Base Joint Venture's governing or
charter documents or other material agreement (including financing agreements)
to be audited, then such financial statements shall be reported on without a
"going concern" or like qualification or exception, or qualification arising out
of the scope of the audit, by independent certified public accountants
acceptable to the Required Banks;
(g) as soon as available, but in any event not later than 45
days after the end of each of the first three quarterly periods of the relevant
Borrowing Base Joint Venture, the unaudited balance sheet of such Borrowing Base
Joint Venture as at the end of such quarter and the related unaudited statements
of income and retained earnings and of cash flows of such Borrowing Base Joint
Venture for such quarter and the portion of the fiscal year through the end of
such quarter, setting forth in each case in comparative form the figures for the
previous year, certified by the chief
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accounting officer or treasurer of the relevant Venture Subsidiary as being
fairly stated in all material respects when considered in relation to the
financial statements of such Borrowing Base Joint Venture (subject to normal
year-end audit adjustments); and
(h) as soon as available, but in any event not later than 30
days after the end of each calendar month, the unaudited balance sheet of the
relevant Borrowing Base Joint Venture as at the end of such month and the
related unaudited consolidated statements of income and retained earnings and of
cash flows of such Borrowing Base Joint Venture for such month, certified by the
chief accounting officer or treasurer of the relevant Venture Subsidiary as
being fairly stated in all material respects when considered in relation to the
financial statements of such Borrowing Base Joint Venture (subject to nominal
year-end audit adjustments);
all such financial statements to be complete and correct in all material
respects and to be prepared in reasonable detail and in accordance with GAAP
applied consistently throughout the periods reflected therein and with prior
periods (except as approved by such accountants or officer, as the case may be,
and disclosed therein).
6.2 CERTIFICATES; OTHER INFORMATION.
(a) Furnish to each Bank:
(i) concurrently with the delivery of the financial
statements referred to in Section 6.1(a), a certificate of the independent
certified public accountants reporting on such financial statements stating that
in making the examination necessary therefor such accounting firm has obtained
no knowledge that a Default or Event of Default has occurred and is continuing,
except as specified in such certificate;
(ii) concurrently with the delivery of the financial
statements referred to in Sections 6.1(a), (b) and (c), a certificate of a
Responsible Officer stating that, to the best of such Responsible Officer's
knowledge, Company and each Subsidiary during such period has observed or
performed the covenants of Sections 7.1, 7.2, 7.3, 7.6, 7.8, 7.9, 7.15, 7.16,
and 7.17 and all other of its covenants and other agreements, and satisfied
every condition, contained in this Agreement and in the Notes and in the other
Loan Documents to which it is a party to be observed, performed or satisfied by
it, and that such Officer has obtained no knowledge that a Default or Event of
Default has occurred and is continuing except as specified in such certificate,
and, if a Default or Event of Default exists, stating the details thereof and
what actions Company proposes to take with respect thereto;
(iii) within five Business Days after the same are
sent, copies of all financial statements and reports which Company sends to its
stockholders and all financial statements and reports which Company or any of
its Subsidiaries sends to the holders or trustee of any Public Debt Securities,
and within five Business Days after the same are filed, copies of all financial
statements
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and reports which Company may make to, or file with, the Securities and Exchange
Commission or any successor or analogous Governmental Authority;
(iv) within 10 Business Days after the same are
delivered, copies of all financial statements and all material reports,
management letters or other financial information prepared for its Board of
Directors; and
(v) promptly, such additional financial and other
information as any Bank may from time to time reasonably request.
(b) Furnish to Agent:
(i) on a monthly basis and, in any event, by no
later than the 30th day of each month: (w) a detailed calculation of the
Borrowing Base; (x) a summary listing, by Borrowing Base category, of the Total
Real Property included directly or indirectly in the Borrowing Base and, by
Borrowing Base Joint Venture, of the investments of the Venture Subsidiaries in
Borrowing Base Joint Ventures, with, in each case, a summary reconciliation to
such listing provided in respect of the prior month; (y) a detailed aging, by
total, of the Homesite Commercial Receivables and of the Commercial Receivables
and of the JV Receivables; and (z) a summary aging, by vendor, of Company's
accounts payable and any book overdraft: in each case, in form satisfactory to
Agent;
(ii) copies of all JV Receivables promptly upon the
sale of the underlying JV Real Property; and
(iii) promptly, such additional financial and other
information as any Bank may from time to time reasonably request.
6.3 PAYMENT OF OBLIGATIONS.
Pay, discharge or otherwise satisfy at or before maturity or
before they become delinquent, as the case may be, all its obligations of
whatever nature, except where the amount or validity thereof is currently being
contested in good faith by appropriate proceedings, and reserves in conformity
with GAAP with respect thereto have been provided on the books of Company or its
Subsidiaries, as the case may be or where the terms of this Agreement or the
Reorganization Plan would prohibit such payment, discharge, or satisfaction.
6.4 CONDUCT OF BUSINESS AND MAINTENANCE OF EXISTENCE. Subject to
Sections 7.5, 7.6, 7.7 and 7.9: (a) continue to engage in business of the same
general type as now conducted by it and preserve, renew and keep in full force
and effect its corporate existence and take all reasonable action to maintain
all rights, privileges and franchises necessary or desirable in the normal
conduct of its business; and (b) to comply with all Contractual Obligations and
Requirements of Law except to the extent that failure to comply therewith is not
reasonably likely to, in the aggregate, have a Material Adverse Effect.
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6.5 MAINTENANCE OF PROPERTY; INSURANCE.
Keep all property useful and necessary in its business in good
working order and condition; maintain with financially sound and reputable
insurance companies insurance on all its property in at least such amounts and
against at least such risks as are usually insured against in the same general
area by companies engaged in the same or a similar business; and furnish to each
Bank, upon written request, full information as to the insurance carried. Each
such policy of insurance shall name Collateral Agent as a loss payee thereunder
and shall provide for at least thirty days prior written notice to Agent of any
material modification or cancellation of such policies. On the Effective Date
and on each anniversary thereafter, Company and its Subsidiaries shall submit to
Agent certificates of insurance evidencing compliance with this Section 6.5.
6.6 INSPECTION OF PROPERTY; BOOKS AND RECORDS; APPRAISALS.
Keep proper books of records and account in which full, true
and correct entries in conformity with GAAP and all Requirements of Law shall be
made of all dealings and transactions in relation to its business and
activities; and permit representatives of Agent, and each Bank, with respect to
Company and its Subsidiaries, to visit and inspect any of the Collateral and
related properties and examine and make abstracts from any of its books and
records at any reasonable time and as often as may reasonably be desired and to
discuss the business, operations, properties and financial and other condition
of Company and its Subsidiaries with officers and employees of Company and such
Subsidiaries and with its independent certified public accountants. From time to
time, if Agent determines that obtaining appraisals is necessary or appropriate,
Agent will either cause its personnel to appraise, or obtain appraisal reports
from appraisers satisfactory to Agent, stating the then current fair market
values of all or any portion of the Total Real Property. Anything herein to the
contrary notwithstanding, Company shall not be obligated to reimburse Agent with
respect to appraisals of the same particular item of Total Real Property that
occur more frequently than once in any year, unless an Event of Default has
occurred and is continuing or there has occurred a material adverse change in
the value of the Collateral, in which case Company shall be obligated to
reimburse Agent with respect to as many appraisals as Agent deems necessary to
conduct.
6.7 NOTICES.
Promptly give notice to Agent and each Bank of:
(a) the occurrence of any Default or Event of Default;
(b) any (i) default or event of default under any Contractual
Obligation of Company or, to the knowledge of Company, any of its Subsidiaries
or (ii) litigation, investigation or proceeding which may exist at any time
between Company or, to the knowledge of Company, any of its Subsidiaries and any
Governmental Authority, which in either case, if not cured or if adversely
determined, as the case may be, would have a Material Adverse Effect;
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(c) any litigation or proceeding affecting Company or, to the
knowledge of Company, any of its Subsidiaries in which the amount involved is
$250,000 or more and, not covered by insurance or in which injunctive or similar
relief is sought;
(d) as soon as possible and in any event within 30 days after
Company knows or has reason to know thereof, the occurrence or expected
occurrence of any event or condition described in Section 4.12 which could
reasonably be expected to result in liability of Company or any Commonly
Controlled Entity in excess of $100,000 and which is not reflected in the
financial statements most recently delivered to Banks pursuant to Section 6.1;
and
(e) any development or event which could reasonably be
expected to have a Material Adverse Effect.
Each notice pursuant to this Section shall be accompanied by a statement of a
Responsible Officer setting forth details of the occurrence referred to therein
and stating what action Company proposes to take with respect thereto.
6.8 ENVIRONMENTAL LAWS.
(a) Comply with, and use its best efforts to insure compliance
by all tenants and subtenants, if any, with, all Environmental Laws and obtain
and comply with and maintain, and insure that all tenants and subtenants obtain
and comply with and maintain, any and all licenses, approvals, registrations or
permits required by Environmental Laws, except in each case to the extent that
failure to do so could not reasonably be expected to have a Material Adverse
Effect;
(b) Conduct and complete all investigations, studies, sampling
and testing, and all remedial, removal and other actions required under
Environmental Laws and promptly comply with all lawful orders and directives of
all Governmental Authorities respecting Environmental Laws, except to the extent
that the same are being contested in good faith by appropriate proceedings and
the pendency of such proceedings could not reasonably be expected to have a
Material Adverse Effect; and
(c) Defend, indemnify and hold harmless Agent and Banks, and
their respective employees, agents, officers and directors, from and against any
and all claims, demands, penalties, fines, liabilities, settlements, damages,
costs and expenses of whatever kind or nature known or unknown, contingent or
otherwise, arising out of, or in any way relating to, the violation of or
noncompliance with any Environmental Laws applicable to the real property owned
or operated by Company or any of its Subsidiaries, or any orders, requirements
or demands of Governmental Authorities related thereto, including attorney's and
consultant's fees, investigation and laboratory fees, court costs and litigation
expenses, except to the extent that any of the foregoing arise out of the gross
negligence or willful misconduct of the party seeking indemnification therefor.
The agreements in this Section shall survive the payment of the Notes and all
other amounts payable hereunder.
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6.9 BUSINESS PLAN.
Furnish to each Bank on or before the tenth day following
approval by Company's Board of Directors, but in no event later than December 31
of each fiscal year and within 10 days (after approval by Company's Board of
Directors, if applicable) of any amendment, modification or update thereto, a
Business Plan of Company and its Subsidiaries for the next succeeding fiscal
year in a form and in substance satisfactory to the Required Banks setting forth
in reasonable detail a projected statement for such fiscal year's income and
cash flow with a projected balance sheet as of the close of the succeeding
fiscal year end, accompanied by a statement of a Responsible Officer that the
Business Plan projected statements of income, cash flow and balance sheet for
the succeeding fiscal year have been adopted by the Board of Directors of
Company. Company and its Subsidiary shall at all times conduct their business
substantially in accordance with the Business Plan and shall not materially
modify or deviate from such Business Plan without the prior written approval of
Agent and the Required Banks.
6.10 [INTENTIONALLY OMITTED]
6.11 DIVIDENDS FROM SUBSIDIARIES.
Cause the Subsidiaries to pay dividends to Company from the
Net Cash Proceeds of any sales of assets (including Real Property Sales) to the
extent not prohibited by law, including the proceeds of any utility
condemnations; provided that proceeds from the sale of residential units, lots
or tracts by Subsidiaries (a) from developed phases of a multi-phase project
comprising Subsidiary Property Under Development may be used to pay all costs
associated with development of the same phase or additional phases of the same
project, including reasonable reserves for such anticipated costs during the
period commencing on the date of sale to the date 180 days after the date of
sale (excluding any costs which are an allocated share of corporate general and
administrative expenses of Company or any Subsidiary), and (b) from single phase
projects comprising Subsidiary Property Under Development to the extent units,
lots or tracts may be sold in accordance with applicable laws and regulations
prior to completion of the projects may be used to pay all costs associated with
development of such project (excluding any costs which are an allocated share of
corporate general and administrative expenses of Company or any other
Subsidiary), in either case until the conclusion of the project, at and
following which time all such proceeds shall be distributed to Company. For
purposes hereof, "conclusion of the project" shall mean the completion of
structure or infrastructure development of the project (or, with multi-phase
projects: (a) (i) the final phase of the project, or (ii) the sale of
substantially all units thereon; and (b) the payment of the Indebtedness in
respect of Subsidiary Property Under Development that prohibits such
distributions) in accordance with the requirements of applicable laws and
regulations.
