THIRD AMENDED AND RESTATED
REVOLVING LOAN AGREEMENT
DATED AS OF DECEMBER 31, 1998
BY AND AMONG
ATLANTIC GULF COMMUNITIES CORPORATION,
THE FINANCIAL INSTITUTIONS LISTED ON THE SIGNATURE PAGES
HEREOF,
▇.▇. ▇▇▇▇▇▇▇▇ & CO., LLC
AS AGENT
AND
▇.▇. ▇▇▇▇▇▇▇▇ & CO., LLC
AS COLLATERAL AGENT
THIRD AMENDED AND RESTATED REVOLVING LOAN AGREEMENT
ATLANTIC GULF COMMUNITIES CORPORATION
TABLE OF CONTENTS
SECTION 1 DEFINITIONS........................................................2
1.1 Certain Defined Terms..............................................2
1.2 Other Definitional Provisions.....................................28
SECTION 2 AMOUNT AND TERMS OF COMMITMENTS..................................29
2.1 Revolving Loans..................................................29
2.2 Notes............................................................30
2.3 Procedure for Borrowing..........................................30
2.4 Use of Proceeds of Loans.........................................31
2.5 Mandatory Reductions of Commitments and Prepayments of
Loans............................................................31
2.6 Optional Prepayments.............................................33
2.7 Repayment at Maturity............................................33
2.8 Interest Rates and Payment Dates.................................34
2.9 Fees.............................................................35
2.10 Computation of Interest and Fees.................................35
2.11 Pro Rata Treatment and Payments..................................36
2.12 Requirements of Law..............................................37
2.13 Taxes............................................................38
2.14 Funding Losses...................................................39
2.15 Issuance of L/C Guarantees and Banks' Purchase of Participations
Therein..........................................................39
SECTION 3 COLLATERAL.......................................................44
3.1 Liens in Subsidiary Stock, Contract Receivables, Real Property
and Personal Property............................................44
3.2 Security Documents...............................................45
3.3 Subordinations and Releases of Mortgage Liens....................48
3.4 Guarantees.......................................................50
SECTION 4 REPRESENTATIONS AND WARRANTIES...................................50
4.1 Financial Condition..............................................50
4.2 No Material Adverse Change.......................................51
4.3 Corporate Existence; Compliance with Law.........................51
4.4 Corporate Power; Authorization; Enforceable Obligations..........52
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4.5 No Legal Bar.....................................................53
4.6 No Material Litigation...........................................53
4.7 No Default.......................................................53
4.8 Ownership of Property; Liens.....................................54
4.9 Intellectual Property............................................54
4.10 Taxes............................................................54
4.11 Federal Regulations..............................................55
4.12 ERISA............................................................55
4.13 Investment Company Act; Other Regulations........................56
4.14 Subsidiaries and Joint Ventures..................................56
4.15 Environmental Matters............................................56
4.16 Indebtedness.....................................................57
4.17 Contingent Obligations...........................................58
4.18 Restitution Program and Final Judgment...........................58
4.19 Certain Fees.....................................................58
4.20 Disclosure.......................................................58
4.21 Insurance........................................................59
4.22 Real Property Matters............................................59
4.23 Reorganization Proceedings.......................................59
4.24 Excluded Subsidiaries; Unrestricted Subsidiaries.................59
4.25 No Further Amounts Due Under Unsecured 1996 Notes................59
4.26 Bank Accounts....................................................60
4.27 [Intentionally Omitted]..........................................60
4.28 MPUD Subsidiary Groups...........................................60
4.29 SPUD Subsidiaries................................................60
4.30 DRI and Zoning Matters...........................................60
4.31 Bankruptcy Matters...............................................60
4.32 Series A Preferred Stock.........................................60
4.33 Series B Preferred Stock.........................................61
SECTION 5 CONDITIONS PRECEDENT.............................................61
5.1 Conditions to Effectiveness of this Agreement....................61
5.2 Conditions to Each Loan and Issuance of Each Letter of Credit....66
5.3 Conditions Subsequent............................................67
SECTION 6 AFFIRMATIVE COVENANTS............................................67
6.1 Financial Statements.............................................68
6.2 Certificates; Other Information..................................69
6.3 Payment of Obligations...........................................70
6.4 Conduct of Business and Maintenance of Existence.................71
6.5 Maintenance of Property; Insurance...............................71
6.6 Inspection of Property; Books and Records; Appraisals............71
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6.7 Notices..........................................................72
6.8 Environmental Laws...............................................73
6.9 Business Plan....................................................73
6.10 Authorizations...................................................74
6.11 Dividends from Subsidiaries......................................74
6.12 Supplemental Reports Regarding Real Property.....................75
6.13 Compliance with Laws.............................................75
6.14 Other Notices....................................................75
6.15 Company Operating Account Control Agreement......................76
6.16 Indemnification by Company.......................................76
6.17 Executive Officers...............................................76
SECTION 7 NEGATIVE COVENANTS...............................................77
7.1 Maintenance of Consolidated Net Worth............................77
7.2 Limitation of Indebtedness.......................................77
7.3 Limitation on Liens..............................................79
7.4 Limitation on Guarantee Obligations..............................81
7.5 Limitations on Fundamental Changes...............................81
7.6 Limitation on Sale of Assets.....................................81
7.7 Limitation on Dividends..........................................82
7.8 Limitation on Capital Expenditures...............................83
7.9 Limitation on Investments, Loans, and Advances...................83
7.10 Limitation on Optional Payments and Modifications of Debt
Instruments......................................................85
7.11 Transactions with Affiliates.....................................85
7.12 Sale and Leaseback...............................................85
7.13 Fiscal Year......................................................86
7.14 Limitation on Negative Pledge Clauses............................86
7.15 Deviation from Business Plan.....................................86
7.16 Inter Project Loans, Mergers, Consolidations and Investments.....86
7.17 Limitation of Bank Accounts......................................86
7.18 Venture Subsidiaries and Joint Ventures..........................87
7.19 Employee Benefits................................................87
7.20 Charter Documents................................................87
SECTION 8 EVENTS OF DEFAULT; REMEDIES......................................88
8.1 Events of Default; Remedies......................................88
SECTION 9 AGENTS...........................................................92
9.1 Appointment of Agent.............................................92
9.2 Appointment of Collateral Agent..................................93
9.3 Appointment of Issuing Bank......................................93
9.4 Delegation of Duties.............................................94
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9.5 Exculpatory Provisions...........................................94
9.6 Reliance by Agent, Collateral Agent and Issuing Bank.............95
9.7 Notice of Default................................................96
9.8 Non-Reliance on Agents, Issuing Bank and Other Banks.............96
9.9 Indemnification..................................................97
9.10 [Intentionally Omitted]..........................................97
9.11 Agents and Issuing Bank in Individual Capacity...................97
9.12 Successor Agents.................................................98
9.13 Co-Agent and/or Co-Collateral Agent..............................99
SECTION 10 MISCELLANEOUS...................................................100
10.1 Amendments and Waivers..........................................100
10.2 Notices.........................................................101
10.3 No Waiver: Cumulative Remedies..................................101
10.4 Survival of Representations and Warranties......................101
10.5 Payment of Expenses and Taxes...................................101
10.6 Successors and Assigns: Participations; Purchasing Banks........102
10.7 Adjustments; Set-Off............................................105
10.8 Appointment of Agent as Company's Lawful Attorney...............106
10.9 Counterparts....................................................106
10.10 Severability....................................................107
10.11 Integration.....................................................107
10.12 Governing Law...................................................107
10.13 Submission to Jurisdiction; Waivers.............................107
10.14 Acknowledgments.................................................109
10.15 Waivers of Any Jury Trial.......................................109
10.16 Confidentiality.................................................109
10.17 Further Assurances..............................................110
10.18 Controlling Agreement...........................................111
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THIRD AMENDED AND RESTATED REVOLVING LOAN AGREEMENT
ATLANTIC GULF COMMUNITIES CORPORATION
THIS THIRD AMENDED AND RESTATED REVOLVING LOAN AGREEMENT (this
"AGREEMENT") is dated as of December 31, 1998, and entered into by and among
ATLANTIC GULF COMMUNITIES CORPORATION, a Delaware corporation, formerly known as
General Development Corporation ("COMPANY"), THE FINANCIAL INSTITUTIONS LISTED
ON THE SIGNATURE PAGES HEREOF (together with each financial institution that may
become a party to this Agreement as herein provided, referred to herein
individually as a "BANK" and collectively as "BANKS"), ▇.▇. ▇▇▇▇▇▇▇▇ & CO., LLC,
a New York limited liability company, as agent for Banks (hereinafter, in such
capacity, together with any successors thereto in such capacity, referred to as
"AGENT"), and ▇.▇. ▇▇▇▇▇▇▇▇ & CO., LLC, a New York limited liability company, as
collateral agent for Banks (hereinafter, in such capacity, together with any
successors thereto in such capacity, referred to as "COLLATERAL AGENT"). All
capitalized terms not otherwise defined herein have the meanings given such
terms in Section 1.
R E C I T A L S:
WHEREAS, pursuant to that certain Purchase Agreement, dated of
even date herewith (the "Purchase Agreement"), by and among FOOTHILL CAPITAL
CORPORATION, a California corporation ("Foothill"), AGENT and COLLATERAL AGENT,
Foothill has assigned all right, title and interest in and to the Second Amended
and Restated Revolving Loan Agreement, dated as of September 30, 1996 (the
"Existing Loan Agreement"), the Fifth Amended and Restated Renewal Working
Capital Note dated January 15, 1999, in the original principal amount of
$20,000,000.00 (the "Existing Note"), and various other loan documents described
in the Purchase Agreement, it being understood that no repayment of the
indebtedness evidenced is being effected; and
WHEREAS, concurrently herewith, the Company is entering into
the Recapitalization Transactions; and
WHEREAS, Banks desire to appoint ▇.▇. ▇▇▇▇▇▇▇▇ & Co., LLC, to
serve as Agent hereunder and under the Guarantees and to serve as Collateral
Agent for Banks under the Security Documents; and
WHEREAS, it is a condition to Agent and Collateral Agent
entering into the Purchase Agreement with Foothill that the Existing Loan
Agreement be amended and restated as provided in this Agreement; and
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WHEREAS, the parties hereto desire to amend and restate the
Existing Loan Agreement in its entirety as provided in this Agreement, it being
understood that no repayment of the obligations evidenced by or secured under
the Existing Loan Agreement is being effected hereby, but merely an amendment
and restatement in accordance with the terms hereof; and
WHEREAS, in connection with the Recapitalization Transactions,
Banks have agreed to extend additional credit in the amount of Nineteen Million
Five Hundred Thousand and No/100 Dollars ($19,500,000.00), consisting of
additional advances as evidenced by that certain Future Advance Working Capital
Note dated of even date herewith in the original principal amount of Twelve
Million and No/100 Dollars ($12,000,000.00) (the "Future Advance Note") and L/C
Guarantees issued for the account of Company from time to time in an amount up
to $7,500,000 in the aggregate as evidenced by that certain Future Advance
Letter of Credit Note dated of even date herewith in the original principal
amount of Seven Million Five Hundred Thousand Dollars ($7,500,000) (the "L/C
Note").
NOW THEREFORE, in consideration of the premises and the
agreements, provisions and covenants herein contained, Company, Banks, Agent,
and Collateral Agent agree as follows:
I.
DEFINITIONS
A. CERTAIN DEFINED TERMS.
The following terms used in this Agreement shall have the
following meanings:
"ADMINISTRATIVE CLAIMS" has the meaning assigned that term in
Article I of the Reorganization Plan.
"AFFILIATE" with respect to any Person, means (a) any other
Person which is a Subsidiary of such Person, (b) any other Person (and each
Subsidiary thereof) of which such Person is a Subsidiary, and (c) any other
Person which is under common control with such Person.
"AGENT" has the meaning assigned that term in the introductory
paragraph to this Agreement.
"AGREEMENT" has the meaning set forth in the preamble hereto.
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"ANGLO AMERICAN" means Anglo American Financial, a New York
limited partnership.
"ANGLO AMERICAN COLLATERAL AGENT" means ▇.▇. ▇▇▇▇▇▇▇▇ & Co.,
LLC, a New York limited liability company.
"ANGLO AMERICAN BANK GROUP" means the Banks party to the Anglo
American Loan Agreement and their respective successors and assigns.
"ANGLO AMERICAN LOAN" means the loan outstanding under the
Anglo American Loan Agreement.
"ANGLO AMERICAN LOAN AGREEMENT" means the Term Loan Agreement,
dated as of December 31, 1998, among Company, the Anglo American Bank Group and
▇.▇. ▇▇▇▇▇▇▇▇ & Co., LLC, as from time to time amended, supplemented or
otherwise modified in accordance with the terms hereof and thereof.
