Atlantic Gulf Communities Corporation Exhibit to the June 30, 1998 Form 10-Q
Exhibit (a)(2) Interim Intercompany Loan and Intercreditor Agreement, dated as
of June 30, 1998
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INTERIM INTERCOMPANY LOAN AND INTERCREDITOR AGREEMENT
This INTERIM INTERCOMPANY LOAN AND INTERCREDITOR AGREEMENT
("AGREEMENT") is made as of the 30th day of June, 1998, by and among: ATLANTIC
GULF COMMUNITIES CORPORATION, a Delaware corporation ("COMPANY"), with its
principal office located at, and having a mailing address of, 0000 Xxxxx
Xxxxxxxx Xxxxx, 0xx Xxxxx, Xxxxx, Xxxxxxx 00000-0000; AGC-SP, INC., a Delaware
corporation ("SP SUB"), with its principal office located at, and having a
mailing address of, 0000 Xxxxx Xxxxxxxx Xxxxx, 0xx Xxxxx, Xxxxx, Xxxxxxx 00000-
5461; AP-AGC, LLC, a Delaware limited liability company ("OBLIGEE"), having a
mailing address of 1301 Avenue of the Xxxxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx
00000; THE BANK OF NEW YORK, a New York banking corporation, as collateral agent
("COLLATERAL AGENT") for Obligee and Foothill Capital Corporation, a California
corporation ("FOOTHILL"), having a mailing address of x/x Xxx Xxxx xx Xxx Xxxx
Trust Company of Florida, N.A., Towermarc Plaza, 00000 Xxxxxxxxx Xxxxxxx,
Xxxxxxxxxxxx, Xxxxxxx 00000; Foothill, as collateral agent ("LOAN AGENT") for
the banks ("LOAN BANKS"), who are parties to that certain Second Amended and
Restated Loan Agreement dated as of September 30, 1996, executed by and among
the Company, Loan Agent and the Loan Banks ("LOAN AGREEMENT"), having a mailing
address of 00000 Xxxxx Xxxxxx Xxxxxxxxx, Xxxxx 0000, Xxx Xxxxxxx, Xxxxxxxxxx
00000-0000; and Foothill, as collateral agent ("NOTE AGENT") for the banks
("NOTE BANKS"), who are parties to that certain Second Amended and Restated
Secured Floating Rate Note Agreement dated as of September 30, 1996, executed by
and among the Company, Note Agent and the Note Banks ("NOTE AGREEMENT").
RECITALS:
A. Pursuant to the terms of that certain Investment Agreement dated as
of February 7, 1997, amended as of March 20, 1997, and amended and restated as
of May 15, 1997 (together with any and all modifications, amendments,
replacements, renewals and extensions thereof, the "INVESTMENT AGREEMENT") among
Obligee, the Company and certain subsidiaries of the Company ("AG SUBS"),
Obligee purchased $25,000,000.00 in the aggregate of preferred stock issued by
the Company ("INVESTMENT").
B. The Company, SP Sub, the AG Subs, the subsidiaries of SP Sub
(collectively, "SP SUB'S SUBSIDIARIES"), Collateral Agent and Note Agent are
parties to that certain Secured Agreement dated February 7, 1997, and amended
and restated as of May 15, 1997 (as the same may be amended, supplemented and
otherwise modified from time to time, the "SECURED AGREEMENT") pursuant to which
Secured Agreement certain obligations of the Company, SP and SP Sub's
Subsidiaries including, without limitation, the obligation to repurchase the
preferred shares given to Obligee in connection with the Investment, are secured
by (1) a first priority lien upon all of the assets of SP Sub and SP Sub's
Subsidiaries as well as a pledge by the Company of all of the stock of SP Sub
and a pledge by SP Sub of all of the stock of SP Sub's Subsidiaries and (2) a
lien upon all other assets of the Company and all assets of the AG Subs
subordinate only to liens securing obligations of the
Company under the Loan Agreement and the Note Agreement.
C. Pursuant to the terms of the Loan Agreement and the Note Agreement,
the Company is indebted to the Loan Banks and Note Banks, respectively, and
certain of the obligations of the Company to the Loan Banks and Note Banks
mature on June 30, 1998 ("1998 NOTES").
D. Pursuant to the terms of the Investment Agreement, the Investment is
to be used for the purpose of enabling the Company to invest through SP Sub and
SP Sub's Subsidiaries in certain approved real estate development projects.