6.12 SUPPLEMENTAL REPORTS REGARDING REAL PROPERTY.
(a) Furnish to Agent such supplemental title reports on the
Real Property subject to the Deeds of Trust and Mortgages as Agent and Required
Banks may reasonably request from time
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to time; provided Company shall not be required to provide such supplemental
reports more than once per quarter.
(b) No later than 60 days after the Effective Date, Company
shall deliver to Agent such third party appraisals, environmental reports,
surveys, and ALTA title policies, as would have complied with the provisions of
Section 5.1(1) if delivered on the Effective Date with respect to all Real
Property to the extent such reports were not required by Banks to be delivered
on or prior to the Effective Date.
6.13 COMPLIANCE WITH LAWS.
Company shall, and shall cause each of its Subsidiaries to
comply with the requirements of all applicable laws, rules, regulations and
orders of any Governmental Authority, noncompliance with which would or could be
reasonably expected to cause a Material Adverse Effect.
6.14 OTHER NOTICES.
Promptly give notice to Agent of:
(a) the creation of any new Deposit Account; and
(b) the organization or formation of any new Venture
Subsidiary, any other Subsidiary, any Unrestricted Subsidiary, or any Joint
Venture; or the disposition or dissolution of any Excluded Subsidiary;
in each case, together with such information related thereto as Agent may
request.
6.15 COMPANY OPERATING ACCOUNT CONTROL AGREEMENT. At all times
from and after the date of its execution and delivery, maintain in full force
and effect the Company Operating Account Control Agreement. At all times from
and after the Effective Date, Company shall continue to maintain Company's cash
management system substantially as such system exists on the Effective Date
after giving effect to the consummation of the transactions contemplated to
occur on such date, and shall continue to concentrate the funds of Company into
the Company Operating Account except to the extent that such funds reasonably
are required to be held in other accounts for permitted uses by Company, and
except to the extent that such funds are invested in investments permitted by
Section 7.9.
SECTION 7
NEGATIVE COVENANTS
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Company hereby agrees that, so long as the Commitments remain
in effect or any Note remains outstanding and unpaid or any other amount is
owing to any Bank or Agent hereunder, Company shall not, and shall not permit
any of its Subsidiaries to, directly or indirectly:
7.1 MAINTENANCE OF CONSOLIDATED NET WORTH.
Permit Consolidated Net Worth at any time to be less than the
amounts set forth below (hereinafter referred to as the "Minimum Consolidated
Net Worth") the sum of: (a) (i) from the Effective Date through December 31,
1996, $26,500,000; and (ii) at any time thereafter, $23,500,000; and (b) 50% of
the Annual Net Income for the prior fiscal year; provided, however, that the
amount determined under this clause (b) shall never be less than zero.
To demonstrate compliance with the Minimum Consolidated Net Worth covenant set
forth in this Section, Company shall furnish to Banks (i) within 45 days of the
close of each calendar quarter a certificate of a Responsible Officer setting
forth Minimum Consolidated Net Worth for such date calculated in accordance with
this Section 7.1, and the calculation upon which it is based; and (ii) within 90
days of the close of each fiscal year, a certificate of a Responsible Officer
setting forth Minimum Consolidated Net Worth as of the such date calculated in
accordance with this Section 7.1 and the calculation upon which it is based,
reflecting in such annual certificate any addition to the Minimum Consolidated
Net Worth that Company is required to maintain resulting from the Annual Net
Income for the fiscal year then ended, but only as calculated under clause (b)
of this Section 7.1.
7.2 LIMITATION OF INDEBTEDNESS.
Create, incur, assume or suffer to exist any Indebtedness,
except:
(a) Indebtedness in respect of the Loans and Letters of
Credit;
(b) Indebtedness of Company in respect of the Secured
Floating Rate Notes;
(c) [intentionally omitted];
(d) Indebtedness of Company in respect of the Public
Debt Securities;
(e) Indebtedness of Company and its Subsidiaries at any
time outstanding, whether recourse or nonrecourse and whether incurred in
connection with Subsidiary Property Under Development or otherwise, not
exceeding $55,000,000 (less the face amount of all outstanding Guarantee
Obligations permitted under Section 7.4(c) in respect of Indebtedness of any
Unrestricted Subsidiary or Joint Venture) in the aggregate; provided, however,
that the proceeds of such Indebtedness used to acquire, finance, or refinance
Real Property shall not exceed 80% of the lesser of the purchase price or fair
market value of such Real Property at the time of application of such proceeds;
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(f) Indebtedness of Company to any Subsidiary or of any
Subsidiary to Company; provided that (i) such intercompany Indebtedness shall
not be evidenced by promissory notes or any other instruments, and (ii) all
Indebtedness of Subsidiaries to Company shall not exceed an aggregate principal
amount of $20,000,000 at any time;
(g) Indebtedness of Company and its Subsidiaries
outstanding on the Effective Date and listed on Schedule 4.16;
(h) The limitations otherwise imposed by Section 7.2(e)
notwithstanding, Indebtedness of any Subsidiary to Persons extending acquisition
or project development financing in connection with Subsidiary Property Under
Development of the Subsidiary (any Subsidiary incurring such Indebtedness shall
be referred to in this Section 7.2(h) as a "SPUD Subsidiary"); provided that (i)
neither Company nor any Subsidiary other than that SPUD Subsidiary is liable for
such Indebtedness in respect of that Subsidiary Property Under Development,
directly or pursuant to a Guarantee Obligation or otherwise, (ii) such
outstanding Indebtedness permitted pursuant to this Section 7.2(h) shall not
exceed in the aggregate $75,000,000 minus other outstanding Indebtedness of
Company and Subsidiaries permitted pursuant to Section 7.2(e), and (iii) the
proceeds of any such Indebtedness used to acquire, finance or refinance Real
Property shall not exceed 80% of the purchase price or fair market value of such
property, whichever is less, at the time of the application of such proceeds;
(i) [intentionally omitted]
(j) [intentionally omitted]; and
(k) Indebtedness of Subsidiaries for the development of
infrastructure, common areas, or recreational facilities owing to
quasi-governmental entities such as community development and special districts
to the extent financed through the issuance of industrial revenue bonds or other
similar public financing; provided that (except for Liens permitted pursuant to
Section 7.3(q)) there is no direct or indirect recourse to Company with respect
to such Indebtedness (other than inchoate Liens arising by operation of law in
respect of such Indebtedness) and such Indebtedness shall not exceed $15,000,000
in the aggregate at any one time outstanding; provided further that Company
shall give Agent prior written notice of the incurrence of any such Indebtedness
under this Section 7.2(k).
Anything to the contrary notwithstanding, in no event shall Company or any
Subsidiary co-make, endorse, guarantee (except to the extent permitted under
Section 7.4(c)), or otherwise become liable or have any recourse with respect to
any Indebtedness of any of the Unrestricted Subsidiaries.
7.3 LIMITATION ON LIENS.
Create, incur, assume or suffer to exist any Lien upon any of
its property, assets or revenues. whether now owned or hereafter acquired,
except for:
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(a) Liens securing Indebtedness permitted by Section 7.2(a);
(b) Liens securing Indebtedness permitted by Section 7.2(b);
(c) [intentionally omitted]
(d) Liens against the Section 365(1) Property securing the Section
365(j) Claims pursuant to, and as defined in, the Reorganization Plan;
(e) Liens for taxes (i) which are not yet delinquent or (ii) which are,
not in an aggregate amount, as to Company and all Subsidiaries, of greater than
$1,000,000 or (iii) which are being contested in good faith by appropriate
proceedings; provided that adequate reserves with respect thereto are maintained
on the books of Company or its Subsidiaries, as the case may be, in conformity
with GAAP;
(f) carriers, warehousemen's, mechanics's, materialmen's, repairmen's
or other like Liens arising in the ordinary course of business which do not
remain unsatisfied or undischarged for a period of more than 60 days or which
are being contested in good faith by appropriate proceedings;
(g) pledges or deposits in connection with workers compensation,
unemployment insurance and other social security legislation and deposits
securing liability to insurance carriers under insurance or self-insurance
arrangements;
(h) deposits to secure the performance of bids, trade contracts (other
than for borrowed money), leases, statutory obligations, surety and appeal
bonds, performance bonds and other obligations of a like nature incurred in the
ordinary course of business;
(i) easements, rights-of-way, restrictions, development orders, plats,
and other similar encumbrances incurred in the ordinary course of business
which, in the aggregate, are not substantial in amount and which do not in any
case materially detract from the value of the property subject thereto or
materially interfere with the ordinary conduct of the business of Company or
such Subsidiary;
(j) Liens granted by Company or any Subsidiary, as lessee, in the
ordinary course of business on leased equipment, leasehold improvements and
furnishings;
(k) Liens created, incurred or assumed in connection with the
acquisition of, or the refinancing or any subsequent refinancing of Indebtedness
incurred in connection with property, plant and equipment acquired after the
date hereof and attaching only to the property, plant and equipment being
acquired or refinanced, if the Indebtedness secured thereby does not exceed (i)
in any acquisition, 80% of the purchase price or fair market value of any Real
Property, whichever is
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less, at the time of such acquisition and (ii) in any refinancing, the
outstanding Indebtedness being refinanced;
(l) other Liens in existence on the Effective Date, listed on Schedule
7.3: provided that no such Lien is spread to cover any additional property after
the Effective Xxxx and that the amount of any Indebtedness or other obligations
secured thereby is not increased;
(m) Liens granted pursuant to Section 7.7 of the Reorganization Plan;
(n) Liens granted by Company or Subsidiaries upon Real Property and
related Personal Property which is Subsidiary Property Under Development and
which is either financed by Indebtedness incurred by Subsidiaries pursuant to
Section 7.2(e) or 7.2(h), or contributed by Company to a Subsidiary pursuant to
Section 7.9(g);
(o) [intentionally omitted]
(p) [intentionally omitted]; and
(q) [inchoate Liens solely arising by operation of law in respect of
Indebtedness incurred pursuant to Section 7.2(k)].
7.4 LIMITATION ON GUARANTEE OBLIGATIONS.
Create, incur, assume or suffer to exist any Guarantee Obligation,
except: (a) the Guarantee Obligations listed on Schedule 4.17; (b) Guarantee
Obligations made in the ordinary course of its business by Company of
obligations (other than Indebtedness) of any of its Subsidiaries, which
obligations are otherwise permitted under this Agreement; (c) Guarantee
Obligations by Company of Indebtedness of any Subsidiary, Unrestricted
Subsidiary, or Joint Venture; provided, however, that any outstanding Guarantee
Obligations permitted under this Section 7.4(c) in respect of Indebtedness of
any Unrestricted Subsidiary or Joint Venture shall reduce on a dollar-for-dollar
basis the $55,000,000 limitation otherwise available for Indebtedness permitted
under Section 7.2(e) and that the sum of all Indebtedness permitted under
Section 7.2(e) and all Guarantee Obligations permitted pursuant to this Section
7.4(c) shall not exceed $55,000,000 in the aggregate; provided further, that
Company may not incur any Guarantee Obligation with respect to Indebtedness of
any Subsidiary permitted pursuant to Section 7.2(h).
7.5 LIMITATIONS ON FUNDAMENTAL CHANGES.
Except to the extent such merger, consolidation, or amalgamation is of
a Subsidiary with and into Company, or between or among wholly owned
Subsidiaries, enter into any merger, consolidation or amalgamation, or
liquidate, wind up or dissolve itself (or suffer any liquidation or
dissolution), or convey, sell, lease, assign, transfer or otherwise dispose of,
all or substantially all of its property, business or assets; provided that
Company or any Subsidiary may convey, sell, assign,
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transfer or have condemned or otherwise disposed of assets to the extent
permitted by Section 7.6 so long as the proceeds of any such sale are applied in
accordance with this Agreement.
