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Exhibit 6
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ATLANTIC GULF COMMUNITIES CORPORATION
-AND-
THE SUBSIDIARIES SET FORTH
ON THE SIGNATURE PAGES HEREOF
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SECURED NOTE AGREEMENT
DATED AS OF FEBRUARY 7, 1997
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TABLE OF CONTENTS
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SECTION 1. DEFINITIONS
1.1 Defined Terms..................................................
1.2 Other Definitional Provisions..................................
SECTION 2. ISSUANCE AND TERMS OF SECURED
NOTES................................................................
2.1 Notes...........................................................
2.2 Payment of Notes................................................
2.3 Satisfaction Upon Issuance of...................................
Preferred Stock...............................................
2.4 Interest Rates and Interest.....................................
Payment Dates.................................................
2.5 Computation of Interest and Fees................................
2.6 Pro Rata Treatment and Payments.................................
2.7 Taxes...........................................................
2.8 Use of Proceeds.................................................
2.9 Fees............................................................
2.10 Maximum Interest Rate...........................................
SECTION 3. COLLATERAL...........................................................
3.1 Liens in Subsidiary Stock,......................................
Contract Receivables, Real Property...........................
and Personal Property.........................................
3.2 Security Documents .............................................
3.3 Section 365(j) Property.........................................
3.4 [intentionally omitted].........................................
3.5 Subordinations and Releases of..................................
Mortgage and Related Personal.................................
Property Liens...................................................
3.6 Subsidiary Guaranties...........................................
SECTION 4. REPRESENTATIONS AND WARRANTIES.......................................
4.1 Financial Condition.............................................
4.2 No Material Adverse Change......................................
4.3 Corporate Existence; Compliance.................................
with Law......................................................
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4.4 Corporate Power; Authorization;.................................
Enforceable Obligations ......................................
4.5 No Legal Bar....................................................
4.6 No Material Litigation..........................................
4.7 No Default......................................................
4.8 Ownership of Property; Liens....................................
4.9 Intellectual Property...........................................
4.10 Taxes...........................................................
4.11 Federal Regulations ............................................
4.12 ERISA ..........................................................
4.13 Investment Company Act; Other...................................
Regulations...................................................
4.14 Subsidiaries and Joint Ventures.................................
4.15 Environmental Matters...........................................
4.16 Indebtedness....................................................
4.17 Contingent Obligations..........................................
4.18 Restitution Program and Final...................................
Judgment......................................................
4.19 Certain Fees....................................................
4.20 Disclosure......................................................
4.21 Insurance......................... .............................
4.22 Total Real Property Matters.....................................
4.23 Reorganization Proceedings......................................
4.24 Excluded Subsidiaries; Unrestricted.............................
Subsidiaries..................................................
4.25 [intentionally omitted].........................................
4.26 Bank Accounts...................................................
4.27 Utility Fund Trusts.............................................
4.28 [intentionally omitted].........................................
4.29 SPUD Subsidiaries...............................................
4.30 DRI and Zoning..................................................
SECTION 5. CONDITIONS PRECEDENT.................................................
5.1 Conditions to Issuance...........................................
5.2 [intentionally omitted]..........................................
SECTION 6. AFFIRMATIVE COVENANTS................................................
6.1 Financial Statements............................................
6.2 Certificates; Other Information.................................
6.3 Payment of Obligations..........................................
6.4 Conduct of Business and Maintenance.............................
of Existence....................................................
6.5 Maintenance of Property; Insurance .............................
6.6 Inspection of Collateral; Books and.............................
Records; Appraisals...........................................
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6.7 Notice..........................................................
6.8 Environmental Laws..............................................
6.9 Business Plan...................................................
6.10 Compliance with Other Transaction .............................
Documents.....................................................
6.11 Dividends from Subsidiaries.....................................
6.12 Supplemental Reports Regarding..................................
Real Property...................................................
6.13 Compliance with Laws............................................
6.14 Other Notices...................................................
Agreement.....................................................
6.16 Foothill Reports................................................
SECTION 7. NEGATIVE COVENANTS
7.1 Maintenance of Consolidated.....................................
Net Worth; Interest Charges...................................
Coverage Ratio................................................
7.2 Limitation of Indebtedness......................................
7.3 Limitation on Liens.............................................
7.4 Limitation on Guarantee Obligations.............................
7.5 Limitations on Fundamental Changes .............................
7.6 Limitation on Sale of Assets....................................
7.7 Limitation on Dividends.........................................
7.8 Limitation on Capital Expenditures .............................
7.9 Limitation on Investments, Loans,...............................
and Advances....................................................
7.10 Limitation on Optional Payments and.............................
Modifications of Debt Instruments.............................
7.11 Transactions with Affiliates....................................
7.12 Sale and Leaseback .............................................
7.13 Fiscal Year.....................................................
7.14 Limitation on Negative Pledge...................................
Clauses......................................................
7.15 Deviation from Business Plan....................................
7.16 Unsold Housing Inventory........................................
7.17 Limitation of Bank Accounts.....................................
7.18 Venture Subsidiaries and Joint..................................
Ventures........................................................
7.19 Excluded Subsidiaries;..........................................
Unrestricted Subsidiaries .............................
SECTION 8. EVENTS OF DEFAULT; REMEDIES..........................................
8.1 Events of Default; Remedies......................................
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SECTION 9 THE COLLATERAL AGENT................................................
9.1 [intentionally omitted].........................................
9.2 Appointment of Collateral Agent.................................
9.3 [intentionally omitted].........................................
9.4 Delegation of Duties............................................
9.5 Exculpatory Provisions..........................................
9.6 Reliance by the Lender..........................................
9.7 Notice of Default...............................................
9.8 Non-Reliance on Collateral Agent................................
9.9 Indemnification.................................................
9.10 [intentionally omitted].........................................
9.11 [intentionally omitted].........................................
9.12 Successor Collateral Agent......................................
SECTION 10 MISCELLANEOUS
10.1 Amendments and Waivers.........................................
10.2 Notices........................................................
10.3 No Waiver; Cumulative Remedies.................................
10.4 Survival of Certain Provisions.................................
10.5 Payment of Expenses and Taxes .................................
10.6 Successors and Assigns;........................................
Participations; Purchasing Lender............................
10.7 Adjustments; Setoff............................................
10.8 Appointment of Secured Creditor................................
as the Company's Lawful Attorney.............................
10.9 Counterparts...................................................
10.10 Severability...................................................
10.11 Integration....................................................
10.12 GOVERNING LAW..................................................
10.13 SUBMISSION TO JURISDICTION;....................................
WAIVERS......................................................
10.14 Acknowledgments................................................
10.15 WAIVERS OF JURY TRIAL..........................................
10.16 Confidentiality................................................
10.17 Controlling Agreement..........................................
10.18 Counsel to Collateral Agent....................................
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SCHEDULES
Schedule E-1 Excluded Subsidiaries
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 4.1 Additional Liabilities of the Company; Pur-
chases and Dispositions by the Company
Schedule 4.2 Material Adverse Effect
Schedule 4.4 Consents and Authorizations
Schedule 4.5 Certain Contractual Obligations
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 Guaranties
Schedule 4.21 Insurance
Schedule 4.24 Unrestricted Subsidiaries' Assets and Busi-
nesses
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
Schedule 7.3 Liens
Schedule 7.17 Restricted Bank Accounts
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EXHIBITS
Exhibit A-1 Form of Deed of Trust
Exhibit B-1 Form of Mortgage and Security Agreement
Exhibit C-1 Form of Secured Promissory Note
Exhibit D-1 Form of Deposit Account Security Agreement
Exhibit E-1 Form of Due Diligence Fee Agreement
Exhibit F-1 Form of Monthly Management Business Plan
Update
Exhibit G-1 Form of Land Sales Report
Exhibit H-1 Form of Junior Assignment of Notes and Deeds
of Trust
Exhibit H-2 Form of Junior Assignment of Notes and
Mortgages
Exhibit I-1 Form of Intercreditor Agreement
Exhibit J-1 Form of Joint Venture Pledge Agreement
Exhibit P-1 Form of Personal Property Security Agreement
Exhibit R-1 Copy of Reorganization Plan
Exhibit S-1 Form of Stock Pledge Agreement
Exhibit S-2 Form of Subsidiary Guaranty
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THIS SECURED NOTE AGREEMENT, dated as of February __, 1997,
among ATLANTIC GULF COMMUNITIES CORPORATION, a Delaware corporation (the
"Company"), the Subsidiaries of the Company named on the signature pages hereof
(the "Mortgagor Subsidiaries," and together with the Company, the "Co-Makers"),
AP-AGC, LLC, a Delaware limited liability company (the "Lender") and the entity
named as collateral agent on the signature pages hereof as collateral agent for
the Lender (hereinafter, in such capacity, together with any successors thereto
in such capacity, referred to as "Collateral Agent").
RECITALS
WHEREAS, in accordance with an Investment Agreement between
the Company and the Lender dated as of the date hereof, the Co-Makers desire to
be able to borrow up to $10,000,000 from the Lender on the terms hereinafter set
forth and the Lender is willing, on the terms and subject to the conditions set
forth in this Agreement, to commit to lend up to $10,000,000 to the Co-Makers.
AGREEMENT
NOW THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the parties hereto hereby agree as follows:
SECTION 1. DEFINITIONS
1.1 Defined Terms. As used in this Agreement, the following
terms shall have the following meanings:
"Administrative Claims": as defined in Article I of the
Reorganization Plan.
"Affiliate": with respect to any Person, (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 Person.
"AG Asia": Atlantic Gulf Asia Holdings N.V., a Netherlands
Antilles corporation.
"Agreement": this Secured Note Agreement, as amended,
supplemented or otherwise modified from time to time.
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"Annual Net Income": income as shown on the consolidated
statements of income provided by the Company under Section 6.1, but
in no event less than 0.
"Bank Accounts": any and all deposit accounts, money market
accounts and any other deposits and investments of the 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 the 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 the Company or any Subsidiary
is prohibited by agreements existing on the date hereof or by law as
set forth in Schedule 7.17, which may be amended from time to time by
written notice to the Lender to include other restricted accounts).
"Bankruptcy Code": Title 11 of the United States Code
entitled "Bankruptcy" from time to time in effect, or any successor
statute.
"Bankruptcy Court": the United States Bankruptcy Court for the
Southern District of Florida or if 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.
"Beige Book": the book prepared by the Company dated December
1994, setting forth the estimated fair market value of the Real
Property of the Company and its Subsidiaries.
"Book Value": with respect to a specified asset of a
specified Person, the carrying value of the specified asset on the
balance sheet of such Person prepared in accordance with GAAP and
delivered to the Lender from time to time pursuant to the Transaction
Documents.
"Borrowing Base": as defined in the Revolving Loan Agreement.
"Business Day": any day excluding Saturday, Sunday and any day
which either is a legal holiday under the laws of the States of
California or New York or is a day on
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which banking institutions located in the States of California or New
York are authorized or required by law or other governmental action to
close.
"Business Plan": as of the Issuance Date and until a new
Business Plan is delivered to the Lender in accordance with Section
6.9, the business plan of the Company and its Subsidiaries dated
October 23, 1996, and thereafter the business plan of the Company and
its Subsidiaries delivered to and approved by the Lender in December of
each year in accordance with Section 6.9.
"Capital Stock": with respect to any Person, any and all
shares, interests, 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": any and all accounts that
Collateral Agent, for the benefit of the Lender, 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": (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.
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"Certificate of Designation": means the "Series A Preferred
Stock Certificate of Designation," as defined in the Investment
Agreement.
"Claims Disbursement Account": the segregated account
established for purposes of holding funds borrowed 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": the Internal Revenue Code of 1986, as amended from
time to time.
"Collateral": as defined in Section 3.1.
"Collateral Agent": the entity named as collateral agent on
the signature page hereof, and any successor thereto, solely in its
capacity as collateral agent for the Lender, and, after the issuance of
the Preferred Stock, as collateral agent for the holders of Preferred
Stock, under the Security Documents, pursuant to the terms of this
Agreement and the Security Documents.
"Commercial Real Estate": all Real Property of the Company
and its Subsidiaries (including condominium and cooperative units),
other than Real Property reserved for sale as single residential
homes or lots.
"Commercial Receivables": all promissory notes and mortgages
and deeds of trust payable to, or held by, the 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.
"Commonly Controlled Entity": an entity, whether or not
incorporated, which is under common control with the Company within the
meaning of Section 4001 of ERISA or is part of a group which includes
the 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 the Company with Sun Trust Bank,
Miami, N.A. or such other deposit account maintained by the Company at
a financial institution reasonably satisfactory to Collateral Agent.
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"Company Operating Account Control Agreement" means a written
agreement among the Company, the Collateral Agent, the "Collateral
Agent" under the Foothill Loan Documents), and Operating Account Bank,
with respect to the Company Operating Account, in form and substance
reasonably satisfactory to the Lender, pursuant to which Operating
Account Bank acknowledges the security interests granted by the Company
to the Collateral Agent for the benefit of Secured Creditor in the
Company Operating Account, waives rights of setoff with respect to the
Company Operating Account, and agrees to act upon the instructions of
the Collateral Agent with respect to the disposition of funds in the
Company Operating Account should Operating Account Bank receive such
instructions from the Collateral Agent.
"Condemnation Awards": any and all proceeds (including
proceeds in the form of promissory notes or other agreements for the
payment of proceeds) from (i) the taking by eminent domain,
condemnation or otherwise, or acquisition pursuant to contract, of any
property of the 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, including any award and/or other compensation awarded to
or for the benefit of, or received by or on behalf of, the Company or
GDU, whether as a result of litigation, arbitration, settlement or
otherwise, or (ii) any sale by the Company or any Subsidiary of a
water and utility system to a Person, whether now owned or hereafter
created or acquired.
"Confirmation Order": the order entered on March 27, 1992, by
the Bankruptcy Court, confirming the Reorganization Plan.
"Consolidated Net Worth": at any particular date, all amounts
which, in accordance with GAAP, would be included as Shareholders'
Equity on a consolidated balance sheet of the Company and its
consolidated Subsidiaries at such date.
"Contractual Obligation": with respect to any Person, any
provision of any security issued by such 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": as described in Subsection 2.13
of the Reorganization Plan.
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"Deed of Trust": the Junior Deed of Trust and Security
Agreement to be executed on or before the Issuance Date and from time
to time thereafter between the Company or a Subsidiary and Collateral
Agent, in the form of Exhibit A-1, as the same be amended, supplemented
or otherwise modified from time to time, pursuant to which the Company
and Subsidiaries grant a security interest in the Real Property located
in Tennessee (and such other jurisdictions where "deeds of trust" are
used to encumber real property) and related Personal Property of the
Company or Subsidiaries to Collateral Agent, for the benefit of Secured
Creditor as required by this Agreement.
"Default": any of the events specified in Section 8.1,
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 that term in
Section 2.4(b).
"Deposit Account Security Agreement": the Deposit Account
Security Agreement, in the form of Exhibit D-1, to be executed by the
Company and each of its Subsidiaries in favor of Collateral Agent on or
before the Issuance Date, for the benefit of Secured Creditor, as the
same may be amended, supplemented or otherwise modified from time to
time.
"Dollars" and "$": dollars in lawful currency of the United
States of America.
"Due Diligence Fee Agreement": the Due Diligence Fee
Agreement, in the form of Exhibit E-1, to be executed by the Company
and the Lender, providing among other things for payment of a fixed due
diligence and investment analysis fee on each Interest Payment Date as
compensation for the due diligence and investment analysis services
described therein.
"Environmental Laws": 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, without
limitation, Hazardous Materials, as now or may at any time hereafter be
in effect.
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"ERISA": the Employee Retirement Income Security Act of 1974,
as amended from time to time.
"Event of Default": any of the events specified in Section
8.1, provided that any requirement for the giving of notice, the
lapse of time, or both, or any other condition, has been satisfied.
"Excluded Property": (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 the 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 real estate taxes on the lots
subject to the respective Homesite Contracts Receivable giving rise to
such payments, and (e) the Trust Property.
"Excluded Subsidiaries": the direct or indirect subsidiaries
of the Company listed on Schedule E-1.
"Financing Lease": any lease of property, real or personal,
the obligations of the lessee in respect of which are required in
accordance with GAAP to be capitalized on a consolidated balance
sheet of the Company and Subsidiaries.
"Foothill Debt": Indebtedness outstanding under the Foothill
Loan Documents.
"Foothill Loan Documents": means, collectively, (i) the
Revolving Loan Agreement, (ii) the "Loan Documents," as defined in the
Revolving Loan Agreement, (iii) the Secured Floating Rate Note
Agreement, and (iv) the "Secured Floating Rate Note Documents," as
defined in the Secured Floating Rate Note Agreement, each of the
foregoing as in effect on the date hereof.
