AMENDED AND RESTATED LETTER OF CREDIT
REIMBURSEMENT AGREEMENT
July 31, 1998
▇▇▇▇▇▇ Financial Corporation
BF Enterprises, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Gentlemen:
With reference to our recent discussions, we are pleased to
confirm our agreement to amend and restate our Letter of Credit Reimbursement
Agreement with you dated April 30, 1994 (as so amended and restated, and as the
same may be hereafter amended, supplemented or otherwise modified, the
"Agreement") and to issue, from the date hereof until the date which is
364 days from the date of this Agreement, irrevocable standby letters of credit
for your joint and several account on the following terms and conditions:
1. Issuance of Letter of Credit; Maximum Amount of Letters of Credit.
-----------------------------------------------------------------
(a) We agree, from the date hereof until the date which is
364 days from the date of this Agreement, on the terms and conditions
hereinafter set forth, (i) to continue for the account of ▇▇▇▇▇▇ Financial
Corporation our irrevocable letter of credit not to exceed US$1,200,000
(together with any replacements or extensions thereto, the "Existing Letter of
Credit"), which Existing Letter of Credit was issued in favor of American
National Bank and Trust Company, trustee of your subordinated debentures issued
under an original indenture dated October 1, 1972 and six supplemental
indentures, and (ii) upon reduction or termination of the Existing Letter of
Credit, one or more other irrevocable letters of credit in such form as
we shall approve in our sole discretion (each, a "Letter of Credit" and,
together with the Existing Letter of Credit, collectively, the "Letters of
Credit").
(b) Notwithstanding anything to the contrary contained in
this Agreement, the face amount of all Letters of Credit issued pursuant to this
Agreement and outstanding at any time shall not exceed, in the aggregate,
US$1,200,000. In addition, and without in any way limiting the limitation set
forth in the immediately preceding sentence, no Letter of Credit will be issued
hereunder if, after giving effect to the issuance of such Letter of Credit, the
sum of (i) the aggregate principal amount of Loans under (and as defined in) the
Promissory Note, dated the date hereof, in the original principal amount of
75
US$3,700,000, executed by each of you in favor of us (as amended, supplemented
or otherwise modified from time to time, together with all replacements thereof
and substitutions therefor, the "Revolving Note"), plus (ii) the aggregate face
amount of all outstanding Letters of Credit issued hereunder, plus (iii) the
aggregate amount of all unpaid and outstanding reimbursement obligations and
fees hereunder in respect of such Letters of Credit (the "Minimum Coverage
Amount"), exceeds the lesser of (i) US$3,700,000 and (ii) the Value of
Investments (as defined in paragraph 6(d) hereof).
(c) Unless extended pursuant to paragraph (d) below, each
Letter of Credit issued hereunder shall have an expiry date (each, an "Expiry
Date") no later than the date which is 364 days from the date of this Agreement.
(d) The current Expiry Date of the Existing Letter of
Credit is December 31, 1998. Subject to the next sentence, we agree to extend
(i) the current Expiry Date of the Existing Letter of Credit at our option, for
additional periods of either one-year or ninety-days and (ii) to extend the
Expiry Date of any other Letter of Credit in our sole discretion.
Notwithstanding the foregoing, we may, in our sole discretion, elect not to
renew the Existing Letter of Credit upon notice to you given not less than sixty
days prior to any Expiry Date. You agree, not less than ten days prior to any
Expiry Date to notify us of any request for an extension of the Expiry Date,
such request to include the following information: (a) the face amount of the
Letter of Credit (which, in the case of the Existing Letter of Credit, shall be
decreased by the amount of any draw and by the amount of any debentures, paid or
purchased by you), (b) the period by which the Expiry Date shall be extended,
and (c) any other change with respect to the Letter of Credit during such
extended term.
2. Letter of Credit Fees.
---------------------
You shall pay us non-refundable fees for our rendering of the
letter of credit services requested. Such fees will be in amounts set by us and
will include, but not be limited to, the following:
(a) Letter of Credit Fee. You shall pay us a letter of
credit fee equal to (i) 3/8 of 1% per annum of the face amount of each Letter of
Credit issued hereunder. The letter of credit fee shall be charged on the face
amount of each Letter of Credit from its issuance date until its Expiry Date,
shall be calculated on the basis of a 360-day year for the actual number of
days elapsed, and shall be payable in advance, beginning on the initial issuance
date and on each Expiry Date thereafter.
(b) Amendment Fee. You shall pay us an amendment fee
equal to $150 for each amendment requested.
76
3. Reimbursement for Payments under the Letter of Credit.
-----------------------------------------------------
We shall promptly notify you in writing each time we are
presented with the requisite documents for a payment pursuant to the terms of a
Letter of Credit (and in such notice specify the amount of such payment). You
agree promptly to reimburse us for such payment, together with interest thereon
from the date of payment by us to the date of reimbursement by you at a
fluctuating interest rate per annum (computed on the basis of a year
of 360 days for the actual number of days elapsed) equal to the fluctuating
rate of interest announced by us as our base rate ("Base Rate") as in effect
from time to time plus one percent (1%), with each change in such fluctuating
rate to take effect simultaneously with the corresponding change in the Base
Rate.
4. Increased Costs.
---------------
If any change in any law or regulation or in the interpretation
thereof by any court or administrative or governmental authority charged with
the administration thereof shall either (i) impose, modify or deem applicable
any reserve, special deposit or similar requirement against Letters of Credit
issued by us to you hereunder or against any other extension of credit by us to
you hereunder, or other assets of, or any deposits or other liabilities taken or
entered into by us or (ii) impose on us any other condition regarding this
Agreement or any Letter of Credit and the result of any event referred to in
clause (i) or (ii) above shall be to increase the cost to us of issuing or
maintaining such Letter of Credit or your reimbursement obligations hereunder or
reduce the amounts receivable by us hereunder (which increase in cost or
reduction in amount receivable shall be the direct result of our reasonable
allocation of the aggregate of such cost increases or reductions resulting from
such events), then, upon demand by us, you shall immediately pay to us for our
account, from time to time as we specify, additional amounts which shall be
sufficient to compensate us for the actual amount of such increased cost or
reduction from the date of such change, together with interest on each such
amount from the date demanded until payment in full thereof at the rate provided
in paragraph 3 above. A certificate setting forth in reasonable detail such
increased cost incurred by us as a result of any event mentioned in clause (i)
or (ii) above, submitted by us to you, shall be conclusive, absent manifest
error, as to the amount thereof.
5. Obligations.
-----------
Your obligations under this Agreement shall be paid strictly in
accordance with the terms of this Agreement under all circumstances whatsoever,
including, without limitation, the following circumstances:
(i) Any lack of validity or enforceability of any Letter
of Credit or any other agreement or instrument relating to it
(collectively, the "related documents");
77
(ii) Any amendment or waiver of or any consent to or
departure from all or any of the related documents;
(iii) The existence of any claim, setoff, defense or other
rights which you may have at any time against any beneficiary or any
transferee of a Letter of Credit, ourselves (other than the defense of
payment to us in accordance with the terms of this Agreement) or any other
person or entity, whether in connection with this Agreement, the related
documents or any unrelated transactions;
(iv) Any statement or any other document presented under a
Letter of Credit proving to be forged, fraudulent, invalid or insufficient
in any respect or any statement therein being untrue or inaccurate in any
respect whatsoever;
(v) Payment by us under a Letter of Credit against
presentation of a sight draft or certificate which does not comply with
the terms of such Letter of Credit, provided that such payment shall not
have constituted negligence or willful misconduct on our part; and
(vi) Any other circumstances or happening whatsoever that
may constitute a legal or equitable discharge or defense to payment,
whether or not similar to any of the foregoing.