"ANGLO AMERICAN LOAN DOCUMENTS" means, collectively, (i) the
Anglo American Loan Agreement, and (ii) the "Loan Documents" as defined in the
Anglo American Loan Agreement, each of the foregoing as from time to time
amended, supplemented or otherwise modified in accordance with the terms hereof
and thereof.
"ANGLO AMERICAN LOAN OBLIGATIONS" means (i) the Anglo American
Loan outstanding under the Anglo American Loan Documents; (ii) all interest,
fees, prepayment premiums and late payment fees now or hereafter payable with
respect thereto; (iii) all existing and future guaranty obligations relating to
the foregoing; and (iv) all other fees (including, without limitation,
attorneys' and paralegals' fees and expenses) and other amounts now or hereafter
payable to the Anglo American Bank Group, or any of them, or their agents under
or in respect of the Anglo American Loan Documents.
"ANNUAL NET INCOME" means income as shown on the consolidated
statements of income provided by Company under Section 6.1, but in no event less
than 0.
"APOLLO" means AP-AGC, LLC, a Delaware limited liability
company.
"BANK" has the meaning assigned to that term in the first
paragraph hereof.
"BANK ACCOUNTS" means any and all deposit accounts, money
market accounts and any other deposits and investments of Company or any
Subsidiary held in
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any bank or other financial institution, any brokerage firm or any other Person
and all money, instruments, securities, documents and other investments held
pursuant thereto, whether now existing or owned or hereafter created or acquired
(exclusive of all but the residual, remainder or beneficial interest of Company
and its Subsidiaries in the Reserve Accounts, the Claims Disbursement Account
and all other escrow, restricted, custodial and fiduciary accounts, the pledge
of which by Company or any Subsidiary is prohibited by agreements existing on
the Effective Date or by law, asset forth in SCHEDULE 7.17, which may be amended
from time to time by written notice to Agent to include other restricted
accounts).
"BANKRUPTCY CODE" means Title 11 of the United States Code
entitled "Bankruptcy" from time to time in effect, or any successor statute.
"BANKRUPTCY COURT" means the United States Bankruptcy Court
for the Southern District of Florida, or in the event that such court ceases to
exercise jurisdiction over the Reorganization Proceedings, the court that
exercises jurisdiction over the Reorganization Proceedings in lieu of the United
States Bankruptcy Court for the Southern District of Florida.
"BORROWING BASE" means the sum of
A. an amount equal to 75% of the principal amount of
Eligible Homesite Contract Receivables and Eligible
Commercial Receivables;
PLUS
B. an amount equal to 50% of the lesser of (i) the GAAP
Book Value or (ii) the appraised value of the
underlying real estate of Commercial Receivables or
Homesite Contract Receivables which are not Eligible
Homesite Contract Receivables and
Eligible Commercial Receivables;
PLUS
C. an amount equal to 50% of the GAAP Book Value of Real
Property consisting of identified scattered
homesites;
PLUS
D. an amount equal to 50% of the GAAP Book Value of
identified Eligible Tract Land;
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PLUS
E. an amount equal to 20% of the (i) Net Equity of the
West Meadow project, the Lakeside Estates project,
the Saxon ▇▇▇▇▇ project, the Trails of West Frisco
project and the Riverwalk Tower project and (ii) Fair
Market Value of the Falcon Trace project and the
Sunset Lakes project
"BORROWING DATE" means any Business Day from and including the
date hereof to but not including the Maturity Date specified in a notice
pursuant to SECTION 2.3 as the date on which Company requests Banks to make
Loans hereunder.
"BUSINESS DAY" means any day excluding Saturday, Sunday and
any day which either is a legal holiday under the laws of the State of New York
or is a day on which banking institutions located in the State of New York are
authorized or required by law or other governmental action to close.
"BUSINESS PLAN" means as of the Effective Date and until a new
Business Plan is delivered to Banks in accordance with SECTION 6.9, the business
plan of Company and its Subsidiaries, dated January 26, 1999, and thereafter the
business plan of Company and its Subsidiaries delivered to and approved by
Required Banks in December of each year in accordance with SECTION 6.9.
"CAPITAL STOCK" means, with respect to any Person, any and all
shares, interests, participations or other equivalents (however designated) of
capital stock of a corporation any and all equivalent ownership interests in a
Person (other than a corporation) and any and all warrants or options to
purchase any of the foregoing.
"CASH COLLATERAL" has the meaning assigned that term in the
Escrow Agreement.
"CASH COLLATERAL ACCOUNTS" means any and all accounts that
Collateral Agent for the benefit of Banks and the Anglo American Bank Group may
from time to time require to be established and maintained with financial
institutions reasonably satisfactory to Collateral Agent and pledged to
Collateral Agent pursuant to cash collateral account agreements in form and
substance reasonably satisfactory to Collateral Agent.
"CASH EQUIVALENTS" means (a) securities issued or directly and
fully guaranteed or insured by the United States Government or any agency or
instrumentality thereof having maturities of not more than 90 days from the date
of acquisition, (b) time deposits and certificates of deposit having maturities
of not more
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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 ▇▇▇▇▇'▇
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.
"CHANGE OF CONTROL" means, (i) directly or indirectly a sale,
transfer, or other conveyance of all or substantially all of the assets of the
Company, on a consolidated basis, to any "person" or "group" (as such terms are
used for purposes of Sections 13 (d) and 14 (d) of the Exchange Act, whether or
not applicable), as an entirety or substantially as an entirety in one
transaction or series of related transactions, in each case with the effect that
the Person or group of Persons that, as of the Effective Date, are not
shareholders of the Company (or any Person or group of Persons that, as of the
Effective Date, are Affiliates of such shareholders) own more than 30% of the
aggregate number of votes of all classes of Capital Stock of the Company which
ordinarily have voting power for the election of directors, managers or trustees
of the transferee entity immediately after such transaction, (ii) any "person"
or "group" (as such terms are used for purposes of Sections 13(d) and 14(d) of
the Exchange Act, whether or not applicable), other than the shareholders of the
Company as of the Effective Date (or any Person or group of Persons that, as of
the Effective Date, are Affiliates of such shareholders), is or becomes the
"beneficial owner" (as that term is used in Rules 13d-3 and 13d-5 under the
Exchange Act, whether or not applicable, except that a Person shall be deemed to
have "beneficial ownership" of all shares that any such Person has the right to
acquire, whether such right is exercisable immediately or only after the passage
of time), directly or indirectly, of more than 30% of the aggregate number of
votes of all classes of Capital Stock of the Company which ordinarily have
voting power for the election of directors of the Company, or (iii) during any
period of twenty-four (24) consecutive months, individuals who at the beginning
of such period constituted the board of directors of the Company, together with
any new directors whose election by such board or whose nomination for election
by the shareholders of the Company was approved by a vote of a majority of the
directors then still in office who were either directors at the beginning of
such period or whose election or nomination for election was previously so
approved, cease for any reason to constitute a majority of the board of
directors of the Company then in office.
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"CLAIMS DISBURSEMENT ACCOUNT" means the segregated account
established for purposes of holding funds to pay Administrative Claims, Priority
Claims and Convenience Class Claims pursuant to Sections 3.2.4 and 8.1.1 of the
Reorganization Plan.
"CODE" means the Internal Revenue Code of 1986, as amended
from time to time.
"COLLATERAL" has the meaning assigned that term in Section
3.1.
"COLLATERAL AGENT" means ▇.▇. ▇▇▇▇▇▇▇▇ & Co., LLC solely in
its capacity as collateral agent for Banks under the Loan Documents pursuant to
the terms of this Agreement and the other Loan Documents.
"COLLECTIONS" means all cash, checks, notes, instruments, and
other items of payment (including insurance proceeds, proceeds of cash sales,
rental proceeds, and tax refunds).
"COMMERCIAL REAL ESTATE" means all Real Property of Company
and its Subsidiaries (including condominium and cooperative units), other than
Real Property reserved for sale as single family residential homes or lots.
"COMMERCIAL RECEIVABLES" means all promissory notes and
mortgages and deeds of trust payable to, or held by, Company or any Subsidiary,
and all other documents, instruments and agreements executed in connection
therewith, whether currently existing or hereafter created or acquired, arising
from the sale of single family homesites or arising from the sale of other Real
Property and all cash and non-cash proceeds thereof.
"COMMITMENT" means, as to any Bank, the obligation of such
Bank, if any, to make (i) a Loan to Company hereunder and (ii) to issue L/C
Guarantees hereunder, in an aggregate principal amount not to exceed the amount
set forth opposite such Bank's name on SCHEDULE 2.1; the Commitments of all
Banks, are collectively referred to herein as the "COMMITMENTS."
"COMMITMENT TRANSFER SUPPLEMENT" has the meaning assigned that
term in Section 10.6.
"COMMONLY CONTROLLED ENTITY" means an entity, whether or not
incorporated, which is under common control with Company within the meaning of
Section 4001 of ERISA or is part of a group which includes Company and which is
treated as a single employer under Section 414 of the Code.
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"COMPANY ACCOUNTANTS" shall mean Ernst & Young LLP or another
accounting firm designated by the Company and approved by Agent.
"COMPANY OPERATING ACCOUNT" means that certain deposit account
number 6189189013641 maintained by Company with Sun Trust Bank, Miami, N.A. or
such other deposit account maintained by Company at a financial institution
reasonably satisfactory to Collateral Agent.
"COMPANY OPERATING ACCOUNT CONTROL AGREEMENT" means a written
agreement among Company, ▇.▇. ▇▇▇▇▇▇▇▇ & Co., LLC (in its capacity as Collateral
Agent), and Operating Account Bank, with respect to the Company Operating
Account, in form and substance reasonably satisfactory to Collateral Agent,
pursuant to which Operating Account Bank acknowledges the security interests
granted by Company to Collateral Agent in the Company Operating Account, waives
rights of setoff with respect to the Company Operating Account, and agrees to
act upon the instructions of Collateral Agent with respect to the disposition of
funds inthe Company Operating Account should Operating Account Bank receive such
instructions from ▇.▇. ▇▇▇▇▇▇▇▇ & Co., LLC.
"CONDEMNATION AWARDS" means any and all proceeds (including
proceeds in the form of promissory notes or other agreements for the payment of
proceeds) from (a) the taking by eminent domain, condemnation or otherwise, or
acquisition pursuant to contract, of any property of Company or any Subsidiary
by the United States of America, the State of Florida or any political
subdivision thereof, or any agency, department, bureau, board, commission or
instrumentality of any of them, including any awards and/or other compensation
awarded to, or received by, the Company or GDU, whether as a result of
litigation, arbitration, settlement or otherwise, arising from the Utility
Condemnation Proceedings or (b) any sale by Company or any Subsidiary of a water
and utility system to a governmental entity in lieu of condemnation whether now
owned or hereafter created or acquired.
"CONFIRMATION ORDER" means the order issued on March 27, 1992
by the Bankruptcy Court, confirming the Reorganization Plan.
"CONSOLIDATED NET WORTH" means, at any particular date, all
amounts which, in accordance with GAAP, would be included as Shareholders'
Equity on a consolidated balance sheet of Company and its consolidated
Subsidiaries at such date.
"CONTRACTUAL OBLIGATION" means, with respect to any Person,
any provision of any security issued by that Person or of any agreement,
instrument or other undertaking to which that Person is a party or by which it
or any of its property is bound.
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"DEEDS OF TRUST" means the Deeds of Trust executed from time
to time between Company or a Subsidiary and Collateral Agent substantially in
the form of the Deeds of Trust in existence as of December 31, 1998, as the same
may be amended, supplemented or otherwise modified from time to time (including
any amendments or modifications made in connection with this Agreement),
pursuant to which Company and Subsidiaries grant a security interest in the Real
Property located in Tennessee (and in such other jurisdictions where "deeds of
trust" are used to encumber real property) and related Personal Property of
Company or Subsidiaries to Collateral Agent, for the benefit of Banks, as
required by this Agreement.
"DEFAULT" means any of the events specified in Section 8,
whether or not any requirement for the giving of notice, the lapse of time, or
both, or any other condition, has been satisfied.
"DEFAULT RATE" has the meaning assigned to that term in
Section 2.8.
"DEPOSIT ACCOUNT SECURITY AGREEMENT" means that certain
Deposit Account Security Agreement, dated as of December 31, 1998, executed by
Company and each of its Subsidiaries in favor of Collateral Agent, for the
benefit of Banks.
"DOLLARS" and the sign "$" means the lawful money of the
United States of America.
"E&Y REPORT" means the Consultant's Report - Atlantic Gulf
Communities Corporation, October 9, 1998, prepared by Ernst & Young LLP.
"EFFECTIVE DATE" means February 1, 1999, the date this
Agreement became effective.