"GAAP": generally accepted accounting principles set forth in
the opinions and pronouncements of the Accounting Principles Board of
the American Institute of Certified Public Accountants and statements
and pronouncements of the Financial Accounting Standards Board or in
such other statements by such other entity as may be approved by a
significant segment of the accounting profession, that are
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applicable to the circumstances as of the date of determination;
provided that calculations in connection with the definitions,
covenants and other 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": General Development Corporation, a Delaware
corporation, under which name the Company was formerly known.
"GDU": the Company's Subsidiary, General Development
Utilities, Inc., a Florida corporation.
"Governmental Authority": any nation or government, any state
or other political subdivision thereof and any entity exercising
executive, legislative, judicial, regulatory or administrative
functions of, or pertaining to,government.
"Guarantee Obligation": 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) as to which 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 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 other wise 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
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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 the Company in
good faith.
"Hazardous Materials": any hazardous materials, hazardous
wastes, 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 Receivable": all contracts for deed,
promissory notes, mortgages, deeds of trust and other agreements,
currently existing or hereafter created or acquired, pursuant to which
the 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": as defined in Article I of the
Reorganization Plan.
"Housing Inventory": 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
the Company and its Subsidiaries prepared at such date in accordance
with GAAP.
"Indebtedness": 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 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
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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 Unsecured Cash Flow Notes. As used
herein, the term "Indebtedness" shall not include Guarantee
Obligations.
"Insolvency": with respect to any Multi-employer Plan, the
condition that such plan is insolvent within the meaning of Section
4245 of ERISA.
"Insolvent": pertaining to a condition of Insolvency.
"Intellectual Property": as defined in Section 4.9.
"Intercreditor Agreement": that certain Intercreditor
Agreement of even date herewith by and between the Lender, Collateral
Agent, the lenders party to the Foothill Loan Documents, and the agent
and collateral agent for such lenders, in the form of Exhibit I-1, as
such agreement may be supplemented, amended or otherwise modified from
time to time.
"Interest Charges": means, with respect to any period, the
sum (without duplication) of the following (eliminating all
intercompany items required to be eliminated in the course of
preparing consolidated financial statements for the Company and its
Subsidiaries in accordance with GAAP) (a) all interest in respect of
the Indebtedness of the Company and its Subsidiaries (including imputed
interest on Financing Leases) deducted in de termining consolidated net
income for such period and (b) all debt discount and expense amortized
or required to be amortized in the determination of consolidated net
income for such period.
"Interest Charges Coverage Ratio": at any time, the ratio of
(a) Net Operating Cash Flow for the period of four fiscal quarters
ending on, or most recently ended prior to, such time, taken as a
whole, to (b) Interest Charges for such period.
"Interest Payment Date": the last day of each calendar month
to occur while any obligation evidenced by the Note is outstanding.
"Investment Agreement": that certain Investment Agreement of
even date herewith by and between the Company
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and the Lender, providing among other things for the execution and
delivery of this Agreement and the issuance of the Preferred Stock.
"Investments": any and all promissory notes, Capital Stock
(other than Subsidiary Stock), bonds, debentures and securities, held
by the Company or any Subsidiary, whether now owned or hereafter
acquired.
"Issuance Date": the date on or before May 22, 1997 upon
which all of the conditions set forth in Section 5 have been met or
waived by the Lender in its sole discretion and the Note is issued.
"Joint Ventures": 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 date hereof 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": the Junior Joint Venture
Pledge Agreement in the form of Exhibit J-1, to be executed by each of
the Venture Subsidiaries and Collateral Agent on or before the Issuance
Date, as the same may be amended, 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 Secured Creditor.
"Junior Assignments": the Junior Assignment of Notes and
Deeds of Trust and the Junior Assignment of Notes and Mortgages, in
the form of Exhibits H-1 and H-2 respectively, to be executed on or
before the Issuance Date, as the same may be amended, supplemented or
otherwise modified from time to time,
"JV Real Property": 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": all contracts for deed, promissory notes,
mortgages, deeds of trust and other agreements, currently existing or
hereafter created or acquired, pursuant to which any Joint Venture has
the right to receive payment in any form whatsoever for the sale of JV
Real
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Property, and cash and non-cash proceeds of any and all of the
foregoing.
"Lender": the Lender, as defined in the Preamble to this
Agreement, together with its permitted successors and assigns.
"Lien": 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).
"Material Adverse Effect": a material adverse effect on (a)
the business, operations, property, condition (financial or otherwise)
or prospects of the Company and its Subsidiaries taken as a whole, (b)
the ability of the Company to perform its obligations under this
Agreement, the Notes, the Security Documents, or the other Transaction
Documents or (c) the validity or enforceability of this Agreement, the
Notes, the Security Documents or other Transaction Documents or the
other Transaction Documents or the rights or remedies of Collateral
Agent or the Secured Creditor hereunder or thereunder.
"Maturity Date": December 31, 1998.
"Mortgages": the Junior Mortgage and Security Agreements to
be executed on or before the Issuance Date and from time to time
thereafter by the Company or a Subsidiary in favor of Collateral
Agent, substantially in the form of Exhibit B-1, as the same may be
amended, supplemented or otherwise modified from time to time,
pursuant to which the Company and Subsidiaries grant a security
interest in the Real Property located in Florida (and in such other
jurisdictions where "mortgages" are used to encumber real property) and
related Personal Property of the Company or Subsidiaries to Collateral
Agent, for the benefit of Secured Creditor, as required by this
Agreement.
"Mortgagor Subsidiaries": the Subsidiaries party to this
Agreement that shall grant to Collateral Agent
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Mortgages on Real Property owned by them in Florida on or before the Issuance
Date as required herein.
"Multi-employer Plan": a Plan which is a multi-employer plan as defined
in Section 4001(a)(3) of ERISA.
"Negative Shareholder Vote": the "Stockholders Approval" (as defined in
the Investment Agreement) not having been obtained by May 22, 1997.
"Net Cash Proceeds": 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 so
received) received from such sale net of bona fide direct costs of sale.
"Net Cash Flow": with respect to any fiscal period of a Person, on a
consolidated basis, the actual consolidated pre-tax net cash flow as determined
on the basis set forth in Schedule N-1.
"Net Operating Cash Flow": 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.
"Note": the Secured Convertible Promissory Note to be issued by the
Company and the Mortgagor Subsidiaries under this Agreement in the form of
Exhibit C-1, and any further or additional notes issued by the Company and/or
the Mortgagor Subsidiaries to the Lender under this Agreement, as any of them
may from time to time be amended, supplemented, modified, renewed, extended,
restated, or replaced.
"Obligations": all obligations of every nature of the Company from time
to time owed to the Secured Creditor or Collateral Agent or either of them
under the Transaction Documents, whether for principal, interest (including
interest accruing after the commencement of a bankruptcy case, whether or not
enforceable in such case), fees, costs, expenses, indemnification or otherwise,
of whatsoever nature and whether now or hereafter made, incurred or created,
whether absolute or contingent, liquidated or unliquidated, regardless of
class, whether due or not due, and however arising.
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"Official Unsecured Creditors Committee": the official committee of
creditors appointed by the United States Trustee in the Reorganization
Proceedings.
"Operating Account Bank": Sun Trust Bank, Miami, N.A. or such other
domestic commercial bank having capital and surplus in excess of $500,000,000
reasonably satisfactory to holders of the Foothill Debt.
"PBGC": the Pension Benefit Guarantee 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": an individual, partnership, corporation, business trust,
joint stock company, trust, unincorporated association, joint venture,
Governmental Authority or other entity of whatever nature.
"Personal Property": the following personal property of the Company or
any Subsidiary (exclusive of Homesite Contracts Receivable and Commercial
Receivables of the Company or any Subsidiary):
(a) the Bank Accounts;
(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 lo cated, 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 cho ses 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 xx xxxxx, goodwill, copyrights, registrations, licenses,
franchises, customer lists, tax refund claims, computer
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programs, any other Intellectual Property, all claims under guarantees,
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 the 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 the 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 con tracts 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 Secured Creditor or
Collateral Agent or any agent or bailee of Secured Creditor or Collateral Agent,
any holder of Foothill Debt or any agent therefor, or any other person;
(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 or
permanent disposition of such items or any interest therein whether or not they
constitute "proceeds" as defined in the Uniform Commercial Code; and
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(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": the Junior Personal Property
Security Agreement in the form of Exhibit P-1, to be executed on or before the
Issuance Date by the Company and the Subsidiaries now or hereafter party thereto
in favor of Collateral Agent, for the benefit of Secured Creditor, as the same
may be amended, supplemented or oth erwise modified from time to time.
"Plan": at a particular time, any employee benefit plan which is covered
by ERISA and in respect of which the 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.
"Preferred Stock": the Cumulative Redeemable Convertible Preferred
Stock, Series A, liquidation preference $1,000 per share, of the Company to be
issued pursuant to the Investment Agreement.
"Principal Raw Land": the parcels of Real Property of the Company and
its Subsidiaries identified on Schedule P-1.
"Priority Claims": as defined in Article I of the Reorganization Plan.
"Real Property": any and all real property and fix tures and interests
in real property and fixtures, now owned or hereafter acquired by the Company or
any Subsidiary.
"Reorganization": with respect to any Multi-employer Plan, the
condition that such plan is in reorganization within the meaning of Section 4241
of ERISA.
"Reorganization Plan": the Restated Second Amended Joint Plan of
Reorganization of General Development Corporation jointly proposed in the
Reorganization Proceedings by the Company and the Official Unsecured Creditors'
Committee, filed on October 9, 1991, with the Clerk of the
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Bankruptcy Court, as modified by Modification filed March 9, 1992, a copy of
which is attached hereto as Exhibit R-1.
"Reorganization Proceedings": 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. 90-12234-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-AJC) and
Environmental Quality Laboratory, Incorporated (Case No. 90-12237-BKC-AJC).
"Reportable Event": 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. Section
2615.
"Requirement of Law": as to any Person, the charter, the certificate
of incorporation and bylaws or other orga nizational 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": 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 es tablished
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, without limitation: 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, the Company and the Trustee, the Class 14
Utility Fund Trust Agreement and the Homesite Program Utility Fund Trust
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Agreement executed by and between the Company and the Trustee, the Class 14
Utility Lot Trust Agreement executed by and between the Company and the
Trustee, as described in Section 7.6 of the Reorganization Plan, if any.
"Responsible Officer": the chief executive officer
and the president of the Company, or with respect to corporate
proceedings, the secretary or any assistant secretary of the Company, or, with
respect to financial matters, the chief financial officer or treasurer of the
Company.
"Reverse Stock Split": the proposal to amend the Company's
restated certificate of incorporation to effect, if subsequently
determined by the Company's board of directors, a reverse stock split of the
Company's outstanding common stock as of 5:00 p.m. (Florida time) on the
effective date of the amendment (the "Reverse Split Effec tive 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 Lender consents
thereto in writing in its sole and absolute discretion prior to the
commencement thereof.
"Revolving Loan Agreement": the Second Amended and Restated Revolving
Loan Agreement dated as of September 30, 1996 by and among the Company, the
Revolving Loan Bank, and Foothill Capital Corporation, a California
corporation, as collateral agent for the Revolving Loan Bank, pursuant to which
the Revolving Loan Bank has agreed to make certain loans to the Company,
together with all amendments, modifications, extensions, substitutions and
renewals thereof.
"Revolving Loan Bank": Foothill Capital Corporation, a California
corporation, and its successors and assigns.
"Revolving Loans": the Revolving Loans outstanding from time to time
under the Revolving Loan Agreement.
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"Sale and Leaseback": any arrangement with any Person providing for the
leasing by the Company or any Subsidiary of real or personal property which has
been or is to be sold or transferred by the 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 the
Company or Subsidiary.
"Section 365(j) Property": the property now or here after 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 Creditor": collectively, the holder or holders from time to
time of the Secured Obligations.
"Secured Floating Rate Note Agreement": the Second Amended and
Restated Secured Floating Rate Note Agreement dated as of September 30, 1996
among the parties to the Revolving Loan Agreement, together with all
amendments, modifications, extensions, substitutions and renewals thereof.
"Secured Floating Rate Notes": the notes issued pursuant to the
Secured Floating Rate Note Agreement.
"Secured Note Documents": this Agreement, the Note, the Subsidiary
Guaranty and the Security Documents.
"Secured Obligations": collectively, all Obligations now or hereafter
owed under this Agreement, the Due Diligence Fee Agreement or any Secured Note
Document together with, after the issuance of the Preferred Stock, all
Obligations owed to the holders of such Preferred Stock pursuant to Section 8
of the Certificate of Designation or, after the occurrence of an Event of
Default, as defined in the Certificate of Designation, pursuant to Section 7.2
of the Investment Agreement.
"Security Agreements": the Personal Property Security Agreement, the
Deposit Account Security Agreement, and any other security agreements, between
the Company and/or a Subsidiary and Secured Creditor or Collateral Agent, as
the same may be amended supplemented or otherwise modified from time to time,
pursuant to which the Company and Subsidiaries assign and grant a security
interest in Homesite Contracts Receivables and Commercial Receivables and
Personal Property of the Company or Subsidiaries to Secured Creditor or
Collateral Agent, for the
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benefit of Secured Creditor, as required by this Agreement.
"Security Documents": the Stock Pledge Agreement, the Joint Venture
Pledge Agreement, the Security Agreements, the Mortgages, the Deed of Trust,
the Junior Assignments, 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 Secured Creditor
or Collateral Agent at any time to create, perfect, maintain or continue
Secured Creditor's and Collateral Agent's Lien in the Collateral, together with
all amendments, modifications, extensions, substitutions and renewals thereof.
"Shareholders' Equity": 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": any Plan which is covered by Title IV of
ERISA, but which is not a Multi-employer Plan.
"SPUD Subsidiary": as defined in Section 7.2(h).
"Stock Pledge Agreement": the Junior Stock Pledge Agreement, in the
form of Exhibit S-1, to be executed on or before the Issuance Date among the
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 the Company and Subsidiaries pledge Subsidiary Stock to Collateral Agent
for the benefit of Secured Creditor.
"Subsidiary": as to any Person, a corporation, partnership, trust
(exclusive of any trust created in connec tion 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 Re serve Account) or other entity are at
the time owned, or the management of which is otherwise controlled, directly
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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
the Company. Unless otherwise indicated, all references to a Subsidiary or
Subsidiaries of the Company shall not mean, include, or refer to the
Unrestricted Subsidiaries or the Joint Ventures.
"Subsidiary Guaranty": the Subsidiary Guaranty, in the form of Exhibit
S-2, to be executed on or before the Issuance Date by the Company and each of
its Subsidiaries in favor of Collateral Agent, for the benefit of Secured
Creditor, as the same may be amended, supplemented or otherwise modified from
time to time.
"Subsidiary Property Under Development": 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": the Capital Stock of any and all Subsidiaries
(including the Unrestricted Subsidiaries).
"Tax Servicing Contracts": collectively, the tax servicing contracts
required to be delivered under the Foothill Loan Documents, and all amendments,
modifications, extensions, substitutions and renewals thereof.
"Total Real Property": collectively, the Real Property and the JV
Real Property.
"Total Unsecured Claims": as defined in Article I of the
Reorganization Plan.
"Transaction Documents": the Secured Note Documents, the Intercreditor
Agreement, the Investment Agreement, the Due Diligence Fee Agreement, the
Preferred Stock, the Warrants, the Certificate of Designation relating to the
Preferred Stock, and each exhibit, schedule, certificate and document to be
executed or delivered pursuant hereto or thereto, each as from time to time
amended, supplemented or otherwise modified.
"Trust Property": 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
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Bank of Florida, as Trustee for the benefit of the Company, the
Beneficiary, (b) Trust Agreement No. 06-01-009-6081954, dated as of
January 17, 1991, by and between NCNB National Bank of Florida, as
Trustee for the benefit of the 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
the 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, Esquire, as successor Trustee for the
benefit of the Company and Cumberland Cove, Inc., the Beneficiaries.
"Unrestricted Subsidiaries": collectively, (a) the direct or
indirect subsidiaries of the Company listed on Schedule U-1, and (b)
any other direct or indirect subsidiary of the Company that is formed
or acquired after the date hereof, 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 the Lender
agrees in writing 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": the "New Unsecured Cash Flow Notes," as
defined in Article I of the Reorganization Plan.
"Unsold Housing Inventory": as at any date, all Housing Inventory
applicable to Unsold Residential Dwelling Units.
"Unsold Residential Dwelling Units": 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 the
Company or any Sub sidiary that are not subject to a contract for sale
to any third-party purchaser.
"Warrants": as defined in the Investment Agreement.
1.2 Other Definitional Provisions.
(a) Unless otherwise specified therein, all terms defined in
this Agreement shall have such defined meanings when
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used in the Notes or any certificate or other document made or
delivered pursuant hereto.