6. Collateral; Minimum Coverage Amount.
-----------------------------------
(a) In order to secure your obligations (i) under this
Agreement and (ii) under the Revolving Note, each of you pledges and grants or
has pledged and granted, as the case may be, to us a security interest in and a
general lien upon the property (the "Collateral") on deposit in Account No.
70-5032-01-9 maintained with us (the "Account"), all as more particularly
described in the Pledge and Security Agreement dated as of the date hereof,
between each of you and us (as amended, supplemented or otherwise modified from
time to time, the "Security Agreement").
(b) You agree that at all times you shall maintain
sufficient Collateral in the Account so that the Value of Investments (as
defined below) in such Account equals or exceeds the Minimum Coverage Amount
(as defined in paragraph 1(b) hereof).
(c) If at any time and for any reason, the Minimum
Coverage Amount exceeds the Value of Investments, then upon our election and
demand, you shall, within 5 business days of written notice from us, repay or
prepay, as the case may be, Loans (as defined in the Revolving Note) in the
amount of such excess or provide additional Investments with an aggregate Value
equal to such excess. You also agree that in the event of your failure to
78
comply with the foregoing provisions of this clause (c), we shall have the
right, in addition to the right to require repayment of the Loans or additional
Collateral, to sell such of the Collateral as we may reasonably select and
determine to be necessary to remedy such shortfall.
(d) You agree to furnish us, or cause to be furnished to
us, within fifteen (15) days of the end of each fiscal month, monthly valuation
reports with respect to the Investments with sufficient detail for us to
establish the Value of Investments.
(d) For purposes hereof, the terms "Minimum Coverage",
"Moody's", "Value", "Investments", "Value of Investments" and "S&P" shall have
the following meanings:
"Investments" shall mean, the types of investments set forth in
the definition of "Value" which are on deposit in, or credit to, the Account.
"Minimum Coverage Amount" shall mean, at any time of
determination, the sum of (i) the aggregate amount which is undrawn and
available under all issued and outstanding Letters of Credit, (ii) the aggregate
amount of all unpaid and outstanding reimbursement obligations hereunder, and
(iii) the aggregate principal amount of Loans (as defined in the Revolving Note)
outstanding under the Revolving Note.
"Moody's" shall mean ▇▇▇▇▇'▇ Investment Service, Inc., and any
successor thereto.
"S&P" shall mean Standard & Poor's Corporation Ratings Services,
a division of ▇▇▇▇▇▇-▇▇▇▇, and any successor thereto.
"Value" shall mean, at any time of determination, with respect
to any of the following types of Investments set forth below (which shall be
denominated in U.S. dollars), the value of each such Investment times the
percentage set forth opposite such Investment below:
Investment Assigned Value
---------- ---------------
Cash and Cash Equivalents - 100%
money market accounts, eurodollar
deposits and other time deposits limited
to one year or less
U.S. Government and Federal agency 90%
obligations with a maturity of less than
five years
79
Investment Assigned Value
---------- --------------
U.S. Government and Federal agency 80%
obligations with a maturity of more than
five years
Commercial Paper- rated A-1 or better To be determined on a case-by-case basis
by S&P or P-1 or better by Moody's, with and, in any event, not to exceed 90%
maturities of 270 days or less
Corporate Bonds- rated BBB or better by 75%
S&P or Baa or better by Moody's, with
maturities of note less than two years
Stock- common or preferred stock traded Coverage rate, amounts, and acceptability
on a U.S. exchange, broadly traded in to be determined by us in our sole
volumes that permit sales without unduly discretion and, in any event, not to exceed
depressing prices and free of legends and 75%
restrictions on sale or transfer
Other money market instruments acceptable 100%
to us in our sole discretion
"Value of Investments" shall mean the aggregate sum of the Value
of all Investments.
7. Payments.
--------
All payments of principal, interest, fees and other amounts
payable by you hereunder shall be made in immediately available and freely
transferable funds of U.S. Dollars by 10:00 a.m., New York time, on the date of
payment to us at our office at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
▇.▇.▇., free and clear of, and without deduction for, any taxes, withholdings or
other charges imposed on such payments (other than taxes, withholdings or
other charges imposed on or measured by our net income or net profits). Should
any such taxes, withholdings or other charges be imposed on any such payment
(other than taxes, withholdings or other charges imposed on or measured by our
net income or net profits), you will pay them and remit to us an amount equal to
what we would have received had such a tax, withholding or other charge not been
imposed, together with receipts evidencing payment of same.
80
8. Conditions Precedent.
--------------------
Our obligation to continue the Existing Letter of Credit or issue
any other Letter of Credit and to extend credit to you hereunder is subject to
our receipt in form satisfactory to us of (a) a certified copy of resolutions of
your board of directors authorizing your execution, delivery and performance of
this Agreement, the Revolving Note and the Security Agreement (and the documents
hereinafter referred to); (b) a certified copy of your charter and by-laws,
together with a secretary's or assistant secretary's certificate certifying as
to the authority of each person executing any of the documents referred to
herein, together with specimen signatures of each such person, (c) payment of
all Letter of Credit fees referred to in paragraph 2; (d) an executed copy of
the Security Agreement and the Revolving Note, together with the Collateral;
(e) such other documents and approvals, or certified copies thereof, and
opinions as we may from time to time reasonably request.
9. Representations and Warranties.
------------------------------
You each hereby represent and warrant that:
(a) You are duly incorporated, validly existing and in
good standing under the laws of the state of your incorporation.
(b) The execution, delivery and performance by you of
this Agreement are within your corporate powers, have been duly authorized by
all necessary corporate action, have received all necessary governmental
approvals and do not contravene (i) your charter or by-laws, or (ii) any law,
regulation or contractual restriction binding on or affecting you which may
have a material adverse affect on your financial condition, operations or
affairs.
(c) This Agreement is your legal, valid and binding
obligation enforceable against you in accordance with its terms.
(d) There is no pending or, to the best of your
knowledge, threatened action or proceeding affecting you before any court,
governmental agency or arbitrator which may materially adversely affect your
financial condition, operations or affairs.
(e) There has been no material adverse change in your
financial condition, operations or affairs as reflected in your most recent
audited consolidated financial statements, copies of which have been furnished
to us.
(f) You wholly-own the Collateral pledged to us free and
clear of all liens and encumbrances whatsoever. No further action, including
any filing or recording of any security agreement or financing statement is
necessary in order to establish and perfect our prior security interest in or
first lien on the Collateral.
81
(g) You have filed all tax returns which you are required
to file, have paid all taxes and assessments due and payable and no taxing
authority has asserted any claim for unpaid taxes or assessments against you
except those claims which are being contested in accordance with paragraph 10(g)
below.
The representations and warranties contained herein shall be true
and correct as of the date of each extension of the Expiry Date of a Letter of
Credit.