"ELIGIBLE COMMERCIAL RECEIVABLES" means those Commercial
Receivables that comply with each and all of the representations and warranties
representing Commercial Receivables made by Company or any Subsidiary to Agent
in the Loan Documents, and that are and at all times continue to be acceptable
to Agent in all respects; PROVIDED; HOWEVER, that standards of eligibility may
be fixed and revised from time to time by Agent in Agent's reasonable credit
judgment. Eligible Commercial Receivables shall not include any of the
following: (i) Commercial Receivables that are in material default; (ii)
Commercial Receivables with respect to which the obligor is an employee,
Affiliate, or agent of Company or any Subsidiary; (iii) Commercial Receivables
with respect to which the obligor is a creditor of Company or any Subsidiary,
has or has asserted a right of setoff, or has disputed its liability or made any
claim with respect to the Commercial Receivables; PROVIDED, HOWEVER, that such
Commercial Receivables only shall be deemed ineligible under this
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clause to the extent of the actual or likely offsetting amount as determined by
Agent, in its reasonable credit judgment, unless Agent believes that the dispute
or claim will jeopardize the repayment of all or substantially all of the
Commercial Receivable in a timely manner; (iv) Commercial Receivables that the
obligor has failed to pay within 90 days of due date; (v) Commercial Receivables
with respect to which the obligor is subject of any Insolvency Proceeding, or
becomes insolvent; and (vi) Commercial Receivables the collection of which
Agent, in its reasonable credit judgment, believes to be doubtful by reason of
the obligor's financial condition.
"ELIGIBLE HOMESITE CONTRACT RECEIVABLES" means those Homesite
Contract Receivables that comply with each and all of the representations and
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warranties respecting Homesite Contract Receivables by Company or any Subsidiary
to Agent in the Loan Documents, and that are and at all times continue to be
acceptable to Agent in all respects; PROVIDED, HOWEVER, that standards of
eligibility may be fixed and revised from time to time by Agent in Agent's
reasonable credit judgment. Eligible Homesite Contract Receivables shall not
include any of the following: (i) Homesite Contract Receivables that are in
material default; (ii) Homesite Contract Receivables with respect to which the
obligor is an employee, Affiliate, or agent of Company or of any Subsidiary;
(iii) Homesite Contract Receivables with respect to which the obligor is a
creditor of Company or any Subsidiary, has or has asserted a right of setoff, or
has disputed its liability or made any claim with respect to the Homesite
Contract Receivable; PROVIDED, HOWEVER, that such Homesite Contract Receivables
only shall be deemed ineligible under this clause to the extent of the actual or
likely offsetting amount as determined by Agent, in its reasonable credit
judgment, unless Agent believes that the dispute or claim will jeopardize the
repayment of all or substantially all of the Homesite Contract Receivable in a
timely manner; (iv) Homesite Contract Receivables that the obligor has failed to
pay within 90 days of due date; (v) Homesite Contract Receivables with respect
to which the obligor is the subject of any Insolvency Proceeding, or becomes
insolvent; and (vi) Homesite Contract Receivables the collection of which Agent,
in its reasonable judgment, believes to be doubtful of the obligor's financial
condition.
"ELIGIBLE JOINT VENTURE PROJECTS" means on the Effective Date,
the Joint Ventures initially consisting of Sunset Lakes project, the Jupiter
Ocean Grande project and the Falcon Trace project, each as described in the E&Y
Report and that certain joint venture project located in Cary, North Carolina
commonly known as "▇▇▇▇ ▇▇▇▇".
"ELIGIBLE SUBDIVISION PROJECTS" means only those real estate
projects owned in their entirety by Company or any of its Subsidiaries. On the
Effective Date, Eligible Subdivision Projects shall consist of the "West Bay
Club" project, the "Trails of West Frisco" project, "West ▇▇▇▇▇▇▇" project, the
"Aspen-Glenwood Springs" project, the "Lakeside Estates" project, the "Saxon
▇▇▇▇▇" project and the "Riverwalk Tower" project, each as described in the E&Y
Report, and that certain condominium project to be located in ▇▇▇ County,
Florida, currently known as the "West Bay Club Condominium".
"ELIGIBLE TRACT LAND" means (1) those Parcels of Real Property
consisting of raw tract land identified on Schedule E-1 and (2) any tract land
the title to which is revested in Company as a result of foreclosure, or deed in
lieu of foreclosure, on a Commercial Receivable.
12
"ENVIRONMENTAL LAWS" means any and all applicable Federal,
state, local or municipal laws, rules, orders, regulations, statutes,
ordinances, codes, decrees or requirements of any Governmental Authority
regulating, relating to, or imposing liability or standards of conduct
concerning, environmental protectionmatters, including Hazardous Materials, as
now or may at any time hereafter be in effect.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time and any successor statute.
"ERISA EVENT" shall mean (a) any "reportable event", as
defined in Section 4043 of ERISA or the regulations issued thereunder, with
respect to a Plan; (b) the adoption of any amendment to a Plan that would
require the provision of security pursuant to Section 401(a)(29) of the Code or
Section 307 of ERISA; (c) the existence with respect to any Plan of an
"accumulated funding deficiency" (as defined in Section 412 of the Code or
Section 302 of ERISA), whether or not waived; (d) the filing pursuant to Section
412(d) of the Code or Section 303(d) of ERISA of an application for a waiver of
the minimum funding standard with respect to any Plan; (e) the incurrence of any
liability under Title IV of ERISA with respect to the termination of any Single
Employer Plan or the withdrawal or partial withdrawal of the Company or any of
its Commonly Controlled Entity from any Single Employer Plan or Multiemployer
Plan; (f) the receipt by the Company or any Commonly Controlled Entity from the
PBGC or a plan administrator of any notice relating to the intention to
terminate any Single Employer Plan or Single Employer Plans or to appoint a
trustee to administer any Single Employer Plan; (g) the receipt by the Company
or any Commonly Controlled Entity of any notice concerning the imposition of
withdrawal liability or a determination that a Multiemployer Plan is, or is
expected to be, insolvent or in reorganization, within the meaning of Title IV
of ERISA; (h) the occurrence of a "prohibited transaction" with respect to which
the Company or any of the Subsidiaries is a "disqualified person" (within the
meaning of Section 4975 of the Code) or with respect to which the Company or any
such Subsidiary could otherwise be liable; and (i) any other event or condition
with respect to a Plan or Multiemployer Plan that could reasonably be expected
to have a Material Adverse Effect.
"ESCROW AGREEMENT" means that certain Escrow Agreement, dated
as of January 29, 1999 by and among Atlantic Gulf Communities Corporation,
United States Trust Company and each of the Banks.
"EVENT OF DEFAULT" means any of the events specified in
Section 8; PROVIDED that any requirement for the giving of notice, the lapse of
time, or both, or any other condition, has been satisfied.
13
"EXCLUDED PROPERTY" means (a) the Capital Stock of General
Development Acceptance Corporation and GDV Financial Corporation, (b) 34% of the
Capital Stock of AG Asia, (c) all money or property now or hereafter deposited
into a Reserve Account pursuant to the Reorganization Plan (exclusive of the
residual, remainder or beneficial interests of Company and its Subsidiaries
therein), (d) any portions of payments made on Homesite Contracts Receivable
which are, as a matterof 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" means the direct or indirect
subsidiaries of Company listed on SCHEDULE E-2.
"EXISTING LOAN AGREEMENT" has the meaning set forth in the
first WHEREAS clause of the Recitals hereto.
"EXISTING NOTE" has the meaning set forth in the first WHEREAS
clause of the Recitals hereto.
"FAIR MARKET VALUE" means, for each Eligible Subdivision
Project and/or Eligible Joint Venture Project, as applicable, at any time the
present value at such time of the pro forma statements of cash flows for such
project (which are included in Appendix L to the E&Y Report or, if so requested
by the Agent or the Required Banks (no more frequently than annually) in any
subsequent report of Ernst & Young or other consultant acceptable to Agent,
provided to Banks) using a discount rate of 15%, and which pro forma statement
shall be updated by the Company from time to time, but no less frequently than
quarterly for actual revenues, expenses and financings. For interim months
between quarterly updates, the pro forma statements shall be adjusted by adding
any project expenditures (contributed by financing or otherwise) less Net Cash
Proceeds from any sales.
"FINANCING LEASE" means 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
Company and Subsidiaries.
"FOOTHILL" means Foothill Capital Corporation, a California
corporation.
"FOOTHILL LOAN DOCUMENTS" means the Existing Loan Agreement
and all security documents and all other instruments and/or agreements related
thereto.
14
"FUNDS FLOW MEMO" means a funds flow memorandum, in form and
substance satisfactory to Agent and Collateral Agent, documenting the sources
and applications of funds in respect of the consummation of the Recapitalization
Transactions and the payment of the amounts required to be paid hereunder to
Agent and Banks on the Effective Date.
"FUTURE ADVANCE NOTE" has the meaning set forth in the final
WHEREAS clause of the Recitals hereto.
"GAAP" means 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 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.
"GAAP BOOK VALUE" means book value as determined by Company
and reflected in Company's consolidated balance sheets prepared in accordance
with GAAP consistently applied, except as may be approved by Agent, and
delivered to Agent from time to time pursuant to this Agreement.
"GDC" means General Development Corporation, a Delaware
corporation, under which name Company was formerly known.
"GDU" means the Company's Subsidiary, General Development
Utilities, Inc., a Florida corporation.
"GOVERNMENTAL AUTHORITY" means any nation or government,
state, local or other political subdivision thereof and any entity exercising
executive, legislative, judicial, regulatory or administrative functions of, or
pertaining to, government.
"GUARANTEE OBLIGATION" means, as to any Person (the
"guaranteeing person"), any obligation of (a) the guaranteeing person or (b)
another Person (including any bank under any letter of credit) to induce the
creation of which obligation the guaranteeing person has issued a reimbursement,
counter indemnity or similar obligation, in either case guaranteeing or in
effect guaranteeing any Indebtedness, leases, dividends or other obligations
(the "primary obligations") of any other third Person (the "primary obligor") in
any manner, whether directly or indirectly, including
15
any obligation of theguaranteeing 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 otherwise to maintain the net worth or
solvency of the primary obligor, (iii) to purchase property, securities or
services primarily for the purpose of assuring the owner of any such primary
obligation of the ability of the primary obligor to make payment of such primary
obligation or (iv) otherwise to assure or hold harmless the owner of any such
primary obligation against loss in respect thereof; PROVIDED, HOWEVER, that, as
used herein, the term "Guarantee Obligation" shall neither include endorsements
of instruments for deposit or collection in the ordinary course of business, nor
constitute Indebtedness. Theamount of any Guarantee Obligation of any
guaranteeing person shall be deemed to be the lower of (a) an amount equal to
the stated or determinable amount of the primary obligation in respect of which
such Guarantee Obligation is made and (b) the maximum amount for which such
guaranteeing person may be liable pursuant to the terms of the instrument
embodying such Guarantee Obligation, unless such primary obligation and the
maximum amount for which such guaranteeing person may be liable are not stated
or determinable, in which case the amount of such Guarantee Obligation shall be
such guaranteeing person's maximum reasonably anticipated liability in respect
thereof as reasonably determined by Company in good faith.
"GUARANTEES" means, collectively, the guarantees of the
Obligations, made by the Subsidiaries and Unrestricted Subsidiaries pursuant to
the Subsidiary Guarantees.
"HAZARDOUS MATERIALS" means any hazardous materials, hazardous
waste, hazardous constituents, hazardous or toxic substances, petroleum products
(including crude oil or any fraction thereof), defined or regulated as such in
or under any Environmental Law.
"HOMESITE CONTRACTS RECEIVABLES" means all contracts for deed,
promissory notes, mortgages, deeds of trust and other agreements, currently
existing or hereafter created or acquired, pursuant to which Company or any
Subsidiary has the right to receive payment in any form whatsoever for the sale
of single-family homesites (excluding Commercial Receivables), including any and
all accounts, contract rights, chattel paper, general intangibles and unpaid
seller's rights, relating to the foregoing or arising therefrom, reserves and
credit balances arising thereunder and cash and non-cash proceeds of any and all
of the foregoing.
"HOMESITE PROGRAM" has the meaning assigned that term in
Article I of the Reorganization Plan.
16
"HOMESITES" means any land now or hereafter held for the
purposes of sale as single-family homesites.
"INDEBTEDNESS" means, of any Person at any date, (a) all
indebtedness of such Person for borrowed money or for the deferred purchase
price of property or services (other than incurred in the ordinary course of
business and payable in accordance with customary practices) or which is
evidenced by a note, bond, debenture or similar instrument, (b) all obligations
(contingent or otherwise) of such Person arising out of letters of credit issued
for the account or upon the application of such Person, (c) all obligations of
such Person under Financing Leases, (d) all obligations of such Person in
respect of acceptances issued or created for the account of such Person, and (e)
all liabilities secured by any Lien on any property owned by such Person even
though such Person may have not assumed or otherwise becomeliable for the
payment thereof. As used herein, the term "Indebtedness" shall not include
Guarantee Obligations.