7.6 LIMITATION ON SALE OF ASSETS.
So long as no Default or Event of Default has occurred and is
continuing or would result therefrom (unless the Permitted Sale Asset is the
subject of a binding written contract of sale with an unaffiliated third party
entered into prior to the first date on which the applicable Default or Event of
Default occurred)), convey, sell, lease, assign, transfer or otherwise dispose
of any of its property, business or assets (including receivables and leasehold
interests), whether now owned or hereafter acquired, except the following
("Permitted Sale Assets"):
(a) raw land;
(b) homes or homesites in the ordinary course of its business;
(c) obsolete or worn out property disposed of in the ordinary course of
business;
(d) Commercial Real Estate;
(e) (i) the sale or discount without recourse of Commercial Receivables
or Homesite Contract Receivables in the ordinary course of business; and (ii)
during the period commencing on the Effective Date and ending on December 31,
1997, the sale or discount with recourse of Commercial Receivables relating
solely to homesites located in Tennessee in an aggregate amount not to exceed
$8,000,000;
(f) dispositions after the Effective Date not otherwise permitted
hereunder the proceeds of which, in the aggregate, do not exceed $2,000,000 in
any 12-month period;
(g) sales or other transfers of any partnership interests or joint
venture interests in entities that are not wholly owned, collectively, by
Company and its Subsidiaries; and
(h) transactions permitted under Section 7.5;
Upon any permitted sale as aforesaid, Collateral Agent shall execute releases of
Collateral Agent's Lien upon the Collateral included in any such sale; provided
that there exists no Default or Event of Default hereunder and no Default or
Event of Default would result therefrom; and provided further, that Collateral
Agent's Lien shall continue against the proceeds of such sale, as evidenced by
any and all documents and filings as may be required by Agent.
7.7 LIMITATION ON DIVIDENDS.
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Declare or pay any dividend (other than dividends payable solely in
common stock or preferred stock of Company) on, or, except for the Reverse Stock
Split, make any payment on account of, or set apart assets for a sinking or
other analogous fund for, the purchase, redemption, defeasance, retirement or
other acquisition of, any Capital Stock of Company, whether now or hereafter
outstanding, or make any other distributions in respect thereof, either directly
or indirectly, whether in cash or property (other than distributions or
dividends in the form of common stock or preferred stock of Company) or in
obligations of Company or any Subsidiary, except for dividends declared and paid
by any Subsidiary to Company or any Subsidiary.
7.8 LIMITATION ON CAPITAL EXPENDITURES.
Make, or enter into any agreement the performance of the terms of which
would require Company or any Subsidiary to make (by way of the acquisition of
securities of a Person or otherwise), any expenditures in respect of the
purchase or other acquisition of fixed or capital assets (excluding any such
asset acquired in connection with nominal replacement and maintenance programs
properly charged to current operations), exceeding in the aggregate $25,000,000
for Company and its Subsidiaries during any 12-month period from and after the
Effective Date.
7.9 LIMITATION ON INVESTMENTS, LOANS, AND ADVANCES.
Except to the extent of assets in the Reserve Accounts, make any
advance, loan, extension of credit or capital contribution to, or purchase any
stock, bonds, notes, debentures or other securities of or any assets
constituting a business unit of, or make any other Investment in, any Person,
except:
(a) extensions of trade credit in the ordinary course of business;
(b) investments in Cash Equivalents;
(c) loans and advances to employees of Company or its Subsidiaries for
travel, entertainment and relocation expenses and for advances on salary prior
to, and otherwise payable during, an employee's vacation, in the ordinary course
of business in an aggregate amount for Company and its Subsidiaries not to
exceed $500,000 at any one time outstanding;
(d) investments by Company in any Subsidiary or by any Subsidiary in
Company or any other Subsidiary in connection with cash management procedures in
the ordinary course of business;
(e) (i) loans by Company to its Subsidiaries or by any Subsidiary of
Company to Company to the extent such Indebtedness is permitted pursuant to
Section 7.2(f); and (ii) capital contributions to Subsidiaries other than
Venture Subsidiaries so long as Company or its Subsidiary making the capital
contribution receives stock equal to the value of the capital contributed as
determined in accordance with GAAP; provided, that Collateral Agent's Lien shall
continue against
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such stock received by Company or its Subsidiary as aforesaid, which Lien shall
be evidenced by any and all documents and filings as may be required by
Collateral Agent and Agent;
(f) extensions of credit for sale of assets; and
(g) capital contributions to Venture Subsidiaries for the purpose of
making investments in Joint Ventures and to Unrestricted Subsidiaries so long as
Company or its Subsidiary making the capital contribution receives stock,
partnership interests, joint venture interests, or beneficial interests,
respectively, equal to the value of the capital contributed as determined in
accordance with GAAP (and upon any permitted capital contribution as aforesaid,
Collateral Agent shall execute releases of Collateral Agent's Lien upon any
Collateral contributed); provided, (i) that no Default or Event of Default
exists hereunder or would result therefrom, (ii) that Collateral Agent's Lien
shall continue against such stock or other interests received by Company or its
Subsidiary as aforesaid, which Lien shall be evidenced by any and all documents
and filings as may be required by Collateral Agent and Agent, (iii) such capital
contributions shall be limited to assets (including cash) having fair market
values for any single enterprise or project no greater than $15,000,000 and fair
market values in the aggregate amount not greater than $35,000,000 plus an
amount equal to 75 % of all dividends (without duplication) paid to Company by
all Subsidiaries having investments in Joint Ventures after the Effective Date.
7.10 LIMITATION ON OPTIONAL PAYMENTS AND MODIFICATIONS OF DEBT INSTRUMENTS.
(a) Make any optional payment or optional prepayment on, or optional
redemption of, any Indebtedness (including any payments on the Secured Floating
Rate Notes and Public Debt Securities) except (i) payments on the Loans, (ii)
payments on Secured Floating Rate Notes or Public Debt Securities but only if
made out of Available Cash on a Payment Date pursuant to Section 8.6(c) of the
Reorganization Plan, or (iii) so long as no Event of Default has occurred and is
continuing or would result therefrom, payments made pursuant to Indebtedness
permitted pursuant to Section 7.2(e), (f), (g) (but exclusive of Indebtedness
permitted pursuant thereto consisting of intercompany Indebtedness among Company
and its Subsidiaries, the Public Debt Securities, and Financing Leases), (h), or
(k):
(b) Amend, modify, or change, or consent or agree to any amendment,
modification or change to any of the terms of any Secured Floating Rate Notes,
any Public Debt Securities, or any other agreement executed in connection with
the foregoing or otherwise in connection with any Indebtedness (other than: (1)
Indebtedness permitted to be incurred pursuant to subsections 7.2(e), (f), (g)
(but exclusive of Indebtedness permitted pursuant thereto consisting of
intercompany Indebtedness among Company and its Subsidiaries, the Public Debt
Securities, and Financing Leases), (h), and (k); and (2) other than any such
amendment, modification, or change to any such other Indebtedness which would
extend the maturity or reduce the amount of any payment of principal thereof or
which would reduce the rate or the amount of interest payable or extend the date
for payment of interest thereon; but in the case of either (1) or (2), solely to
the extent the
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amendment, modification, or change to any such Indebtedness is not prohibited by
any other provision in this Agreement or the other Loan Documents): and
(c) Amend any subordination provisions of any instrument governing any
Indebtedness (except for amendments pursuant to this Agreement and the Security
Documents or the Secured Floating Rate Note Agreement and the security documents
in respect thereof).
7.11 TRANSACTIONS WITH AFFILIATES.
Enter into any transaction, including any purchase, sale, lease or
exchange of property or the rendering of any service, with any Affiliate (other
than any Subsidiary of Company), unless such transaction is otherwise permitted
under this Agreement, is in the ordinary course of Company's or such Affiliate's
business and is upon fair and reasonable terms no less favorable to Company or
such Affiliate, as the case may be, than it would obtain in a comparable arms
length transaction with a Person not an Affiliate.
7.12 SALE AND LEASEBACK.
Enter into any Sale and Leaseback to the extent the aggregate Book
Value of all assets sold and leased under all such transactions exceeds
$2,000,000 during the term of this Agreement.
7.13 FISCAL YEAR.
Permit the fiscal year of Company to end on a day other than December
31.
7.14 LIMITATION ON NEGATIVE PLEDGE CLAUSES.
Enter into any agreement, other than the Secured Floating Rate Note
Agreement, any industrial revenue bonds, community development district
financing, purchase money mortgages, Financing Leases, or agreements executed in
connection with Indebtedness incurred in connection with Subsidiary Property
Under Development permitted by this Agreement (in which cases, any prohibition
or limitation shall only be effective against the assets financed thereby), with
any Person other than Banks pursuant hereto which prohibits or limits the
ability of Company or any of its Subsidiaries to create, incur, assume or suffer
to exist any Lien upon any of its property, assets or revenues, whether now
owned or hereafter acquired.
7.15 DEVIATION FROM BUSINESS PLAN.
Allow either
(a) the actual Net Operating Cash Flow during any fiscal year, to
deviate from the Net Operating Cash Flow projected under the Business Plan by a
negative margin equal to or greater than 30 percent, as of the end of each
fiscal quarter on a cumulative basis; and
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(b) the total actual Net Cash Flow for any fiscal year, including major
asset dispositions, to deviate from the annual Net Cash Flow projected under the
Business Plan for such year by a negative margin equal to or greater than 40
percent.
7.16 UNSOLD HOUSING INVENTORY.
Permit Unsold Housing Inventory to exceed, in the aggregate,
$10,000,000 at any one time.
7.17 LIMITATION OF BANK ACCOUNTS.
So long as Loans or Commitments are outstanding, allow cash and Cash
Equivalents maintained in Bank Accounts of Company and Subsidiaries other than
in the Cash Collateral Account and the restricted accounts set forth in Schedule
7.17 (including any beneficial interest therein), less the amount of checks
outstanding to pay current expenses in the ordinary course of business or to
prepay expenses to be incurred in the immediately subsequent three-month period
consistent with past practices, to exceed $5,000,000 in the aggregate at any
time. Company and its Subsidiaries (a) shall deposit in a Cash Collateral
Account amounts required to cash collateralize Letters of Credit pursuant to
Section 8, and (b) shall deposit in the Company Operating Account, after
application pursuant to Section 2.11(a)(iii), all remaining cash of Company and
its Subsidiaries in excess of amounts permitted to be maintained in accounts
other than a Cash Collateral Account under this Section 7.17.
7.18 VENTURE SUBSIDIARIES AND JOINT VENTURES.
(a) Cause, suffer, or permit any Venture Subsidiary to have any asset
or revenues other than the Joint Venture interests owned by such Venture
Subsidiary as disclosed on Schedule 4.14(B) and the revenues arising from such
revenue.
(b) Cause, suffer, or permit any Venture Subsidiary to create, incur,
assume, or suffer to exist any Lien (other than Liens in favor of Collateral
Agent for the benefit of Banks and the holders of the Secured Floating Rate
Notes) upon any of such Venture Subsidiary's property, assets, or revenues,
whether now owned or hereafter acquired (including the Joint Venture interests
owned by such Venture Subsidiary as disclosed on Schedule 4.14(B) and the
revenues arising from such revenue).
7.19 [INTENTIONALLY OMITTED].
7.20 [INTENTIONALLY OMITTED].
7.21 [INTENTIONALLY OMITTED].