10. Covenants.
---------
So long as this Agreement is in effect and until all your
obligations hereunder shall have been paid in full, with accrued interest, you
each covenant and agree that:
(a) Financial Statements; No Default Certificate. You
shall furnish us, (i) within 100 days after the close of each fiscal year, with
your audited financial statements, prepared and certified by your independent
certified public accountants without "going concern" or like qualification as of
the end of such period, including a balance sheet and related statements of
earnings, shareholder's equity and changes in financial position for such fiscal
year, in each case setting forth in comparative form the figures for the
previous year, (ii) within 50 days after the close of each of the first three
quarters of your fiscal year, similar financial statements to those referred to
in (i) above, unaudited but prepared in accordance with generally accepted
accounting principles consistently applied and certified as true and correct by
your Treasurer or chief financial officer; (iii) within 100 days after the close
of each fiscal year and 50 days after the close of each fiscal quarter a
certificate signed by your chief financial officer to the effect that no default
has occurred and is continuing, or, if a default shall have occurred or is
continuing, specifying each such default in reasonable detail, the nature and
status thereof and the actions taken or proposed to be taken by you with respect
to such default; and (iv) such other financial or other information as we may
from time to time reasonably request.
(b) Notice. You shall promptly give notice in writing to
us of (i) the occurrence of a default hereunder or under the Revolving Note or
the occurrence of any event which according to your judgment with notice or the
passage of time or both would result in the occurrence of a default hereunder,
(ii) any material adverse condition affecting you or your operations and (iii)
any action or event known to you which may materially and adversely affect your
performance of this Agreement.
(c) Regulations. You shall observe and comply in all
material respects with all statutes, rules, regulations, guidelines or other
requirements having the force of law that now or at any time hereafter may be
applicable to you, the noncompliance with which could materially adversely
affect your business, operations or financial condition.
82
(d) Negative Pledge. Except for the security interest
granted in our favor, you shall not create, incur, assume or suffer to exist any
mortgage, deed of trust, pledge, lien, security interest or other charge or
encumbrance of any kind on any of the Collateral, whether now owned or hereafter
acquired.
(e) Taxes. You shall duly file all tax returns with
respect to you and your property which are required to be filed and duly pay all
taxes shown thereon to be due and payable, unless such taxes are being contested
in accordance with clause (g) below.
(f) Corporate Existence. You shall cause to be done all
things necessary to preserve and keep in full force and effect your corporate
existence, rights and franchises so as to maintain your business as in existence
on the date hereof; at all times maintain, preserve and protect in all material
respects all trade names, trademarks, copyrights, patents, permits, service
marks and licenses, or rights thereto used in the conduct of your business;
preserve, in all material respects, property used or useful in the conduct of
your business and keep the same in good repair, working order and condition,
ordinary wear and tear expected, and from time to time make, or cause to be
made, all needful and proper repairs and improvements thereto so that the
business carried on in connection therewith may be properly conducted at all
times; and maintain insurance to such extent and against such risks as is
customary for companies similarly situated.
(g) Obligations. You shall pay all of your indebtedness
and obligations promptly and in accordance with normal terms and trade
practices; and pay and discharge or cause to be paid and discharged promptly all
taxes, assessments and governmental charges or levies imposed upon you or upon
your income and profits, or upon any of your property, real, personal or mixed,
or upon any part thereof, before the same becomes in default, as well as all
lawful claims for labor, materials and supplies or otherwise that, if unpaid,
might become a lien upon your properties or any part thereof; provided, however,
that you shall not be required to pay and discharge or cause to be paid and
discharged any such indebtedness, obligation, tax assessment, charge, levy or
claim so long as (i) the applicability or validity thereof is being contested in
good faith by appropriate corporate procedures, and (ii) you have set aside on
your books adequate reserves with respect to contests in excess of US$100,000.
(h) Books and Records. You shall keep proper books of
record and account in which full, true and correct entries in conformity with
generally accepted accounting principles and all requirements of law shall be
made of all dealings and transactions in relation to your business and
activities; and permit our authorized representatives to visit your offices
from time to time during normal business hours, to examine such books and
records and make a reasonable number of copies or extracts therefrom and to
discuss your affairs and accounts with your officers and accountants.
(i) Tangible Net Worth. You shall at all times maintain a
83
tangible net worth of not less than US$12,000,000. For purposes of this
covenant, guarantees not shown on the financial statements delivered pursuant to
subparagraph (a) above shall be excluded from the calculation of tangible net
worth.
(j) Acquisition; Merger. You shall not consolidate or
merge into any other entity or acquire through the purchase of assets or stock
any business entity with an aggregate value in excess of US$5,000,000 without
our prior written consent, which consent shall not be unreasonably withheld.
(k) Further Acts. From time to time you shall execute
and deliver to us all such further documents and instruments and do all such
other acts and things as may be reasonably required in our opinion to enable us
to exercise and enforce our rights hereunder and under the other documents
referred to herein.
11. Miscellaneous.
-------------
(a) Amendments, Waivers, Etc. No amendment or waiver of
any provision of this Agreement nor consent to any departure by you therefrom,
shall in any event be effective unless the same shall be in writing and signed
by us and then such waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given. No failure on our part
to exercise, and no delay in exercising, any right, remedy or power hereunder
shall operate as a waiver thereof, nor shall any single or partial exercise by
us of any right, remedy or power hereunder preclude any other or future exercise
of any other right, remedy or power. You further agree that our rights,
remedies and powers hereunder shall continue unimpaired and that you shall
remain obligated in accordance with the terms hereof notwithstanding the partial
exercise by us of any right, remedy or power. Each and every right, remedy and
power hereby granted to us or allowed us by law or other agreement shall be
cumulative and not exclusive and may be exercised by us from time to time.
(b) Notices, Etc. Notices and other communications
provided for hereunder shall be in writing (including telex or telegraphic
communications) and mailed, telexed, telegraphed or delivered to you at your
address as shown on the first page hereof; and, if to us, at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Middle Market Corporate Finance; or as to
each of us at such other address as shall be designated by such party in a
written notice to the other party.
(c) Accounting Terms. All accounting terms not
specifically defined herein shall be construed in accordance with generally
accepted accounting principles consistent with those applied in the preparation
of the financial statements referred to in paragraph 10(a) and all financial
data submitted pursuant to this Agreement shall be prepared in accordance with
such principles.
84
(d) Costs and Expenses. You agree to pay all of our
reasonable expenses (including, but not limited to, reasonable legal fees and
disbursements) of every kind incidental to the enforcement of this Agreement or
the collection of any sums due to us hereunder. You hereby indemnify us and
hold us harmless from and against any and all claims, damages, losses,
liabilities, reasonable costs or expenses whatsoever which we may incur (or
which may be claimed against us by any person or entity whatsoever) by reason of
or in connection with the execution and delivery or transfer of, or payment or
failure to pay under, the Letter of Credit; provided that you shall not be
required to indemnify us for any claims, damages, losses, liabilities, costs or
expenses to the extent, but only to the extent, caused by our willful
misconduct or negligence in determining whether a sight draft or certificate
presented under a Letter of Credit complied with the terms of such Letter of
Credit. Nothing in this paragraph is intended to limit your reimbursement
obligation contained in this Agreement.
(e) Governing Law. This Agreement shall be governed by,
and construed in accordance with, the laws of the State of New York. Except as
otherwise provided in the Letter of Credit, such Letter of Credit shall be
subject to the Uniform Customs and Practice for Documentary Credits (1993
Revision), International Chamber of Commerce Publication No. 500, and any
subsequent revisions thereof approved by a Congress of the International
Chamber of Commerce and adhered to by us. The provisions herein are
supplemental to, and not in substitution of, said Uniform Customs and Practice.