(b) As used herein and in the Notes, and any certificate or other
document made or delivered pursuant hereto, accounting terms relating to the
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, and Section, Subsection,
Schedule and Exhibit references are to this Agreement unless otherwise
specified.
(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.
(g) Except as may be expressly specified otherwise herein, each
reference to an agreement or instrument amended, supplemented or otherwise
modified from time to time means such agreement or instrument as amended,
supplemented or modified in accordance with the terms hereof and thereof and
the Intercreditor Agreement, if applicable.
SECTION 2. ISSUANCE AND TERMS OF SECURED NOTE
2.1 Note. The Lender hereby agrees that on the Issuance Date, subject
to the terms and conditions set forth herein, (a) the Lender shall make a loan
to the Company and the Mortgagor Subsidiaries in a principal amount to be
specified by the Company, up to $10,000,000, and (b) the Company and the
Mortgagor Subsidiaries shall execute and deliver to the Lender the Note. There
shall be only one borrowing hereunder. If the initial loan to be made hereunder
is less than $10,000,000 the Lender's commitment shall terminate with respect to
any remaining portion of such $10,000,000.
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2.2 Payment of Note. The then outstanding principal amount of the Note
shall be due and payable, and shall be paid in full by the Company and the
Mortgagor Subsidiaries, on the Maturity Date. In addition: (a) a principal
installment in an amount designated in writing by the Lender in its sole
discretion to the Company on or before December 2, 1997, not to exceed the
lesser of (x) the outstanding amount due under the Note and (y) $5,000,000,
shall be due with respect to the Note on December 31, 1997, provided that if the
Lender shall fail to designate any amount by such date, the amount of such
installment shall be the lesser of (x) the outstanding amount due under the Note
and (y) $5,000,000, and (b) in the event of any acceleration of the maturity of
any of the principal of the Note pursuant to the provisions of Section 8 hereof
or pursuant to the terms of the Note, such accelerated principal shall be
immediately due and payable. The principal of the Note may be prepaid in whole
or in part, from time to time, without premium or penalty. On any date that any
principal is due and payable hereunder, anything herein to the contrary
notwithstanding, all accrued and unpaid interest with respect to such principal
likewise shall be due and payable on such date.
2.3 Conversion of Note into Preferred Stock. The outstanding principal
amount of the Note shall be convertible into Preferred Stock on the terms and
subject to the conditions set forth in the Investment Agreement. All interest
and other amounts (other than principal) theretofore accrued and owing hereunder
or under the Due Diligence Fee Agreement shall be paid in full prior to or
concurrent with such conversion. If the Note is converted into Preferred Stock
and the Lender purchases an additional $15,000,000 of Preferred Stock as set
forth in the Investment Agreement, the Company will be obligated to repurchase
all such Preferred Stock on the happening of certain conditions set forth in the
Certificate of Designation. From and after such conversion of the Note into
Preferred Stock, the Note shall no longer evidence an indebtedness for borrowed
money, and notwithstanding anything herein to the contrary the term Secured
Obligations as used in this Agreement and each other Transaction Document shall
not mean or include any indebtedness for principal or interest, but the Note
shall remain in full force and effect to evidence the obligation of the Company
to repurchase all such Preferred Stock under Section 8 of the Certificate of
Designation and pay all other Secured Obligations then outstanding and the joint
and several obligation of each and every Mortgagor Subsidiary to pay the Secured
Obligations then outstanding shall continue to be secured by the Secured Note
Documents.
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2.4 Interest Rates and Interest Payment Dates.
(a) From and after the Issuance Date, subject to Sections
2.4(b) and 2.10, as well before as after judgment, the Note at all times shall
bear interest at a rate per annum equal to twenty percent (20%).
(b) Section 2.4(a) notwithstanding, but subject to Section
2.10, from and after the occurrence and during the continuance of an Event of
Default and in any event at all times after a Negative Shareholder Vote, the
Note and all amounts due hereunder and not paid at all such times shall bear
interest at a per annum rate, as well before as after judgment, equal to
twenty-three percent (23%) (the "Default Rate").
(c) Interest shall be payable in arrears on each Interest
Payment Date, provided that from and after the occur rence and during the
continuance of an Event of Default interest accruing pursuant to paragraph (b)
of this Section 2.4 also shall be payable on demand.
2.5 Computation of Interest and Fees.
(a) Interest on the Notes and fees shall be calculated
on the basis of a 360-day year for the actual days elapsed.
(b) Each determination of an interest rate by the
Lender pursuant to any provision of this Agreement shall be conclusive and
binding in the absence of manifest error.
2.6 Pro Rata Treatment and Payments. If the Note is replaced with
multiple Notes pursuant to Section 10.6, each payment (including each
prepayment) by the Company on account of principal of and interest on such Notes
shall be made pro rata according to the respective outstanding principal amounts
of the Notes. All payments (including prepayments) to be made by the Company
hereunder and under the Notes, whether on account of principal, interest, fees
or otherwise, shall be made without setoff or counterclaim and shall be made
prior to noon, New York City time, on the due date thereof, in Dollars and in
immediately available funds to the following account: FBO: Apollo Real Estate
Investment Fund II, L.P.-Operating Money Market Account, Chase Manhattan Bank,
000 Xxxxxxx Xxxxxx, XXX #: 000-000-000, Account #: 230-211755. 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 then-applicable
rate during such extension.
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2.7 Taxes. Any Lender that is not organized under the laws of the
United States of America or a state thereof agrees that it will deliver to the
Company and the Lender (a) two duly completed copies of United States Internal
Revenue Service Form 1001 or 4224 or successor applicable form, as the case may
be, and (b) an Internal Revenue Service Form W-8 or W-9 or successor applicable
form. Each such Lender also agrees to deliver to the Company 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 the
Company, and such extensions or renewals thereof as may reasonably be requested
by the Company, 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
Lender from duly completing and delivering any such form with respect to it and
such the Lender so advises the Company and any other Lenders. Such Lender shall
certify (a) 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 (b) in the case of a Form W-8 or W-9, that it
is entitled to an exemption from United States backup withholding tax.
2.8 Use of Proceeds. The proceeds of the issuance of the Note hereunder
shall be used only for the lawful and permitted corporate purposes relating to
the Company's domestic business specified pursuant to Section 5.1(z).
2.9 Fees. The Company shall pay (a) to the Collateral Agent such fees
as may be required under any agreement between the Company and the Collateral
Agent with respect to compensation of the Collateral Agent in respect of its
services, and (b) to each other person or entity to whom the Company has agreed
to pay a fee in connection with this Agreement or the other Transaction
Documents and the transactions contemplated hereby or thereby, such fees as may
be required under such agreement; provided in each case that such agreement has
been approved by the Lender.
2.10 Maximum Interest Rate. Nothing contained in this Agreement, the
Note or any other Transaction Document shall require the Company or the
Mortgagor Subsidiaries to pay interest at a rate exceeding the maximum rate
permitted by applicable law. If the amount of interest paid or payable on any
Interest Payment Date, computed pursuant to applicable law and the Transaction
Documents, would exceed the maximum amount
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permitted by applicable law to be charged, the amount of interest paid
or payable on such Interest Payment Date shall be automatically reduced to such
maximum permissible amount and the excess applied to principal or, if no
principal shall be outstanding and such amount has been paid, returned to the
payor. If the amount of interest payable to the Lender in respect of any
interest computation period is reduced pursuant to the preceding sentence of
this Section and the amount of interest payable for its account in respect of
any subsequent interest computation period, computed pursuant to applicable law
and the Transaction Documents, would be less than the maximum amount permitted
by applicable law to be charged, then the amount of interest payable to the
Lender in respect of such subsequent interest computation period shall be
automatically increased to such maximum permissible amount; provided that at no
time shall the aggregate amount by which interest paid had been increased
pursuant to this sentence exceed the aggregate amount by which interest has
theretofore been reduced pursuant to the preceding sentence of this Section.
SECTION 3. COLLATERAL
3.1 Liens in Subsidiary Stock, Contract Receivables, Real Property and
Personal Property. To secure the prompt payment of the Secured Obligations,
together with all costs, expenses, fees and other obligations payable by the
Company or the Mortgagor Subsidiaries hereunder or under the Investment
Agreement with respect to the Secured Obligations, on or before the Issuance
Date the Company shall grant, and shall cause each Subsidiary to grant, to
Collateral Agent a continuing Lien, junior to the Lien created by, and securing
the obligations of the Company and Subsidiaries under, the Foothill Loan
Documents, in and to all of the following property and interests in property of
the Company and the Subsidiaries, except the Excluded Property, whether now
owned or existing or hereafter acquired or arising, or in which the Company and
the Subsidiaries now or hereafter have any rights, and wheresoever located, and
all proceeds thereof ("Collateral"):
(a) the Subsidiary Stock;
(b) the Homesite Contracts Receivable;
(c) the Commercial Receivables;
(d) the Real Property; and
(e) the Personal Property.
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At such times as any Excluded Property is freed of contractual or legal
restrictions against becoming subject to a Lien to secure the Secured
Obligations or upon the distribution of any Trust Property to the Company or a
Subsidiary (including an Unrestricted Subsidiary or Joint Venture), such
property shall, automatically, become subject to the Liens created by the
Security Documents, and the Company shall notify the Secured Creditor
in writing of such event and take such further actions as may be required by
the Secured Creditor 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 the
Secured Creditor and Collateral Agent in the Collateral in accordance with
applicable law, on or before the Issuance Date the Company shall execute and
deliver and will cause the Subsidiaries to execute and deliver, to Collateral
Agent the Security Documents, which Security Documents will be delivered to the
Lender and filed and recorded, and the Company will deliver, and shall cause the
Subsidiaries to deliver (or, if such Collateral shall be in the possession of
the collateral agent for the holders of the Foothill Debt, shall cause such
agent to acknowledge that it is holding such Collateral for the benefit of the
Lender as well as the holders of the Foothill Debt) 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 the Company. Specifically, but without limiting the generality of
the foregoing, on or before the Issuance Date the Company will do, and will
cause the Subsidiaries to do, the following, subject in each case to the senior
and prior Liens created by, and securing the obligations of the Company and
Subsidiaries under, the Foothill Loan Documents:
(a) Stock Pledge. To evidence and perfect the Liens of
Collateral Agent in the Subsidiary Stock, the Company and the Subsidiaries
owning other Subsidiaries or Unrestricted Sub sidiaries shall execute and
deliver the Stock Pledge Agreement and will execute and deliver related undated
stock powers executed in blank by the Company and shall deliver all original
certificates representing the Subsidiary Stock to Collateral Agent 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
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Agent in the Homesite Contracts Receivable and Commercial Receivables,
the Company and the Subsidiaries will execute and deliver to Collateral Agent
the Security Agreements, together with related financing statements, which will
be filed and recorded in accordance with applicable law, and the Company and
Subsidiaries shall duly endorse any and all promissory notes included in the
Homesite Contracts Receivable and Commercial Receivables to the order of
Collateral Agent and shall deliver such promissory notes and the related
mortgages or deeds of trust to Collateral Agent or its designee, and shall
execute and 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 March 31, 1992, 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, the Company shall execute and deliver to
Collateral Agent the Mortgages, and the Mortgagor Subsidiaries shall execute and
deliver to Collateral Agent the Mortgages and Deed of Trust, as applicable, and
related financing statements encumbering such Real Property, which will be filed
and recorded in accordance with applicable law, accompanied by ALTA title
insurance policies insuring Secured Creditor's Lien represented thereby, and, if
requested by Secured Creditor, 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, the Company 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 in the Personal Property, the Company and Subsidiaries shall
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, to the extent that the Personal Property
comprises Investments or Bank Accounts, the Com pany 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, the Company shall from time
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to time deliver, or shall from time to time cause such
Subsidiary to deliver, the original thereof to the Collateral Agent,
together with appropriate assignments and endorsements or other
specific evidence of assignment thereof to the Collateral Agent, in
form and substance acceptable to the Collateral Agent;
(ii) with respect to any Investment or Bank
Account which is not certificated or otherwise evidenced as described
in clause (i) above, including uncertificated securities and
depository and other accounts maintained with financial institutions
and any other Persons, the Company shall notify the Secured Creditor
thereof and take, or cause such Subsidiary to take, any and all steps
which are required by the Secured Creditor for purposes of perfecting
the Collateral Agent's Lien therein;
(iii) the Company shall keep the Secured
Creditor informed of any and all Bank Accounts maintained by the
Company or any such Subsidiary with any financial institution or other
Person and, if requested by the Secured Creditor, the Company or any
such Subsidiary shall execute a cash collateral account agreement in
form and substance satisfactory to the Secured Creditor, pursuant to
which the Lien of Collateral Agent in such Bank Accounts is perfected
and preserved; and
(iv) if deemed by the Secured Creditor, in
its sole discretion, to be necessary for purposes of perfecting the
Lien of the Collateral Agent in any Bank Account, the 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 the Secured Creditor, shall execute and cause any such Subsidiary to
execute 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 pre
served; provided, however, the Company shall not be required to
deposit the residual, remainder or beneficial interest of the Company
and any such Subsidiary 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 or remainder is available to the Company and its
Subsidiaries for deposit in an unrestricted account.
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(f) Additional Acts. The Company shall, and shall cause the
Subsidiaries to, take all actions and execute all documents deemed necessary by
the Secured Creditor or Collateral Agent to ensure that, upon the issuance of
the Note, the Secured Creditor or Collateral Agent, for the benefit of the
Secured Creditor, shall have a security interest in the Collateral granted by
the Security Documents junior only to the Liens thereon established under the
Foothill Loan Documents. If the perfection or recordation of Collateral Agent's
Lien or the Lien of the Secured Creditor pursuant hereto upon any Collateral
acquired hereafter by the Company or any Subsidiary requires any additional act
of possession or filing or recordation of any Security Document, the Company
shall notify the Secured Creditor of the acquisition of such Collateral and, at
the Secured Creditor's request, the 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 Collateral Agent
or the Secured Creditor may reasonably request for purposes thereof and the
Company shall pay the cost of preparing any such Security Documents and the
filing and recordation thereof. Without limiting the generality of the
foregoing, the Company agrees to, and to cause each Subsidiary (other than with
respect to property required to be released pursuant to Section 3.6) to notify
the Secured Creditor upon the acquisition of any Real Property acquired after
the date hereof, except as provided by Section 3.6, and upon request of the
Secured Creditor, to provide to the Secured Creditor an appraisal and an
environmental report (each in form and substance satisfactory to the Secured
Creditor) covering such property, and to cause such Real Property to be
subjected to a Mortgage or Deed of Trust in favor of Collateral Agent for the
benefit of Secured Creditor. With respect to any such Mortgages or Deed of
Trust, the Company or such Subsidiary shall deliver to the Secured Creditor the
following, all in form and substance satisfactory to the Secured Creditor: (i)
executed Mortgages or Deed 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 the Secured Creditor showing the Mortgage or Deed of Trust as a
perfected lien upon the property, subject only to Liens permitted pursuant to
Section 7.3 and such other exceptions as may be approved by the Secured
Creditor in writing, together with endorsements reasonably required by the
Secured Creditor and affirmative assurances that the improvements are wholly
located within the boundaries of the insured land.
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3.3 Section 365(j) Property. Pursuant to the Reorganization Plan and
the Confirmation Order, the Company has designated the property which comprises
the Section 365(j) Property, which property, at the time of execution of the
mortgage encumbering the Section 365(j) Property in favor of the trustee for the
holders of Section 365(j) Liens, had a value, as appraised pursuant to the
Company's land plan book dated May, 1991, no greater than 120% of the value of
the Section 365(j) Liens established pursuant to the Reorganization Plan. The
Liens granted to Collateral Agent pursuant hereto in the Section 365(j) Property
are subordinate to the Liens of the 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 the 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 and Related
Personal Property Liens.
(a) [intentionally omitted]
(b) At such times as Liens are granted by the 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 the Secured Creditor 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, the Secured Creditor 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 the Secured Creditor and Collateral Agent, unless such Real
Property qualifies for the release provisions 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 the Secured
Creditor 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, the Secured Creditor 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
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project financing provisions of Sections 7.2(f) or 7.2(j), and (y) the
terms of such financing prohibit subordinate Liens upon such Real Property, or
(ii) such Real Property is contributed by the Company to a Subsidiary pursuant
to Section 7.8(g). The 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 Subsidiary
Property Under Development pursuant to this Section 3.5(c), upon the request of
the Company, Secured Creditor shall instruct Collateral Agent to, and
Collateral Agent shall, release any Liens upon any Personal Property related
to, and integral to the use of, the Real Property being released; provided
that the Company provides a detailed list of such Personal Property to be
released in form and substance satisfactory to Secured Creditor. If such
lender/seller will permit such subordination, then, notwithstanding the
foregoing provisions of this Section 3.5(c), Collateral Agents'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 Secured Creditor.