SECTION 8
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EVENTS OF DEFAULT; REMEDIES
8.1 EVENTS OF DEFAULT; REMEDIES.
If any of the following events ("EVENTS OF DEFAULT") shall occur and be
continuing:
(a) Company shall fail to pay any principal when due of any Note, or
any amount payable to Issuing Bank in reimbursement of any drawing under a
Letter of Credit in accordance with the terms thereof or hereof; or Company
shall fail to pay any interest due on any Note or any other amount payable
hereunder within five days after any such interest or other amount becomes due
in accordance with the terms thereof or hereof; or
(b) Any representation or warranty made or deemed made by Company or
any of its Subsidiaries herein or in any other Loan Document or which is
contained in any certificate, document or financial or other statement furnished
at any time under or in connection with this Agreement shall prove to have been
incorrect in any material respect on or as of the date made or deemed made; or
(c) Company shall default in the observance or performance of any
agreement contained in Section 7; or
(d) Company or any Subsidiary shall default in the observance or
performance of any other agreement contained in this Agreement (other than as
provided in paragraphs (a) through (c) of this Section) or in any other Loan
Document, and such default shall continue unremedied for a period of 30 days; or
(e) Company shall fail to pay any principal of or interest on any
Secured Floating Rate Notes or any Public Debt Securities (whether at scheduled
maturity or by required prepayment, acceleration, demand or otherwise) and such
failure shall continue after the applicable grace period, if any, specified in
the agreement or instrument relating to such Secured Floating Rate Note or any
Public Debt Securities; or
(f) Any Secured Floating Rate Notes or any Public Debt Securities shall
be declared to be due and payable, or required to be prepaid (other than by a
regularly scheduled required prepayment), prior to the stated maturity thereof;
or
(g) Any Subsidiary of Company shall fail to pay any principal of, or
interest on, any Indebtedness or any Guarantee Obligation (other than any
Guarantee Obligation created pursuant to any Loan Document) in excess of
$1,000,000, when due and payable (whether at scheduled maturity or by required
prepayment, acceleration, demand or otherwise) and such failure shall continue
after the applicable grace period, if any, specified in the agreement or
instrument under which such Indebtedness or Guarantee Obligation was created
and, if such agreement or instrument permits the acceleration of the maturity of
such Indebtedness or Guarantee Obligation as a result of
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such failure, such Indebtedness or Guarantee Obligation shall be declared to be
due and payable, or required to be prepaid (other than by a regularly scheduled
required prepayment), prior to the stated maturity thereof; or any such
Indebtedness or Guarantee Obligation shall be declared to be due and payable, or
required to be prepaid (other than by a regularly scheduled required
prepayment), prior to the stated maturity; or
(h) Company shall (i) default in any payment of principal of or
interest on any Indebtedness (other than the Notes, the Secured Floating Rate
Notes, or any Public Debt Securities) or in the payment of any Guarantee
Obligation in excess of $1,000,000, beyond the period of grace, if any, provided
in the instrument or agreement under which such Indebtedness or Guarantee
Obligation was created; or (ii) default in the observance or performance of any
other agreement or condition relating to any such Indebtedness or Guarantee
Obligation or contained in any instrument or agreement evidencing, securing or
relating thereto, or any other event shall occur or condition exist, the effect
of which default or other event or condition is to cause, or permit the holder
or holders of such Indebtedness or beneficiary or beneficiaries of such
Guarantee Obligation (or a trustee or agent on behalf of such holder or holders
or beneficiary or beneficiaries) to cause, with the giving of notice if
required, such Indebtedness to become due prior to its stated maturity or such
Guarantee Obligation to become payable; or
(i) (i) Company or any of its Subsidiaries shall commence any case,
proceeding or other action (x) under any existing or future law of any
jurisdiction, domestic or foreign, relating to bankruptcy, insolvency,
reorganization or relief of debtors, seeking to have an order for relief entered
with respect to it, or seeking to adjudicate it a bankrupt or insolvent, or
seeking reorganization, arrangement, adjustment, winding-up, liquidation,
dissolution, composition or other relief with respect to it or its debts, or (y)
seeking appointment of a receiver, trustee, custodian or other similar official
for it or for all or any substantial part of its assets, or Company or any of
its Subsidiaries shall make a general assignment for the benefit of its
creditors; or (ii) there shall be commenced against Company or any of its
Subsidiaries any case, proceeding or other action of a nature referred to in
clause (i) above which (x) results in the entry of an order for relief or any
such adjudication or appointment or (y) remains undismissed, undischarged or
unbonded for a period of 60 days; or (iii) there shall be commenced against
Company or any of its Subsidiaries any case, proceeding or other action seeking
issuance of a warrant of attachment, execution, distraint or similar process
against all or any substantial part of its assets which results in the entry of
an order for any such relief which shall not have been vacated, discharged, or
stayed or bonded pending appeal within 60 days from the entry thereof; or (iv)
Company or any of its Subsidiaries shall take any action in furtherance of, or
indicating its consent to, approval of, or acquiescence in, any of the acts set
forth in clause (i), (ii), or (iii) above; or (v) Company or any of its
Subsidiaries shall generally not, or shall be unable to, or shall admit in
writing its inability to, pay its debts as they become due, provided that
Company or any of its Subsidiaries may admit in writing that it is "insolvent"
as such term is defined in, and for purposes of, Section 108(a)(1)(8) of the
Code; or (vi) Company or any of its Subsidiaries shall cause to be reinstated
the Reorganization Proceedings; or
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(j) The Confirmation Order shall be reversed, withdrawn, or modified
(in any manner adverse to Company or any of its Subsidiaries), or any rehearing
shall be ordered with respect thereto by the Bankruptcy Court or by any court
having jurisdiction over Company; or
(k) (i) There occurs one or more events or conditions described in
Section 4.12 which individually or in the aggregate result in liability of
Company or any Commonly Controlled Entity in excess of $4,600,000; or the
present value of all accrued benefits under each Single Employer Plan (based on
the reasonable assumptions used by the independent actuary for such Plan for
purposes of establishing the minimum funding requirements under Section 412 of
the Code), as of the last annual valuation date, exceed the value of the assets
of such plan allocable to such accrued benefits, individually or in the
aggregate for all Single Employer Plans with respect to which the value of the
assets exceed the present value of the accrued benefits, by more than
$4,600,000; or
(l) One or more judgments or decrees shall be entered against Company
or any of its Subsidiaries involving in the aggregate a liability (not paid or
fully covered by insurance) of $500,000 or more in the case of Company or any of
its Subsidiaries and all such judgments or decrees shall not have been vacated,
discharged, stayed or bonded pending appeal within 60 days from the entry
thereof; or
(m) (i) Any of the Guarantees or any Security Document hereunder shall
cease, for any reason, to be in full force and effect or Company or any of its
Subsidiaries, as the case may be, party thereto shall so assert in writing, or
(ii) any Security Document shall cease to be effective to grant a perfected Lien
on the collateral described therein with the priority purported to be created
thereby (other than as a result of any action or inaction on the part of Agent
or Banks or their agents or bailees or other than with respect to Collateral
having an aggregate value of $100,000 or less); or
(n) Any Person or two or more Persons acting in concert shall have
acquired beneficial ownership (within the meaning of Rule 13d-3 of the
Securities and Exchange Commission under the Securities Exchange Act of 1934, as
amended) of 30% or more of the outstanding Capital Stock of Company;
(o) Any event or change shall occur that has caused or evidences,
either in any case or in the aggregate, a Material Adverse Effect; or
(p) [intentionally omitted];
then, and in any such event, (a) if such event is an Event of Default specified
in clause (i), (ii), (iv), (v) or (vi) of paragraph (i) above, (i) the
Commitments and the obligation of Issuing Bank to issue Letters of Credit shall
automatically immediately terminate, and (ii) the Loans hereunder (with accrued
interest thereon), an amount equal to the maximum amount that may at any time be
drawn under all Letters of Credit then outstanding (whether or not any
beneficiary under any such Letter of Credit shall have presented, or shall be
entitled at such time, to present, the drafts or other documents or certificates
required to draw such Letter of Credit), and all other Obligations shall
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immediately become due and payable in full, and Agent and Collateral Agent shall
have all rights and remedies given to Agent and Collateral Agent pursuant to the
Security Documents and all rights of a secured party, mortgagee and pledgee
under applicable law, all of which rights and remedies shall be cumulative and
non-exclusive, to the extent permitted by law; and (b) if such event is any
other Event of Default, either or both of the following actions may be taken:
(i) with the consent of the Required Banks, Agent may, or upon the request of
the Required Banks, Agent shall, by notice to Company declare the Commitments to
be terminated forthwith, whereupon the Commitments and the obligation of Issuing
Bank to issue Letters of Credit shall immediately terminate; and (ii) with the
consent of the Required Banks, Agent may, or upon the request of the Required
Banks, Agent shall, by notice of default to Company, declare the Loans hereunder
(with accrued interest thereon), an amount equal to the maximum amount that may
at any time be drawn under all Letters of Credit then outstanding (whether or
not any beneficiary under any such Letter of Credit shall have presented, or
shall be entitled at such time, to present, the drafts or other documents or
certificates required to draw such Letter of Credit), and all other Obligations
to be due and payable in full, and Agent shall have all rights and remedies
given to Agent and Collateral Agent pursuant to the Security Documents and all
rights of a secured party, mortgagee and pledgee under applicable law, all of
which rights and remedies shall be cumulative and non-exclusive, to the extent
permitted by law; provided, however, with regard to clause (b) hereof, that
unless and until Agent shall have received such directions, Agent may (but shall
not be obligated to) take such action, or refrain from taking such action, with
respect to such Default or Event of Default as it shall deem advisable in the
best interests of Banks. Any amounts received by Agent on account of amounts
that may be drawn (but which have not yet been drawn) under the Letters of
Credit shall be held by Agent in one or more Cash Collateral Accounts and
applied in a manner consistent with the applicable cash collateral account
agreement in respect thereof.
SECTION 9
AGENTS
9.1 APPOINTMENT OF AGENT.
Each Bank hereby irrevocably designates and appoints Foothill as Agent
of such Bank under this Agreement and the other Loan Documents, and Foothill
hereby accepts such appointment, subject to the terms and provisions of this
Agreement and the other Loan Documents. Each Bank irrevocably authorizes
Foothill, as Agent for such Bank, to take such action on its behalf under the
provisions of this Agreement and the other Loan Documents and to exercise such
powers and perform such duties as are expressly delegated to Agent by the terms
of this Agreement and the other Loan Documents together with such other powers
as are reasonably incidental thereto.
Each Bank hereby further authorizes Agent to enter into the Security
Documents to be executed and delivered by Agent, on behalf of and for the
benefit of Banks, on the Effective Date and agrees to be bound by the terms
thereof. Each Bank irrevocably authorizes Agent to take such action on its
behalf under the provisions of the Security Documents, and to exercise such
powers and
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perform such duties as are expressly delegated to Agent by the terms of the
Security Documents, together with such other powers as are reasonably incidental
thereto; provided that Agent shall not enter into any consent to any amendment,
modification, termination or waiver of any provision contained in any Security
Document to which it is party without the prior written consent of Required
Banks. Each Bank agrees that no Bank shall have any right individually to
realize upon the collateral granted by the Security Documents (including through
the exercise of a right of set-off against call deposits, if any, of such Bank
in which any funds on deposit in the Cash Collateral Accounts may from time to
time be invested), it being understood and agreed that such rights and remedies
may be exercised only by Agent at the direction of Required Banks, for the
benefit of Banks, in accordance with the terms of such agreements. Each Bank
hereby authorizes Agent to release Collateral only as expressly permitted or
required under this Agreement or the Security Documents, and agrees that a
certificate executed by Agent evidencing such release of Collateral shall be
conclusive evidence of such release to any third party.
9.2 APPOINTMENT OF COLLATERAL AGENT.
Each Bank hereby irrevocably designates and appoints Foothill as
Collateral Agent of such Bank under this Agreement and the Security Documents to
which Foothill is a party, and Foothill hereby accepts such appointment, subject
to the terms and provisions of this Agreement and the Security Documents to
which it is a party. Each Bank hereby further authorizes Collateral Agent to
enter into the Security Documents to be executed and delivered by Collateral
Agent on the Effective Date and agrees to be bound by the terms thereof. Each
Bank irrevocably authorizes Foothill, as Collateral Agent for such Bank, to take
such action on its behalf under the provisions of this Agreement and the
Security Documents to which Collateral Agent is a party, and to exercise such
powers and perform such duties as are expressly delegated to Collateral Agent by
the terms of this Agreement and the Security Documents to which it is a party,
together with such other powers as are reasonably incidental thereto; provided
that Collateral Agent shall not enter into any consent to any amendment,
modification, termination or waiver of any provision contained in any Security
Document to which it is party without the prior written consent of Required
Banks. Each Bank agrees that no Bank shall have any right individually to
realize upon the security granted by the Security Documents to which Collateral
Agent is party, it being understood and agreed that such rights and remedies may
be exercised only by Collateral Agent at the direction of Agent on behalf of
Required Banks, for the benefit of Banks, in accordance with the terms of such
agreements. Each Bank hereby authorizes Collateral Agent to release Collateral
only as expressly permitted or required under this Agreement or the Security
Documents and agrees that a certificate executed by Collateral Agent evidencing
such release of Collateral shall be conclusive evidence of such release to any
third party. Collateral Agent shall not subordinate or release any Liens under
any of the Security Documents except as provided in this Agreement or upon the
written direction of Agent on behalf of the Required Banks. All notices and
directions to Collateral Agent shall be given by Agent on behalf of and at the
direction of Required Banks.