(f) Consent to Jurisdiction. You represent that you have
no immunity with respect to any action or proceeding brought in connection with
this Agreement, and agree that any legal or equitable action or proceeding with
respect to this Agreement or the enforcement thereof may be brought in any
Federal or State court of competent jurisdiction located in the City of New York
and, by execution and delivery of this Agreement, you accept for yourself
and your property, generally and unconditionally, the jurisdiction of the
aforesaid courts and any related appellate court, irrevocably agree to be bound
by any judgment rendered thereby in connection with this Agreement, and
irrevocably waive any objection you may now or hereafter have as to the venue of
any such action or proceeding brought in such a court or that such court
is an inconvenient forum. You consent to the service of process out of any of
the aforementioned courts in any such action or proceeding by mailing of copies
thereof by registered mail, postage prepaid, such service to become effective
three business days after such mailing. Nothing herein shall affect our right
to serve process in any other manner prescribed by law or the right to bring
legal or equitable actions or proceedings in other competent jurisdictions. Any
judicial proceeding by you against us involving, directly or indirectly, any
matter in any way arising out of, related to or connected with this Agreement
shall be brought only in a court located in the City of New York. YOU HEREBY
WAIVE TRIAL BY JURY IN ANY JUDICIAL PROCEEDING BROUGHT BY YOU OR US INVOLVING,
DIRECTLY OR INDIRECTLY, ANY MATTER IN ANY WAY ARISING OUT OF, RELATED TO, OR
CONNECTED WITH THIS AGREEMENT.
85
(g) Continuing Obligation. This Agreement shall
constitute your continuing obligation, shall survive the termination of a
Letter of Credit and shall (i) be binding on yourselves, your successors and
assigns and (ii) inure to the benefit of and be enforceable by ourselves and our
successors and assigns, provided that you may not assign all or any part of this
Agreement without our prior written consent.
(h) Responsibility. The beneficiary (or beneficiaries as
the case may be) of a Letter of Credit shall be deemed to be your agent and you
assume all risks for its acts or omissions. We do not assume any liability for
our failure to pay under a Letter of Credit if such failure is due to any
restriction in force at the time and place of presentment and you agree to
indemnify us and hold us harmless from any consequences that may arise
therefrom. Neither we nor our correspondents, if any, shall be responsible: for
the validity, sufficiency, or genuineness of documents, even if such documents
should in fact prove to be in any or all respects invalid, insufficient,
fraudulent or forged; for failure of any draft to bear any reference or adequate
reference to an applicable Letter of Credit, or failure of any person to note
the amount of any draft on such Letter of Credit or to surrender or take up such
Letter of Credit; each of which provisions, if contained in such Letter of
Credit itself, it is agreed may be waived by us, provided, however, that with
respect to each of the above, we have acted in good faith and without gross
negligence or willful misconduct. We and our correspondents, if any, may
receive, accept or pay as complying with the terms of a Letter of Credit, any
drafts or other documents, otherwise in order, which may be signed by, or issued
to, the administrator or executor of, or the trustee in bankruptcy of, or the
receiver for any of the property of, or any other person or entity acting as the
representative or in the place of, the party in whose name such Letter of Credit
provides drafts or other documents should be drawn or issued. Furthermore,
neither we nor our correspondents, if any, shall be responsible for errors,
omissions, interruptions or delays in transmission or delivery of any messages,
by mail, cable, telegraph, facsimile transmission or otherwise; nor shall we be
responsible for any error, neglect, or default of any of our correspondents, if
any; and none of the above shall affect, impair, or prevent the vesting of any
of your rights or powers hereunder. In furtherance and not in limitation of the
specific provisions hereinbefore set forth, you agree that any action taken or
not taken by us in good faith, or by any correspondent of ours, if any, in good
faith, under or in connection with a Letter of Credit or the drafts or documents
pertaining thereto, shall be binding on you and shall not put us or such
correspondents under any resulting liability to you.
12. Termination; Acceleration.
--------------------------
(a) This Agreement shall remain effective, and your
obligations hereunder shall continue, until the termination or expiration, as
applicable, of all Letters of Credit issued hereunder and the payment in full of
all amounts due hereunder and under the Revolving Note.
(b) If (i) you fail to pay when due any principal or
interest or any other amount payable hereunder; or (ii) you fail to perform or
86
observe any term, covenant or agreement contained in this Agreement, the
Revolving Note or the Security Agreement or in any instrument, document or
agreement delivered pursuant hereto or in connection herewith; or (iii) any
representation or warranty made or deemed to be made by you hereunder or in any
application, financial statement, instrument, document or agreement delivered
pursuant hereto or in connection herewith shall prove to have been incorrect in
any material respect when made or shall prove to be incorrect in any material
respect as of the date made or deemed to be made; or (iv) you shall, with
respect to any obligation (other than your obligations under this Agreement or
the Revolving Note) in excess of US$1,500,000, (x) fail to pay any of your
indebtedness for borrowed money or any interest or premium thereon, when due
(whether by scheduled maturity, required prepayment, acceleration, demand or
otherwise) and such failure shall continue after the applicable grace period,
if any, or (y) fail to perform or observe any term, covenant or condition on
your part to be performed or observed under any agreement or instrument
relating to any such indebtedness for borrowed money, when required to be
performed or observed, and such failure shall continue after the applicable
grace period, if any, specified in such agreement or instrument, if the effect
of such failure to perform or observe is to accelerate the maturity of such
indebtedness for borrowed money, or any such indebtedness for borrowed money
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 (v) an Event of Default under (and as defined in) the Revolving Note
shall have occurred and be continuing, then, our agreement to issue Letters of
Credit shall terminate and in any such event, we may, by notice of default given
to you, take any one or more of the following actions: (1) declare all of your
outstanding obligations to us hereunder (including, but not limited to, all
contingent and unmatured obligations hereunder), together with accrued interest
to the date of payment, to be immediately due and payable without presentment,
demand, protest or other notice of any kind, all of which you hereby waive,
and/or (2) require that you provide us, within five business days of the date
you receive notice from us of such default, with cash collateral in
an amount equal to the sum of (A) the maximum aggregate amount of all drafts
that might thereafter be drawn under all Letters of Credit, plus (B) all fees
thereafter payable in respect of all Letters of Credit.
(c) In the event of the commencement by you of a
voluntary case under any applicable bankruptcy, insolvency or other similar law
now or hereafter in effect, or the consent by you to the entry of an order for
relief in an involuntary case under any such law or to the appointment of or the
taking possession by a receiver, liquidator, assignee, trustee, custodian,
sequestrator (or other similar official) of you or of any substantial part of
your property, or the making by you of any general assignment for the benefit of
creditors, or your failure generally to pay your debts as such debts become due,
or the taking of corporate action by you in furtherance of any of the foregoing,
then, and in any such event, our agreement to issue Letters of Credit shall
terminate and all of your outstanding obligations to us hereunder (including,
but not limited to, all contingent and unmatured obligations hereunder),
together with accrued interest to the date of payment, shall thereupon
immediately become due and payable without presentment, demand, protest or other
notice of any kind, all of which you hereby waive; and
87
we may require that you provide us with cash collateral in an amount equal to
the sum of (A) the maximum aggregate amount of all drafts that might thereafter
be drawn under all Letters of Credit plus (B) all fees thereafter payable in
respect of all Letters of Credit.