(d) [intentionally omitted]
3.6 Subsidiary Guaranties. The payment and performance by the Company
of its obligations under this Agreement and the other Transaction Documents,
and any and all other liabilities of the Company to the Secured Creditor or
Collateral Agent, whether now existing or hereafter created or acquired, are
and shall continue to be guaranteed by any and all Subsidiaries, which are and
shall continue to be evidenced by guarantees in the form of the Subsidiary
Guaranties. The Company shall cause any entity becoming a Subsidiary after the
date hereof to execute and deliver counterparts of the Transaction Documents to
which Subsidiaries of the Company are parties (other than the Note, the Note
Agreement and the initial Mortgages recorded in Florida), including the
Subsidiary Guaranties and the Security Documents, and to take all such steps as
shall be necessary to create in favor of the Collateral Agent duly perfected
and recorded Liens securing the Secured Obligations. In the case of any
subsequent Florida Mortgages executed by such subsequent Subsidiaries to secure
their obligations under the Subsidiary Guaranties, the amount of recovery under
such subsequent Mortgages shall be limited to an amount not greater than the
value of the respective additional mortgaged property.
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SECTION 4. REPRESENTATIONS AND WARRANTIES
The Company hereby represents and warrants to Secured Creditor that:
4.1 Financial Condition.
(a) The consolidated balance sheets of the 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, a copy of which has been furnished
to the Lender, fairly and accurately present the consolidated financial
condition of the Company and its consolidated Subsidiaries as at such date, and
the consolidated results of their operations and their consolidated cash flows
for the fiscal year then ended.
(b) The unaudited consolidated balance sheets of the
Company and its consolidated Subsidiaries as at September 30, 1996, and the
related consolidated statements of income and cash flows for the three months
and fiscal year then ended, a copy of which has been delivered to the Lender,
fairly and accurately presents the consolidated financial condition of the
Company and its consolidated Subsidiaries as at such date, and the consolidated
results of their operations and their consolidated cash flows for the three
months, and fiscal year, then ended (subject to normal year-end adjustments)
and a Responsible Officer has so certified to the Lender.
(c) All such financial statements described in clauses
(a) and (b) 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 accountants or
Responsible Officer, as the case may be, and as disclosed therein). Neither
the 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. Since September 30,
1996 there has been no sale, transfer or other disposition or agreement
therefor by the 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 the Company and
its consolidated Subsidiaries at September 30, 1996, except as
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described in Schedule 4.1 or consented to in writing by the Lender in its sole
discretion.
(d) The three-year Management Business Plan update for
the period 1996-1998 delivered to the Lender prior to the date hereof (i) was
prepared in good faith upon assumptions believed by the Company to be
reasonable, it being understood that the projections therein contained as to
future events are subject to certain uncertainties and contingencies which are
beyond the control of the Company and may be significant, and thus no assurance
can be given that such projections will be realized, and (ii) presents fairly,
in all material respects, the actual results of operations of the Company and
Subsidiaries for the period from January 1, 1996 through the date thereof, in
accordance with GAAP, subject to recurring year-end audit adjustments and the
absence of footnotes.
4.2 No Material Adverse Change. Since September 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 the 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 the Lender 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 the Company nor has any of the Capital Stock of the
Company been redeemed, retired, purchased or otherwise acquired for value by
the Company or any of its Subsidiaries. As of the date hereof and the Issuance
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 or any other
Transaction Document.
4.3 Corporate Existence; Compliance with Law. Each of the 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
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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.
(a) The Company. The Company has the corporate power and
authority, and the legal right, to make, deliver and perform this Agreement,
the Note and other Transaction Documents, and to borrow hereunder and perform
the terms thereof 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 the other Transaction Documents including the issuance of the Preferred
Stock and the Initial Warrants, except for shareholder action necessary to
authorize (i) the Preferred Stock, (ii) the Common Stock of the Company
issuable upon conversion of the Preferred Stock and exercise of the Warrants
and (iii) issuance of the Warrants. 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 Note or the other Transaction Documents,
except such consents, authorizations, filings or other acts as have been
obtained, made or performed, as the case may be, and as remain in full force
and effect. This Agreement and the other Transaction Documents to which the
Company is party have been or will be, duly executed and delivered on behalf of
the Company. This Agreement, and each other Transaction Document executed and
delivered constitutes, or when executed and delivered will constitute, a legal,
valid and binding obligation of the Company enforceable against the 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 Transaction Documents has the corporate
power and authority, and the legal
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right, to make, deliver and perform the Transaction Documents to which it is a
party and has taken all necessary corporate action to authorize the execution,
delivery and performance of the Transaction 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 Transaction 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, and as remain in full force
and effect. Each Transaction 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 Transaction 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. The execution, delivery and performance of this
Agreement, the Note, the Subsidiary Guaranty and the other Transaction
Documents, and the use of the proceeds of the Notes will not violate (i) any
Requirement of Law or (ii) except as disclosed on Schedule 4.5 hereto, any
material Contractual Obligation of the Company or of any of its Subsidiaries or
Unrestricted Subsidiaries 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. No litigation, investigation or
proceeding of or before any arbitrator or Governmental Authority is pending or,
to the knowledge of the Company, threatened by or against the Company or any of
its Subsidiaries or against any of its or their respective properties or
revenues (a) with respect to this Agreement, the Note or other Transaction
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 the
Company's filings with the Securities and Exchange Commission made prior to the
date hereof, true and correct copies of which have been delivered to the Lender
or on Schedule 4.6 hereto.
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4.7 No Default. Neither the 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 the
Company's filings with the Securities and Exchange Commission made prior to the
date hereof, true and correct copies of which have been delivered to the Lender
or on Schedule 4.7. No Default or Event of Default has occurred and is
continuing. No default has occurred and is continuing under any of the
Foothill Loan Documents or the indenture governing the Unsecured Cash Flow
Notes.
4.8 Ownership of Property; Liens. Each of the 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 the Company or such
Subsidiaries is subject to any Lien except as permitted by Section 7.3. To the
best knowledge of the Company, after diligent inquiry, the Collateral includes
all property of the Company and its Subsidiaries that is not Excluded Property.
4.9 Intellectual Property. The 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 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 the
Company know of any valid basis for any such claim. The use of such
Intellectual Property by the 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 the
Company, there exists no infringement upon the Intellectual Property rights of
the Company and Subsidiaries by any other Person.
4.10 Taxes. Each of the 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 the 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,
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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 the 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 the 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 the Note
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
the Lender referring to this Section 4.12 delivered on or prior to the date
hereof 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. The 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, 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 the 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 the Company nor any Commonly Controlled Entity has had a
complete
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or partial withdrawal from any Multiemployer Plan and neither the Company nor
any Commonly Controlled Entity would become subject to any liability under
ERISA if the 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 the Company or
any Commonly Controlled Entity in connection with any such Plan. Neither the
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. The 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.
The 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. The Subsidiaries listed on
Schedule 4.14(A) constitute all of the Subsidiaries and such schedule
identifies the shareholders of such Subsidiary, 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 neither the Company nor any Subsidiary
other than a Venture Subsidiary owns any Joint Venture interest.
4.15 Environmental Matters. 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 described in the certificate
regarding environmental matters required pursuant to Section 5.1(i) or except
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,
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including the soil and groundwater thereunder, any Hazardous Materials in
violation of any Environmental Law.
(b) The Company, its Subsidiaries, the 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 the Company nor any of its Subsidiaries nor
any of the 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 the Company
aware that any Governmental Authority is contemplating delivering to the
Company or any of its Subsidiaries or any of the Joint Ventures any such
notice. Neither the Company nor any of its Subsidiaries nor any of the 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 the Company nor any of its
Subsidiaries nor any of the Joint Ventures has ever owned or operated or
currently owns or operates any waste disposal or storage facilities,
underground storage tanks or surface impoundments except as disclosed on
Schedule 4.15.
(e) There are no governmental or administrative actions
or judicial proceedings pending or, to the knowledge of the Company,
contemplated under any Environmental Laws to which the Company or any of its
Subsidiaries or any of the Joint Ventures is or, to the knowledge of the
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 the Company or any of
its Subsidiaries or any of the 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 the Lender.
4.16 Indebtedness. Schedule 4.16 lists all Indebtedness
(including available commitments) of the Company and its Subsidiaries as
existing on the date hereof.
4.17 Contingent Obligations. Schedule 4.17 lists all Guarantee
Obligations of the Company and all Guarantee Obligations of any of its
Subsidiaries.
4.18 Restitution Program and Final Judgment. The 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 other Transaction
Document or any of the transactions contemplated hereby or thereby except for
the fee payable by the Company to Banker's Trust pursuant to an engagement
letter dated August 3, 1995, as amended by a letter agreement dated February
29, 1996, which the Company agrees to pay, and the Company hereby indemnifies
Secured Creditor against, and agrees that it will hold Secured Creditor
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 the Company or
any of its Subsidiaries contained in any Transaction Document or in any other
document, certificate or written statement furnished to Secured Creditor by or
on behalf of the Company or any of its Subsidiaries for use in connection with
the transactions contemplated by this Agreement or any other Transaction
Document contains any untrue statement of a material fact or omits to state a
material fact (known to the 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
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made. Any projections and pro forma financial information contained in such
materials are based upon good faith estimates and assumptions believed by the
Company to be reasonable at the time made, it being recognized by the Lender
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 may differ from the projected results. There are no facts known
(or which should upon the reasonable exercise of diligence be known) to the
Company (other than matters of an economic nature affecting business
enterprises generally) 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 Secured Creditor for use in connection with the transactions
contemplated hereby.
4.21 Insurance. The 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 Issuance Date for the Company and each of its Subsidiaries.
4.22 Total Real Property Matters. The Company and each of its
Subsidiaries (including the Joint Ventures) is in compliance with all
development orders obtained by the 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. The Company has delivered to
the Lender 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. The Company and its
Subsidiaries are in all material respects in compliance with the Reorganization
Plan and Confirmation Order.
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.
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(b) The Unrestricted Subsidiaries do not have, nor are
they anticipated to have, any assets 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 [intentionally omitted]
4.26 Bank Accounts. Schedule 4.26 (as amended from time to time
by written notice to the Lender) is a true and correct list of all Bank
Accounts of the Company and its Subsidiaries.
4.27 Utility Fund Trusts. All of the 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 the Company and First Union National Bank of Florida as Trustee
have been fully funded in the amount of $10,000,000.
4.28 [intentionally omitted]
4.29 SPUD Subsidiaries. Except as disclosed on Schedule 4.29, no
Subsidiary is a SPUD Subsidiary.
4.30 DRI and Zoning. 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
5.1 Conditions to Issuance. The obligation of the Lender to
accept the Note and make the loan contemplated hereby is subject to the
satisfaction, or waiver by the Lender, on or before May 22, 1997, of the
following conditions precedent:
(a) Secured Note Documents. The Lender shall have
received (i) this Agreement, executed and delivered by a duly authorized
officer of the Company and the Mortgagor Subsidiaries, (ii) a Note conforming
to the requirements hereof and executed and delivered by a duly authorized
officer of the Company and the Mortgagor Subsidiaries, (iii) each other Secured
Note Document conforming to the requirements hereof and executed and delivered
by a duly authorized officer of the Company or each of its Subsidiaries
(including each of the Unrestricted Subsidiaries as to its Acknowledgment under
the Stock Pledge Agreement), as the case may be, which are parties to such
Secured Exchangeable Note Document, (iv) each other Transaction Document,
executed and delivered by a duly authorized
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52
officer of each party thereto, (v) copies, certified as true and correct copies
by a Responsible Officer, of the Security Documents and (vi) in form and
substance satisfactory to the Lender and Collateral Agent, a duly executed
agreement with local counsel or representatives with respect to certain
collateral-related services to be provided thereby to the Lender and Collateral
Agent, respectively.
(b) Corporate Proceedings of the Company. The Lender
shall have received a copy of the resolutions, in form and substance
satisfactory to the Lender and dated on or prior to the date hereof, of the
Board of Directors of the Company authorizing the execution, delivery and
performance of this Agreement, the Note, and the other Transaction Documents to
which it is a party, certified by the secretary or an assistant secretary of
the Company as of the Issuance 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 the Lender.
(c) Corporate Proceedings of the Subsidiaries. The
Lender shall have received a copy of the resolutions, in form and substance
satisfactory to the Lender and dated on or prior to the date hereof, of the
Board of Directors of each Subsidiary which is a party to any Transaction
Document authorizing the execution, delivery and performance of the Transaction
Documents to which it is a party, certified by its secretary or an assistant
secretary as of the Issuance 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 the Lender.
(d) Corporate Documents. The Lender shall have received
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 Transaction
Document certified by the Secretary of State of their respective jurisdictions
of incorporation as of a recent date prior to the Issuance Date, (ii) the
Bylaws of the Company and each of its Subsidiaries which is a party to any
Transaction Document certified as of the Issuance 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 Transaction 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
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53
foreign corporation dated as of a recent date prior to the Issuance Date and
(iv) incumbency and signature certificates for the Company and each Subsidiary
executing any Transaction Document as of the Issuance Date.
(e) Other Documents. The Lender shall have received
copies, certified as true and correct by a Responsible Officer, of (i) the
indenture relating to the Unsecured Cash Flow Notes and the Foothill Loan
Documents, each as amended through the Issuance Date, and (ii) the Business
Plan and the Beige Book.
(f) No Violation. The consummation of the transactions
contemplated hereby and by the other Transaction Documents shall not
contravene, violate or conflict with, nor involve Secured Creditor in any
violation of, any Requirement of Law.
(g) Consents, Authorizations, and Filings. The Lender
shall have received 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 Transaction 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 the Lender.
(h) Legal Opinions. The Collateral Agent and the Lender
shall have received executed legal opinions dated as of the Issuance Date in
form and substance satisfactory to the Lender:
(i) Arent Fox Xxxxxxx Xxxxxxx & Xxxx, counsel to
the Company and its Subsidiaries;
(ii) corporate counsel to the Company and its
Subsidiaries;
(iii) Greenberg, Traurig, Hoffman, Lipoff,
Xxxxx & Quentel, P.A., special Florida counsel to the Company and its
Subsidiaries;
(iv) Xxxxxxxxx & Xxxxxx, special Tennessee counsel
to the Company and its Subsidiaries; and
(v) Xxxxxxx Xxxxxx Xxxx Xxxxxxxx Xxxxx & Xxxxxx,
P.A., special Florida counsel to the Lender and Collateral Agent.
Each such legal opinion shall cover such other matters incident to the
transactions contemplated by this Agreement and the
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other Transaction Documents as the Lender may reasonably require.
(i) Certification as to Environmental Matters. The
Lender shall have received a certificate of a Responsible Officer (i) stating
that the 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 the Company or any Subsidiary or any Joint Venture in excess of
$200,000 except as listed on a schedule attached to such certificate and (ii)
certifying that the Company has made, and agreeing that the Company will
continue to make, available to the Lender 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.
(j) Continued Perfection of Security Interests. The
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 Secured Creditor has and
continues to have a valid and perfected security interest in the Collateral
granted by the Security Documents subject to the Liens permitted pursuant to
this Agreement and the Security Documents (and the Lender and Collateral Agent
shall have received satisfactory evidence thereof). Such action shall include:
(i) the delivery by the 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 the Lender) representing all Subsidiary
Stock; (ii) the delivery to Collateral Agent of Uniform Commercial Code
financing statements, executed by each of the 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 the Lender that
all other filings, recordings and other actions Collateral Agent and the Lender
deems necessary or advisable to establish, preserve and perfect the Liens and
the priority thereof granted to Collateral Agent and the Lender hereunder shall
have been made.
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(k) Real Property Matters. The Lender shall have
received: (i) such Mortgages and Deeds of Trust as may be requested by the
Lender, in each case in form and substance satisfactory to the Lender and its
local counsel, to protect and preserve the Lien and priority of the Mortgages
and Deeds of Trust as they secure the Secured Obligations and other amounts due
hereunder and under the other Transaction Documents, 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 Trust in liability,
amount and form issued by a title company satisfactory to the Lender 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 the Lender in its sole
discretion, together with any endorsements reasonably required by the Lender,
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 the
Lender may request, each as specified or contemplated on Schedule 5.1(k). The
legal descriptions of real property Collateral shall be satisfactory to Lender
and its local counsel.
(l) [intentionally omitted]
(m) [intentionally omitted]
(n) [intentionally omitted]
(o) Evidence of Insurance. The Company shall have
delivered to the Lender certificates of insurance naming Collateral Agent on
behalf of Secured Creditor as loss payee under the casualty and surety policies
required pursuant to Section 6.5.
(p) No Material Adverse Effect. On the Issuance Date,
the Lender shall have received an officer's certificate executed by a
Responsible Officer stating that no Material Adverse Effect has occurred since
September 30, 1996.