9.3 [INTENTIONALLY OMITTED].
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9.4 DELEGATION OF DUTIES.
Agent and Collateral Agent may execute any of their respective duties
under this Agreement and the other Loan Documents by or through agents or
attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. Neither Agent nor Collateral Agent shall be
responsible for the negligence or misconduct of any agents or attorneys-in-fact
selected by it with reasonable care. Notwithstanding any provision to the
contrary elsewhere in this Agreement, neither Agent nor Collateral Agent shall
have any duties or responsibilities, except those expressly set forth herein, or
any fiduciary relationship with any Bank, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or any other Loan Document or otherwise exist against Agent or
Collateral Agent; and Agent and Collateral Agent are acting hereunder and under
the other Loan Documents solely as the agent and collateral agent, respectively,
of Banks pursuant hereto and thereto, and neither Agent nor Collateral Agent is
acting as trustee for Banks.
9.5 EXCULPATORY PROVISIONS.
Neither Agent, Collateral Agent nor any of their respective officers,
directors, employees, agents, attorneys-in-fact or Affiliates shall be (a)
liable for any action lawfully taken or omitted to be taken by it or such Person
under or in connection with this Agreement or any other Loan Document (except
for its or such Persons own gross negligence or willful misconduct) or (b)
responsible in any manner to any of Banks for any recitals, statements,
representations or warranties made by Company or any officer thereof contained
in this Agreement or any other Loan Document or in any certificate, report,
statement or other document referred to or provided for in, or received by Agent
under or in connection with, this Agreement or any other Loan Document or for
the value, validity, effectiveness, genuineness, enforceability or sufficiency
of this Agreement or the Notes or any other Loan Document or for any failure of
Company to perform its obligations hereunder or thereunder. Neither Agent nor
Collateral Agent shall be under any obligation to any Bank to ascertain or to
inquire as to the observance or performance of any of the agreements contained
in, or conditions to, this Agreement or any other Loan Document or as to the use
of proceeds of the Loans or of the existence or possible existence of a Default
or Event of Default, or to inspect the properties, books or records of Company.
Notwithstanding anything herein to the contrary, neither Agent nor Collateral
Agent shall have any liability arising from confirmations of the amount of
outstanding Loans.
9.6 RELIANCE BY AGENTS.
(a) Each of Agent and Collateral Agent shall be entitled to rely, and
shall be fully protected in relying, upon any Note, writing, resolution, notice,
consent, certificate, affidavit, letter, cablegram, telegram, telecopy, telex or
teletype message, statement, order or other document or conversation believed by
it to be genuine and correct and to have been signed, sent or made by the proper
Person or Persons and upon advice and statements of legal counsel (including
counsel to Company), independent accountants and other experts selected by Agent
or Collateral Agent, as the
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case may be. Agent and Collateral Agent may deem and treat the payee of any Note
as the owner thereof for all purposes unless a written notice of assignment,
negotiation or transfer thereof shall have been filed with Agent.
(b) Each of Agent and Collateral Agent shall be fully justified in
failing or refusing to take any action under this Agreement or any other Loan
Document unless (i) it shall first receive such advice or concurrence as it
deems appropriate from Agent, in the case of Collateral Agent or from any Bank,
Banks or Required Banks in the case of Agent, as may be required pursuant to
this Agreement for such action, or (ii) it shall first be indemnified to its
satisfaction by such Banks against any and all liability and expense which may
be incurred by it by reason of taking or continuing to take any such action,
except in the case of Agent's or Collateral Agent's, as the case may be, gross
negligence or willful misconduct. Each of Agent and Collateral Agent shall in
all cases be fully protected in acting, or in refraining from acting, under this
Agreement, the Notes and the other Loan Documents in accordance with a request
of any Bank, Banks or Required Banks in the case of Agent, or Agent in the case
of Collateral Agent, as required pursuant hereto and such request and any action
taken or failure to act pursuant thereto shall be binding upon all Banks and all
future holders of the Notes.
9.7 NOTICE OF DEFAULT.
Neither Agent nor Collateral Agent shall be deemed to have knowledge or
notice of the occurrence of any Default or Event of Default unless Agent or
Collateral Agent, as the case may be, has received notice from a Bank or Company
referring to this Agreement, describing such Default or Event of Default and
stating that such notice is a "notice of default." If Agent receives such a
notice, Agent shall promptly give notice thereof to Banks and Collateral Agent.
If Collateral Agent receives such a notice, Collateral Agent shall give notice
thereof to Agent. Agent and Collateral Agent shall take such action with respect
to such Default or Event of Default as shall be directed by Agent in the case of
Collateral Agent and by any Bank Banks or Required Banks in the case of Agent,
as required pursuant hereto (subject to the provisions of Section 9.4(b));
provided that unless and until Agent or Collateral Agent, as the case may be,
shall have received such directions, Agent or Collateral Agent, as the case may
be, may (but shall not be obligated to) take such action, or refrain from taking
such action, with respect to such Default or Event of Default as it shall deem
advisable in the best interests of Banks.
9.8 NON-RELIANCE ON AGENTS AND OTHER BANKS.
Each Bank expressly acknowledge that neither Agent, Collateral Agent
nor any of their respective officers, directors, employees, agents,
attorneys-in-fact or Affiliates has made any representations or warranties to it
and that no act by Agent or Collateral Agent hereinafter taken, including any
review of the affairs of Company or any of its Subsidiaries, shall be deemed to
constitute any representation or warranty by Agent or Collateral Agent to any
Bank. Each Bank represents to Agent and Collateral Agent that it has,
independently and without reliance upon Agent or Collateral Agent or any other
Bank, and based on such documents and information as it has
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deemed appropriate, made its own appraisal of and investigation into the
business, operations, property, financial and other condition and
creditworthiness of Company and its Subsidiaries and made its own decision to
make its Loans hereunder and enter into this Agreement. Each Bank also
represents that it will, independently and without reliance upon Agent,
Collateral Agent or any other Bank, and based on such documents and information
as it shall deem appropriate at the time, continue to make its own credit
analysis, appraisals and decisions in taking or not taking action under this
Agreement and the other Loan Documents, and to make such investigation as it
deems necessary to inform itself as to the business, operations, property,
financial and other condition and creditworthiness of Company and its
Subsidiaries. Except for notices, reports and other documents expressly required
to be furnished to Banks by Agent hereunder, neither Agent nor Collateral Agent
shall have any duty or responsibility to provide any Bank with any credit or
other information concerning the business, operations, property, condition
(financial or otherwise), prospects or creditworthiness of Company or any of its
Subsidiaries which may come into the possession of Agent or Collateral Agent or
any of their respective officers, directors, employees, agents,
attorneys-in-fact or Affiliates.
9.9 INDEMNIFICATION.
Banks agree to indemnify Agent and Collateral Agent in their respective
capacities as such (to the extent not reimbursed by Company and without limiting
the obligation of Company to do so), ratably according to the respective
outstanding principal amounts of their Commitments, from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind whatsoever which may at any time
(including at any time following the payment of the Notes) be imposed on,
incurred by or asserted against Agent or Collateral Agent in any way relating to
or arising out of this Agreement, any of the other Loan Documents or any
documents contemplated by or referred to herein or therein or the transactions
contemplated hereby or thereby or any action taken or omitted by Agent or
Collateral Agent under or in connection with any of the foregoing; provided that
no Bank shall be liable for the payment of any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements resulting solely from Agent's or Collateral Agent's
gross negligence or willful misconduct. The agreements in this Section 9.9 shall
survive the payment of the Notes and all other amounts payable hereunder.
9.10 [INTENTIONALLY OMITTED].
9.11 AGENT IN ITS INDIVIDUAL CAPACITY.
Agent and its Affiliates may make loans to, accept deposits from and
generally engage in any kind of business with Company as though Agent were not
Agent hereunder and under the other Loan Documents. With respect to its Loans
made or renewed by it and any Note issued to it, Agent shall have the same
rights and powers under this Agreement and the other Loan Documents as any Bank
and may exercise the same as though it were not Agent, and the terms "Bank" and
"Banks" shall include Agent in its individual capacity.
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9.12 SUCCESSOR AGENTS.
Each of Agent and Collateral Agent may resign as Agent or Collateral
Agent, as the case may be, upon 30 days notice to Agent in the case of
Collateral Agent and to Banks in the case of Agent. If Agent or Collateral Agent
shall resign as Agent or Collateral Agent, as the case may be, under this
Agreement and the other Loan Documents, then the Required Banks shall appoint
from among Banks a successor agent or collateral agent for Banks, which
successor agent or collateral agent, except if an Event of Default shall have
occurred and be continuing, shall be approved by Company (which approval shall
not be unreasonably withheld), whereupon, effective upon acceptance of its
appointment as successor agent or collateral agent, such successor agent or
collateral agent shall succeed to the rights, powers and duties of Agent or
Collateral Agent, as the case may be, and the terms "Agent" and "Collateral
Agent" shall mean such successor agent or collateral agent, as the case may be,
and the former Agent's or Collateral Agent's rights, powers and duties as Agent
or Collateral Agent, as the case may be, shall be terminated, without any other
or further act or deed on the part of such former Agent or Collateral Agent or
any of the parties to this Agreement or any holders of the Notes. If the
Required Banks fail to appoint a successor or collateral agent for Banks as
provided above within 30 days after the resignation of Agent or Collateral
Agent, then Agent or Collateral Agent, as the case may be, may appoint a
successor agent or collateral agent for Banks, which successor agent or
collateral agent, except if an Event of Default shall have occurred and be
continuing, shall be approved by Company (which approval shall not be
unreasonably withheld), whereupon, effective upon acceptance of its appointment
as successor agent or collateral agent, such successor agent or collateral agent
shall succeed to the rights, powers and duties of Agent or Collateral Agent, as
the case may be, and the terms "Agent" and "Collateral Agent" shall mean such
successor agent or collateral agent and the former Agent's or Collateral Agent's
rights, powers and duties as Agent or Collateral Agent, as the case may be,
shall be terminated, without any other or further act or deed on the part of
such former Agent or Collateral Agent or any of the parties to this Agreement or
any holders of the Notes. After any retiring Agent's or Collateral Agent's
resignation as Agent or Collateral Agent, as the case may be, the provisions of
this Section 9 shall inure and survive to its benefit as to any actions taken or
omitted to be taken (or any matter related thereto) by it while it was Agent or
Collateral Agent under this Agreement and the other Loan Documents.
Notwithstanding anything herein to the contrary, the resignation of Agent or
Collateral Agent shall not be effective unless and until a successor agent or
collateral agent has been appointed and has accepted such appointment.
SECTION 10
MISCELLANEOUS
10.1 AMENDMENTS AND WAIVERS.
Neither this Agreement, any Note, any other Loan Document, nor any
terms hereof or thereof may be amended, supplemented or modified except in
accordance with the provisions of this Section. With the prior written consent
of the Required Banks, Agent and Company may, from
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time to time, enter into written amendments, supplements or modifications hereto
and to the Notes and the other Loan Documents for the purpose of adding any
provisions to this Agreement or the Notes, or the other Loan Documents or
changing in any manner the rights of Banks or of Company hereunder or thereunder
or waiving, on such terms and conditions as Agent may specify in such
instrument, any of the requirements of this Agreement or the Notes or the other
Loan Documents or any Default or Event of Default and its consequences;
provided, however, that no such waiver and no such amendment, supplement or
modification shall (a) reduce the amount of the Obligations or extend the
maturity of the
Obligations, or reduce the rate or extend the time of payment of
interest thereon, or reduce the amount or extend the time of payment of any fee
payable to any Bank hereunder or change the amount of any Bank's Commitments,
reduces the amount or postpones the due date of any amount payable in respect
of, or extends the required expiration date of any Letter of Credit, or changes
in any manner the obligations of Banks relating to the purchase of
participations in Letters of Credit, in each case without the consent of Bank
affected thereby, or (b) amend, modify or waive any provision of this Section or
reduce the percentage specified in the definition of Required Banks, or consent
to the assignment or transfer by Company of any of its rights and obligations
under this Agreement and the other Loan Documents, or release and/or subordinate
the Liens with respect to any Collateral in excess of 5 % of the aggregate value
of the Collateral on a Book Value basis during the term of this Agreement
(except as expressly required or provided for hereunder, including as provided
in Section 7.3(n), or in the Security Documents or as otherwise required by
law), or release any Subsidiary from its Guarantee, or amend, modify or waive
the provisions of Sections 2.1, 2.4, 2.6, 2.9, 2.11, 2.17, 2.18, 2.19, 3.2, 3.5,
5.2, or 10.5 (or any of the defined terms used in such Sections) or any
provision hereof or of any other Loan Document which, by its terms, shall be
taken or permitted only with the consent of all Banks, or extend the Working
Capital Loan Commitment Period or the Reducing Revolving Loan Commitment Period,
in each case without the written consent of all Banks, or (c) amend, modify or
waive any provision of Section 9, without the written consent of the then Agent
or Collateral Agent affected thereby, or (d) amend, modify or waive any
provision of Section 2.21 without the written consent of Issuing Bank. Any such
waiver and any such amendment, supplement or modification shall apply equally to
each of Banks and shall be binding upon Company, Banks, Agent, Collateral Agent
and all future holders of the Notes. In the case of any waiver, Company, Banks,
Agent and Collateral Agent shall be restored to their former position and rights
hereunder and under the outstanding Notes and any other Loan Documents, and any
Default or Event of Default waived shall be deemed to be cured and not
continuing; but no such waiver shall extend to any subsequent or other Default
or Event of Default, or impair any right consequent thereon.