13. Joint and Several Obligations.
-----------------------------
For all purposes of this Agreement, the provisions hereof shall,
unless specifically stated to the contrary, apply to each or any of you and you
shall be jointly and severally liable for all of your obligations hereunder,
under the Revolving Note, the Security Agreement or any other agreement or
document relating hereto or thereto. It is understood and agreed that the
obligations of each of you under this Agreement, the Revolving Note, the
Security Agreement or any other agreement or document relating hereto or thereto
shall not be affected by any release or other indulgence granted by us to any
one of you with respect to the obligations of any other party hereto.
If the foregoing agreement is acceptable to you, please sign and
return to us the enclosed copy of this letter and the other documents referred
to above.
Very truly yours,
IBJ ▇▇▇▇▇▇▇▇ BANK & TRUST COMPANY
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇
---------------------------
▇▇▇▇ ▇▇▇▇▇▇
Managing Director
Agreed to and accepted:
▇▇▇▇▇▇ FINANCIAL CORPORATION
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title:
BF ENTERPRISES, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title:
88
PLEDGE AND SECURITY AGREEMENT
(Possessory Lien)
PLEDGE AND SECURITY AGREEMENT (this "Security Agreement")
dated July 31, 1998 among BF ENTERPRISES and ▇▇▇▇▇▇ FINANCIAL CORPORATION
(collectively, the "Pledgors") and IBJ ▇▇▇▇▇▇▇▇ BANK & TRUST COMPANY
(the "Bank").
WHEREAS, the Pledgors are parties to the Loan and Security
Agreement dated April 30, 1994 (the "Existing Security Agreement") pursuant to
which, among other things, the Pledgors party thereto granted the Bank a lien on
and security interest in the Account (as defined below) maintained with the
Bank, and all property on deposit therein as security for the payment and
performance of the Pledgors' obligations under the Letter of Credit
Reimbursement Agreement dated April 30, 1994 (the "Existing Reimbursement
Agreement") pursuant to which, among other things, the Bank agreed to issue
letters of credit for the joint and several account of the Pledgors; and
WHEREAS, concurrently with the execution and delivery of this
Security Agreement, (i) the Pledgors and the Bank are entering into an Amended
and Restated Letter of Credit and Reimbursement Agreement dated the date hereof
which amends and restates the Existing Reimbursement Agreement (as the same may
be amended, restated, supplemented or otherwise modified from time to time, the
"Reimbursement Agreement") and (ii) the Pledgors are executing a Promissory
Note, dated the date hereof, in favor of the Bank in the original principal
amount of $3,700,000 pursuant to which, subject to the terms and conditions
therein, the Bank has agreed to extend credit to the Pledgors (as the same may
be amended, restated, supplemented or otherwise modified from time to time,
together with any substitution therefor, the "Note"); and
WHEREAS, it is a condition precedent to extensions of credit
under the Note and the issuance of letters of credit under the Reimbursement
Agreement that the Pledgors amend and restate the Existing Security Agreement;
NOW THEREFORE, in consideration of the foregoing premises, and
for other good and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, the parties hereto hereby agree to amend and restate the
Existing Security Agreement as follows:
1. Security Interest. Subject to the terms and conditions
hereinafter set forth and as security for the prompt payment and performance of
the Pledgors' obligations to the Bank under the Note and the Reimbursement
Agreement, each Pledgor hereby ratifies and confirms the security interests and
liens granted pursuant to the Existing Security Agreement and pledges, assigns,
hypothecates, transfers, sets over, grants a security interest in and delivers
to the Bank all of such Pledgor's rights, title and interest in and to all cash,
time deposits, certificates of deposit, securities, financial assets, securities
entitlements, financial instruments, investment property and other property, and
any permitted substitutions therefor or additions thereto (the "Collateral") on
89
deposit with the Bank in Custody Account No. 70-5032-01-9 (the "Account")
and/or any other account maintained by any of the Pledgors with the Bank,
together with any and all proceeds thereof.
Each Pledgor covenants and agrees to maintain Collateral in
the Account acceptable to the Bank in the amounts and subject to the margins set
forth in the Reimbursement Agreement and the Note. The Account and all
Collateral on deposit therein shall be under the sole dominion and control of
the Bank, provided that the Pledgors shall be entitled to make withdrawals from
the Account, if (i) the Bank shall have consented to such withdrawal, such
consent not to be unreasonably withheld, (ii) after giving effect to such
withdrawal, the Value of Investments (as such term is defined in the
Reimbursement Agreement) equal or exceeds the Minimum Coverage Amount (as
defined in the Reimbursement Agreement) and (iii) immediately prior to and after
giving effect to such withdrawal, no default shall have occurred and be
continuing under the Note or the Reimbursement Agreement.
2. Representations and Warranties. Each Pledgor
represents and warrants that (a) such Pledgor has the power and authority to
enter into this Security Agreement and to grant a security interest in the
Collateral and the Account pursuant to the provisions hereof and (b) such
Pledgor or one of the other Pledgors is the sole beneficial owner of the
Collateral and the Account and the assets contained therein, free and clear of
all security interests, liens and other encumbrances, and the transferability
of the Collateral is not restricted in any way.
3. Default. Upon the occurrence of any event described in
Paragraphs 12(b) or (c) of the Reimbursement Agreement or an Event of Default
under (and as defined in) the Note, the Bank may, in addition to any other
rights and remedies it may have with respect to the Account and the Collateral,
(a) immediately and without further demand declare all obligations under the
Reimbursement Agreement and the Note, together with accrued interest thereon and
all fees payable thereunder, immediately due and payable, (b) cause the
Collateral to be registered in the Bank's name or in the name of the Bank's
nominee, (c) vote the Collateral so transferred, and receive income and make or
receive collections thereon and hold said income and collections as Collateral
or apply said income and collections to any of the obligations owing hereunder
or under the Note or the Reimbursement Agreement, and (d) exercise any and all
of the rights and remedies of a secured party upon default under the Uniform
Commercial Code and otherwise including, without limitation, the right without
further demand or notice of any kind, all of which are hereby expressly waived
by the Pledgors to the extent permitted by applicable law, to sell and deliver
the Collateral, or any of it, at any broker's board, or at public or private
sale, in whole at any time or in part from time to time, within New York City or
elsewhere, for cash, upon credit or for future delivery and at such price or
prices as it shall deem satisfactory.
The Bank may be a purchaser at any sale and may apply the
amounts due and unpaid under the Note and the Reimbursement Agreement to the
payment of the purchase price for the Collateral. In case of any sale by the
90
Bank, any of the Collateral sold may be retained by the Bank until the selling
price is paid by the purchaser, but the Bank shall incur no liability in
case of the failure of the purchaser to take up and pay for the Collateral so
sold. In case of any such failure, such Collateral so sold may be again
similarly sold. All proceeds from any such sale or sales shall be held and
applied by the Bank against the outstanding obligations of Borrower to the Bank.
4. Waivers by Pledgors. Each Pledgor hereby waives (a)
all rights, if any, of marshalling the Account or any other property, and (b)
all protests and notices of dishonor and all other notices except those
specifically provided for herein.
5. Reimbursement of Expenses. Each Pledgor hereby agrees,
jointly and severally, to reimburse the Bank on demand for all reasonable
expenses incurred by it in connection with the enforcement of this Security
Agreement including reasonable attorneys fees. Each Pledgor further agrees,
jointly and severally, to indemnify the Bank and to hold it harmless from and
against any all liability incurred by it hereunder or in connection herewith,
unless such liability shall be due to willful misconduct or gross negligence on
the part of the Bank.