"INSOLVENCY", means, with respect to any Multiemployer Plan,
the condition that such plan is insolvent within the meaning of Section 4245 of
ERISA.
"INSOLVENCY PROCEEDING" means any proceeding commenced by or
against any Person under any provision of the Bankruptcy Code or under any other
bankruptcy or insolvency law, assignments for the benefit of creditors, formal
or informal moratoria, compositions, extensions generally with creditors, or
proceedings seeking reorganization, arrangement, or other similar relief.
"INSOLVENT" means pertaining to a condition of Insolvency.
"INTELLECTUAL PROPERTY" has the meaning assigned that term in
Section 4.9.
"INTERCREDITOR AGREEMENT" means that certain Intercreditor
Agreement, dated as of December 31, 1998, by and among Agent, Banks, the Anglo
American Collateral Agent, the Anglo American Bank Group, the Secured Agreement
Banks and the Collateral Agent and the Secured Agreement Collateral Agent and
acknowledged by Company and its Subsidiaries (including Unrestricted
Subsidiaries and Excluded Subsidiaries) and The Bank of New York, substantially
in the form of EXHIBIT I-1, as such agreement may be supplemented, amended or
otherwise modified from time to time.
"INTEREST PAYMENT DATE" means, as to any Loan, the last day of
each calendar month to occur while such Loan is outstanding.
17
"INVESTMENT AGREEMENT" has the meaning ascribed to such term
in the Intercreditor Agreement, but shall not refer to amendments,
modifications, supplements, or restatements thereof entered into after the
Effective Date without the prior consent of Agent and the Banks.
"INVESTMENT INSTRUMENTS" means the Investment Agreement, the
Preferred Stock, the certificate of designation of preferences and rights
relating to the Preferred Stock, and all other documents, instruments, and
agreements executed in connection therewith, each as from time to time amended,
supplemented or otherwise modified in accordance with the terms hereof, thereof,
and of the Intercreditor Agreement.
"INVESTMENTS" means any and all promissory notes, Capital
Stock (other than Subsidiary Stock), bonds, debentures and securities, held by
Company or any Subsidiary, whether now owned or hereafter acquired.
"ISSUING BANK" means, with respect to any L/C Guarantee, DK
Acquisition Partners, LLC or its designee.
"JOINT VENTURES" means, collectively, (a) the joint ventures
identified on Schedule 4.14(B), and (b) any other partnership, joint venture,
limited liability company, or other entity in which a Subsidiary acquires, after
the Effective Date and as permitted under Section 7.9(g) and 7.18, equity
interests therein representing 50% or less of such entity's contributed capital;
and "Joint Venture" means any one of them.
"JOINT VENTURE PLEDGE AGREEMENT" means that certain Assignment
of Partnership Interests, dated as of December 31, 1998, substantially in the
form of EXHIBIT J-1, among each of the Venture Subsidiaries and Collateral
Agent, pursuant to which the Venture Subsidiaries pledge all of their right,
title, and interest in and to the Joint Ventures to Collateral Agent for the
benefit of Banks.
"LAS OLAS PROPERTY" means the real property project in Fort
Lauderdale, Florida identified in the E&Y Report as the Riverwalk Tower project.
"BANKS" has the meaning assigned that term in the introductory
paragraph to this Agreement.
"L/C GUARANTEE" means a guarantee of payment or reimbursement
obligation with respect to a letter of credit issued by an issuing bank for the
account of Company.
18
"L/C NOTE" has the meaning set forth in the final WHEREAS
clause of the Recitals hereto, which is a contingent obligation of the Company
as more particularly described in Section 2.15(f)
"LETTER OF CREDIT" or "LETTERS OF CREDIT" means Standby
Letters of Credit to be obtained by Issuing Bank for the account of Company
pursuant to Section 2.15.
"LETTER OF CREDIT USAGE" means, as of any date of
determination, the sum of (a) the maximum aggregate amount which is or at any
time thereafter may become available for drawing under all L/C Guarantees then
outstanding PLUS (b) the aggregate amount of all drawings under L/C Guarantees
honored by Issuing Bank and not theretofore reimbursed by Company (whether by
means of the proceeds of Loans pursuant to SECTION 2.15(E)(II) or otherwise).
"LIEN" means any mortgage, security interest, pledge,
hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or
other), or preference, priority or other security agreement or preferential
arrangement of any kind or nature whatsoever (including any conditional sale or
other title retention agreement, any Financing Lease having substantially the
same economic effect as any of the foregoing, and the filing of any financing
statement under the Uniform Commercial Code or comparable law of any
jurisdiction in respect of any of the foregoing).
"LITCHFIELD" means Litchfield Financial Corporation.
"LOAN BORROWING DATE" means the Business Day specified in a
notice pursuant to SECTION 2.2 as a date on which Company requests Banks to make
the Loans hereunder.
"LOAN DOCUMENTS" means this Agreement, the Notes, the L/C
Guarantees, any applications for L/C Guarantees, the Subsidiary Guarantees, the
Security Documents, the Tax Servicing Contracts, and any other agreement entered
into, now or in the future, in connection with this Agreement.
"LOANS" has the meaning assigned that term in Section 2.1.
"MATERIAL ADVERSE EFFECT" means a material adverse effect upon
(a) the business, operations, property or condition (financial or otherwise) or
prospects of Company and its Subsidiaries taken as a whole, (b) the ability of
Company to perform its obligations under this Agreement, the Notes, the Security
Documents or other Loan Documents, or (c) the legality, validity, enforceability
of this Agreement, the Notes, the Security Documents or other Loan Documents,
the attachment, perfection or
19
priority of any Liens created by the Loan Documents, or the rights or remedies
of Agent, Collateral Agent or Banks hereunder or thereunder.
"MATURITY DATE" means the close of business on the eighteen
month anniversary of the Effective Date.
"MAXIMUM PERMISSIBLE CREDIT AMOUNT" means the aggregate of the
Commitments of all of the Banks to make Loans and to obtain Letters of Credit
and issue L/C Guarantees, being, on any date of determination prior to the
Maturity Date, the Maximum Permissible Loan Amount plus $7,500,000, and on or
after the Maturity Date, $0.
"MAXIMUM PERMISSIBLE LOAN AMOUNT" means the aggregate of the
Commitments of all of the Banks to make Loans, being, on any date of
determination prior to the Maturity Date, $32,000,000 (as such amount may be
reduced from time to time in accordance with Section 2.5 hereof) and on or after
the Maturity Date, $0.
"MEZZANINE PROPERTY UNDER DEVELOPMENT" means, collectively,
the Real Property of any MPUD Subsidiary which is acquired for the purpose of
being developed, or which is in the process of being improved or developed,
either by theconstruction of roads, curb cuts, sewer and water facilities or
other improvements, or by the construction of residential units and
appurtenances thereto.
"MORTGAGES" means the Mortgage and Security Agreements
executed from time to time by Company or a Subsidiary in favor of Collateral
Agent, substantially in the form of the Mortgages in existence as of December
31, 1998, and as the same may be amended, supplemented, consolidated or
otherwise modified from time to time (including as any amendments and
modifications made in connection with this Agreement), pursuant to which Company
and Subsidiaries grant a security interest in the Real Property located in
Florida (or in such other jurisdictions where "mortgages" are used to encumber
real property) and related Personal Property of Company or Subsidiaries to
Collateral Agent, for the benefit of Banks.
"MPUD HOLDING COMPANY" means a Subsidiary of Company the sole
asset of which is all of the issued and outstanding stock of an MPUD Subsidiary.
"MPUD SUBSIDIARY" has the meaning assigned that term in
Section 7.2(h).
"MPUD SUBSIDIARY GROUP(S)" means an MPUD Subsidiary Holding
Company and all direct and/or indirect, wholly-owned Subsidiaries of such MPUD
Subsidiary ("MPUD Subsidiary Subsidiaries").
20
"MULTIEMPLOYER PLAN" means a Plan which is a multiemployer
plan as defined in Section 4001(a) (3) of ERISA.
"NET CASH FLOW" means, with respect to any fiscal period of a
Person, on a consolidated basis, the actual consolidated net cash flow from
operations as determined on the basis set forth in SCHEDULE N-1.
"NET CASH PROCEEDS" means with respect to any sale of assets
all cash payments (including any cash received by way of deferred payment
pursuant to, or monetization of, a note receivable or otherwise, but only as and
when and so received) received from such sale net of bona fide direct costs of
sale.
"NET EQUITY" means, for each Eligible Subdivision Project, the
excess of (1) the Fair Market Value thereof over (2) the identified Project
Specific Debt related thereto outstanding as of the date of determination of
such Fair Market Value.
"NOTES" means the Sixth Note, the Future Advance Note, the L/C
Note, and any renewal, replacement or substitution for any of them.
"NOTIFICATION DATE" has the meaning assigned that term in
Section 2.15(a) (ii).
"OBLIGATIONS" means all obligations of every nature of Company
from time to time owed to Agent, Banks or Collateral Agent or any of them under
the Loan Documents, whether for principal, interest (including any interest
that, but for the provisions of the Bankruptcy Code, would have accrued),
premiums (including Early Termination Premiums), fees, costs, and expenses
(including any fees, costs, or expenses that, but for the provisions of the
Bankruptcy Code, would have accrued including without limitation, all interest
accruing after the commencement of an Insolvency Proceeding whether or not
allowed as a claim in an Insolvency Proceeding), indemnification, or otherwise.
"OPERATING ACCOUNT BANK" means Sun Trust Bank, Miami, N.A. or
such other financial institution reasonably satisfactory to Agent.
"PBGC" means the Pension Benefit Guaranty Corporation
established pursuant to Subtitle A of Title IV of ERISA or any successor
thereto.
"PERMITTED SALE ASSET" has the meaning assigned that term in
Section 7.6.
21
"PERSON" means an individual, partnership, corporation,
business trust, joint stock company, trust, unincorporated association, joint
venture, Governmental Authority or other entity of whatever nature.
"PERSONAL PROPERTY" means the following personal property of
Company or any Subsidiary (exclusive of Homesite Contracts Receivable and
Commercial Receivables of Company or any Subsidiary):
(a) the Bank Accounts;
(b) the Investments;
(c) any and all accounts, contract rights, chattel paper,
instruments and documents, including any right to payment for goods sold or
leased or services rendered, whether now owned or hereafter acquired;
(d) any and all machinery, apparatus, equipment,
fittings, furniture, fixtures, motor vehicles and other tangible personal
property of every kind and description, whether now owned or hereafter acquired,
and wherever located, and all parts, accessories and special tools and
replacements therefor;
(e) any and all general intangibles, whether now owned or
hereafter created or acquired, including all causes of action, rights in and to
any and all Condemnation Awards, corporate or other business records, deposit
accounts, inventions, designs, patents, patent applications, trademarks, trade
names, trade secrets, goodwill, copyrights, registrations, licenses, franchises,
customer lists, taxrefund claims, computer programs, any other Intellectual
Property, all claims under guaranties, security interests or other security to
secure payment of any accounts by an account debtor, all rights to
indemnification and all other intangible property of every kind and nature,
including (i) the interests, if any, of Company or any Subsidiary in payments,
proceeds, residuals and remainders from, or as a beneficiary of, the Reserve
Accounts, Claims Disbursement Account, or other such accounts, (ii) any and all
beneficial interests in the trusts pursuant to which title to the Trust Property
is held and (iii) any and all other proceeds or causes of action with respect
to, or rights to receive proceeds from, any condemnation of any Real Property or
Personal Property of Company or any Subsidiary, whether now in existence or
hereafter created or acquired.
(f) any and all goods which are, or may at any time be,
goods held for sale or lease or furnished under contracts of service or raw
materials, work-in-process or materials used or consumed in business,
wheresoever located and whether now owned or hereafter created or acquired,
including all such property the sale or
22
other disposition of which has givenrise 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 any Bank,
the Anglo American Bank Group or the Secured Agreement Obligees or any agent or
bailee of any Bank, the Anglo American Bank Group or the Secured Agreement
Obligees;
(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
(i) all books, records, documents and ledger receipts
pertaining to any of the foregoing, including customer lists, credit files,
computer records, computer programs, storage media and computer software used or
acquired in connection with generating, processing and storing such books and
records or otherwise used or acquired in connection with documenting information
pertaining to the aforesaid property.
"PERSONAL PROPERTY SECURITY AGREEMENT" means that certain
Personal Property Security Agreement, dated as of December 31, 1998, executed by
Company and the Subsidiaries (including Unrestricted Subsidiaries and Excluded
Subsidiaries) now or hereafter party thereto in favor of Collateral Agent, for
the benefit of Banks.