10.2 NOTICES.
All notices, requests and demands to or upon the respective parties
hereto to be effective shall be in writing (including by telecopy), and, unless
otherwise expressly provided herein, shall be deemed to have been duly given or
made when delivered by hand, or five Business Days after being deposited in the
mail, postage prepaid, or, in the case of telecopy notice, when the recipient
has
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confirmed receipt; provided that any notice, request or demand to or upon Agent,
Collateral Agent or Banks shall not be effective until received. For the
purposes hereof, the addresses of the parties hereto (until a notice of change
thereof is delivered as provided in this Section 10.2) shall be as set forth
under each party's name on the signature pages hereof.
10.3 NO WAIVER: CUMULATIVE REMEDIES.
No failure to exercise and no delay in exercising, on the part of
Agent, Collateral Agent or any Bank, any right, remedy, power or privilege
hereunder shall operate as a waiver thereof; nor shall any single or partial
exercise of any right, remedy, power or privilege hereunder preclude any other
or further exercise thereof or the exercise of any other right, remedy, power or
privilege. The rights, remedies, powers and privileges herein provided are
cumulative and not exclusive of any rights, remedies, powers and privileges
provided by law.
10.4 SURVIVAL OF REPRESENTATIONS AND WARRANTIES.
All representations and warranties made hereunder and in any document,
certificate or statement delivered pursuant hereto or in connection herewith
shall survive the execution and delivery of this Agreement and the Notes.
10.5 PAYMENT OF EXPENSES AND TAXES.
Company agrees (a) to pay or reimburse Agent, Collateral Agent, and
each Bank for all its out-of-pocket costs and expenses incurred in connection
with the development, preparation and execution of, and any amendment,
supplement or modification to, this Agreement, the Notes, the Intercreditor
Agreement, and the other Loan Documents and any other documents prepared in
connection herewith or therewith, and the consummation of the transactions
contemplated hereby and thereby, including the reasonable fees and disbursements
of counsel to Agent, counsel to Collateral Agent, and the several counsel to
Banks and the reasonable allocated costs of in-house counsel to Agent, in-house
counsel to Collateral Agent, and the several in-house counsel to Banks, (b) to
pay or reimburse each Bank, Agent, and Collateral Agent for all its costs and
expenses incurred in connection with the enforcement or preservation of any
rights under this Agreement, the Notes, the Intercreditor Agreement, the other
Loan Documents and any such other documents, including fees and disbursements of
counsel to Agent, counsel to Collateral Agent, and to the several counsel to
Banks, and the reasonable allocated costs of in-house counsel to Agent and
in-house counsel to Collateral Agent, (c) to pay, indemnify, and hold each Bank,
Agent, and Collateral Agent harmless from, any and all recording and filing
fees, any and all Florida documentary stamp taxes and Florida intangible
personal property taxes and any and all other stamp, excise and other taxes
(other than any taxes which are determined based solely upon the income or
revenues of any such Bank, Agent or Collateral Agent), if any, which may be
payable or determined to be payable in connection with the execution and
delivery of, or consummation of any of the transactions contemplated by this
Agreement, including any and all advances of the Loans pursuant hereto, the
Notes, the other Loan Documents, and any such other documents, and any and all
liabilities with respect to, or resulting
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from any delay in paying any of such fees and taxes, (d) to pay the costs of
furnishing all opinions of counsel for Company, or obtaining technical
assistance advisories, required hereunder, (e) to pay the costs of obtaining any
required consents, amendments, waivers or other modifications to the Secured
Floating Rate Note Agreement, the agreements governing the Public Debt
Securities, and any other agreements, (f) to pay the costs and expenses incurred
to continue the perfection of any Liens in favor of Agent and Collateral Agent
pursuant to any of the Security Documents, including the costs of title
searches, title insurance premiums, UCC searches and UCC filing charges, (g) to
pay, indemnify, and hold each Bank, Agent and Collateral Agent harmless from and
against any and all other liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind or
nature whatsoever with respect to the execution, delivery, enforcement,
performance and administration of this Agreement, the Notes, the Intercreditor
Agreement, the other Loan Documents and any such other documents (all the
foregoing, collectively, the "indemnified liabilities"); provided, that Company
shall have no obligation hereunder to Agent, Collateral Agent or any Bank with
respect to indemnified liabilities arising from the gross negligence or willful
misconduct of Agent, Collateral Agent or any such Bank, and (h) to pay or
reimburse Agent and Collateral Agent for all out-of-pocket costs and expenses
incurred in connection with any change of counsel to Collateral Agent pursuant
to Section 10.18, including the reasonable fees and disbursements of counsel to
Agent, the replaced counsel to Collateral Agent, and the new counsel to
Collateral Agent, and the reasonable allocated costs of in-house counsel to
Agent and in-house counsel to Collateral Agent. The agreements in this Section
shall survive repayment to the Notes and all other amounts payable hereunder.
10.6 SUCCESSORS AND ASSIGNS: PARTICIPATIONS; PURCHASING BANKS.
(a) This Agreement shall be binding upon and inure to the benefit of
Company, Banks, Agent, Collateral Agent, all future holders of the Notes and
their respective successors and assigns, except that Company may not assign or
transfer any of its rights or obligations under this Agreement and the other
Loan Documents without the prior written consent of each Bank.
(b) Any Bank may, in accordance with applicable law, at any time sell
to one or more banks or other entities ("Participants") participating interests
in any Loan owing to such Bank, any Note held by such Bank, any Commitment of
such Bank or any other interest of such Bank hereunder and under the other Loan
Documents. In the event of any such sale by a Bank of participating interest to
a Participant, such Bank's obligations under this Agreement to the other parties
to this Agreement shall remain unchanged, such Bank shall remain solely
responsible for the performance thereof, such Bank shall remain the holder of
any such Note for all purposes under this Agreement and the other Loan
Documents, and Company and Agent shall continue to deal solely, and directly
with such Bank in connection with such Bank's rights and obligations under this
Agreement and the other Loan Documents. Company agrees that if amounts
outstanding under this Agreement and the Notes are due or unpaid, or shall have
been declared or shall have become due and payable upon the occurrence of an
Event of Default, each Participant shall be deemed to have the right of setoff
in respect of its participating interest in amounts owing under this Agreement
and any Note to the same extent as if the amount of its participating interest
were owing directly to it as
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a Bank under this Agreement or any Note; provided that such Participant shall
only be entitled to such right of setoff if it shall have agreed in the
agreement pursuant to which it shall have acquired its participating interest to
share with Banks the proceeds thereof as provided in Section 10.7. Company also
agrees that each Participant shall be entitled to the benefits of Sections 2.18,
2.19 and 10.5 with respect to its participation in the Commitments and the Loans
outstanding from time to time; provided, that no Participant shall be entitled
to receive any greater amount pursuant to such Sections than the transferor Bank
would have been entitled to receive in respect of the amount of the
participation transferred by such transferor Bank to such Participant had no
such transfer occurred. Participants shall not be entitled to require the
applicable Bank to take or omit to take any action hereunder except with respect
to amendments or waivers resulting in (i) the extension of the regularly
scheduled maturity dates of any portion of the principal of or interest on a
Loan in which such Participant is participating, (ii) a reduction of the
principal amount of, or the rate of interest (except in connection with a waiver
of the applicability of any post-default increase in interest rates or margins)
or fees payable on the Loans in which such participant is participating, (iii)
the release of a substantial portion of the Collateral or any of the Guarantees
(except as otherwise expressly provided in the Loan Documents) or (iv) an
increase in the Commitments in which such Participant is participating.
(c) Any Bank may, in accordance with applicable law, at any time sell
to any Bank or any Affiliate thereof or to one or more banks or financial
institutions ("PURCHASING BANKS") all or any part of its rights and obligations
under this Agreement, the Notes and other Loan Documents pursuant to a
Commitment Transfer Supplement, substantially in the form of Exhibit 10.6,
executed by such Purchasing Bank and such transferor Bank, and delivered to
Agent for its acceptance and recording in the Register. Upon such execution,
delivery, acceptance and recording, from and after the Transfer Effective Date
determined pursuant to such Commitment Transfer Supplement, (i) the Purchasing
Bank thereunder shall be a party hereto and, to the extent provided in such
Commitment Transfer Supplement, have the rights and obligations of a Bank
hereunder and under the other Loan Documents, and (ii) the transferor Bank
thereunder shall, to the extent provided in such Commitment Transfer Supplement,
be released from its obligations under this Agreement and under the other Loan
Documents (and, in the case of a Commitment Transfer Supplement covering all or
the remaining portion of a transferor Bank's rights and obligations under this
Agreement and under the other Loan Documents, such transferor Bank shall cease
to be a party hereto and thereto). Such Commitment Transfer Supplement shall be
deemed to amend this Agreement to the extent, and only to the extent, necessary
to reflect the addition of such Purchasing Bank and the resulting adjustment of
Commitment and Loan percentages arising from the purchase by such Purchasing
Bank of all or a portion of the rights and obligations of such transferor Bank
under this Agreement, the Notes and other Loan Documents. At the request of
Purchasing Bank, Company and Agent shall negotiate in good faith with Purchasing
Bank to accommodate Purchasing Bank's reasonable requests with respect to the
timing of the obligations of Company, Agent and Banks set forth in Section 2.3.
On or prior to the Transfer Effective Date determined pursuant to such
Commitment Transfer Supplement, Company, at its own expense, shall execute and
deliver to Agent in exchange for the surrendered Note(s), new renewal Note(s) to
the order of such Purchasing Bank in an amount equal to the Commitment assumed
by it pursuant to such Commitment Transfer Supplement and, if the
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transferor Bank has retained a Commitment hereunder, new Note(s) to the order of
the transferor Bank in an amount equal to the Commitment retained by it. Such
new Note(s) shall be dated the Transfer Effective Date and shall otherwise be in
the form of the Note(s) replaced thereby. The Note(s) replaced by such new
Note(s), marked "renewed," shall be attached to such new Note(s); and a copy
thereof shall be sent to Company.
(d) Agent shall maintain at its address referred to in Section 10.2 a
copy of each Commitment Transfer Supplement delivered to it and a register (the
"Register") for the recordation of the names and addresses of Banks and the
Commitments of, and principal amount of the Loans owing to, each Bank from time
to time. The entries in the Register shall be conclusive, in the absence of
manifest error, and Company, Agent, Collateral Agent and Banks may treat each
Person whose name is recorded in the Register as the owner of the Loans recorded
therein for all purposes of this Agreement. The Register shall be available for
inspection by Company or any Bank at any reasonable time and from time to time
upon reasonable prior notice.
(e) Upon its receipt of a Commitment Transfer Supplement executed by a
transferor Bank and Purchasing Bank, Agent shall (i) promptly accept such
Commitment Transfer Supplement, (ii) forward a copy of such Commitment Transfer
Supplement to Company and (iii) on the Transfer Effective Date determined
pursuant thereto record the information contained therein in the Register and
give notice of such acceptance and recordation to Banks and Company.