6. Further Pledge, Etc. Except for withdrawals permitted
by Section 1 hereof, no Pledgor shall sell, withdraw, assign, transfer,
mortgage, pledge or otherwise hypothecate or encumber the Account or the
Collateral to anyone other than the Bank, and none of the Pledgors shall permit
a financing statement describing the Collateral or the Account to be filed in
any jurisdiction.
7. Governing Law. This Security Agreement shall be
governed by, and construed in accordance with, the laws of the State of New
York, U.S.A.
8. Consent to Jurisdiction. Each Pledgor represents that
it has no immunity with respect to any action or proceeding brought in
connection with this Security Agreement, and agrees that any legal or equitable
action or proceeding with respect to this Security Agreement or the enforcement
thereof may be brought in any Federal or State court of competent jurisdiction
located in the City of New York and, by execution and delivery of this
Agreement, such Pledgor accepts for itself and its property pledged hereunder,
generally and unconditionally, the jurisdiction of the aforesaid courts and any
related appellate court, irrevocably agrees to be bound by any judgment rendered
thereby in connection with this Agreement, and irrevocably waives any objection
it may now or hereafter as to the venue of any such action or proceeding
brought in such a court or that such court is an inconvenient forum. Each
Pledgor consents to the service of process out of any of the aforementioned
courts in any such action or proceeding by hand delivery or by mailing of copies
thereof by certified mail, postage prepaid, such service to become effective
upon receipt if delivered by hand, otherwise five business days after such
mailing. Nothing herein shall affect the Bank's right to serve process in any
other manner prescribed by law or the right to bring legal or equitable actions
or proceedings in other competent jurisdictions. Any judicial proceeding by any
Pledgor against the Bank involving, directly or indirectly, any matter in any
91
way arising out of, related to or connected with this Agreement shall be brought
only in a court located in the City of New York. EACH PLEDGOR HEREBY WAIVES
TRIAL BY JURY IN ANY JUDICIAL PROCEEDING BROUGHT BY THE PLEDGOR OR THE BANK
INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER IN ANY WAY ARISING OUT OF,
RELATED, OR CONNECTED WITH THIS AGREEMENT.
[Signature page follows.]
92
IN WITNESS WHEREOF, each of the parties hereto have executed this
Agreement as of the date and year first written above.
Pledgors:
--------
BF ENTERPRISES, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Chairman
▇▇▇▇▇▇ FINANCIAL CORPORATION
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Chairman
Bank:
----
IBJ ▇▇▇▇▇▇▇▇ BANK & TRUST COMPANY
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇
-----------------------------
▇▇▇▇ ▇▇▇▇▇▇
Managing Director
93
IBJ ▇▇▇▇▇▇▇▇ CORPORATE-REVOLVER
Bank & Trust Company
PROMISSORY NOTE
US $3,700,000 New York, New York
July 31, 1998
FOR VALUE RECEIVED, the undersigned hereby promises to pay to the
order of IBJ ▇▇▇▇▇▇▇▇ BANK & TRUST COMPANY (the "Bank"), the principal sum of
THREE MILLION SEVEN HUNDRED THOUSAND U.S. Dollars (US$3,700,000), or such lesser
amount as may be outstanding hereunder from time to time, on the Maturity Date
(defined below), together with accrued and unpaid interest, fees and expenses.
The amount due and owing from time to time by the undersigned and the interest
rate applicable thereto shall be evidenced by the Bank's records which shall be
conclusive evidence thereof.
1. Maturity Date. For purposes of this Note, "Maturity Date" shall mean the
earlier of (i) the date of any default hereunder and (ii) the date which is 364
days from the date of this Note.
2. Maximum Amount of Loans. Notwithstanding anything to the contrary contained
in this Note, including, without limitation, the stated original principal
amount, the Bank shall not be required to make any loan or advance to the
undersigned (each, a "Loan" and, collectively, "Loans") hereunder if, after
giving effect to the making of such Loan, the sum of (i) the aggregate
principal amount of Loans outstanding under this Note, plus (ii) the aggregate
face amount of all outstanding Letters of Credit issued under (and as defined
in) the Amended and Restated Letter of Credit Facility Agreement between the
Bank and the undersigned, dated as of the date hereof (as amended, supplemented
or otherwise modified from time to time, the "Reimbursement Agreement") plus
(iii) the aggregate amount of all unpaid and outstanding reimbursement
obligations and fees under the Reimbursement Agreement in respect of such
Letters of Credit (the "Minimum Coverage Amount"), exceeds the lesser of
(i) US$3,700,000 and (ii) the Value of Investments (as such term is defined in
the Reimbursement Agreement). The undersigned further acknowledges and agrees
that, notwithstanding anything to the contrary contained in this Note or the
Reimbursement Agreement, the face amount of all outstanding Letters of Credit
issued under (and as defined in) the Reimbursement Agreement shall not exceed,
in the aggregate, US$1,200,000.
3. Interest. The undersigned promises to pay interest on the unpaid principal
balance hereof from time to time outstanding from the date hereof until such
amount is due and payable at an interest rate per annum (computed on the basis
of a year of 360 days for the actual number of days elapsed) for each Interest
Period (as hereinafter defined) equal to 1.50% in excess of the rate of interest
at which U.S. Dollar deposits are offered to the Cayman Islands Branch of the
Bank in the London Interbank Eurodollar Market two business days (as hereafter
defined) prior to the commencement of such Interest Period for a period equal to
such Interest Period, plus the cost, as determined in good faith by the Bank, of
complying with any reserve, special deposit, or similar requirement (including,
but not limited to reserve requirements) imposed or deemed applicable by any
U.S. governmental authority against any assets held by the Bank or deposits or
accounts
94
with the Bank or credit extended by the Bank ("LIBOR"). "Interest Period" shall
mean a period of one month, provided that (i) any Interest Period which would
end on a date beyond the Maturity Date shall end on the Maturity Date, and
(ii) any Interest Period which would otherwise end on a non-business day shall
end on the next succeeding business day (defined below), unless such day falls
in a new calendar month, in which event such Interest Period shall end on the
next preceding business day. The availability of Loans using the LIBOR Rate
shall be subject in each instance to the availability of U.S. Dollar deposits to
the Cayman Islands Branch, such availability to be determined in the Bank's sole
discretion. All references to "business day" shall mean a day on which the Bank
is open for business at its New York City headquarters and, in the case of
determining LIBOR, "business day" shall also mean a day in which dealings in
U.S. dollars are carried on in the London Interbank Eurodollar Market.
The undersigned shall pay the Bank accrued interest on each Loan from
time to time outstanding hereunder on the last day of each Interest Period and
on the Maturity Date. The undersigned promises to pay the Bank interest on any
overdue principal and any overdue interest from the due date thereof (whether by
acceleration or otherwise) at a floating rate per annum equal at all times to 4%
over the greater of the interest rate then in effect and the Base Rate (as
defined in the Reimbursement Agreement) (the "Default Rate"). Interest shall be
charged by offset against the Account (as defined in paragraph 14) which
undersigned maintains with the Bank.
Notwithstanding anything to the contrary above, no amount outstanding
hereunder shall bear interest in excess of the maximum rate of interest
permitted by law.