"PLAN" means, at a particular time, any employee benefit plan
which is covered by ERISA and in respect of which Company or a Commonly
Controlled Entity is (or, if such plan were terminated at such time, would under
Section 4069 of ERISA be deemed to be) an "employer" as defined in Section 3(5)
of ERISA.
"PREFERRED STOCK" means the Company's (1) 20% Cumulative
Redeemable Convertible Preferred Stock, Series A (the "SERIES A PREFERRED
STOCK"), the terms and conditions of which are set forth in that certain
Statement of Preferences and Rights of the Series A Preferred Stock (the "SERIES
A STATEMENT"), a copy of which is attached as Annex A to the Company's Amended
and Restated Certificate of Incorporation and (2) 20% Cumulative Redeemable
Convertible Preferred Stock, Series B (the "SERIES B PREFERRED STOCK"), the
terms and conditions of which are set forth in that certain Statement of
Preferences and Rights of the Series B Prefer-red Stock (the
23
"SERIES B STATEMENT"), a copy of which is attached as Annex B to the Company's
Amended and Restated Certificate of Incorporation.
"PRIORITY CLAIMS" has the meaning assigned that term in
Article I of the Reorganization Plan.
"PROJECT SPECIFIC DEBT" shall mean the total amount of all
third party debt incurred by all Subsidiaries in connection with the development
and ownership of the various projects being developed from time to time by
Subsidiaries.
"PRO RATA SHARE" means: the percentage obtained by dividing
(i) a Bank's Commitment, by (ii) the Commitments of all Banks; PROVIDED,
HOWEVER, that, in each case, in the event all Commitments have been terminated,
Pro Rata Share shall be determined according to the Commitments in effect
immediately prior to such termination and otherwise as set forth above.
"REAL PROPERTY" means any and all real property and fixtures
and interests in real property and fixtures now owned or hereafter acquired by
Company or any Subsidiary.
"REAL PROPERTY SALE" means the sale, assignment or other
transfer for value of any Real Property by Company or any Subsidiary.
"RECAPITALIZATION TRANSACTIONS" means: (a) the assignment of
the Foothill Loan Documents to Agent; (b) the execution and delivery of this
Agreement and the Anglo American Loan Agreement and the funding of the Loans in
accordance herewith and of the Anglo American Loans in accordance therewith; (c)
(i) the execution and delivery of the Intercreditor Agreement, (ii) the
resignation of The Bank of New York as SP Sub Collateral Agent, and (iii) the
transition of the SP Sub Collateral Agent functions from The Bank of New York to
DK Acquisition Partners, L.P.; and the use by Company of (i) the proceeds of the
Loans on the Effective Date, (ii) the proceeds of the Anglo American Loans and
the Loans, and (iii) unrestrictedand unencumbered cash of Company, in each case,
in accordance with the Funds Flow Memo, to finance: (A) the retirement by
Company of all of the outstanding Unsecured Cash Flow Notes in an aggregate
principal amount not greater than $39,496,400; and (B) the repurchase by Company
of Homesite Contract Receivables from (1) Litchfield in an aggregate amount not
to exceed $2,300,000, and (2) BankBoston N.A. in an aggregate amount not to
exceed $8,300,000.
"REORGANIZATION" means, with respect to any Multiemployer
Plan, the condition that such plan is in reorganization within the meaning of
Section 4241 of ERISA
24
"REORGANIZATION PLAN" means the Restated Second Amended Joint
Plan of Reorganization of General Development Corporation jointly proposed in
the Reorganization Proceedings by Company and the Official Unsecured Creditors
Committee, filed on October 9, 1991 with the Clerk of the Bankruptcy Court, as
modified by Modification filed March 9, 1992.
"REORGANIZATION PROCEEDINGS" means the cases commenced on
April 6 and April 12, 1990 under Chapter 11 of Title 11 of the United States
Code in the Bankruptcy Court by GDC (Case No. 90-12231-BKC-AJC), General
Development Financial Services, Inc. (Case No. 90-12232-BKC-AJC), General
Development Resorts, Inc. (Case No. 90-12233 BKC-AJC), Town & Country II, Inc.
(formerly Florida Residential Communities, Inc.) (Case No. 9012234-BKC-AJC),
Five Star Homes Group, Inc. (Case No. 90-12235-BKC-AJC), Five Star Homes, Inc.
(Case No. 90-12338-BKC-AJC), GDV Financial Corporation (Case No. 90-I2236BKC-MC)
and Environmental Quality Laboratory, Incorporated (Case No. 90-12237-BKC-AJC).
"REPORTABLE EVENT" means any of the events set forth in
Section 4043(b) of ERISA, other than those events as to which the thirty day
notice period is waived.
"REQUIRED BANKS" means Banks holding at least 66 2/3% of the
aggregate amount of the Commitments.
"REQUIREMENT OF LAW" means, as to any Person, the certificate
or articles of incorporation and bylaws or other organizational or governing
documents of such Person, and any law, treaty, rule or regulation, or
determination of an arbitrator or a court or other Governmental Authority, in
each case applicable to or binding upon such Person or any of its property or to
which such Person or any of its property is subject.
"RESERVE ACCOUNTS" means the Disbursement Account (as defined
in Section 8.4 of the Reorganization Plan); the Disputed Claims Reserve Account
(as defined in Section 8.7 of the Reorganization Plan); any reserve of
securities, utility-satisfied lots, cash or other assets that is established
pursuant to the ReorganizationPlan, the Homesite Program, or any agreement
resolving a claim of the State of Florida in the Reorganization Proceedings, to
satisfy requests for utility service; and any reserve of securities or cash
established to fund road or other improvements pursuant to any agreement
resolving a claim of the State of Florida in the Reorganization Proceedings,
including the Utility Lot Trust Agreement, dated December 26, 1996 executed by
and between Company and the State of Florida, Department of Business Regulation,
Division of Florida Land Sales, Condominiums and Mobile Homes.
25
"RESPONSIBLE OFFICER" means the chief executive officer and
the president of Company, or with respect to corporate proceedings, the
secretary or any assistant secretary of Company, or, with respect to financial
matters, the chief financial officer or treasurer of Company.
"REVERSE STOCK SPLIT" has the meaning set forth in the
definition of "STOCK SPLIT".
"SALE AND LEASEBACK" means any arrangement with any Person
providing for the leasing by Company or any Subsidiary of real or personal
property which has been or is to be sold or transferred by Company or such
Subsidiary to such Person or to any other Person to whom funds have been or are
to be advanced by such Person on the security of such property or rental
obligations of Company or Subsidiary.
"SECURED AGREEMENT" has the meaning ascribed to such term in
the Intercreditor Agreement, but shall not refer to amendments, modifications,
supplements, or restatements thereof entered into after the Effective Date
without the prior consent of Agent and Banks.
"SECURED AGREEMENT COLLATERAL AGENT" means DK Acquisition
Partners, L.P.
"SECURED AGREEMENT DOCUMENTS" means the Secured Agreement, the
"Transaction Documents" as defined in the Secured Agreement, the Investment
Instruments, the Secured Note and any and all instruments, documents and
agreements executed in connection therewith, as amended, supplemented or
otherwise modified from time to time in accordance with the terms thereof and of
the Intercreditor Agreement.
"SECURED AGREEMENT OBLIGEES" has the meaning ascribed to such
term in the Intercreditor Agreement.
"SECURED AGREEMENT OBLIGATIONS" means: (i) any indebtedness
and obligations now or hereafter owing to the Secured Agreement Obligees under
or in connection with the Secured Agreement Documents, including, without
limitation,(x) redemption and repurchase obligations with respect to the Series
A Preferred Stock and (y) the Secured Note Obligations; (ii) all interest,
prepayment premiums and late payment fees now or hereafter payable with respect
thereto; (iii) all existing and future guaranty obligations relating to the
foregoing; and (iv) all other fees (including, without limitation, attorneys'
and paralegals' fees and expenses) and other amounts now or hereafter payable to
the Secured Agreement Obligees, or any of them, or their agents under or in
respect of the Secured Agreement Documents.
"SECURED DEBT DOCUMENTS" means, collectively, the Loan
Documents, the Anglo American Loan Documents, and the Secured Agreement
Documents, each as amended, supplemented or otherwise modified from time to time
in accordance with the terms hereof, thereof, and of the Intercreditor
Agreement.
26
"SECURED NOTE" means, collectively, (a) that certain $850,000
promissory note dated as of December 31, 1998 and (b) that certain $1,000,000
promissory note dated as of December 31, 1998, each made by the Company to the
order of the Secured Agreement Obligees and each having a maturity date of
February 1, 2002.
"SECURED NOTE OBLIGATIONS" means all obligations of the
Company to the Secured Agreement Obligees under or with respect to the Secured
Note (whether for principal, interest, fees, costs, expenses, or otherwise) and
all obligations of any Subsidiary of the Company with respect thereto (whether
pursuant to a guaranty thereof, as a co-maker thereof or co-obligor with respect
thereto, or otherwise).
"SECURITY AGREEMENTS" means the Personal Property Security
Agreement, the Deposit Account Security Agreement, and any other security
agreements, between Company and/or a Subsidiary and Agent or Collateral Agent,
as the same may be amended supplemented or otherwise modified from time to time,
pursuant to which Company and Subsidiaries assign and grant a security interest
in Homesite Contracts Receivables and Commercial Receivables and Personal
Property of Company or Subsidiaries to Agent or Collateral Agent, for the
benefit of Banks, as required by this Agreement.
"SECURITY DOCUMENTS" means the Stock Pledge Agreement, the
Joint Venture Pledge Agreement, the Security Agreements, the Mortgages, the
Deeds of
27
Trust, the Company Operating Account Control Agreement, any cash collateral
account agreements, and any and all other agreements, instruments, documents,
financing statements, assignments, notices, mortgages and other written matter
necessary or reasonably required by Agent or Collateral Agent at any time to
create, perfect, maintain or continue Agent's and Collateral Agent's Lien in the
Collateral, together with all amendments, modifications, extensions,
substitutions and renewals thereof.
"SERIES A DOCUMENTS" has the meaning set forth in Section
4.32.
"SERIES A PREFERRED STOCK" and "SERIES B PREFERRED STOCK" have
the meanings specified in the definition of Preferred Stock.
"SERIES A STATEMENT" has the definition assigned to that term
in the definition of "PREFERRED STOCK".
"SERIES B STATEMENT" has the definition assigned to that term
in the definition of "PREFERRED STOCK".
"SHAREHOLDERS' EQUITY" means, as to any corporation, an amount
equal to the excess of the assets of such corporation (including minority
interests) over its liabilities, determined in accordance with GAAP and as shown
on the most recently prepared applicable balance sheet of such corporation. The
Company's Preferred Stock shall not be treated as liabilities for purposes
hereof.
"SINGLE EMPLOYER PLAN" means any Plan which is covered by
Title IV of ERISA, but which is not a Multiemployer Plan.
"SIXTH NOTE" means the Sixth Amended and Restated Renewal
Working Capital Note dated as of December 31, 1998 made by the Company in favor
of Agent to renew, amend and restate the Existing Note.
"SPUD SUBSIDIARY" has the meaning assigned that term in
Section 7.2(h).
"STANDBY LETTER OF CREDIT" means any standby letter of credit
or similar instrument issued in accordance with the provisions of this Agreement
for the purpose of repayment of a portion (the "Repayment Amount") of the
principal of the Unsecured Cash Flow Notes in an aggregate amount not to exceed
$7,500,000 subject to reduction from time to time in accordance with the terms
of the Escrow Agreement.
"STOCK PLEDGE AGREEMENT" means the Fourth Amended and Restated
Stock Pledge Agreement, dated as of December 31, 1998, among Company, each of
its
28
Subsidiaries and Collateral Agent, pursuant to which Company and Subsidiaries
pledge Subsidiary Stock to Collateral Agent for the benefit of Banks.
"STOCK SPLIT" means a proposal to amend Company's Amended and
Restated Certificate of Incorporation to effect, if subsequently determined by
Company's board of directors, (1) a reverse stock split of Company's outstanding
common stock on the effective date of the amendment (the "Reverse Split
Effective Date"), pursuant to which a fixed number of 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 all fractions created
in the Reverse Stock Split will be cashed out and (2) to effect a forward split
of the Company's common stock 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 a fixed number of whole shares of the Company's
common stock (as determined by the Company's board of directors in its
discretion).
"SUBSIDIARY" means, as to any Person, a corporation,
partnership, trust (exclusive of any trust created in connection with a Reserve
Account) or other entity of which shares of stock, partnership interests,
beneficial interests or other ownership interests having ordinary voting power
(other than stock or such other ownership interests having such power only by
reason of the happening of a contingency) to elect a majority of the board of
directors or other managers of such corporation, partnership, trust (exclusive
of any trust created in connection with a Reserve Account) or other entity are
at the time owned, or the management of which is otherwise controlled, directly
or indirectly, through one or more intermediaries, or both, by such Person.