E. SP Sub has set aside $11,500,000.00 of the Investment ("UNUSED
INVESTMENT"), for future acquisition of certain real estate projects in which
Obligee would be granted first priority liens and security interests ("PENDING
PROJECTS"), subject only to the rights of development lenders for the Pending
Projects, which Unused Investment is one of the assets in which Obligee has a
first priority security interest.
F. The Company has requested that the Obligee permit it to use the
Unused Investment in order to pay, in part, the 1998 Notes rather than to fund
the Pending Projects, and the Obligee has agreed to permit the Company to borrow
the Unused Investment from SP Sub in order to pay, in part, the 1998 Notes upon
the terms and conditions hereinafter set forth.
NOW, THEREFORE, in order to induce Obligee to permit the Company to use
a portion of the Investment to pay a portion of the 1998 Notes, the Company, SP
Sub, Obligee, Collateral Agent, Note Agent and Loan Agent hereby agree as
follows:
AGREEMENT
1. INCORPORATION OF RECITALS. The aforesaid Recitals are true and
correct and are incorporated herein.
2. CONSENT AND TERMS OF AGREEMENT TO CONSENT. Obligee hereby consents
to the Company's use of the Unused Investment for the purpose of paying a
portion of the indebtedness evidenced by the 1998 Notes, on the following terms
and conditions:
a. the Company shall execute a Term Note payable to the order of SP
Sub, substantially in the form attached hereto as EXHIBIT A, which shall be duly
endorsed to the order of the Collateral Agent ("TERM NOTE");
b. the AG Subs shall execute a Subsidiary Guaranty, substantially in
the form attached hereto as EXHIBIT B ("SUBSIDIARY GUARANTY");
c. the Company shall execute a Subordinate Stock Pledge Agreement,
substantially in the form attached hereto as EXHIBIT C ("STOCK PLEDGE");
d. the Company and AG Subs shall execute a Subordinate Personal
Property Security Agreement, substantially in the form attached hereto as
EXHIBIT D ("SECURITY AGREEMENT") and related UCC-1 financing statements;
e. as substitute collateral for the Unused Investment, SP Sub shall
execute an Assignment of Note and Other Loan Documents in favor of The Bank of
New York as collateral agent for Obligee, substantially in the form attached
hereto as EXHIBIT E ("ASSIGNMENT OF NOTE");
f. notwithstanding anything to the contrary contained in the
Investment Agreement, the Secured Instrument Documents or that certain
Intercreditor Agreement dated as of June 23, 1997, executed by and between
Obligee, Collateral Agent and Foothill ("INTERCREDITOR AGREEMENT"), a default
under this Agreement, the Term Note, Subsidiary Guaranty, the Stock Pledge, the
Security Agreement or the Assignment of Note (collectively, "INTERCOMPANY LOAN
DOCUMENTS") shall be a default under the Secured Instrument Documents; and
g. SP Sub agrees to be bound by the same terms and shall be a
third-party beneficiary of the same rights under the Intercreditor Agreement
with respect to Intercompany Loan Documents as Obligee is with respect to the
Security Instrument Documents.
3. Obligee and Foothill hereby direct the Collateral Agent to execute
this Agreement as collateral agent for Obligee and Foothill.
4. This Agreement shall be binding upon all parties and their
respective successors and assigns.
5. The validity and enforceability of this Agreement shall be construed
and interpreted according to the laws of the State of New York.
6. This Agreement, and any amendments, waivers, consents or
supplements, may be executed in one or more counterparts, each of which when so
executed and delivered shall be deemed an original and all of which together
shall constitute one and the same Agreement.
IN WITNESS WHEREOF, and intending to be legally bound hereby, this
Agreement has been duly signed, sealed and delivered by the undersigned as of
the day and year specified at the beginning hereof.
ATLANTIC GULF COMMUNITIES
CORPORATION, a Delaware corporation
By:
--------------------------------
Xxxx X. Xxxxxxx
Vice President
AGC-SP, INC., a Delaware corporation
By:
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Xxxx X. Xxxxxxx
Vice President
AP-AGC, LLC., a Delaware limited liability
corporation
By: Kronus Property, Inc., its Manager
By:
--------------------------------
Xxxxxxx Xxxxxxxxxxxxx
Vice President
THE BANK OF NEW YORK, a New York banking
corporation, as Collateral Agent
By: The Bank of New York Trust Company of
Florida, N.A., its agent
By:
--------------------------------
Xxxxxxx X. Xxxxx
Assistant Vice President
FOOTHILL CAPITAL CORPORATION, a
California corporation, as Foothill, Loan Agent and
Note Agent
By:
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Xxxxxxxx Silver
Vice President