(f) Subject to Section 10.16, Company authorizes each Bank to disclose
to any Participant or Purchasing Bank (each, a "Transferee") and any prospective
Transferee any and all financial information in such Bank's possession
concerning Company and its Affiliates which has been delivered to such Bank by
or on behalf of Company pursuant to this Agreement or which has been delivered
to such Bank by or on behalf of Company in connection with such Bank's credit
evaluation of Company and its Affiliates prior to becoming a party to this
Agreement; provided, however, that such Transferee agrees in writing to be bound
by the terms of Section 10.16.
(g) If, pursuant to this Section 10.6, any interest in this Agreement
or any Note is transferred to any Purchasing Bank which is organized under the
laws of any jurisdiction other than the United States or any state thereof,
Company will not be required to pay any increased withholding taxes of the
United States or any political subdivision thereof unless, prior to the date of
transfer, the transferor Bank shall cause such Purchasing Bank to comply with
the requirements of Section 2.19(b).
(h) Nothing herein shall prohibit any Bank from pledging or assigning
any Note to any Federal Reserve Bank in accordance with applicable law.
(i) Notwithstanding the foregoing provisions of this Section 10.6, no
holder of any Note shall transfer such Note in a manner which would violate any
Requirement of Law.
10.7 ADJUSTMENTS; SET-OFF.
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(a) If any Bank (a "BENEFITTED BANK") shall at any time receive any
payment of all or part of its Loans owing to it, or interest thereon, or receive
any collateral in respect thereof (whether voluntarily or involuntarily, by
set-off, pursuant to events or proceedings of the nature referred to in the last
paragraph of Section 8.1, or otherwise), in a greater proportion than any such
payment to or collateral received by, any other Bank, if any, in respect of such
other Bank's Loans owing to it, or interest thereon, or fees due to it
hereunder, such benefitted Bank shall purchase for cash from the other Banks
such portion of each such other Banks' Loans, or make such payment on account of
such fees, or shall provide such other Banks with the benefits of any such
collateral, or the proceeds thereof as shall be necessary to cause such
benefitted Bank to share the excess payment or benefits of such collateral or
proceeds ratably with each of Banks; provided, however, that if all or any
portion of such excess payment or benefits is thereafter recovered from such
benefitted Bank, such purchase shall be rescinded, and the purchase price and
benefits returned, to the extent of such recovery, but without interest. Company
agrees, that each Bank so purchasing a portion of another Bank's Loan owing to
it may exercise all rights of payment (including rights of set-off) with respect
to such portion as fully as if such Bank were the direct holder of such portion.
(b) In addition to any rights and remedies of Banks provided by law,
each Bank shall have the right, without prior notice to Company, any such notice
being expressly waived by Company to the extent permitted by applicable law,
upon any Secured Debt (whether at the stated maturity, by acceleration or
otherwise) to set-off and appropriate and apply against such amount any and all
deposits (general or special, time or demand, provisional or final), in any
currency, and any other credits, indebtedness or claims, in any currency, in
each case whether direct or indirect, absolute or contingent, matured or
unmatured, at any time held or owing by such Bank to or for the credit or the
account of Company. Each Bank agrees promptly to notify Company and Agent after
any such set-off and application made by such Bank; provided that the failure to
give such notice shall not affect the validity of such set-off and application.
10.8 APPOINTMENT OF AGENT AS COMPANY'S LAWFUL ATTORNEY.
Company irrevocably designates, makes, constitutes and appoints Agent
(and all Persons designated by Agent) as Company's true and lawful attorney (and
agent-in-fact) coupled with an interest, with the power to sign the name of
Company on any instruments, documents and agreements, including security
agreements, pledge agreements, mortgages, and financing statements, as deemed by
Agent as necessary or reasonably required by Agent to grant, perfect, maintain
and continue the Liens in the Collateral or to monitor or administer the Loans,
together with any and all amendments, modifications, extensions, substitutions
and renewals thereof and deliver any of such instruments, documents and
agreements to such persons as Agent, in its sole discretion, may elect, and in
such event copies thereof shall be delivered to Company.
10.9 COUNTERPARTS.
This Agreement may be executed by one or more of the parties to this
Agreement on any number of separate counterparts, and all of said counterparts
taken together shall be deemed to
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constitute one and the same instrument. A set of the copies of this Agreement
signed by all the parties shall be lodged with Company and Agent.
10.10 SEVERABILITY.
Any provision of this Agreement which is prohibited or unenforceable in
any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
10.11 INTEGRATION.
This Agreement, together with the other Loan Documents, represents the
entire agreement of Company, Agent, Collateral Agent and Banks and supersedes
all prior agreements with respect to the subject matter hereof or thereof, and
there are no promises, undertakings, representations or warranties by Agent,
Collateral Agent or any Bank relative to subject matter hereof or thereof not
expressly set forth or referred to herein or in the other Loan Documents.
10.12 GOVERNING LAW.
THIS AGREEMENT, THE NOTES AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
UNDER THIS AGREEMENT AND THE NOTES SHALL BE GOVERNED BY, AND CONSTRUED AND
ENFORCED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK
(INCLUDING SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW
YORK), WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES.
10.13 SUBMISSION TO JURISDICTION; WAIVERS.
COMPANY HEREBY IRREVOCABLY AND UNCONDITIONALLY:
(a) SUBMITS FOR ITSELF AND ITS PROPERTY IN ANY LEGAL ACTION OR
PROCEEDING RELATING TO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS TO WHICH IT
IS A PARTY, OR FOR RECOGNITION AND ENFORCEMENT OF ANY JUDGMENT IN RESPECT
THEREOF, TO THE NONEXCLUSIVE GENERAL JURISDICTION OF THE COURTS OF THE STATE OF
CALIFORNIA, THE COURTS OF THE UNITED STATES OF AMERICA FOR THE CENTRAL DISTRICT
OF CALIFORNIA AND APPELLATE COURTS FROM ANY THEREOF;
(b) CONSENTS THAT ANY SUCH ACTION OR PROCEEDING MAY BE BROUGHT IN SUCH
COURTS AND WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE VENUE
OF ANY SUCH ACTION OR PROCEEDING IN ANY
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SUCH COURT OR THAT SUCH ACTION OR PROCEEDING WAS BROUGHT IN AN INCONVENIENT
COURT AND AGREES NOT TO PLEAD OR CLAIM THE SAME;
(c) AGREES THAT SERVICE OF PROCESS IN ANY SUCH ACTION OR PROCEEDING MAY
BE EFFECTED BY MAILING A COPY THEREOF BY REGISTERED OR CERTIFIED MAIL (OR ANY
SUBSTANTIALLY SIMILAR FORM OF MAIL) POSTAGE PREPAID, TO COMPANY AT ITS ADDRESS
SET FORTH ON THE SIGNATURE PAGES HEREOF OR AT SUCH OTHER ADDRESS OF WHICH AGENT
SHALL HAVE BEEN NOTIFIED PURSUANT THERETO:
(d) AGREES THAT NOTHING HEREIN SHALL AFFECT THE RIGHT TO EFFECT SERVICE
OF PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT THE RIGHT TO XXX
IN ANY OTHER JURISDICTION;
(e) WAIVES (i) PRESENTMENT, DEMAND AND PROTEST AND NOTICE OF
PRESENTMENT, PROTEST, DEFAULT, NON-PAYMENT, MATURITY, RELEASE, COMPROMISE,
SETTLEMENT, EXTENSION OR RENEWAL OF THE NOTES AND ALL OTHER LOAN DOCUMENTS AND
HEREBY RATIFIES AND CONFIRMS WHATEVER BANKS, AGENT OR COLLATERAL AGENT MAY DO IN
THIS REGARD; (II) ALL RIGHTS TO NOTICE OF A HEARING PRIOR TO BANKS' OR AGENT'S
OR COLLATERAL AGENT'S ATTACHMENT OR LEVY UPON THE COLLATERAL, AND ANY BOND OR
SECURITY WHICH MIGHT BE REQUIRED BY ANY COURT PRIOR TO ALLOWING BANKS, AGENT OR
COLLATERAL AGENT TO EXERCISE ANY OF BANKS' OR AGENT'S OR COLLATERAL AGENT'S
REMEDIES; AND (X THE BENEFIT OF ALL VALUATION, APPRAISEMENT AND EXEMPTION LAWS;
AND
(f) WAIVES, TO THE MAXIMUM EXTENT NOT PROHIBITED BY LAW, ANY RIGHT IT
MAY HAVE TO CLAIM OR RECOVER IN ANY LEGAL ACTION OR PROCEEDING REFERRED TO IN
THIS SECTION ANY SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES.
10.14 ACKNOWLEDGMENTS.
Company hereby acknowledges that;
(a) it has been advised by counsel in the negotiation, execution and
delivery of this Agreement, the Notes. and the other Loan Documents:
(b) none of Agent, Collateral Agent or any Bank has any fiduciary
relationship to Company, and the relationship between Agent and Banks, on one
hand, and Company, on the other hand, is solely that of creditor and debtor, and
(c) no joint venture exists among Banks or among Company and Banks.
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10.15 WAIVERS OF ANY JURY TRIAL.
EACH OF THE PARTIES TO THIS AGREEMENT HEREBY AGREES TO WAIVE ITS
RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR
ARISING OUT OF THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. The scope
of this waiver is intended to be all encompassing of any and all disputes that
may be filed in any court and that relate to the subject matter of this
Agreement, including contract claims, tort claims, breach of duty claims, and
all other common law and statutory claims. Each party hereto acknowledges that
this waiver is a material inducement to enter into a business relationship, that
each has already belied on this waiver in entering into this Agreement, and that
each will continue to rely on this waiver in entering into any further
documentation related to the transactions contemplated hereby and otherwise in
their related future dealings. Each party hereto further warrants and represents
that it has reviewed this waiver with its legal counsel and that it knowingly
and voluntarily waives its jury trial rights following consultation with legal
counsel. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER
ORALLY OR IN WRITING, AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT OR ANY OTHER DOCUMENTS
OR AGREEMENTS RELATING TO THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT. In
the event of litigation, this Agreement may be filed as a written consent to a
trial by the court.
10.16 CONFIDENTIALITY.
Each Bank agrees to take normal and reasonable precautions and exercise
due care to maintain the confidentiality of all non-public information provided
to it by Company or any of its Subsidiaries, or by Agent or Collateral Agent on
Company's behalf, in connection with this Agreement or any other Loan Document
and agrees and undertakes that neither it nor any of its Affiliates shall use
any such information for any purpose or in any manner other than pursuant to the
terms contemplated by this Agreement. Any Bank may disclose such information
(a) at the request of any regulatory authority or in connection with an
examination of such Bank by any such authority; (b) pursuant to subpoena or
other court process; (c) when required to do so in accordance with the
provisions of any applicable law; (d) at the express direction of any other
agency of any State of the United States of America or of any other
jurisdiction, in which such Bank conducts its business; (e) to such Bank's
independent auditors and other professional advisors; (f) following an Event of
Default, in connection with the sale or other realization on the collateral
under the Security Documents; (g) in connection with any litigation or dispute
between (i) such Bank and (ii) Company and/or any Subsidiary; and (h) in
connection with any litigation or dispute involving such Bank if the disclosure
is determined by such Bank to be necessary for the defense or protection of such
Bank's rights and/or interests. Each Bank further agrees, upon receipt by such
Bank of a request to disclose any information to a Governmental Authority or
courts (other than governmental bank examiners and independent auditors of such
Bank), to notify Company of such request and to permit, to the extent
practicable, Company to seek a protective order with respect
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thereto; provided however that no Bank shall be requested to notify Company of
any such request if (i) it is not permitted to do so by applicable law and
regulations, (ii) it is requested not to notify Company by any Person acting or
purporting to act on behalf of a Governmental Authority, or (iii) it otherwise
reasonably believes that it is not permitted to so notify Company.
10.17 CONTROLLING AGREEMENT.
In the event of any conflict between the terms and provisions of this
Agreement and the terms and provisions of any other Loan Document, the terms and
provisions of this Agreement shall control.