Unless otherwise qualified, all references to a "Subsidiary" or to
"Subsidiaries" in this Agreement shall refer to a Subsidiary or Subsidiaries of
Company. Unless otherwise indicated, all references to a Subsidiary or
Subsidiaries of Company shall not mean, include, or refer to the Unrestricted
Subsidiaries, the Excluded Subsidiaries, or the Joint Ventures.
"SUBSIDIARY GUARANTEE" means the Subsidiary Guarantee, dated
as of December 31, 1998, executed by Company and each of its Subsidiaries and
Unrestricted Subsidiaries in favor of Agent, for the benefit of Banks.
"SUBSIDIARY PROPERTY UNDER DEVELOPMENT" means, collectively,
the Real Property of any Subsidiary which is acquired for the purpose of being
developed, or which is in the process of being improved or developed, either by
the construction of roads, curb cuts, sewer and water facilities or other
improvements, or by the construction of residential units and appurtenances
thereto.
29
"SUBSIDIARY STOCK" means the Capital Stock of any and all
Subsidiaries, Excluded Subsidiaries, and Unrestricted Subsidiaries.
"TAX SERVICING CONTRACTS" means, collectively, the tax
servicing contracts required to be delivered under Section 5.3, and all
amendments, modifications, extensions, substitutions and renewals thereof.
"TOTAL USAGE" means, as of any date of determination,
$7,500,000.
"TRUST PROPERTY" means the real property held in trust
pursuant to (a) Trust Agreement No. 06-01-009-6082101, dated as of January
17,1991, by and between NCNB National Bank of Florida, as Trustee for the
benefit of Company, the Beneficiary; (b) Trust Agreement No. 06-01-009-6081954,
dated as of January 17,1991, by and between NCNB National Bank of Florida, as
Trustee for the benefit of Company, the Beneficiary; (c) Trust Agreement No.
06-01-009-6082655, dated as of January 17, 1991, by and between NCNB National
Bank of Florida, as Trustee for the benefit of Company and General Development
Financial Services, Inc., the Beneficiaries; (d) Trust Agreement No. 2, dated as
of May 31, 1991, by and between ▇▇▇▇ ▇▇▇▇▇▇, Esq., as successor Trustee for the
benefit of Company and Cumberland Cove, Inc., the Beneficiaries; and (e) Utility
Lot Trust Agreement.
"20% PROFITS INTEREST" means that certain 20% net profits
interest granted by Company to Apollo or its designee in that certain project
located in Tampa, Florida, known as the Apollo Beach project currently under
consideration by the Company or another project hereafter acquired or to be
acquired by Company (or a Subsidiary of Company) satisfactory to Apollo of
economic value equivalent to the Apollo Beach project, which 20% net profits
interest represents an additional fee payable to Apollo in connection with the
consummation of the transactions contemplated herein and in the Anglo American
Loan Agreement.
"UCC" means the Uniform Commercial Code as shall be in effect
from time to time in the state of New York.
"UNRESTRICTED SUBSIDIARIES" means, collectively, (a) the
direct or indirect subsidiaries of Company listed on Schedule U-1, and (b) any
other direct or indirect subsidiary of Company that is formed or acquired after
the Effective Date, that does not have or make any investment in any Joint
Venture (nor was formed or acquired for the purpose of having or making any such
investment), and that Agent agrees in writing that such entity shall constitute
an Unrestricted Subsidiary under and for all purposes of this Agreement and the
other Loan Documents, upon which Schedule U-1 automatically shall be deemed to
be amended to reflect the inclusion on
30
such schedule of such new Unrestricted Subsidiary; and "UNRESTRICTED SUBSIDIARY"
means any one of them.
"UNSECURED CASH FLOW NOTES" means those certain Unsecured 13%
Cash Flow Notes due December 31, 1998, issued pursuant to the Indenture dated as
of March 31, 1992.
"UNSECURED 1996 NOTES" means those certain 12% Notes due
December 31, 1996, issued pursuant to the Indenture dated as of March 31, 1992.
"UTILITY LOT TRUST AGREEMENT" means the Utility Lot Trust
Agreement, dated December 26, 1996, by and between Company and the State of
Florida.
"VENTURE SUBSIDIARY" means any Subsidiary whose sole asset is
its equity interest in a Joint Venture and whose sole revenues are derived from
such sole asset.
"WORKING CAPITAL RESERVES" has the meaning assigned that term
in Article I of the Reorganization Plan.
B. OTHER DEFINITIONAL PROVISIONS.
(a) Unless otherwise specified therein, all terms defined
in this Agreement shall have such defined meanings when used in the other Loan
Documents or any certificate or other document made or delivered pursuant
hereto.
(b) As used herein and in the other Loan Documents, and any
certificate or other document made or delivered pursuant hereto, accounting
terms relating to Company and its Subsidiaries not defined in Section 1.1 and
accounting terms partly defined in Section 1.1, to the extent not defined, shall
have the respective meanings given to them under GAAP.
(c) The words "hereof", "herein" and "hereunder" and words
of similar import when used in this Agreement shall refer to this Agreement as a
whole and not to any particular provision of this Agreement.
(d) The meanings given to terms defined herein shall be
equally applicable to both the singular and plural forms of such terms.
(e) References to "Sections", "subsections", Exhibits and
Schedules are to Sections, Sub-sections, Exhibits and Schedules, respectively,
of this Agreement unless otherwise specifically provided.
31
(f) Unless the context of this Agreement clearly requires
otherwise, the term "including" is not limiting.
(g) Unless the context of this Agreement or the other Loan
Documents clearly requires otherwise, any reference in this Agreement or in the
other Loan Documents to this Agreement, any of the other Loan Documents, any of
the other Secured Debt Documents, or the Intercreditor Agreement shall include
all alterations, amendments, changes, extensions, modifications, renewals,
replacements, substitutions, and supplements, thereto and thereof, as
applicable, made in accordance with the terms hereof, thereof, and of the
Intercreditor Agreement.
II.
AMOUNT AND TERMS OF COMMITMENTS
A. REVOLVING LOANS.
(a) Subject to the terms and conditions hereof, each Bank
severally agrees to make loans (collectively, the "Loans") to Company from time
to time in an aggregate amount such that at no time shall the sum of the
aggregate principal amount of all Loans then outstanding at such time exceed the
lesser of (i) the Maximum Permissible Loan Amount or (ii) the Borrowing Base.
The Loans shall be made by each of Banks on each Borrowing Date pro rata based
on such Bank's Pro Rata Share of the aggregate amount to be borrowed on such
Borrowing Date.
(b) Subject to the terms and conditions hereof, amounts
prepaid or repaid on account of the Loans may be reborrowed during the term of
this Agreement except that the Maximum Permissible Loan Amount shall be reduced
as provided in Sections 2.5(c), (d), (e), (f) and (g).
(c) After the cumulative amount of Loans advanced under the
Future Advance Note reaches its full face amount of $12,000,000, then (i) any
Loan repayments made in connection with a reduction of the Maximum Permissible
Loan Amount as provided in Sections 2.5(c), (d), (e), (f) and (g) shall be
deemed made against the Future Advance Note until the Maximum Permissible Loan
Amount is reduced to $20,000,000, and thereafter such repayments shall be deemed
made against the Sixth Note, (ii) any other Loan repayments (i.e., those that
can be reborrowed) shall be deemed made against the Sixth Note until the
outstanding principal balance of the Sixth Note is reduced to $0, and
thereafter, against the Future Advance Note, and (iii) any such reborrowings
shall be deemed made under the Sixth Note until the Sixth Note is fully drawn,
and thereafter such reborrowings shall be deemed made under the Future Advance
Note.
32
(d) All Loans shall be made by Banks simultaneously, it
being understood that no Bank shall be responsible for any default by any other
Bank in the other Bank's obligations to make Loans hereunder nor shall the
Commitment of any Bank be increased as a result of the default by any other Bank
in such other Bank's obligation to make Loans hereunder. The default by any Bank
in its obligations to make Loans shall not excuse any other Bank from its
obligations to make Loans.
B. NOTES.
The Loans made by each Bank shall be evidenced by the Sixth
Note and the Future Advance Note, and any renewal, replacement or substitution
therefor,made in favor of the Agent for the benefit of all of the Banks. The
Agent is hereby authorized to record the date and amount of each Loan made by
such Bank and the date and amount of each payment or prepayment of principal
thereof or of interest on a Loan on the schedule annexed to and constituting a
part of its Note, and any such recordation shall constitute prima facie evidence
of the accuracy of the information so recorded. Each such Note shall (a) be
dated December 31, 1998, (b) be stated to mature as provided in SECTION 2.7 and
(c) provide for the computation and payment of interest in accordance with
SECTIONS 2.8 and 2.10.
C. PROCEDURE FOR BORROWING.
Subject to the conditions set forth in this Agreement, Company
may make a borrowing hereunder on any Business Day during the period from the
date hereof to but not including the Maturity Date. Company shall give Agent
irrevocable notice (which notice must be received by Agent prior to 2:00 p.m.,
New York time two Business Days prior to the requested Borrowing Date),
specifying (a) the amount to be borrowed and (b) the requested Borrowing Date.
Upon receipt of any such notice from Company, Agent shall promptly (and in any
event on the same Business Day) notify each Bank thereof. The notice of a
request for borrowing by Company shall be accompanied by a certificate of a
Responsible Officer of Company (a) representing and warranting that the purpose
for which the requested borrowing is to be used is permitted by, and is in
accordance with, the terms and conditions of this Agreement, and (b)
representing and warranting that, after giving effect to the requested borrowing
of Loans, the sum of the aggregate principal amount of all Loans outstanding at
such time does not exceed the lesser of (i) the Maximum Permissible Loan Amount
and (ii) the Borrowing Base at such time. Each Bank shall make the amount of its
Pro Rata Share of each requested borrowing available to Agent for the account of
Company at the office of Agent specified on the signature pages hereof prior to
10:00 a.m., New York time, on the requested Borrowing Date in funds immediately
available to Agent. Such borrowing will then be made available to Company by
Agent by paying to such deposit account as Company may designate in the notice
of such Borrowing the
33
aggregate of the amounts made available to Agent by Banksand in like funds as
received by Agent; PROVIDED, HOWEVER, that if Agent or any Bank determines that
any condition precedent to such borrowing has not been met (and, in the case of
a Bank, such Bank has so notified Agent), Agent shall not make such borrowing
available to Company.
D. USE OF PROCEEDS OF LOANS.
The proceeds of the Loans shall be used by Company or its
Subsidiaries for the following purposes only: (i) to finance a portion of the
Recapitalization Transactions (as described in, and only to the extent set forth
in, such definition), (ii) to pay transactional fees, costs, and expenses
incurred in connection with this Agreement, and (iii) for the lawful and
permitted corporate purposes of the Company or its Subsidiaries consistent with
the terms and conditions hereof.
E. MANDATORY REDUCTIONS OF COMMITMENTS AND PREPAYMENTS OF LOANS.
Company shall make the following mandatory reductions of the
Commitments and prepayments of the Loans:
1. If, at any time the aggregate principal amount of the
Loans outstanding exceeds the lesser of (i) the Maximum Permissible Loan Amount,
or (ii) the Borrowing Base in effect at such time, Company shall immediately pay
to Agent, in cash, the amount of such excess for application to the prepayment
of the Loans.
2. If at any time the amount of cash or Cash Equivalents
held by Company and its Subsidiaries exceeds $5,000,000 (less any checks
outstanding to the extent such checks have been written to pay current expenses
and not to prepay expenses except for expenses to be incurred in the immediately
subsequent three-month period and consistent with past practices), Company shall
immediately pay to Agent, in cash, the amount of such excess for application to
the prepayment of the principal of the Loans.
3. Upon the closing of the sale of the Las Olas Property
and Company's receipt of the Net Cash Proceeds therefrom, the Maximum
Permissible Loan Amount shall automatically be reduced by $3,000,000 and Company
shall immediately pay to Agent, in cash, for application to the prepayment of
the principal of the Loans, together with accrued interest thereon, the amount
necessary to reduce the aggregate amount of the outstanding Loans to the Maximum
Permissible Loan Amount. In any event, taking into account any prior prepayment
of the principal of the Loans on or before March 31, 1999, Company shall have
prepaid to Agent the principal of the Loans, together with accrued interest
thereon, in an amount no less than $4,000,000,
34
and immediately thereafter theMaximum Permissible Loan Amount shall
automatically be reduced by an equal amount.