4. Increased Costs; Illegality. If, after the date hereof, due to any
increase in reserve requirements or other charges or costs imposed by any
governmental authority (whether or not having the force of law), the Bank shall
determine in good faith that there has been a direct increase in the costs to
the Bank of making, funding or maintaining any Loan, or a reduction in the
yield received by the Bank thereon, then the undersigned shall from time to
time, upon the Bank's demand to such effect, pay to the Bank additional amounts
sufficient to compensate the Bank for such increased costs or reduction in
yield to the Bank. A detailed statement as to the amount of such increased
costs or reduction in yield, submitted to the undersigned by the Bank shall be
conclusive and binding for all purposes. Notwithstanding anything to the
contrary herein contained, if any law, regulation or treaty or any change
therein or in the interpretation or application thereof by any authority or
agency charged with the administration thereof or by any court shall make it
unlawful for the Bank to make or fund or maintain any Loan or to give effect to
any of its obligations as contemplated hereby, then, on written notice thereof
and demand therefor by the Bank to the undersigned, (i) the obligation of the
Bank to make such Loan to the undersigned shall terminate or (ii) if any such
Loan shall be outstanding, the undersigned shall, on the last day of the
applicable Interest Period for each such Loan or, if earlier, the latest date
allowed by applicable law, prepay such Loan together with all accrued interest
thereon and all fees and other amounts payable to the Bank hereunder.
5. Representations and Warranties. The undersigned represents and warrants
on the date hereof that: (i) it is duly organized, validly existing and in good
95
standing under the laws of its jurisdiction of incorporation; (ii) the
execution, delivery and performance by the undersigned of this Note are within
the powers of the undersigned, have been duly authorized by all necessary
action, have received all necessary governmental approvals, and do not
contravene its organizational documents, or any law, regulation or contractual
restriction binding on or affecting the undersigned; (iii) this Note is the
legal, valid and binding obligation of the undersigned enforceable against the
undersigned in accordance with its terms; (iv) there is no pending or threatened
action or proceeding affecting the undersigned before any court, governmental
agency or arbitrator which may materially adversely affect the financial
condition, operations or affairs of the undersigned; (v) there has been no
material adverse change in the financial condition, operations or affairs of the
undersigned as reflected in the most recent audited financial statements of the
undersigned, copies of which have been furnished to the Bank or any material
adverse change in the undersigned's ability to perform its obligations
hereunder; (vi) except as being contested by the undersigned in good faith, all
tax returns with respect to the undersigned and the undersigned's property which
are required to be filed have been duly filed, all taxes and assessments shown
thereon to be due and payable by the undersigned have been paid, and no taxing
authority has asserted any claim for unpaid taxes or assessments against the
undersigned; and (vii) the undersigned shall apply the proceeds of the Loan
evidenced by this Note toward general business requirements or as otherwise
permitted by the Bank.
6. Covenants. The undersigned covenants that until all obligations of the
undersigned hereunder shall have been paid in full, with accrued interest, the
undersigned shall: (i) furnish the Bank, (a) within 100 days after the close of
each fiscal year, with audited consolidated and consolidating financial
statements of the undersigned prepared and certified by independent certified
public accountants acceptable to the Bank as of the end of such period,
including a balance sheet and related statements of earnings, shareholders'
equity (if applicable) and changes in financial position for such fiscal year,
in each case setting forth in comparative form the figures for the previous year
prepared in accordance with generally accepted accounting principles
consistently applied during the period involved without a "going concern" or
like qualification or exception or any qualification arising out of the scope of
the audit; (b) within 50 days after the close of each of the first three
quarters of each fiscal year, similar financial statements to those referred to
in (a) above, unaudited but prepared in accordance with generally accepted
accounting principles consistently applied and certified by the chief financial
officer of the undersigned; and (c) such other financial or other information as
the Bank may from time to time request; (ii) duly file all tax returns with
respect to the undersigned and its property which are required to be filed and
duly pay all taxes shown thereon to be due and payable by the undersigned;
(iii) not use the proceeds of any Loan evidenced by this Note for the purpose of
purchasing or carrying "margin stock" as defined in Regulation U of the Board of
Governors of the Federal Reserve System; (iv) comply, at all times in all
material respects with to the Employee Retirement Income Security Act of 1974,
as amended, including any regulations promulgated thereunder and carry all
insurance available through the Pension Benefits Guaranty Corporation ("PBGC")
or any private insurance companies covering its obligations to the PBGC;
and (v) notify the Bank promptly of the occurrence of an Event of Default (as
defined in paragraph 4) or an event which with notice or lapse of time or both
would constitute an Event of Default. So long as the Reimbursement Agreement
96
remains in effect, compliance by the undersigned with its obligations under the
Reimbursement Agreement shall be deemed to satisfy the obligations of the
undersigned in this paragraph, but only to the extent that such obligations are
duplicative.
7. Events of Default; Acceleration. If any of the following events ("Events
of Default") shall occur: (i) any amount payable hereunder shall not be paid
when due; (ii) any representation, warranty or statement made or deemed made by
the undersigned in this Note, in any collateral documents executed
contemporaneously herewith, or if subsequent hereto, contemplated hereby
or which is contained in any certificate, document, financial or other
statement, furnished at any time in connection with this Note shall prove to be
incorrect or untrue in any material respect when made or deemed made; (iii)
failure by the undersigned to perform or observe any covenant or agreement
contained in this Note, the Reimbursement Agreement or the Security Agreement
(as defined below); (iv) any event described in Paragraphs 12(b) or (c) of the
Reimbursement Agreement shall have occurred which event entitles the Bank to
terminate its obligation to issue Letters of Credit under (and as defined in)
the Reimbursement Agreement (whether or not the Reimbursement Agreement is then
in effect and whether or not the Bank has actually terminated its obligation to
issue Letters of Credit thereunder); (v) the undersigned shall be dissolved or
shall become insolvent or admit in writing its inability to pay its debts or
make a general assignment for the benefit of creditors, or if any proceeding
shall be instituted by or against the undersigned seeking a garnishment, an
adjudication of bankruptcy or insolvency, or seeking reorganization,
arrangement, adjustment or composition of the debts of such person or entity
under any law relating to bankruptcy, insolvency, reorganization or relief of
debtors, or seeking appointment of or the taking possession by a receiver,
trustee, liquidator, assignee, custodian, sequestrator or other similar official
for such person or entity or the property thereof, or the undersigned shall take
any action to authorize any of the foregoing; (vi) any governmental authority or
any court at the instance thereof shall take possession of any substantial part
of the property of, or assume control over the affairs or operations of, the
undersigned, or the transaction of the usual business of the undersigned shall
be suspended; or (vii) the undersigned shall grant or suffer to exist any
security interest, lien, charge or other encumbrance on the Collateral (as
defined in paragraph 14); then, and in each such event (unless the Bank shall
otherwise elect in writing), any obligation on the Bank's part to extend or
maintain credit to the undersigned hereunder shall immediately cease and this
Note and all obligations of the undersigned hereunder shall forthwith be due and
payable without presentment, demand, protest or other notices of any kind, all
of which are hereby waived by the undersigned. Notwithstanding any other rights
the Bank may have under any applicable law and hereunder, upon the occurrence of
an Event of Default, the Bank shall have the right to apply (including by
way of set off) any of the property of the undersigned now or hereafter in the
possession or control of the Bank (including account balances) to a reduction of
the obligations of the undersigned under this Note. The undersigned hereby
pledges all such property to the Bank to secure this Note.