(q) Intercreditor Agreement. The Intercreditor Agreement
shall have been executed and delivered by each of the parties thereto, and the
Lender shall have received a fully executed copy thereof in form and substance
satisfactory to the Lender.
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56
(r) Fees, Costs, and Expenses. The Company shall have
paid, when and as invoiced: (i) to the Lender all fees, costs, and expenses of
the Lender and its counsel incurred in connection with the preparation,
negotiation, and execution of this Agreement, the other Transaction Documents,
and any other documents executed in connection herewith or therewith; and (ii)
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, any other Transaction Documents to which it is a
party and any other documents executed in connection herewith or therewith.
(s) Borrowing Request. The Company shall have delivered
a Borrowing Request, signed by a Responsible Officer, specifying the amount of
the borrowing requested and the date such borrowing is to be made and
certifying, as of the date of such certificate and the date of such borrowing,
to the fact that no Default or Event of Default has occurred and that each
representation and warranty of the Company or any Subsidiary contained in this
Agreement and each other Transaction Document was true and correct in all
material respects when made and on as of the date of such certificate and the
date of such borrowing.
(t) [intentionally omitted]
(u) Consents under Certain Loan Documents. Any consents
necessary under the terms of the Security Documents and other Foothill Loan
Documents in connection with the transactions contemplated by the Transaction
Documents shall have been obtained and shall be in form and substance
satisfactory to the Lender.
(v) Other Matters. The Company shall have made available
to the Lender such other documents and information, or taken such other
actions, as the Lender may reasonably request.
(w) Addressee. Each certificate delivered to the Lender
under this Section 5 shall be addressed to Secured Creditor.
(x) Tax Servicing Contracts. Provision reasonably
satisfactory to the Lender and Collateral Agent shall have been made for
delivery to each of them of all reports and information delivered to the
holders of the Foothill Debt pursuant to any Tax Servicing Contracts existing
in favor of such holders in respect of Real Property located in Florida and
Tennessee.
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(y) Due Diligence Fee Agreement. The Company and the
Lender shall have executed and delivered the Due Diligence Fee Agreement.
(z) Use of Proceeds. The Lender shall have received an
officer's certificate executed by a Responsible Officer specifically describing
the use to be made of the proceeds of the issuance of the Note and the Lender
shall approve such use, in its sole and absolute discretion.
(aa) Collateral Agent. A Person reasonably satisfactory
to the Lender shall have agreed to serve as Collateral Agent under the
Transaction Documents and shall have executed and delivered each Transaction
Document to which the Collateral Agent is a party.
5.2 [intentionally omitted]
SECTION 6. AFFIRMATIVE COVENANTS
The Company hereby agrees that, from and after the date hereof and
until the "Closing Date" (as defined in the Investment Agreement) and
thereafter at any time while there shall be due and owing and unpaid any
Repurchase Obligation under Section [8] of the Certificate of Designation, the
Company shall, and shall cause each of its Subsidiaries to:
6.1 Financial Statements. Furnish to the Lender:
(a) as soon as available, but in any event not later than
90 days after the end of each fiscal year of the Company, a copy of the
consolidated balance sheet of the 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 Lender;
(b) as soon as available, but in any event not later than
90 days after the end of each fiscal year of the Company, a copy of the
consolidating balance sheet of the 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
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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 the Company, the unaudited consolidated and consolidating
balance sheet of the 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 the 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 the
Company and its consolidated Subsidiaries (subject to normal year-end audit
adjustments);
(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 the 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 the 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 the Company and its consolidated Subsidiaries (including
Unrestricted Subsidiaries) (subject to normal 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 the Company of the
operating cash flow budget of the 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, the Company's best estimate of its future financial
performance;
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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 the Lender:
(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 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 Lender;
(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 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
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statements of such Borrowing Base Joint Venture (subject to normal 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. Furnish to the Lender:
(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, the Company and each Subsidiary
during such period has observed or performed the covenants of Section
7 and all other of its covenants and other agreements, and satisfied
every condition, contained in this Agreement and in the Note and in
the other Transaction 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 the 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
the Company sends to its stockholders and all financial statements and
reports which the Company or any of its Subsidiaries sends to the
holders or trustee of any Unsecured Cash Flow Notes, and within five
Business Days after the same are filed, copies of all financial
statements and reports which the Company may make to, or file with,
the Securities and Exchange Commission or any successor or analogous
Governmental Authority;
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(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;
(v) 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 Joint Venture, of the investments of the
Venture Subsidiaries in 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 the Company's accounts payable and any
book overdraft; in each case, in form satisfactory to the Lender;
(vi) not later than the tenth Business Day of
every month, the monthly Management Business Plan update for the
previous month, in form substantially equivalent to that attached
hereto as Schedule F-1;
(vii) not later than the tenth Business
Day of every month, the "Land Sales Report" for the previous month, in
form substantially equivalent to that attached hereto as Schedule G-1;
and
(viii) promptly, such additional financial
and other information as the Lender 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 the 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: continue (a) 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
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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.
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 the Lender, 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 Secured Creditor of any material
modification or cancellation of such policies. On the Issuance Date and on
each anniversary thereafter, the Company and its Subsidiaries shall submit to
Secured Creditor certificates of insurance evidencing compliance with this
Section 6.5.
6.6 Inspection of Collateral; 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 the Lender with respect to the Company and its Subsidiaries,
to inspect 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 the Company and its Subsidiaries with officers
and employees of the Company and such Subsidiaries and with its independent
certified public accountants. From time to time, if the Lender determines that
obtaining appraisals is necessary or appropriate, the Lender will obtain
appraisal reports from appraisers satisfactory to the Lender, stating then
current fair market values of all or any portion of the Total Real Property.
Anything herein to the contrary notwithstanding, the Company shall not be
obligated to reimburse the Lender 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 the Company shall be obligated to reimburse the Lender with respect to as
many appraisals as the Lender deems necessary to conduct.
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6.7 Notices. Promptly give notice to the Lender of:
(a) the occurrence of any Default or Event of Default;
(b) any (i) default or event of default under any
Contractual Obligation of the Company or, to the knowledge of the Company, any
of its Subsidiaries or (ii) litigation, investigation or proceeding which may
exist at any time between the Company or, to the knowledge of the 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;
(c) any litigation or proceeding affecting the Company
or, to the knowledge of the 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 the 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 the Company or any
Commonly Controlled Entity in excess of $100,000 and which is not reflected in
the financial statements most recently delivered to the Lender 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 the 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
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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 Secured Creditor,
and its 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 the 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 Note and all other amounts payable hereunder.
6.9 Business Plan. Furnish to the Lender on or before the tenth
day following approval by the Company's Board of Directors, but in no event
later than December 31 of each fiscal year and within 10 days (after approval
by the Company's Board of Directors, if applicable) of any amendment,
modification or update thereto, a Business Plan of the Company and its
Subsidiaries for the next succeeding fiscal year in a form and in substance
satisfactory to the Lender 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 the Company. The 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 the Lender.
6.10 Compliance with Other Transaction Documents. Comply with,
and cause the Subsidiaries to comply with, all of the Transaction Documents.
6.11 Dividends from Subsidiaries. Cause the Subsidiaries to pay
dividends to the Company from the Net Cash Proceeds of
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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 the 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 the 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 the
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 the Lender such supplemental title reports
on the Real Property subject to the Deed of Trust and Mortgages as the Lender
may reasonably request from time to time; provided the Company shall not be
required to provide such supplemental reports more than once per quarter.
(b) No later than 60 days after the Issuance Date, the
Company shall deliver to the Lender such third party appraisals, environmental
reports, surveys, and ALTA title policies, as would have complied with the
provisions of Section 5.1(l) if delivered on the Issuance Date with respect to
all Real Property to the extent such reports were not required by the Lender to
be delivered on or prior to the Issuance Date.
6.13 Compliance with Laws. The Company shall, and shall cause
each of its Subsidiaries to, comply with the requirements of all applicable
laws, rules, regulations and orders of any
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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 the Lender 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 the Lender may request.
6.15 The Company Operating Account Control Agreement. Maintain
in full force and effect the Company Operating Account Control Agreement. At
all times from and after the date hereof, the Company shall continue to
maintain the Company's cash management system substantially as such system
exists on the date hereof, and shall continue to concentrate the funds of the
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 the
Company, and except to the extent that such funds are invested in investments
permitted by Section 7.9.
6.16 Foothill Reports. Deliver to the Lender a copy of each
report, certificate or other document or information delivered to the lenders
or agent pursuant to the Foothill Loan Documents, concurrently with the
delivery thereof to such lenders or agent, including all annexes or attachments
thereto.
SECTION 7. NEGATIVE COVENANTS
The Company hereby agrees that, from and after the date hereof and
until the "Closing Date" (as defined in the Investment Agreement) and
thereafter at any time while there shall be due and owing and unpaid any
Repurchase Obligation under Section 8 of the Certificate of Designation, the
Company shall not, and shall not permit any of its Subsidiaries to, directly or
indirectly:
7.1 Maintenance of Consolidated Net Worth; Interest Charge
Coverage Ratio. Permit (i) 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) $23,500,000; and (b) 50% of the
Annual Net Income for the prior fiscal year; provided, however, that the amount
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determined under this clause (b) shall never be less than zero, or (ii) permit
the Interest Charges Coverage Ratio at any time to be less than 1.5.
To demonstrate compliance with the Minimum Consolidated Net
Worth and the Interest Charges Coverage Ratio covenants set forth in this
Section, the Company shall furnish to the Lender (i) within 45 days of the
close of each calendar quarter a certificate of a Responsible Officer setting
forth Minimum Consolidated Net Worth and the Interest Charges Coverage Ratio
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 and the Interest Charges Coverage Ratio as of 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 the 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 of the Company under or in respect of
the Transaction Documents;
(b) Indebtedness under or in respect of (i) the
Revolving Loan Agreement (including Indebtedness in respect of Letters of
Credit issued under the Revolving Loan Agreement), and any replacement of the
Revolving Loans, not to exceed $45,000,000 in the aggregate principal amount
outstanding at any time (unless increased to an amount up to $50,000,000
pursuant to an increase in the Working Capital Loan Commitments (as defined in
the Revolving Loan Agreement) from $20,000,000 to an amount up to $25,000,000
in accordance with the terms of the "Intercreditor Agreement" included in the
Foothill Loan Documents) or (ii) the Secured Floating Rate Note Agreement, and
any replacement Indebtedness, not to exceed the amount then outstanding under
such Note Agreement, provided that any such replacement loans shall be on terms
and conditions collectively no less favorable to the Company than those set
forth in the Revolving Loan Agreement or the Secured Floating Rate Note
Agreement, as applicable;
(c) [intentionally omitted];
(d) Indebtedness of the Company in respect of the
Unsecured Cash Flow Notes;
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(e) Indebtedness of the 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;
(f) Indebtedness of the Company to any Subsidiary or of
any Subsidiary to the 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 the Company shall not exceed an aggregate
principal amount of $20,000,000 at any time;
(g) Indebtedness of the Company and its Subsidiaries
outstanding on the date hereof 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 the 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 the 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
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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 the 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
the Company shall give the Lender 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
the 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:
(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(j) Property securing
the Section 365(j) Claims pursuant to the Reorganization Plan;
(e) Liens for taxes (i) which are not yet delinquent, or
(ii) which are not in an aggregate amount, as to the 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 the Company or its Subsidiaries,
as the case may be, in conformity with GAAP;
(f) carriers', warehousemen's, mechanics', construction,
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;
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(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
the Company or such Subsidiary;
(j) Liens granted by the 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 less, at the time of such acquisition and
(ii) in any refinancing, the outstanding Indebtedness being refinanced;
(l) other Liens in existence on the date hereof listed
on Schedule 7.3, provided that no such Lien is spread to cover any additional
property after the date hereof 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 the 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 the
Company to a Subsidiary pursuant to Section 7.9(g);
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(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 the Company of obligations (other than
Indebtedness) of any of its Subsidiaries, which obligations are otherwise
permitted under this Agreement; (c) Guarantee Obligations by the 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 the 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
the 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 the Company or any Subsidiary may convey,
sell, assign, 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
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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 October 1, 1996 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 on or after October 1, 1996 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 the 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 the
Lender.
7.7 Limitation on Dividends. Declare or pay any dividend (other
than dividends payable solely in common stock or preferred stock of the
Company) on, or 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 the 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
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form of common stock or preferred stock of the Company) or in obligations of
the Company or any Subsidiary, except for dividends declared and paid by any
Subsidiary to the 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 the 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 the Company and its
Subsidiaries during any 12-month period from and after October 1, 1996.
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 the 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 the
Company and its Subsidiaries not to exceed $500,000 in any one time
outstanding;
(d) investments by the Company in any Subsidiary or by
any Subsidiary in the Company or any other Subsidiary in connection with cash
management procedures in the ordinary course of business;
(e) (i) loans by the Company to its Subsidiaries or by
any Subsidiary of the Company to the 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 the 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 such stock received by the
Company or its Subsidiary as
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aforesaid, which Lien shall be evidenced by any and all documents and filings
as may be required by Collateral Agent and the Lender;
(f) extensions of credit for sale of assets;
(g) capital contributions to Venture Subsidiaries for
the purpose of making investments in Joint Ventures and to Unrestricted
Subsidiaries so long as the 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 the 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 the Lender, (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 the Company by all Subsidiaries
having investments in Joint Ventures after October 1, 1996.
7.10 Limitation on Optional Payments and Modifications of Debt
Instruments.
(a) Make any optional payment or optional prepayment on, or
optional redemption of, or purchase or otherwise acquire any interest in, any
Indebtedness (including payments on Indebtedness under the Unsecured Cash Flow
Notes) other than the Note, except payments on the Foothill Debt.
(b) Amend, modify or change, or consent or agree to any
amendment, modification or change to any of the terms of any Unsecured Cash
Flow Notes or any Indebtedness outstanding under the Foothill Loan Documents or
any other agreement executed in connection with either thereof or otherwise in
connection with any Indebtedness (other than: (1) terms other than payment
terms of 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 the Company and its Subsidiaries, the
Unsecured Cash Flow Notes, and Financing Leases), (h), and (k); and (2) other
than any such amendment,
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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 amendment, modification, or change to any such Indebtedness is
not prohibited by any other provision in this Agreement or the other
Transaction 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 Revolving Loan 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), unless such
transaction is otherwise permitted under this Agreement, is in the ordinary
course of the Company's or such Affiliate's business and is upon fair and
reasonable terms no less favorable to the 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 period from October 1, 1996
through the termination of this Agreement.
7.13 Fiscal Year. Permit the fiscal year of the Company to end
on a day other than December 31.
7.14 Limitation on Negative Pledge Clauses. Enter into any
agreement, other than the Foothill Loan Documents, 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 the
Lender pursuant hereto which prohibits or limits the ability of the 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.
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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; or
(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 the Note is
outstanding, allow cash and Cash Equivalents maintained in Bank Accounts of the
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. The Company and
its Subsidiaries (a) shall deposit in a Cash Collateral Account amounts
required to cash collateralize Letters of Credit under the Revolving Loan
Agreement pursuant to Section 8 of the Revolving Loan Agreement, and (b) shall
deposit in the Company Operating Account, after application to the Loans (as
defined in the Revolving Loan Agreement) pursuant to Section 2.11(a)(iii) of
the Revolving Loan Agreement, all remaining cash of the 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 interests.
(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 Secured Creditor and the holders of the
Foothill Debt) upon any of such Venture Subsidiary's property, assets, or
revenues, whether now owned or hereafter acquired (including the Joint
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Venture interests owned by such Venture Subsidiary as disclosed on Schedule
4.14(B) and the revenues arising from such interests).
7.19 Excluded Subsidiaries; Unrestricted Subsidiaries. Except as
disclosed on Schedule 7.19, permit any Excluded Subsidiary to own any assets,
have any revenues or liabilities, or conduct any business or except as
specifically agreed in writing by the Lender permit any Unrestricted Subsidiary
to own any assets, have any revenues or liabilities or conduct any business.