4. Upon the closing of the sale of the Trails of West
Friscoproject and the Company's receipt of the Net Cash Proceeds therefrom, the
Maximum Permissible Loan Amount shall automatically be reduced by an amount
equal to the sum of $1,000,000 plus 75% of any excess in Net Cash Proceeds from
the sale of the Trails of West Frisco project over $15,000,000, and Company
shall immediately pay to Agent, in cash, for application to the prepayment of
the principal of the Loans, together with accrued interest thereon, the amount
necessary to reduce the aggregate amount of the outstanding Loans to the Maximum
Permissible Loan Amount. In any event, taking into account any prior prepayment
of the principal of the Loans made pursuant to Section 2.5(c) and the preceding
sentence of this Section 2.5(d), on or before May 31, 1999, Company shall have
prepaid the principal of the Loans in an amount no less than $5,000,000, and
immediately thereafter the Maximum Permissible Loan Amount shall automatically
be reduced by an equal amount.
5. Upon the closing of a bulk sale of the greater of (i)
one-third (1/3) or more of the total number of planned lots at the time of
acquisition and (ii) one-third (1/3) of the land that would otherwise comprise
such planned lots in any Eligible Subdivision Project at the time of acquisition
(other than the Riverwalk Tower project, the Trails of West Frisco project, the
Apollo Beach project, that certain project under consideration by the Company
and located in Palm Beach County, Florida currently known as "Grand Oaks", that
certain project under consideration by the Company and located in St. John's
County, Florida currently known as "Rayland") in a single transaction and
Company's receipt of the Net Cash Proceeds therefrom, the Maximum Permissible
Loan Amount shall automatically be reduced by an amount equal to 75% of such Net
Cash Proceeds, and Company shall immediately pay to Agent, in cash, for
application to the prepayment of the principal of the Loans, together with
accrued interest thereon, the amount necessary to reduce the aggregate amount of
the outstanding Loans to the Maximum Permissible Amount.
6. On the 15th day of February, March and April, 2000,
(or if any such day is not a Business Day, on the next Business Day), (i) the
Maximum Permissible Loan Amount shall automatically be reduced by $1,666,666.66,
and (ii) Company shall immediately pay to Agent, in cash, for application to the
prepayment of the principal of the Loans, together with accrued interest
thereon, the amount necessary to reduce the aggregate amount of the outstanding
Loans to the Maximum Permissible Amount. Any prepayment of the Loans required
under Section 2.5(e) shall be credited against succeeding prepayment obligations
required under Sections 2.5(f) and 2.5(g) in chronological order.
35
7. On the 15th day of May, June and July, 2000 (or if any
such day is not a Business Day, on the next Business Day), the Maximum
Permissible Loan Amount shall automatically be reduced by $2,333,333.33, and
Company shall immediately pay to Agent, in cash, for application to the
prepayment of the principal of the Loans, together with accrued interest thereon
the amount necessary to reduce the aggregate amount of the outstanding Loans to
the Maximum Permissible Loan Amount. Any prepayment of the Loans required under
Section 2.5(e) shall be credited against succeeding prepayment obligations
required under Sections 2.5(f) and 2.5(g) in chronological order.
8. The prepayment of the Loans required under Sections 2.5
(a) and (b) shall not result in a reduction of the Maximum Permissible Loan
Amount. The reductions of the Maximum Permissible Loan Amount required under
Sections 2.5(c), (d), (e), (f) and (g) above shall be applied ratably to the
Commitment of each of the Banks. Commitments, when reduced, may not be
reinstated and Loans, when prepaid pursuant to any of the provisions of Sections
2.5(c), (d), (e), (f) and/or (g) may not be reborrowed.
9. If, on the date of any required prepayment of the
Loans under any of the foregoing clauses, such prepayment would exceed the
amount of the outstanding Loans on such date, then the amount of the required
prepayment shall be limited to the amount of the outstanding Loans. Moreover, if
a sale described in clause (c) above closes after March 31, 1999 and/or a sale
described in clause (d) above closes after May 31, 1999, then any prepayment of
the proceeds required thereunder shall not result in a further reduction of the
Maximum Permissible Loan Amount; provided, however, with respect to a sale of
the Trails of West Frisco project, the Maximum Permissible Loan Amount shall
automatically be reduced by only 75% of any excess in Net Cash Proceeds from
such sale over $15 million.
10. In the event that any of the foregoing prepayments of
the Loans shall reduce the Maximum Permissible Loan Amount to $O, any excess
prepayment amounts required hereunder shall be held by the Collateral Agent in
an interest bearing account and applied solely to the cash collateralization of
the Letters of Credit and L/C Guarantees in accordance with the provisions of
Section 2.15, up to the amount of the L/C Guarantees.
F. OPTIONAL PREPAYMENTS.
Company may at any time and from time to time prepay the
Loans, in whole or in part, without premium or penalty, upon at least one
Business Day's irrevocable prior notice to Agent, specifying the date and amount
of prepayment. Upon receipt of any such notice Agent shall promptly (and in any
event on the same Business
36
Day) notify each Bank thereof. If any such notice isgiven, the amount specified
in such notice shall be due and payable on the date specified therein, together
with accrued interest and fees to such date on the amount prepaid. Partial
optional prepayments shall be in an aggregate principal amount of at least
$500,000. Optional prepayments made pursuant to this Section shall be applied in
accordance with SECTION 2.11.
G. REPAYMENT AT MATURITY.
On the Maturity Date, all Obligations immediately shall become
due and payable without notice or demand, and Company unconditionally agrees to
repay to Agent, for the ratable account of Banks, the principal amount of all
Loans in full, together with interest thereon and all other amounts then payable
hereunder and under the other Loan Documents including, without limitation, the
return to Agent of all outstanding Cash Collateral in accordance with the terms
of the Escrow Agreement. Company shall not be relieved or discharged of
Company's duties, Obligations, or covenants hereunder, and the continuing
security interests of Agent for the benefit of Banks in the Collateral shall
remain in effect until all Obligations have been fully and finally discharged
and the Banks' obligations to extend credit hereunder is terminated.
H. INTEREST RATES AND PAYMENT DATES.
1. RATE OF INTEREST. Company agrees to pay interest on
the outstanding principal amount of each Loan, from and including the date on
which such Loan is made to but not including the date on which such Loan shall
be paid in full, at a rate of eleven per cent (11%) per annum (calculated by
multiplying 11% times the average daily outstanding principal amount of each
Loan and dividing by 12).
2. DEFAULT RATE. If any Obligation, whether for principal
or (to the maximum extent permitted by applicable law) interest or other
amounts, is not paid in full when due (whether at stated maturity, by
acceleration or by required prepayment, and whether by operation of the
subordination provisions of the Intercreditor Agreement or otherwise), Company
agrees to pay interest on the amount in default, from and including the date on
which such amount became due (including any applicable cure or grace period) to
but not including the date on which such amount shall be paid in full, at a rate
equal to the lesser of (i) four (4%) percent per annum in excess of (a) the rate
of interest set forth in Section 2.8(a) above with respect to the Loans and (b)
the rate of interest set forth in Section 2.15(f)(i) with respect to the L/C
Guarantees, in the case of each of (a) and (b) compounded monthly, and (ii) the
maximum rate of interest allowed by applicable law (calculated as provided in
Section 2.8(a) above) (the "Default Rate"). In addition, after the occurrence
and during the continuance of an Event of Default, Company shall pay interest on
the outstanding
37
principal amount of each Loan from and after the date of the occurrence of such
Default until such Event of Default is cured or waived.
3. INTEREST PAYMENT DATES. Accrued interest shall be
payable in arrears on each Interest Payment Date; PROVIDED, that interest
accruing pursuant to paragraph (b) of this Section also shall be payable from
time to time on demand.
4. MAXIMUM INTEREST RATE. Anything in this Agreement or
the Notes or the other Loan Documents to the contrary notwithstanding, in no
event shall any Bank be entitled to take, charge, collect or receive interest on
the Loans or on any other Obligations at a rate in excess of the maximum lawful
rate permitted under applicable law. In the event that any Bank inadvertently
shall take, charge, collect or receive interest in excess of such maximum lawful
rate, the excess amount of such interest shall automatically be applied to
reduce the principal amount of the Loans, and any excess remaining after such
application shall be applied to any remaining Obligations (other than such
interest) hereunder or under the other Loan Documents, and any excess remaining
after the aforesaid application shall be returned to Company.
I. FEES.
1. AGENT CLOSING FEE. Company shall pay to Collateral
Agent, for the sole and separate account of Banks, on the Effective Date, a
non-refundable closing fee of $1,280,000.
2. FINANCIAL EXAMINATION FEES. Company shall pay to
Agent: (i) a fee of $650 per day per examiner, plus reasonable out-of-pocket
expenses for each financial analysis and examination of Company or its
Subsidiaries (including Unrestricted Subsidiaries, Excluded Subsidiaries, and
Joint Ventures) performed by Agent or Banks or their agents; (ii) a fee of
$1,000 per day per appraiser, plus out-of-pocket expenses for each appraisal of
the Collateral performed by Agent or Banks or their agents; and (iii) the actual
charges paid or incurred by Agent if it elects to employ the services of one or
more non-Affiliates to perform such financial analyses and examinations (i.e.,
audits) of Company or to appraise the Collateral.
3. COLLATERAL AGENT SERVICING FEE. Company shall pay to
Agent for the sole and separate account of Collateral Agent, on the last day of
each month, in arrears, during the term of this Agreement, and thereafter so
long as any Obligations are outstanding, a servicing fee in an amount equal to
$10,000.
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J. COMPUTATION OF INTEREST AND FEES.
1. Interest on Loans and fees shall be calculated on the
basis of a 360-day year for a year of twelve 30-day months (e.g., 11% of the
average daily outstanding principal balance of the Loans divided by 12). Each
determination of an interest payment by Agent pursuant to any provision of this
Agreement shall be conclusive and binding on Company and Banks in the absence of
manifest error.
2. All payments of interest, fees, costs and expenses and
all other payments due to Agent under this Agreement or any other Loan Document
shall be paid by Company to Agent as and when incurred and/or payable by wire
transfer in accordance with directions specified by Agent from time to time.
K. PRO RATA TREATMENT AND PAYMENTS.
1. PRO RATA TREATMENT. Each borrowing by Company from
Banks hereunder and each payment by Company on account of any fee payable to the
Banks shall be made ratably according to the respective Pro Rata Shares of
Banks.
2. APPORTIONMENT OF PAYMENTS. Each payment (including
each prepayment) by Company on account of principal of and interest on the Loans
shall be made pro rata according to the effective outstanding principal amounts
of the Loans then held by Banks. All payments (including prepayments) to be made
by Company hereunder and under the Notes and the other Loan Documents, whether
onaccount of principal, interest, fees or otherwise, shall be made without set
off or counterclaim and shall be made not later than 12:00 p.m., New York time,
on the due date thereof, to Agent, for the account of Banks, at Agent's office
specified on the appropriate signature page hereof, in Dollars and in
immediately available funds. All such payments not relating to principal or
interest of specific Loans, or not constituting payment of specific fees shall
be applied as follows:
FIRST, to pay any fees, costs, or expense reimbursements then
due to Collateral Agent from Company;
SECOND, to pay any fees, costs, or expense reimbursements then
due to Agent from Company;
THIRD, to pay any fees, premiums, costs, or expense
reimbursements then due to Banks from Company;
FOURTH, ratably to pay any interest due in respect of the
Loans, until paid in full;
39
FIFTH, ratably to pay principal of the Loans;
SIXTH, ratably to pay any other Obligations due to Agent or
any Bank by Company.
If any payment hereunder becomes due and payable on a day other than a Business
Day, such payment shall be extended to the next succeeding Business Day, and,
with respect to payments of principal, interest thereon shall be payable at the
then applicable rate during such extension.
3. PAYMENTS BY BANKS. Unless Agent shall have been
notified in writing prior to any Loan Borrowing Date by any Bank having a
Commitment that such Bank will not make the amount that would constitute its Pro
Rata Share of the Loans to be borrowed on such an Borrowing Date, available on
such date to Agent, Agent may assume that such Bank has made such amount
available to Agent on such Loan Borrowing Date, and Agent may, in its sole
discretion, but shall not be obligated to, in reliance upon such assumption,
make available to Company a corresponding amount. If such corresponding amount
is not made available to Agent on such Loan Borrowing Date, Agent shall be
entitled to recover such corresponding amount from such Bank, together with
interest thereon, for each day from such Loan Borrowing Date until the date such
amount is paid to Agent, at the customary rate set by Agent for correction of
errors among banks for three Business Days and thereafter at the Default Rate. A
certificate of Agent submitted to any Bank with respect to any amounts owing
under this Section shall be conclusive in the absence of manifest error. If such
Bank does not pay such corresponding amount to Agent forthwith upon demand,
Agent shall promptly notify Company and Company shall immediately paysuch
corresponding amount to Agent with interest thereon, for each day from the Loan
Borrowing Date until the date such amount is paid to Agent, at the rate payable
under this Agreement for the Loans.