10.18 COUNSEL TO COLLATERAL AGENT.
If Company reasonably and in good faith requests in writing to
Collateral Agent and Agent that Collateral Agent replace, at Company's sole
expense, the then existing counsel to Collateral Agent, Collateral Agent shall
consider such request and, so long as no Default or Event of Default has
occurred and is continuing, Collateral Agent shall not unreasonably withhold its
consent to such request.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their proper and duly authorized officers as of
the day and year first above written.
ATLANTIC GULF COMMUNITIES
CORPORATION
By:
---------------------------------------
Name:
Title:
Notice Address:
0000 Xxxxx Xxxxxxxx Xxxxx, 0xx Xxxxx
Xxxxx, Xxxxxxx 00000-0000
Telecopy: (000) 000-0000
Attention: Chief Financial Officer
FOOTHILL CAPITAL CORPORATION
as Agent and as a Bank
By:
---------------------------------------
Name:
Title:
Notice Address:
00 Xxxxx Xxxxxx
Xxxxx 0000
Xxxxxx, Xxxxxxxxxxxxx 00000
Telecopy: (000) 000-0000
Attention: Business Finance Division
Manager
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FOOTHILL CAPITAL CORPORATION
as Collateral Agent
By:
---------------------------------------
Name:
Title:
Notice Address:
00 Xxxxx Xxxxxx
Xxxxx 0000
Xxxxxx, Xxxxxxxxxxxxx 00000
Telecopy: (000) 000-0000
Attention: Business Finance Division
Manager
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Atlantic Gulf Communities Corporation Exhibit to the 1996 Form 10-K
EXHIBIT (C) 4. A. SECOND AMENDED AND RESTATED REVOLVING LOAN AGREEMENT
DATED AS OF SEPTEMBER 30, 1996, AS AMENDED AS OF MARCH 31, 1997
AMENDMENT
As of March 31, 1997
Atlantic Gulf Communities Corporation
0000 Xxxxx Xxxxxxxx Xxxxx, 0xx Xxxxx
Xxxxx, Xxxxxxx 00000-0000
Ladies and Gentlemen:
Reference is made to: (a) that certain Second Amended and Restated
Revolving Loan Agreement, dated as of September 30, 1996 (as amended,
supplemented, or otherwise modified from time to time, the "Loan Agreement"), by
and among Atlantic Gulf Communities Corporation, a Delaware corporation
("Company"), the financial institutions listed therein (the "Loan Banks"),
Foothill Capital Corporation, as Agent for the Loan Banks ("Loan Agent"), and
Foothill Capital Corporation, as Collateral Agent; and (b) that certain Second
Amended and Restated Secured Floating Rate Note Agreement, dated as of September
30, 1996 (as amended, supplemented, or otherwise modified from time to time, the
"Note Agreement"), by and among Company, the financial institutions listed
therein (the "Note Banks"), Foothill Capital Corporation, as Agent for the Note
Banks ("Note Agent"), and Foothill Capital Corporation, as Collateral Agent.
Capitalized terms used in this Amendment without definition shall have the
meanings ascribed to them in the Loan Agreement.
You have advised Loan Agent, the Loan Banks, Note Agent, and the Note
Banks (collectively, the "Bank Group") that the sum of the Working Capital
Facility Usage, the Reducing Revolving Usage, and the aggregate outstanding
balance of all Secured Floating Rate Notes exceeds the Adjusted Borrowing Base
Amount (the amount of such excess in existence from time to time, the
"Overadvance"). The amount of the Overadvance in existence as of March 31, 1997
is approximately $5,200,000. You also have advised the Bank Group that Company
anticipates that, during the period commencing on March 31, 1997 and ending on
the earlier to occur of June 30, 1997 and the date that the Overadvance is
reduced to zero (the "Designated Period"), such Overadvance is likely to
continue and may need to increase from approximately $5,200,000 to up to a
maximum of $10,000,000.
Anything in the Loan Agreement, the Loan Documents, the Note
Agreement, or the "Secured Floating Rate Note Documents" (as that term is
defined in the Note Agreement) to the contrary notwithstanding, the Bank Group
hereby agrees that, effective solely during the Designated Period and so long as
the Overadvance does not exceed the
117
"Permitted Overadvance Amount" (as that term is defined below) at any time,
Company need not repay the Loans in an amount equal to the Overadvance pursuant
to Section 2.11 of the Loan Agreement. The agreement contained in this paragraph
(the "Limited Amendment") only shall be effective through the end of the
Designated Period and only so long as the Overadvance does not exceed the
Permitted Overadvance Amount; otherwise, Company's obligation to repay the Loans
in an amount equal to the Overadvance in accordance with Section 2.11 of the
Loan Agreement shall not be deemed to have been waived or amended by the Bank
Group. As used herein, "Permitted Overadvance Amount" shall mean the result of
(A) $10,000,000, less (B) the aggregate amount of repayments (if any) made in
respect of the Overadvance pursuant to Section 1.d hereof.
As a condition precedent to the effectiveness of the Limited
Amendment, the Loan Banks shall have received a fee, which fee Company and the
Bank Group mutually have agreed shall be in the amount of One Million Dollars
($1,000,000) and shall be charged to Company as a further Reducing Revolving
Loan.
In order to induce the Bank Group to provide the Limited Amendment,
Company and the Bank Group hereby agree that, anything in the Loan Agreement,
the Loan Documents, the Note Agreement, or the Secured Floating Rate Note
Documents to the contrary notwithstanding:
1. the Loan Agreement hereby is amended as follows:
a. solely during the Designated Period and so long as
no Event of Default has occurred and is
continuing, all Obligations (other than Letters of
Credit) shall bear interest at a rate equal to the
rate that would otherwise be applicable to such
Obligations pursuant to Section 2.14(a) of the
Loan Agreement plus 200 basis points, and the fee
provided in Section 2.21(d)(i)(y) of the Loan
Agreement in respect of Letters of Credit shall be
increased by 200 basis points.
b. solely during the Designated Period and so long as
no Overadvance greater than the Permitted
Overadvance Amount exists or would result
therefrom, the Loan Banks agree, subject to the
provisions hereof and otherwise subject to the
terms and conditions of the Loan Agreement, (i) to
make additional Reducing Revolving Loans
("Permitted Overadvance Reducing Revolving Loans")
upon the written request therefor by Company, and
(ii) that amounts repaid on account of Permitted
Overadvance Reducing Revolving Loans may be
reborrowed during the Designated Period. The
foregoing notwithstanding, the Loan Banks shall
have no obligation to make Permitted
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Overadvance Reducing Revolving Loans: (y) to the
extent that the sum of the Working Capital
Facility Usage and the Reducing Revolving Usage
exceeds the sum of the Working Capital Loan
Commitments and the Reducing Revolving Loan
Commitments; and (z) other than (1) for payment to
the Bank Group of fees and interest due and
payable during the Designated Period (including
all interest due and payable on each Interest
Payment Date in respect of the Loans and all
interest due and payable on each "Interest Payment
Date" (as that term is defined in the Note
Agreement) in respect of the "Notes" (as that term
is defined in the Note Agreement)) and charged to
Company pursuant hereto or pursuant to the Loan
Documents or the Secured Floating Rate Note
Documents, and (2) consistent with the terms and
conditions of the Loan Agreement and the Note
Agreement, for any other purpose or use to the
extent that the portion of the Overadvance not
payable pursuant to the foregoing clause (z)(1)
exceeds $1,000,000 plus the amount, if any, by
which Company, after the date hereof, has made
repayments of principal of the Reducing Revolving
Loans outstanding pursuant to Section 2.13(a) of
the Loan Agreement (other than such repayments
that are applied to repay and permanently reduce
the Overadvance pursuant to Section 1.d below).
c. except for the transactions described (in detail
satisfactory to the Bank Group) on Schedule A
attached hereto, solely during the Designated
Period and without the Bank Group's prior written
consent, Company shall not, and shall not permit
any of its Subsidiaries to, directly or
indirectly, convey, sell, lease, assign, transfer,
or otherwise dispose of (whether in a single
transaction or a series of related transactions)
any of its property, business, or assets
(including Permitted Sale Assets, receivables and
leasehold interests) having either a book value or
a fair market value in excess of $500,000.
d. solely during the Designated Period, Company
shall, and shall cause each of its Subsidiaries
and Excluded Subsidiaries to, pay over to the Bank
Group the following amounts, which amounts shall
be applied to repay, and reduce permanently the
amount of, the then existing Overadvance (and the
excess, if any, to be subject to the other terms
and conditions of the Loan Agreement and the Note
Agreement): (i) 100% of the Net Cash Proceeds of
any equity securities offering or sale (other than
the offering and sale of 25,000 shares of Series A
Preferred Stock of Company
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and 5,000,000 Warrants for the Purchase of Common
Stock of Company, in each case, as contemplated by
that certain Investment Agreement, dated as of
February 7, 1997, between Company and AP-AGC, LLC,
a limited liability company organized and existing
under the laws of Delaware); and (ii) in respect
of any asset of such entity that is listed on
Schedule B attached hereto and constitutes an
element or component of the Borrowing Base (a
"Borrowing Base Asset"), first, 100% of the Net
Cash Proceeds of any sale or other disposition
(except in the ordinary course of business) of
such Borrowing Base Asset up to the amount of
borrowing availability that such Borrowing Base
Asset contributed to the Borrowing Base (the
"Allocated Borrowing Base Amount"), and, then, 75%
of the Net Cash Proceeds of such Borrowing Base
Asset in excess of the Allocated Borrowing Base
Amount shall be used to repay and permanently
reduce the then existing Overadvance.
e. on the first Business Day of each week, Company
shall deliver to Loan Agent the following (each in
form and substance satisfactory to Loan Agent):
(1) a detailed calculation of the Borrowing
Base;
(2) a summary listing, by Borrowing Base
category, of the Total Real Property
included directly or indirectly in the
Borrowing Base and, by Borrowing Base
Joint Venture, of the investments of the
Venture Subsidiaries in Borrowing Base
Joint Ventures, with, in each case, a
summary reconciliation to such listing
provided in respect of the prior week;
(3) a detailed report of all sales of assets
by Company and its Subsidiaries during
the prior week; and
(4) a consolidated Company cash flow
projection for the 8- week period
commencing on the first day of such
week.
2. the Note Agreement hereby is amended as follows:
a. solely during the Designated Period and so long as
no "Event of Default" (as that term is defined in
the Note Agreement) has occurred and is
continuing, each Note shall bear interest at a
rate equal to the rate that would otherwise be
applicable to such Note
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pursuant to Section 2.4(a) of the Note Agreement
plus 200 basis points.
The Limited Amendment shall be limited precisely as written, and
nothing in this Amendment shall be deemed to (a) constitute a waiver of
compliance by Company with respect to (i) Section 2.11 of the Loan Agreement in
any other instance or (ii) any other term, provision, or condition of the Loan
Agreement, the Note Agreement, or any other instrument or agreement referred to
therein (whether in connection with the Overadvance or otherwise) or (b)
prejudice any right or remedy that the Bank Group may now have or may have in
the future under or in connection with the Loan Agreement, the Note Agreement,
or any other instrument or agreement referred to therein. Except as expressly
set forth herein, the terms, provisions, and conditions of the Loan Agreement,
the other Loan Documents, the Note Agreement, and the other Secured Floating
Rate Note Documents shall remain in full force and effect and in all other
respects hereby are ratified and confirmed.
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This Amendment may be executed in any number of counterparts and by
different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed an original, but all such counterparts
when taken together shall constitute but one and the same instrument. Delivery
of an executed counterpart of this Amendment by telefacsimile shall be equally
as effective as delivery of an original executed counterpart of this Amendment.
Any party delivering an executed counterpart of this Amendment by telefacsimile
also shall deliver an original executed counterpart of this Amendment but the
failure to deliver an original executed counterpart shall not affect the
validity, enforceability, and binding effect of this Amendment. This Amendment
is a Loan Document and a Secured Floating Rate Note Document.
FOOTHILL CAPITAL CORPORATION,
individually as a Loan Bank
and as the Loan Agent
By:_________________________
Title:______________________
FOOTHILL CAPITAL CORPORATION,
individually as a Note Bank
and as the Note Agent
By:_________________________
Title:______________________
Acknowledged and Agreed:
ATLANTIC GULF COMMUNITIES CORPORATION
By:______________________________
Title:___________________________
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