SECTION 8. EVENTS OF DEFAULT; REMEDIES
8.1 Events of Default; Remedies. If any of the following events
shall occur and be continuing:
(a) (i) The Company and the Mortgagor Subsidiaries
shall fail to pay any principal when due of the Note in accordance with the
terms thereof or hereof; or (ii) the Company and the Mortgagor Subsidiaries
shall fail to pay any interest due on the Note or any other amount payable
hereunder or under any other Transaction Document, thereby giving rise to a
Default, and fail to cure such Default within five (5) days after any such
interest or other amount becomes due in accordance with the terms thereof or
hereof; provided, however, if any event described in this Section 8.1(a)(ii)
shall occur and be continuing, it shall not constitute an Event of Default
until and unless the Lender provides the Company with a written declaration
that such event constitutes an Event of Default; or
(b) Any representation or warranty made or deemed made
by the Company or any of its Subsidiaries herein or in any other Transaction
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) The Company shall default in the observance or
performance of any agreement contained in Section 7; or
(d) The 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 Transaction Document, and such default shall continue unremedied for
a period of thirty (30) days; or
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(e) The Company shall fail to pay any obligations under
the Foothill Loan Documents or any principal of or interest on any Unsecured
Cash Flow Notes (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 obligation under the Foothill Loan Documents or any Unsecured
Cash Flow Notes; or
(f) Any Foothill Debt or any Unsecured Cash Flow Notes
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 the 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 Transaction
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 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) The Company shall (i) default in any payment of
principal of or interest on any Indebtedness (other than the Notes the Foothill
Debt, or any Unsecured Cash Flow Notes) 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
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required, such Indebtedness to become due prior to its stated maturity or such
Guarantee Obligation to become payable; or
(i) (i) The Company or any of its Subsidiaries shall
commence any case, proceeding or other action (A) 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 (B) seeking appointment of a receiver, trustee, custodian or other
similar official for it or for all or any substantial part of its assets, or
the Company or any of its Subsidiaries shall make a general assignment for the
benefit of its creditors, or (ii) there shall be commenced against the Company
or any of its Subsidiaries any case, proceeding or other action of a nature
referred to in clause (i) above which (A) results in the entry of an order for
relief or any such adjudication or appointment or (B) remains undismissed,
undischarged or unbonded for a period of 60 days, or (iii) there shall be
commenced against the 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) the 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 clauses (i), (ii), or (iii)
above, or (v) the 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 the 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) the Company or any of
its Subsidiaries shall cause to be reinstated the Reorganization Proceedings;
or
(j) The Confirmation Order shall be reversed, withdrawn,
modified (in any manner adverse to the 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 the 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 the Company or any Commonly Controlled Entity in excess of
$4,600,000; or the present value
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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 the 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 the 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) The Subsidiary Guaranty or any Security
Document shall cease, for any reason, to be in full force and effect or the
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 the Lender or their agents or bailees or other than
with respect to Collateral having an aggregate value of $100,000 or less); or
(n) Other than Secured Creditor or any Affiliate of
Secured Creditor and any Person acting in concert with Secured Creditor or any
Affiliate of Secured Creditor, any Person that is not a transferee of Secured
Creditor or of any Affiliate of Secured Creditor or two or more such 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 the Company, or fewer than [ONE] member of the Board of Directors of
the Company shall be a designee of the Lender, other than as a result of the
Lender's failure to nominate a successor to a designee who has resigned or been
removed for cause; or
(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) The Total Unsecured Claims shall exceed $1.5
Billion;
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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 Section 8.1(i) above,
automatically the principal amount of the Note (with accrued interest thereon)
and all other amounts owing under this Agreement and the Note shall immediately
become due and payable in full, which amount shall accrue interest at the
Default Rate as well before as after judgment, and the Lender and Collateral
Agent shall have all rights and remedies given to the Lender 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, the Lender may, by notice of
default to the Company, declare the principal amount of the Note (with accrued
interest thereon) and all other amounts owing under this Agreement and the Note
to be due and payable in full, which amount shall accrue interest at the
Default Rate as well before as after judgment, and the Lender and Collateral
Agent shall have all rights and remedies given to the Lender 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.
SECTION 9. THE COLLATERAL AGENT
9.1 [intentionally omitted]
9.2 Appointment of Collateral Agent. The Lender hereby
irrevocably designates and appoints as Collateral Agent under this Agreement
and the Security Documents to which the Collateral Agent is a party, and the
Collateral Agent hereby accepts such appointment, subject to the terms and
provisions of this Agreement and the Security Documents to which it is a party.
The Lender hereby further authorizes Collateral Agent to enter into the
Security Documents to be executed and delivered by Collateral Agent on the
Issuance Date and agrees to be bound by the terms thereof. The Lender
irrevocably authorizes the Collateral Agent, as Collateral Agent for the
Lender, 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
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written consent of the Lender. The Lender 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 the Lender. All
notices and directions to Collateral Agent shall be given by the Lender on
behalf of and at the direction of the Lender.
9.3 [intentionally omitted]
9.4 Delegation of Duties. Collateral Agent may execute any of
its duties under this Agreement and the other Secured Note Documents by or
through agents or attorneys-in-fact and shall be entitled to advice of counsel
concerning all matters pertaining to such duties. Collateral Agent shall not
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, Collateral Agent shall
not have any duties or responsibilities, except those expressly set forth
herein, or any fiduciary relationship with the Lender, and no implied
covenants, functions, responsibilities, duties, obligations or liabilities
shall be read into this Agreement or any other Secured Exchangeable Note
Document or otherwise exist against Collateral Agent; and Collateral Agent is
acting hereunder and under the other Secured Note Documents solely as the
collateral agent of the Lender pursuant hereto and thereto, and Collateral
Agent is not acting as trustee for the Lender.
9.5 Exculpatory Provisions. Neither the Lender, 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 Transaction Document (except for its or such
Persons own gross negligence or willful misconduct) or (b) responsible in any
manner for any recitals, statements, representations or warranties made by the
Company or any officer thereof contained in this Agreement or any other
Transaction Document or in any certificate, report, statement or other document
referred to or provided for in, or received by the Lender under or in
connection with, this Agreement or any other Secured Floating Rate Note
Document or for the value, validity, effectiveness, genuineness, enforceability
or sufficiency of this Agreement or the Note or any other Transaction Document
or for any failure of the Company to perform its obligations hereunder or
thereunder.
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Neither the Lender nor Collateral Agent shall be under any obligation 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
Transaction Document or as to the use of proceeds of the Note or the Investment
Agreement or of the existence or possible existence of a Default or Event of
Default, or to inspect the properties, books or records of the Company.
9.6 Reliance by the Lender.
(a) Each of the Lender 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 the Company), independent
accountants and other experts selected by the Lender or Collateral Agent, as
the case may be.
(b) Collateral Agent shall be fully justified in failing
or refusing to take any action under this Agreement or any other Transaction
Document unless (i) it shall first receive such advice or concurrence as it
deems appropriate from the Lender, or (ii) it shall first be indemnified to its
satisfaction by the Lender 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 Collateral Agent's gross negligence or willful
misconduct. Collateral Agent shall in all cases be fully protected in acting,
or in refraining from acting, under this Agreement, the Note and the other
Transaction Documents in accordance with a request of the Lender and such
request and any action taken or failure to act pursuant thereto shall be
binding upon the Lender and all future holders of the Note.
9.7 Notice of Default. Neither the Lender nor Collateral Agent
shall be deemed to have knowledge or notice of the occurrence of any Default or
Event of Default unless the Lender or Collateral Agent, as the case may be, has
received notice from the Lender (in the case of Collateral Agent) or the
Company referring to this Agreement, describing such Default or Event of
Default and stating that such notice is a "notice of default." If the Lender
receives such a notice, the Lender shall promptly give notice thereof to
Collateral Agent. If Collateral Agent receives such a notice, Collateral Agent
shall promptly give notice thereof to the Lender. Collateral Agent shall take
such action with respect to such Default or Event of
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Default as shall be directed by the Lender (subject to the provisions of
Section 9.4(b)); provided that unless and until Collateral Agent shall have
received such directions, Collateral 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
the Lender.
9.8 Non-Reliance on Collateral Agent. The Lender expressly
acknowledges that neither Collateral Agent nor any of its officers, directors,
employees, agents, attorneys-in-fact or Affiliates has made any representations
or warranties to it and that no act by Collateral Agent hereinafter taken,
including any review of the affairs of the Company or any of its Subsidiaries,
shall be deemed to constitute any representation or warranty by Collateral
Agent to the Lender. The Lender represents to Collateral Agent that it has,
independently and without reliance upon Collateral Agent, and based on such
documents and information as it has deemed appropriate, made its own appraisal
of and investigation into the business, operations, property, financial and
other condition and creditworthiness of the Company and its Subsidiaries and
made its own decision to enter into this Agreement. The Lender also represents
that it will, independently and without reliance upon Collateral Agent, 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 Transaction
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 the Company and its Subsidiaries. Except for notices,
reports and other documents expressly required to be furnished to the Lender
hereunder, Collateral Agent shall not have any duty or responsibility to
provide the Lender with any credit or other information concerning the
business, operations, property, condition (financial or otherwise), prospects
or creditworthiness of the Company or any of its Subsidiaries which may come
into the possession of Collateral Agent or any of its officers, directors,
employees, agents, attorneys-in-fact or Affiliates.
9.9 Indemnification. The Lender agrees to indemnify Collateral
Agent in its capacity as such (to the extent not reimbursed by the Company and
without limiting the obligation of the Company to do so) 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 Note) be
imposed on, incurred by or asserted against Collateral Agent in any way
relating to or
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arising out of this Agreement, any of the other Transaction 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 Collateral
Agent under or in connection with any of the foregoing; provided that the
Lender shall not 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 Collateral Agent's gross
negligence or willful misconduct. The agreements in this Section shall survive
the payment of the Note and all other amounts payable hereunder.
9.10 [intentionally omitted]
9.11 [intentionally omitted]
9.12 Successor Collateral Agent. Collateral Agent may resign as
Collateral Agent, upon 30 days' notice to the Lender. If Collateral Agent
shall resign as Collateral Agent under this Agreement and the other Transaction
Documents, then the Lender shall appoint a successor collateral agent for the
Lender, which successor collateral agent, except if an Event of Default shall
have occurred and be continuing, shall be approved by the Company (which
approval shall not be unreasonably withheld), whereupon, effective upon
acceptance of its appointment as successor collateral agent, such successor
collateral agent shall succeed to the rights, powers and duties of Collateral
Agent and the term "Collateral Agent" shall mean such successor collateral
agent, and the former Collateral Agent's rights, powers and duties as
Collateral Agent shall be terminated, without any other or further act or deed
on the part of such former Collateral Agent or any of the parties to this
Agreement or any holder of the Note. If the Lender fails to appoint a
successor collateral agent for the Lender as provided above within 30 days
after the resignation of Collateral Agent, then Collateral Agent may appoint a
successor collateral agent for the Lender, which successor collateral agent,
except if an Event of Default shall have occurred and be continuing, shall be
approved by the Company (which approval shall not be unreasonably withheld),
whereupon, effective upon acceptance of its appointment as successor collateral
agent, such successor collateral agent shall succeed to the rights, powers and
duties of Collateral Agent and the term "Collateral Agent" shall mean such
successor collateral agent and the former Collateral Agent's rights, powers and
duties as Collateral Agent, as the case may be, shall be terminated, without
any other or further act or deed on the part of such former Collateral Agent or
any of the parties to this Agreement or any holder of the Note. After any
retiring
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Collateral Agent's resignation as Collateral Agent, 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
Collateral Agent under this Agreement and the other Transaction Documents.
Notwithstanding anything herein to the contrary, the resignation of Collateral
Agent shall not be effective unless and until a successor collateral agent has
been appointed and has accepted such appointment.
SECTION 10. MISCELLANEOUS
10.1 Amendments and Waivers. Neither this Agreement, the Note,
any other Transaction Document, nor any terms hereof or thereof may be amended,
supplemented or modified except with the prior written consent of the Lender.
No such amendment, supplement or modification shall amend, modify or waive any
provision of Section 9 without the written consent of then Collateral Agent
affected thereby. Any such waiver of a Default or Event of Default in
accordance with the terms hereof and any such amendment, supplement or
modification shall be binding upon the Company, the Lender, Collateral Agent
and all future holders of the Note. In the case of any waiver, the Company,
the Lender, and Collateral Agent shall be restored to their former position and
rights hereunder and under the outstanding Note and any other Transaction
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 confirmed receipt, addressed as follows in the
case of the Company, the Lender, and Collateral Agent:
The Company: Atlantic Gulf Communities Corporation
0000 Xxxxx Xxxxxxxx Xxxxx
Xxxxx, Xxxxxxx 00000-0000
Attention: Xxxx X. Xxxxxxx,
Vice President and Treasurer
Telecopy: (000) 000-0000
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Copy to: Arent Fox Xxxxxxx Xxxxxxx & Xxxx
0000 Xxxxxxxxxxx Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000-0000
Attention: Carter Strong, Esquire
Telecopy: (000) 000-0000
The Lender: AP-AGC, LLC
Two Xxxxxxxxxxxxxx Xxxx
Xxxxxxxx, Xxx Xxxx 00000
Attention: W. Xxxxxx Xxxxxxx
Telecopy: (000) 000-0000
Copy to: Wachtell, Lipton, Xxxxx & Xxxx
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx Xxxxxxx, Esquire
Xxxxxx Xxxxxxx, Esquire
Telecopy: (000) 000-0000
The Collateral
Agent: As specified by Collateral Agent
Copy to: As specified by Collateral Agent
and, in the case of the other parties hereto, as set forth under that party's
name on the signature pages hereof, or, in each case, to such other address as
may be hereafter notified by the respective parties hereto and any future
holders of the Notes; provided, however, that any notice, request or demand to
or upon Collateral Agent or the Lender shall not be effective until received.
10.3 No Waiver; Cumulative Remedies. No failure to exercise and
no delay in exercising, on the part of Collateral Agent or the Lender, 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 Certain Provisions. All representations and
warranties made hereunder or under any other Transaction Document and in any
document, certificate or statement delivered pursuant hereto or thereto or in
connection herewith or therewith, all indemnities made hereunder or under any
thereof
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in favor of the Lender, Secured Creditor or Collateral Agent, all agreements or
undertakings herein or in any thereof in favor of the Lender, Secured Creditor
or Collateral Agent and all agreements or undertakings in Section 3 hereof or
otherwise contained herein or in any thereof relating to the Collateral shall
survive the execution and delivery of this Agreement and the Note and the
payment in full of the Note and all Obligations hereunder. Without limiting
the generality of the foregoing, the following agreements and undertakings
shall continue in full force and effect so long as the Note, any Preferred
Stock or any unpaid Repurchase Price or Optional Redemption Price (each as
defined in the Certificate of Designation) remains outstanding, whether or not
any principal shall be outstanding hereunder: (i) each term and provision of
the Note, the Subsidiary Guaranties, and the Security Documents, (ii) Section
3, (iii) Sections 6 and 7, but only during the period specified in the
introductory paragraph to each such Section, except that the last paragraph of
Section 7.6 shall remain in effect whether or not the balance of Section 7
shall at the time be in effect and (iv) Sections 9, 10 and 11 and (in each
case) the relevant definitions.
10.5 Payment of Expenses and Taxes. The Company agrees (a) to
pay or reimburse Secured Creditor and Collateral Agent 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 Note, the Intercreditor Agreement, and the other
Transaction 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 Secured
Creditor and counsel to Collateral Agent, and the reasonable allocated costs of
in-house counsel to Secured Creditor and in-house counsel to Collateral Agent,
(b) to pay or reimburse Secured Creditor and Collateral Agent for all its costs
and expenses incurred in connection with the enforcement or preservation of any
rights under this Agreement, the Note, the Intercreditor Agreement, the other
Transaction Documents and any such other documents, including fees and
disbursements of counsel to Secured Creditor and counsel to Collateral Agent,
and the reasonable allocated costs of in-house counsel to Secured Creditor and
in-house counsel to Collateral Agent, (c) to pay, indemnify, and hold Secured
Creditor 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 Secured Creditor or Collateral Agent), if any, which may be payable
or determined to be payable in connection with
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the execution and delivery of, or consummation of any of the transactions
contemplated by this Agreement, the Note, the other Transaction Documents, and
any such other documents, and any and all liabilities with respect to, or
resulting from any delay in paying any of such fees and taxes, (d) to pay the
costs of furnishing all opinions of counsel for the 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 Foothill Loan Documents and the agreements governing the Unsecured Cash
Flow Notes, and any other agreements, (f) to pay the costs and expenses
incurred to continue the perfection of any Liens in favor of Secured Creditor
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 Secured Creditor 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
Note, the Intercreditor Agreement, the other Transaction Documents, and any
such other documents (all the foregoing, collectively, the "indemnified
liabilities"), provided, that the Company shall have no obligation hereunder to
Collateral Agent or Secured Creditor, with respect to indemnified liabilities
arising from (i) the gross negligence or willful misconduct of Collateral Agent
or Secured Creditor, or (ii) legal proceedings commenced against Secured
Creditor by any Transferee (as defined in Section 10.6), and (h) to pay or
reimburse Secured Creditor 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 Secured Creditor, the replaced counsel to Collateral Agent, and the
new counsel to Collateral Agent, and the reasonable allocated costs of in-house
counsel to Secured Creditor and in-house counsel to Collateral Agent. The
agreements in this Section shall survive repayment of the Note and all other
amounts payable hereunder.