8. Payments and Prepayments; Reborrowings Prohibited. All payments to be made
hereunder shall be made not later than 11:00 a.m. New York City time on the date
97
on which such payment shall become due in immediately available and freely
transferable funds of U.S. Dollars for the account of the Bank at ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, free and clear, and without deduction for, any
and all present and future taxes, withholdings and other charges (excluding
taxes, withholdings or other charges imposed on or measured by the Bank's net
income or net profits) imposed on such payments (all such non-excluded taxes,
withholdings or other charges, collectively referred to as "Taxes"). Should any
Taxes be imposed on such payments, or any documentary, stamp, excise or similar
type tax be imposed on this Note or on the execution, delivery or enforcement
hereof, the undersigned shall pay the same and remit payment to the Bank in an
amount equal to that which would have been payable had no Taxes or such other
impositions been imposed thereon, together with receipts evidencing payment of
such taxes.
If any date of payment is not a business day in New York City, payment
shall be made the next succeeding business day (except with respect to payments
of interest, which shall be subject to the definition of "Interest Period" set
forth in paragraph 3). All payments and prepayments will first be applied to
accrued interest and any remaining amount will then be applied to principal.
From and until the Maturity Date, amounts borrowed hereunder and repaid
may be reborrowed. An request for a borrowing hereunder shall be made at least
three business days prior to the date such Loan is to be made, and each
borrowing hereunder shall be in a minimum principal amount of US$100,000 or in
multiples of US$100,000 in excess thereof.
In the event that the Bank shall incur any loss or expense (including
any loss or expense incurred by reason of the liquidation or reemployment of
deposits or other funds acquired by the Bank to make any Loan hereunder) as a
result of any repayment or prepayment of a Loan on a date other than the
scheduled last day of an Interest Period or any Loan not being made on the
date such Loan was requested to be made, then, upon written notice to the
undersigned, the undersigned agree, within five business days of such notice,
to pay the Bank such amount as will (in the reasonable determination of the
Bank) reimburse the Bank for such loss or expense. Such written notice shall,
in the absence of manifest error, be conclusive and binding on the undersigned.
9. Fees and Expenses. The undersigned shall pay the Bank on demand all
reasonable expenses (including, but not limited to, reasonable legal fees and
disbursements) of any kind incidental to the enforcement of this Note or the
collection of any sums due to the Bank hereunder.
10. Successors and Assigns; Benefits of Note; Joint and Several Obligations.
This Note shall inure to the benefit of the Bank and its successors and assigns.
This Note and the provisions hereof are binding upon the assigns and successors
of the undersigned and they shall continue in force notwithstanding any change
in any partnership party hereto, whether such change occurs through death,
retirement or otherwise. The undersigned, if more than one, shall be jointly
and severally liable hereunder, and all provisions hereof shall apply to each or
any of the undersigned; provided that the obligations of each of the undersigned
shall not be affected by any release or other indulgence granted by the Bank to
any other of the undersigned with respect to its obligations hereunder.
98
11. Notices. Notices and other communications provided for hereunder shall be
in writing (including telex, electronic or telegraphic communications) and
mailed, telexed, sent, telegraphed or delivered to the undersigned at the
address as shown on the signature page hereof; and, if to the Bank, at ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Middle Market Corporate
Finance; or as to each party at such other address as shall be designated by
such party in a written notice to the other party.
12. Governing Law; Waiver of Immunities; Consent to Jurisdiction; Waiver of
Jury Trial. This Note shall be governed by and construed in accordance with the
laws of the State of New York. To the extent that the undersigned has or
hereafter may acquire any immunity from jurisdiction of any court or from any
legal process (whether through service or notice, attachment prior to judgment,
attachment in aid of execution, execution or otherwise) with respect to the
undersigned or its property, the undersigned hereby irrevocably waives such
immunity in respect of its obligations hereunder. The undersigned agrees that
any legal or equitable action or proceeding with respect to this Note or the
enforcement hereof may be brought in any Federal or State court of competent
jurisdiction located in the City of New York and, by execution and delivery of
this Note, the undersigned accepts for the undersigned and the property of the
undersigned, generally and unconditionally, the jurisdiction of the aforesaid
courts and any related appellate court, irrevocably agrees to be bound by any
judgment rendered thereby in connection with this Note, and irrevocably waives
any objection the undersigned may now or hereafter have as to the venue of any
such action or proceeding brought in such a court or that such court is an
inconvenient forum. The undersigned consents to the service of process out of
any of the aforementioned courts in any such action or proceeding by mailing of
copies thereof by registered air mail, postage prepaid, to the address(es) set
forth below, such service to become effective three business days after such
mailing. Nothing herein shall affect the Bank's right to serve process in any
other manner prescribed by law or the right to bring legal or equitable actions
or proceedings in other competent jurisdictions. Any judicial proceeding by the
undersigned against the Bank involving, directly or indirectly, any matter in
any way arising out of, related to or connected with this Note shall be brought
only in a court located in the borough of Manhattan.
THE UNDERSIGNED HEREBY WAIVES TRIAL BY JURY IN ANY JUDICIAL
PROCEEDING BROUGHT BY THE UNDERSIGNED OR THE BANK INVOLVING,
DIRECTLY OR INDIRECTLY, ANY MATTER IN ANY WAY ARISING OUT OF,
RELATED TO, OR CONNECTED WITH THIS NOTE.
13. Amendment; Waiver. No provision hereof shall be modified or limited
except by a written instrument expressly referring to this Note. No delay on
the part of the Bank in exercising any power or right hereunder shall operate as
a waiver thereof; nor shall any single or partial exercise of any power or right
hereunder preclude any other or further exercise thereof or the exercise of
any other power or right. The rights, remedies, and benefits granted herein are
cumulative and not exclusive of any rights, remedies or benefits which the Bank
may otherwise have. The undersigned hereby waives presentment, notice of
dishonor and protest of this Note.
99
14. Grant of Security Interest; Minimum Coverage Amount. In order to the
obligations of the undersigned under this Note and the Reimbursement Agreement,
the undersigned pledges and grant or has pledged and granted, as the case may
be, to the Bank us a security interest in and a general lien upon the property
(the "Collateral") on deposit in Account No. 70-5032-01-9 maintained with the
(the "Account"), all as more particularly described in the Pledge and
Security Agreement dated as of the date hereof, between each of you and us
(as amended, supplemented or otherwise modified from time to time, the
"Security Agreement").
The undersigned agree that at all times there shall be sufficient
Collateral in the Account so that the Value of Investments (as such term is
defined in the Reimbursement Agreement referred to in paragraph 1) in such
Account equals or exceeds the Minimum Coverage Amount (as defined in
paragraph 1).
If at any time and for any reason, the Minimum Coverage Amount exceeds
the Value of Investments, then upon the Bank's election and demand, the
undersigned shall, within 5 business days of written notice from the Bank, repay
or prepay, as the case may be, any Loans outstanding in the amount of such
excess or provide additional Investments with a Value equal to such excess. The
undersigned also agree that in the event that the undersigned fail to comply
with the foregoing provisions of this paragraph, the Bank shall have the right,
in addition to the right to require repayment of the Loan or additional
Collateral, to sell such of the Collateral as the Bank may reasonably select
and determine to be necessary to remedy such shortfall.
IN WITNESS WHEREOF, the undersigned has executed this Note as of the
date set forth above, retaining one copy for the undersigned's records.
▇▇▇▇▇▇ FINANCIAL CORPORATION BF ENTERPRISES, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------ -----------------------
Name: Name:
Title: Title:
Address for Notices: Address for Notices:
c/o BF Enterprises, Inc. ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ Attn: ▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Attn: ▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
100