10.6 Successors and Assigns; Participations; Purchasing Lender.
(a) This Agreement shall be binding upon and inure to
the benefit of the Company, the Lender, Collateral Agent, all future holders of
the Note and their respective successors and assigns, except that the Company
may not assign or transfer any of its rights or obligations under this
Agreement and the other Transaction Documents without the prior written consent
of the Lender.
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(b) Subject to Sections 10.6(h) and (k), the Lender may
at any time sell to one or more banks or other entities ("Participants")
participating interests in the Note or any other interest of the Lender
hereunder and under the other Transaction Documents. In the event of any such
sale by the Lender of participating interests to a Participant, the Lender's
obligations under this Agreement to the other parties to this Agreement shall
remain unchanged, the Lender shall remain solely responsible for the
performance thereof, the Lender shall remain the holder of its Note for all
purposes under this Agreement and the other Transaction Documents, and the
Company and Collateral Agent shall continue to deal solely, and directly, with
the Lender in connection with the Lender's rights and obligations under this
Agreement and the other Transaction Documents. The Company agrees that if
amounts outstanding under this Agreement and the Note 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 the Note to the same extent as if the amount of its
participating interest were owing directly to it as the Lender under this
Agreement or the 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 the Lender the
proceeds thereof as provided in Section 10.7. The Company also agrees that
each Participant shall be entitled to the benefits of Sections 2.7, 2.9 and
10.5 with respect to its participation in the Note outstanding from time to
time; provided, that no Participant shall be entitled to receive any greater
amount pursuant to such Sections than the transferor Lender would have been
entitled to receive in respect of the amount of the participation transferred
by such transferor the Lender to such Participant had no such transfer
occurred. Notwithstanding anything herein to the contrary, participants shall
not be entitled to require the Lender 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 Note in which such Participant is participating
(it being understood that any waiver of an installment on, or the application
of, any prepayment or the method of application of any prepayment to the
amortization of the Notes shall not constitute an extension of the regularly
scheduled maturity dates), (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
Note in which such participant is participating, or (iii) the release of all or
substantially all of
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the Collateral or the Subsidiary Guaranty (except as otherwise expressly
provided in the Transaction Documents).
(c) Subject to Sections 10.6(h) and (k), the Lender may
at any time sell to any bank or other entity ("Purchasing Lender") all or any
part of its rights and obligations under this Agreement and the Note and other
Transaction Documents, whereupon (i) the Purchasing Lender shall be a party
hereto and have the rights and obligations of a Lender hereunder and under the
other Transaction Documents, and (ii) the transferor Lender shall, to the
extent of such transfer, be released from its obligations under this Agreement
and under the other Transaction Documents (and, in the case of a transfer
covering all or the remaining portion of a transferor Lender's rights and
obligations under this Agreement and under the other Secured Note Documents,
such transferor Lender shall cease to be a party hereto and thereto). Such
transfer shall be deemed to amend this Agreement to the extent, and only to the
extent, necessary to reflect the addition of such Purchasing Lender under this
Agreement and the Note and other Secured Note Documents. On or prior to the
transfer effective date, the Company, at its own expense, shall execute and
deliver to the Lender new Note(s) to the order of such Purchasing Bank in an
amount equal to the Note or Note portion acquired by it and, if the transferor
Lender has retained a portion of the Note hereunder, new Note(s) to the order
of the transferor Lender in an amount equal to the portion retained by it.
Such new Note(s) shall be dated the same date as, and shall otherwise be in the
form of, the Note(s) replaced thereby. The Note(s) replaced by the new
Note(s), marked "renewed and replaced," shall be attached to the new Note(s);
and a copy thereof shall be sent to the Company.
(d) [intentionally omitted]
(e) [intentionally omitted]
(f) Subject to Section 10.16, the Company authorizes the
Lender to disclose to any Participant or Purchasing Lender (each, a
"Transferee") and any prospective Transferee any and all information in the
Lender's possession concerning the Company and its Affiliates; 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 Lender which is
organized under the laws of any jurisdiction other than the United States or
any state thereof, the Company will not be required to pay any increased
withholding taxes of
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the United States or any political subdivision thereof unless, prior to the
date of transfer, the transferor Lender shall cause such Purchasing Lender to
comply with the requirements of Section 2.7.
(h) [intentionally omitted]
(i) Nothing herein shall prohibit any Lender which is a
bank from pledging or assigning any Note to any Federal Reserve Bank in
accordance with applicable law.
(j) Notwithstanding the foregoing provisions of this
Section 10.6, no holder of a Note shall transfer such Note in a manner which
would violate any Requirement of Law.
(k) Notwithstanding the foregoing provisions of this
Section 10.6, the initial Lender hereunder agrees not to sell or assign the
Note prior to the earliest of (a) the second anniversary of the Issuance Date,
(b) the occurrence of an Event of Default and (c) a Negative Shareholder Vote.
10.7 Adjustments; Setoff.
(a) If at any time when there is more than one Lender
any Lender (a "Benefitted Lender") shall at any time receive any payment of all
or part of its Note(s), or interest thereon, or receive any collateral in
respect thereof (whether voluntarily or involuntarily, by setoff, pursuant to
events or proceedings of the nature referred to in Section 8.1(i), or
otherwise), in a greater proportion than any such payment to or collateral
received by, any other Lender, if any, in respect of such other Lender's
Note(s), or interest thereon, or fees due to it hereunder, such Benefitted
Lender shall purchase for cash from the other Lender such portion of each such
other Lender's Note(s), or make such payment on account of such fees, or shall
provide such other Lender with the benefits of any such collateral, or the
proceeds thereof, as shall be necessary to cause such Benefitted Lender to
share the excess payment or benefits of such collateral or proceeds ratably
with each of the Lenders; provided, however, that if all or any portion of such
excess payment or benefits is thereafter recovered from such Benefitted Lender,
such purchase shall be rescinded, and the purchase price and benefits returned,
to the extent of such recovery, but without interest. The Company agrees, that
each Lender purchasing a portion of another Lender's Note(s) owing to it may
exercise all rights of payment (including, without limitation, rights of
setoff) with respect to such portion as fully as if such Lender were the direct
holder of such portion.
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(b) In addition to any rights and remedies of the Lender
provided by law, each Lender shall have the right, without prior notice to the
Company, any such notice being expressly waived by the Company to the extent
permitted by applicable law, upon any Secured Obligations becoming due (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 Lender to or for the credit or the account of the Company. Each
Lender agrees promptly to notify the Company and each other Lender after any
such setoff and application made by such the Lender, provided that the failure
to give such notice shall not affect the validity of such setoff and
application.
10.8 Appointment of Secured Creditor as the Company's Lawful
Attorney. The Company irrevocably designates, makes, constitutes and appoints
Secured Creditor (and all Persons designated by Secured Creditor) as the
Company's true and lawful attorney (and agent-in-fact) coupled with an
interest, with the power to sign the name of the Company on any instruments,
documents and agreements, including, without limitation, security agreements,
pledge agreements, mortgages, and financing statements, as deemed by Secured
Creditor as necessary or reasonably required by Secured Creditor to grant,
perfect, maintain and continue the Liens in the Collateral or to monitor or
administer the Note, 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 Secured Creditor, in
its sole discretion, may elect, and in such event copies thereof shall be
delivered to the 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 constitute one and
the same instrument. A set of the copies of this Agreement signed by all the
parties shall be lodged with the Company and the Lender.
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.
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10.11 Integration. This Agreement, together with the other
Transaction Documents represents the entire agreement of the Company,
Collateral Agent and the Lender and supersedes all prior agreements with
respect to the subject matter hereof, and there are no promises, undertakings,
representations or warranties by Collateral Agent or the Lender relative to
subject matter hereof not expressly set forth or referred to herein or in the
other Transaction Documents.
10.12 GOVERNING LAW. THIS AGREEMENT, THE NOTES AND THE RIGHTS AND OF
THE PARTIES UNDER THIS AGREEMENT AND THE NOTES SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
10.13 SUBMISSION TO JURISDICTION; WAIVERS. THE 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 TRANSACTION
DOCUMENTS TO WHICH IT IS A PARTY, OR FOR RECOGNITION AND ENFORCEMENT OF ANY
JUDGMENT IN RESPECT THEREOF, TO THE NON-EXCLUSIVE GENERAL JURISDICTION OF THE
COURTS OF THE STATES OF CALIFORNIA AND NEW YORK, THE COURTS OF THE UNITED
STATES OF AMERICA FOR THE CENTRAL DISTRICT OF CALIFORNIA AND THE SOUTHERN
DISTRICT OF NEW YORK, 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 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 THE
COMPANY AT ITS ADDRESS SET FORTH IN SECTION 10.2 OR AT SUCH OTHER ADDRESS OF
WHICH THE Lender SHALL HAVE BEEN NOTIFIED PURSUANT THERETO;
(d) AGREES THAT NOTHING HEREIN SHALL AFFECT THE RIGHT TO
EFFECT SERVICE OF PROCESS MANY 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 SECURED
NOTE DOCUMENTS AND HEREBY RATIFIES
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AND CONFIRMS WHATEVER SECURED CREDITOR OR COLLATERAL AGENT MAY DO IN THIS
REGARD, (ii) ALL RIGHTS TO NOTICE OF A HEARING PRIOR TO SECURED CREDITOR'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 SECURED
CREDITOR OR COLLATERAL AGENT TO EXERCISE ANY OF SECURED CREDITOR'S OR
COLLATERAL AGENT'S REMEDIES, AND (iii) 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. The Company hereby acknowledges that:
(a) it has been advised by counsel in the negotiation,
execution and delivery of this Agreement, the Note and the other Transaction
Documents;
(b) neither Collateral Agent nor the Lender has any
fiduciary relationship to the Company, and the relationship between the Lender,
on one hand, and the Company, on the other hand, is solely that of debtor and
creditor; and
(c) no joint venture exists between the Company and the
Lender.
10.15 WAIVERS OF JURY TRIAL. THE COMPANY AND THE SECURED CREDITOR
HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL ACTION
OR PROCEEDING RELATING TO THIS AGREEMENT OR THE NOTE OR ANY OTHER TRANSACTION
DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.
10.16 Confidentiality. Secured Creditor agrees to take normal and
reasonable precautions and exercise due care to maintain the confidentiality of
all non-public information provided to it by the Company or any of its
Subsidiaries, or by Collateral Agent on the Company's behalf, in connection
with this Agreement or any other Transaction 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 and the other Transaction Documents. Secured Creditor may
disclose such information (a) at the request of any regulatory authority or in
connection with an examination of Secured Creditor 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
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any other agency of any State of the United States of America or of any other
jurisdiction, in which Secured Creditor conducts its business; (e) to Secured
Creditor'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) Secured Creditor and (ii) the Company and/or any
Subsidiary; and (h) in connection with any litigation or dispute involving
Secured Creditor if the disclosure is determined by Secured Creditor to be
necessary for the defense or protection of Secured Creditor's rights and/or
interests. Secured Creditor further agrees, upon receipt by Secured Creditor
of a request to disclose any information to a Governmental Authority or courts
(other than governmental bank examiners and independent auditors of Secured
Creditor, to notify the Company of such request and to permit, to the extent
practicable, the Company to seek a protective order with respect thereto;
provided, however, that no Secured Creditor shall be requested to notify the
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 the 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
the Company.
10.17 Controlling Agreement. In the event of any conflict between the
terms and conditions of this Agreement and the terms and conditions of any
other Secured Exchangeable Note Document, the terms and conditions of this
Agreement shall control.
10.18 Counsel to Collateral Agent. If the Company reasonably and in
good faith requests in writing to Collateral Agent and the Lender that
Collateral Agent replace, at the Company's sole expense, then existing counsel
to Collateral Agent, the Lender and Collateral Agent shall consider such
request and, so long as no Default or Event of Default has occurred and is
continuing, the Lender and Collateral Agent shall not unreasonably withhold its
consent to such request.
SECTION 11. THE CO-MAKERS
11.1 Certain Defined Terms. As used in this Section, the following
terms shall have the following meanings unless the context otherwise requires:
"payment in full," "paid in full" or any similar term means
payment in full in cash of the Secured Obligations including all principal,
interest, costs, fees and expenses
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(including, without limitation, reasonable legal fees and expenses) of Lender
and Collateral Agent as required under the Transaction Documents.
11.2 All Co-Makers Liable. Subject to the provisions of subsection
11.3, all Co-Makers are jointly and severally irrevocably and unconditionally
liable, as primary obligors and not merely as sureties, for the due and
punctual payment in full of the Secured Obligations when the same shall become
due, whether at stated maturity, by required prepayment, declaration,
acceleration, demand or otherwise (including amounts that would become due but
for the operation of the automatic stay under Section 362(a) of the Bankruptcy
Code, 11 U.S.C. Section 362(a)).
11.3 Limitation on Obligations of Mortgagor Subsidiaries; Contribution
among Mortgagor Subsidiaries.
(a) Anything contained in this Agreement to the contrary
notwithstanding, the obligations of each Mortgagor Subsidiary hereunder shall
be limited to a maximum aggregate amount equal to the largest amount that would
not render its obligations hereunder subject to avoidance as a fraudulent
transfer or conveyance under Section 548 of Title 11 of the United States Code
or any applicable provisions of comparable state law (collectively, the
"Fraudulent Transfer Laws"), in each case after giving effect to all other
liabilities of such Mortgagor Subsidiary, contingent or otherwise, that are
relevant under the Fraudulent Transfer Laws (specifically excluding, however,
any liabilities of such Mortgagor Subsidiary (i) in respect of intercompany
indebtedness to Company or other affiliates of Company to the extent that such
indebtedness would be discharged in an amount equal to the amount paid by such
Mortgagor Subsidiary hereunder and (ii) under any guaranty of subordinated
indebtedness which guaranty contains a limitation as to maximum amount similar
to that set forth in this subsection 11.3(a), pursuant to which the liability
of such Mortgagor Subsidiary hereunder is included in the liabilities taken
into account in determining such maximum amount) and after giving effect as
assets to the value (as determined under the applicable provisions of the
Fraudulent Transfer Laws) of any rights to subrogation, reimbursement,
indemnification or contribution of such Mortgagor Subsidiary pursuant to
applicable law or pursuant to any agreement.
(b) The Mortgagor Subsidiaries under this Agreement are
also parties to a Subsidiary Guaranty among Subsidiaries of the Company and
pursuant thereto have allocated as among themselves liability for the Secured
Obligations and provided contribution from one another in amounts designed to
assure
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that each bears only its "fair share" (as defined in the Subsidiary Guaranty)
of the obligations in respect of the Secured Obligations. The allocation among
Subsidiaries of their obligations as set forth in the Subsidiary Guaranty shall
not be construed in any way to limit the liability of any Co-Maker hereunder or
under the Subsidiary Guaranty. The obligations of the Mortgagor Subsidiaries
under the Subsidiary Guaranty are not secured by the initial Mortgages recorded
in Florida, which Mortgages secure the direct obligations of the Co-Makers
rather than guaranties of the obligations of others.
11.4 Liability of Co-Makers Absolute. Each Co-Maker agrees that its
obligations hereunder are irrevocable, absolute, independent and unconditional
and shall not be affected by any circumstance which constitutes a legal or
equitable discharge of a co-maker other than indefeasible payment in full of
the Secured Obligations. In furtherance of the foregoing and without limiting
the generality thereof, each Co-Maker agrees as follows:
(a) The obligation of each Co-Maker is independent,
primary and original, and not dependent upon failure of Lender to collect from
any other Co-Maker.
(b) Lender may enforce this Agreement against the
Mortgagor Subsidiaries notwithstanding the existence of any dispute between
Lender and Company or any Mortgagor Subsidiary with respect to the existence of
an Event of Default.
(c) The obligations of each Mortgagor Subsidiary
hereunder are independent of the obligations of Company under the Transaction
Documents and the obligations of any other Co-Maker or any guarantor, and a
separate action or actions may be brought and prosecuted against such Mortgagor
Subsidiary whether or not any action is brought against Company or any of such
other Co-Makers or guarantor and whether or not Company is joined in any such
action or actions.
(d) Payment by any Co-Maker of a portion, but not all,
of the Secured Obligations shall in no way limit, affect, modify or abridge any
other Co-Maker's liability for any portion of the Secured Obligations which has
not been paid. Without limiting the generality of the foregoing, if Lender is
awarded a judgment in any suit brought to enforce any Co-Maker's covenant to
pay a portion of the Secured Obligations, such judgment shall not be deemed to
release such Co-Maker from its covenant to pay the portion of the Secured
Obligations that is not the subject of such suit, and such judgment shall not,
except to the extent satisfied by such Co-Maker, limit, affect,
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modify or abridge any other Co-Maker's liability hereunder in respect of the
Secured Obligations.
(e) Lender, upon such terms as it deems appropriate,
without notice or demand and without affecting the validity or enforceability
of this Agreement or giving rise to any reduction, limitation, impairment,
discharge or termination of any Co-Maker's liability hereunder, from time to
time may (i) renew, extend, accelerate, increase the rate of interest on, or
otherwise change the time, place, manner or terms of payment of the Secured
Obligations, (ii) settle, compromise, release or discharge, or accept or refuse
any offer of performance with respect to, or substitutions for, the Secured
Obligations or any agreement relating thereto and/or subordinate the payment of
the same to the payment of any other obligations; (iii) request and accept
guaranties of the Secured Obligations and take and hold security for the
payment of this Agreement or the Secured Obligations; (iv) release, surrender,
exchange, substitute, compromise, settle, rescind, waive, alter, subordinate or
modify, with or without consideration, any security for payment of the Secured
Obligations, any guaranties of the Secured Obligations, or any other obligation
of any Person (including any other Co-Maker) with respect to the Secured
Obligations; (v) enforce and apply any security now or hereafter held by or for
the benefit of Lender in respect of this Agreement or the Secured Obligations
and direct the order or manner of sale thereof, or exercise any other right or
remedy that Lender may have against any such security, as Lender in its
discretion may determine consistent with this Agreement and any applicable
security agreement or mortgage, including foreclosure on any such security
pursuant to one or more judicial or nonjudicial sales, whether or not every
aspect of any such sale is commercially reasonable, and even though such action
operates to impair or extinguish any right of reimbursement or subrogation or
other right or remedy of any Co-Maker against any other Co-Maker or any
security for the Secured Obligations; and (vi) exercise any other rights
available to it under the Transaction Documents.
(f) This Agreement and the obligations of the Co-Makers
hereunder shall be valid and enforceable and shall not be subject to any
reduction, limitation, impairment, discharge or termination for any reason
(other than indefeasible payment in full of the Secured Obligations), including
the occurrence of any of the following, whether or not any Co-Maker shall have
had notice or knowledge of any of them: (i) any failure or omission to assert
or enforce, or agreement or election not to assert or enforce, or the stay or
enjoining, by order of court, by operation of law or otherwise, of the exercise
or enforcement of, any claim or demand or any right, power or
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remedy (whether arising under the Transaction Documents, at law, in equity or
otherwise) with respect to the Secured Obligations or any agreement relating
thereto, or with respect to any guaranty of or security for the payment of the
Secured Obligations; (ii) any rescission, waiver, amendment or modification of,
or any consent to departure from, any of the terms or provisions (including
provisions relating to events of default) of this Agreement, any of the other
Transaction Documents or any agreement or instrument executed pursuant thereto,
or of any guaranty or security for the Secured Obligations, in each case
whether or not in accordance with the terms of the Agreement or such
Transaction Document or any agreement relating to such guaranty or security;
(iii) the Secured Obligations, or any agreement relating thereto, at any time
being found to be illegal, invalid or unenforceable in any respect; (iv) the
application of payments received from any source (other than payments received
pursuant to the other Transaction Documents or from the proceeds of any
security for the Secured Obligations, except to the extent such security also
serves as collateral for indebtedness other than the Secured Obligations) to
the payment of indebtedness other than the Secured Obligations, even though
Lender might have elected to apply such payment to any part or all of the
Secured Obligations; (v) Lender's consent to the change, reorganization or
termination of the corporate structure or existence of Company or any of its
Subsidiaries and to any corresponding restructuring of the Secured Obligations;
(vi) any failure to perfect or continue perfection of a security interest in
any collateral which secures any of the Secured Obligations; (vii) any
defenses, setoffs or counterclaims which any Co-Maker may allege or assert
against Lender in respect of the Secured Obligations, including failure of
consideration, breach of warranty, payment, statute of frauds, statute of
limitations, accord and satisfaction and usury; and (viii) any other act or
thing or omission, or delay to do any other act or thing, which may or might in
any manner or to any extent vary the risk of any Co-Maker as an obligor in
respect of the Secured Obligations.
11.5 Waivers by Co-Maker. Each Co-Maker hereby waives, for the
benefit of Lender:
(a) any right to require Lender, as a condition of
payment or performance by such Co-Maker, to (i) proceed against Company, any
Mortgagor Subsidiary or any guarantor of the Secured Obligations or any other
Person, (ii) proceed against or exhaust any security held from Company, any
other Mortgagor Subsidiary or any guarantor of the Secured Obligations or any
other Person, (iii) proceed against or have resort to any balance of any
deposit account or credit on the books of Lender
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in favor of Company or any other Person, or (iv) pursue any other remedy in the
power of Lender whatsoever;
(b) any defense arising by reason of the incapacity,
lack of authority or any disability or other defense of any Co-Maker including
any defense based on or arising out of the lack of validity or the
unenforceability of the Secured Obligations or any agreement or instrument
relating thereto or by reason of the cessation of the liability of any Co-Maker
from any cause other than indefeasible payment in full of the Secured
Obligations;
(c) any defense based upon any statute or rule of law
which provides that the obligation of a co-maker must be neither larger in
amount nor in other respects more burdensome than that of any other obligor;
(d) any defense based upon Lender's errors or omissions
in the administration of the Secured Obligations, except behavior which amounts
to bad faith;
(e) (i) any principles or provisions of law, statutory
or otherwise, which are or might be in conflict with the terms of this
Agreement or which result or might result in any legal or equitable discharge
of such Co-Maker's obligations hereunder, (ii) the benefit of any statute of
limitations affecting such Co-Maker's liability hereunder or the enforcement
hereof, (iii) any rights to setoffs, recoupments and counterclaims, and (iv)
promptness, diligence and any requirement that Lender protect, secure, perfect
or insure any security interest or lien or any property subject thereto;
(f) notices, demands, presentments, protests, notices of
protest, notices of dishonor and notices of any action or inaction, including
acceptance of this Agreement, notices of default under this Agreement or any
agreement or instrument related thereto, notices of any renewal, extension or
modification of the Secured Obligations or any agreement related thereto,
notices of any extension of credit to any other Co-Maker and notices of any of
the matters referred to in subsection 11.4 and any right to consent to any
thereof; and
(g) any defenses or benefits that may be derived from or
afforded by law which limit the liability of or exonerate co-makers, guarantors
or sureties, or which may conflict with the terms of this Agreement.
11.6 Payment by Mortgagor Subsidiaries; Application of Payments.
Subject to the provisions of subsection 11.3(a), Mortgagor Subsidiaries hereby
jointly and severally agree, in
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furtherance of the foregoing and not in limitation of any other right which
Lender or any other Person may have at law or in equity against any Mortgagor
Subsidiary by virtue hereof, that upon the failure of Company to pay any of the
Secured Obligations when and as the same shall become due, whether at stated
maturity, by required prepayment, declaration, acceleration, demand or
otherwise (including amounts that would become due but for the operation of the
automatic stay under Section 362(a) of the Bankruptcy Code, 11 U.S.C. Section
362(a)), Mortgagor Subsidiaries will upon demand pay, or cause to be paid, in
cash, to Lender, an amount equal to all Secured Obligations then due as
aforesaid, including accrued and unpaid interest on such Secured Obligations
(including interest which, but for the filing of a petition in bankruptcy with
respect to Company, would have accrued on such Secured Obligations, whether or
not a claim is allowed against Company for such interest in any such bankruptcy
proceeding) and all other Secured Obligations then owed to Lender as aforesaid.
All such payments shall be applied promptly from time to time by Lender in
accordance with this Agreement.
11.7 Co-Makers' Rights of Subrogation, Contribution, Etc. Each
Co-Maker hereby waives any claim, right or remedy, direct or indirect, that
such Co-Maker now has or may hereafter have against any other Co-Maker or any
of its assets in connection with this Agreement or the performance by such
Co-Maker of its obligations hereunder, in each case whether such claim, right
or remedy arises in equity, under contract, by statute, under common law or
otherwise and including without limitation (a) any right of subrogation,
reimbursement or indemnification that such Co-Maker now has or may hereafter
have against Company, (b) any right to enforce, or to participate in, any
claim, right or remedy that Lender now has or may hereafter have against any
other Co-Maker, and (c) any benefit of, and any right to participate in, any
collateral or security now or hereafter held by Lender. In addition, until the
Secured Obligations shall have been indefeasibly paid in full, each Co-Maker
shall withhold exercise of any right of contribution such Co-Maker may have
against any guarantor of the Secured Obligations (including any such right of
contribution under any guaranty). Each Co-Maker further agrees that, to the
extent the waiver or agreement to withhold the exercise of its rights of
subrogation, reimbursement, indemnification and contribution as set forth
herein is found by a court of competent jurisdiction to be void or voidable for
any reason, any rights of subrogation, reimbursement or indemnification such
Co-Maker may have against any other Co-Maker or against any collateral or
security, and any rights of contribution such Co-Maker may have against any
such guarantor, shall be junior and subordinate to any rights Lender may have
against Company and
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the other Co-Makers, to all right, title and interest Lender may have in any
such collateral or security, and to any right Lender may have against such
guarantor. If any amount shall be paid to any Co-Maker on account of any such
subrogation, reimbursement, indemnification or contribution rights at any time
when all Secured Obligations shall not have been paid in full, such amount
shall be held in trust for Lender and shall forthwith be paid over to Lender to
be credited and applied against the Secured Obligations, whether matured or
unmatured, in accordance with the terms hereof.
11.8 Subordination of Other Obligations. Any indebtedness of any
Co-Maker now or hereafter held by any other Co-Maker is hereby subordinated in
right of payment to the obligations of such indebted Co-Maker in respect of the
Secured Obligations, and any such indebtedness of a Co-Maker to another
Co-Maker collected or received by such other Co-Maker after an Event of Default
has occurred and is continuing shall be held in trust for Lender and shall
forthwith be paid over to Lender to be credited and applied against the Secured
Obligations but without affecting, impairing or limiting in any manner the
liability of any Co-Maker under any other provision of this Agreement.
11.9 Expenses. Co-Makers jointly and severally agree to pay, or cause
to be paid, on demand, and to save Lender harmless against liability for, any
and all costs and expenses (including reasonable fees and disbursements of
counsel and allocated costs of internal counsel) incurred or expended by Lender
in connection with the enforcement of, or preservation of any rights under,
this Agreement.
11.10 Continuing Agreement. This Agreement shall remain in effect as
against each Co-Maker until all of the Secured Obligations shall have been
indefeasibly paid in full. Each Co-Maker hereby irrevocably waives any right
to revoke this Agreement as to future transactions giving rise to any Secured
Obligations.
11.11 Authority of the Co-Makers. It is not necessary for Lender to
inquire into the capacity or powers of any Co-Maker or the officers, directors
or any agents acting or purporting to act on behalf of any of them.
11.12 Financial Condition of the Company. Any Secured Obligations may
be incurred by Company or continued from time to time without notice to or
authorization from any Mortgagor Subsidiary regardless of the financial or
other condition of Company at the time of any such grant or continuation. The
Lender shall have no obligation to disclose or discuss with any
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Mortgagor Subsidiary its assessment, or any Mortgagor Subsidiary's assessment,
of the financial condition of Company. Each Mortgagor Subsidiary has adequate
means to obtain information from Company on a continuing basis concerning the
financial condition of Company and its ability to perform its obligations under
the Transaction Documents, and each Mortgagor Subsidiary assumes the
responsibility for being and keeping informed of the financial condition of
Company and of all circumstances bearing upon the risk of nonpayment of the
Secured Obligations. Each Mortgagor Subsidiary hereby waives and relinquishes
any duty on the part of Lender to disclose any matter, fact or thing relating
to the business, operations or conditions of Company now known or hereafter
known by lender.
11.13 Rights Cumulative. The rights, powers and remedies given to
Lender by this Agreement are cumulative and shall be in addition to and
independent of all rights, powers and remedies given to Lender by virtue of any
statute or rule of law or in any of the other Transaction Documents or any
agreement between any Mortgagor Subsidiary and Lender or between Company and
Lender. Any forbearance or failure to exercise, and any delay by Lender in
exercising, any right, power or remedy hereunder shall not impair any such
right, power or remedy or be construed to be a waiver thereof, nor shall it
preclude the further exercise of any such right, power or remedy.
11.14 Bankruptcy; Post-Petition Interest; Reinstatement of Agreement.
(a) So long as any Secured Obligations remain
outstanding, no Co-Maker shall, without the prior written consent of Lender in
accordance with the Agreement, commence or join with any other Person in
commencing any bankruptcy, reorganization or insolvency proceedings of or
against any other Co-Maker. The obligations of the Co-Makers under this
Agreement shall not be reduced, limited, impaired, discharged, deferred,
suspended or terminated by any proceeding, voluntary or involuntary, involving
the bankruptcy, insolvency, receivership, reorganization, liquidation or
arrangement of any other or by any defense which any other Co-Maker may have by
reason of the order, decree or decision of any court or administrative body
resulting from any such proceeding.
(b) Each Co-Maker acknowledges and agrees that any
interest on any portion of the Secured Obligations which accrues after the
commencement of any proceeding referred to in clause (a) above (or, if interest
on any portion of the Secured Obligations ceases to accrue by operation of law
by reason of the commencement of said proceeding, such interest as would
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have accrued on such portion of the Secured Obligations if said proceedings had
not been commenced) shall be included in the Secured Obligations because it is
the intention of Co-Makers and Lender that the Secured Obligations of each Co-
Maker pursuant to this Agreement should be determined without regard to any
rule of law or order which may relieve any other Co-Maker of any portion of
such Secured Obligations. The Co-Makers will permit any trustee in bankruptcy,
receiver, debtor in possession, assignee for the benefit of creditors or
similar person to pay Lender, or allow the claim of Lender in respect of, any
such interest accruing after the date on which such proceeding is commenced.
(c) If all or any portion of the Secured
Obligations is paid by any Co-Maker, the obligations of the other Co-Makers
hereunder shall continue and remain in full force and effect or be reinstated,
as the case may be, in the event that all or any part of such payment(s) are
rescinded or recovered directly or indirectly from Lender as a preference,
fraudulent transfer or otherwise, and any such payments which are so rescinded
or recovered shall constitute Secured Obligations for all purposes under this
Agreement.
11.15 Setoff. In addition to any other rights Lender may
have under law or in equity, if any amount shall at any time be due and owing
by any Co-Maker to Lender under this Agreement, Lender is authorized at any
time or from time to time, without notice (any such notice being hereby
expressly waived), to set off and to appropriate and to apply any and all
deposits (general or special, including but not limited to indebtedness
evidenced by certificates of deposit, whether matured or unmatured) and any
other indebtedness of Lender owing to such Co-Maker and any other property of
such Co-Maker held by Lender to or for the credit or the account of such
Co-Maker against and on account of the Secured Obligations and liabilities of
such Co-Maker to Lender under this Agreement; provided, however, that the
foregoing shall not apply to Excluded Property and the restricted Bank Accounts
identified in Schedule 7.17 of this Agreement.
SECTION 12. MISCELLANEOUS
12.1 Acknowledgment Regarding Certain Environmental
Obligations. Each Mortgagor Subsidiary hereby acknowledges and agrees that the
Secured Obligations includes Company's obligation under this Agreement to
comply with the Comprehensive Environmental Response, Compensation and
Liability Act of 1980 and all other Environmental Laws and to indemnify and
hold harmless Lender from and against any and all liability arising out of, or
in connection with the presence of
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Hazardous Materials at any property of Company or any Mortgagor Subsidiary
given as security for the Secured Obligations, and each Mortgagor Subsidiary
hereby expressly undertakes as Co-Maker the payment, performance and discharge
of such obligations and liabilities of Company.
REMAINDER OF PAGE LEFT INTENTIONALLY BLANK
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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 CORPO-
RATION, a Delaware corporation
By: /s/ Xxxxxx X. Xxxxxxx
--------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Executive Vice President
and Chief Financial Officer
CUMBERLAND COVE, INC.
By: /s/ Xxxxxx X. Xxxxxxx
--------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Vice President
ENVIRONMENTAL QUALITY LABORATORY INC.
By: /s/ Xxxxxx X. Xxxxxxx
--------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Vice President
GENERAL DEVELOPMENT UTILITIES, INC.
By: /s/ Xxxxxx X. Xxxxxxx
--------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Vice President
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FIVE STAR HOMES, INC.
By: /s/ Xxxxxx X. Xxxxxxx
--------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: President
ATLANTIC GULF OF TAMPA, INC.
By: /s/ Xxxxxx X. Xxxxxxx
--------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Vice President
ESTERO POINTE DEVELOPMENT
CORPORATION
By: /s/ Xxxxxx X. Xxxxxxx
--------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Vice President
AP-AGC, LLC, as Lender
By: /s/ Xxxxxxx Xxxxxxxxxxxxx
--------------------------------
Name: Xxxxxxx Xxxxxxxxxxxxx
Title: Vice President of Kronus
Property, Inc., its
Manager
_____________, as Collateral Agent
By:
--------------------------------
Name:
Title:
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