4. PAYMENTS BY COMPANY. Unless Agent shall have been
notified by Company in writing prior to any date on which a payment becomes due
from Company that Company will not make available to Agent on such date the
amount then due, Agent may assume that Company has made such amount available to
Agent on such date, and Agent may, in its sole discretion, but shall not be
obligated to, in reliance upon such assumption, make available to the relevant
Bank or Banks or Issuing Bank a corresponding amount. If such corresponding
amount is not made available to Agent on such date, then without prejudice to
any claim that Agent, Issuing Bank or any Bank may have against Company for the
amount not so paid and without prejudice to Company's obligation to pay default
interest thereon, Agent shall be entitled to recover such corresponding amount
from such Bank, together with interest thereon, for each day from such Loan
Borrowing Date until the date such amount is paid to Agent, at the customary
rate set by Agent for correction of errors among banks for three
40
Business Days and thereafter at the Default Rate. A certificate of Agent
submitted to any Bank with respect to any amounts owing under this Section shall
be conclusive in the absence of manifest error. If such Bank does not pay such
corresponding amount to Agent forthwith upon demand, Agent shall promptly notify
Company and Company shall immediately pay such corresponding amount to Agent
with interest thereon, for each day from the Loan Borrowing Date until the date
such amount is paid to Agent, at the rate payable under this Agreement for the
Loans.
L. REQUIREMENTS OF LAW.
If any Bank shall have determined that any change in any
Requirement of Law regarding capital adequacy or in the interpretation or
application thereof or compliance by such Bank or any corporation controlling
such Bank with any request or directive regarding capital adequacy (whether or
not having the force of law) from any Governmental Authority made subsequent to
the date hereof does or shall have the effect of reducing the rate of return on
such Bank's or such corporation's capital as a consequence of its obligations
hereunder to a level below that which such Bank or such corporation could have
achieved but for such change or compliance (taking into consideration such
Bank's or such corporation's policies with respect to capital adequacy) by an
amount deemed by such Bank to be material, then from time to time, after
submission by such Bank to Company (with a copy to Agent) of a written request
therefor, Company shall pay to such Bank such additional amount or amounts as
will compensate such Bank for such reduction. The agreements in this Section
shall survive the payment of the Notes and all other amounts due hereunder.
M. TAXES.
1. PAYMENTS TO BE FREE AND CLEAR; GROSS-UP. All payments
made by Company under this Agreement and the Notes and the other Loan Documents
shall be made free and clear of, and without deduction or withholding for or on
account of, any present or future taxes, levies, imposts, duties, charges, fees,
deductions or withholdings, now or hereafter imposed, levied, collected,
withheld or assessed by any Governmental Authority, excluding, (i) in the case
of Agent and each Bank, net income taxes and franchise taxes (imposed in lieu of
net income taxes) imposed on Agent or such Bank, as the case may be, as a result
of a present or former connection between the jurisdiction of the government or
taxing authority imposing such tax and Agent or such Bank (excluding a
connection arising solely from Agent or such Bank having executed, delivered or
performed its obligations or received a payment under, or enforced, this
Agreement, the Notes or any other Loan Document) or any political subdivision or
taxing authority thereof or therein and (ii) in the case of each Bank organized
under the laws of a jurisdiction outside the United States, United States
federal withholding tax payable with respect to payments by Company that would
not
41
have been imposed had such Bank, to the extent then required thereunder,
delivered to Company and Agent the forms prescribed by Section 2.13(b) (all
such non-excluded taxes, levies, imposts, duties, charges, fees, deductions and
withholdings being hereinafter called "Taxes"). If any Taxes are required by law
to be withheld from any amounts payable to Agent or any Bank hereunder or under
the Notes or under the other Loan Documents, the amounts so payable to Agent or
such Bank shall be increased to the extent necessary to yield to Agent or such
Bank (after payment of all Taxes) interest or any such other amounts payable
hereunder at the rates or in the amounts specified in this Agreement and the
Notes and the other Loan Documents. If Company fails to pay any Taxes when due
to the appropriate taxing authority, Company shall indemnify Agent and Banks for
any incremental taxes, interest or penalties that may become payable by Agent or
any Bank as a result of any such failure. The agreements in this Section shall
survive the termination of this Agreement and the payment of the Notes and all
other amounts payable hereunder.
2. TAX CERTIFICATES. Each Bank that is not organized
under the laws of the United States of America or a state thereof agrees that it
will deliver to Company and Agent (i) two duly completed copies of United States
Internal Revenue Service Form 1001 or 4224 or successor applicable form, as the
case may be, and (ii) an Internal Revenue Service Form W-8 or W-9 or successor
applicable form. Each such Bank also agrees to deliver to Company and Agent two
further copies of the said Form 1001 or 4224 and Form W-8 or W-9, or successor
applicable forms, or other manner of certification, as the case may be, on or
before the date that any such form expires or becomes obsolete or after the
occurrence of any event requiring a change in the most recent form previously
delivered by it to Company, and such extensions or renewals thereof as may
reasonably be requested by Company or Agent, unless in any such case any change
in treaty, law or regulation has occurred prior tothe date on which any such
delivery would otherwise be required which renders all such forms inapplicable
or which would prevent such Bank from duly completing and delivering any such
form with respect to it and such Bank so advises Company and Agent. Such Bank
shall certify (i) in the case of a Form 1001 or 4224, that it is entitled to
receive payments under this Agreement without deduction or withholding of any
United States federal income taxes and (ii) in the case of a Form W-8 or W-9,
that it is entitled to an exemption from United States backup withholding tax.
N. FUNDING LOSSES. If Company (i) for any reason
whatsoever, makes any payment of the Loans on any day other than the date on
which such payment originally is scheduled to become due, (ii) for any reason
fails to make any prepayment of the Loans on the date for which it has given
notice pursuant to Section 2.6 or is required to make payment pursuant to
Section 2.5 or (ii) fails to make a borrowing on a requested Borrowing Date
after notice has been given to Agent in accordance with Section 2.3, Company
shall reimburse each Bank on demand for any loss incurred by it in obtaining,
42
liquidating or employing deposits or other funding (and any incidental costs
relating thereto). Such Bank shall deliver to the Agent a certificate of such
Bank as to the amount of such loss or expense, which certificate shall set forth
in reasonable detail the basis for such loss or expense, and the Agent, in turn,
shall promptly deliver such certificate to Company. Any such certificate shall
be conclusive and binding in the absence of manifest error. All reimbursements
shall be made by making payment thereof when due to the Agent, which shall
promptly distribute the relevant amount to the respective Bank.
O. ISSUANCE OF L/C GUARANTEES AND BANKS' PURCHASE OF
PARTICIPATIONS THEREIN.
1. LETTERS OF CREDIT AND L/C GUARANTEES. Subject to the
terms and conditions of this Agreement, Issuing Bank agrees to obtain standby
letters of credit for the account of Company (each, a "Letter of Credit") and to
issue guarantees of payment (each such guarantee, an "L/C Guarantee") with
respect to such Letters of Credit for the account of Company for the purposes
specified in the definition of Letter of Credit. Issuing Bank shall have no
obligation to obtain any Letter of Credit and/or issue any L/C Guarantee:
(a) if after giving effect to such L/C Guarantee,
the aggregate Letter of Credit Usage would exceed $7,500,000;
(b) having an expiration date later than the earlier
of (A) January 4, 2001 and (B) the date which is two (2) years from the
date of issuance of such L/C Guarantee; or
(c) denominated in a currency other than Dollars.
2. MECHANICS OF ISSUANCE.
(a) NOTICE OF ISSUANCE. Whenever Company desires the
issuance of a Letter of Credit, it shall deliver to Issuing Bank (with
a copy to Agent if Agent is not Issuing Bank) a Notice of Issuance of
Letter of Credit no later than 1:00 p.m. (New York time) at least four
Business Days or in such shorter period as may be agreed to by Issuing
Bank in any particular instance, in advance of the proposed date of
issuance. The Notice of Issuance of Letter of Credit shall specify (i)
the proposed date of issuance (which shall be a Business Day), (ii) the
face amount of the Letter of Credit, (iii) the expiration date of the
Letter of Credit, (iv) the name and address of the beneficiary, and (v)
the verbatim text of the proposed Letter of Credit or the proposed
terms and conditions thereof, including a precise description of any
documents and the verbatim text of any certificates to be presented by
the beneficiary which, if
43
presented by the beneficiary prior to the expiration date of the Letter
of Credit would require the issuing bank to make payment under the
Letter of Credit; provided that Issuing Bank in its reasonable
discretion, may require changes in the text of the proposed Letter of
Credit or any such documents or certificates, including that such
Letter of Credit be governed by the Uniform Customs and Practices
publication number 500.
Company shall notify Issuing Bank (and Agent, if Agent
is not Issuing Bank) prior to the issuance of any Letter of Credit if
any of the matters to which Company is required to certify in the
applicable Notice of Issuance of Letter of Credit is no longer true and
correct as of the proposed date of issuance of such Letter of Credit,
and upon the issuance of any Letter of Credit, Company shall be deemed
to have re-certified, as of the date of such issuance, as to the
matters to which Company is required to certify in the applicable
Notice of Issuance of Letter of Credit.
(b) NOTIFICATION TO BANKS. Promptly after receipt of
a Notice of Issuance of Letter of Credit: (i) Agent shall notify each
Bank of the proposed issuance of such Letter of Credit, the amount of
any L/C Guarantee required to obtain such Letter of Credit and the
amount of such Bank's respective participation therein, determined in
accordance with SECTIONS 2.15(C) AND (L) and (ii) Agent shall deliver
to each other Bank a copy of such Notice of Issuance of Letter of
Credit.
(c) ISSUANCE OF LETTER OF CREDIT. Upon satisfaction
or waiver (in accordance with SECTION 10.1) of the conditions set forth
in SECTION 5.2, Issuing Bank shall obtain the requested Letter of
Credit and provide the related L/C Guarantee and upon obtaining such
Letter of Credit and providing such L/C Guarantee, Issuing Bank shall
promptly notify Agent and each Bank of such issuance, which notice
shall be accompanied by a copy of such Letter of Credit and related L/C
Guarantee.
(d) REPORTS TO BANKS. Within 15 days after the end
of each calendar quarter ending after the Effective Date, so long as
any Letter of Credit and/or L/C Guarantee shall have been outstanding
during such calendar quarter, Issuing Bank shall deliver to each other
Bank a report setting forth the average for such calendar quarter of
the daily maximum amount available to be drawn under the Letter(s) of
Credit obtained by Issuing Bank that were outstanding during such
calendar quarter.
3. BANKS' PURCHASE OF PARTICIPATIONS IN L/C GUARANTEES.
Immediately upon the issuance of each L/C Guarantee, each Bank shall be deemed
to,
44
and hereby agrees to, have irrevocably purchased from Issuing Bank a
participation in such L/C Guarantee and drawings thereunder in an amount equal
to such Bank's Pro Rata Share of the maximum amount which is or at any time may
become available to be drawn thereunder.
4. FEES WITH RESPECT TO OBTAINING LETTERS OF CREDIT AND
ISSUING RELATED L/C GUARANTEES. Company agrees to pay the following amounts to
Issuing Bank or Agent, as the case may be, with respect to Letters of Credit
obtained and related L/C Guarantees issued by it:
(a) on the Effective Date, a non-refundable closing
fee of $150,000 to Agent for the sole and separate account of Banks;
(b) on the first anniversary of the Effective Date a
non-refundable fee of $150,000 to Agent for the sole and separate
account of Banks.
5. FUNDINGS UNDER L/C GUARANTEES.
If Issuing Bank funds a drawing under an L/C Guarantee
issued by it, such funding shall be deemed to be a funding under the
L/C Note.
6. INTEREST ON AMOUNTS ADVANCED ON L/C NOTE.
(a) PAYMENT OF INTEREST BY COMPANY. Company agrees
to pay interest on the outstanding principal amount under the L/C Note
at a rate equal to fifteen percent (15%) per annum (calculated by
multiplying 15% times the outstanding principal amount and dividing by
12) of the average daily maximum amount advanced under such L/C Note in
each case payable in arrears on and through the last day of each month.
(b) on the date of each advance under an L/C Note,
Company shall pay a non-refundable fee equal to 8% of each such advance
to Agent for the sole and separate account of Banks;
7. INDEMNIFICATION: NATURE OF ISSUING BANKS' DUTIES. In
addition to other amounts payable as provided in this Section 2.15, Company
hereby agrees to protect, indemnify, pay and save harmless Issuing Bank from and
against any and all claims, demands, liabilities, damages, losses, costs,
charges and expenses (including reasonable fees, expenses and disbursements of
counsel and allocated costs of internal counsel) which Issuing Bank may incur or
be subject to as a consequence, direct or indirect, of the issuance of any L/C
Guarantee, or obtaining any Letter of Credit, by Issuing Bank, other than as a
result of (x) the gross negligence or willful misconduct of
45
Issuing Bank as determined by a final judgment of a court of competent
jurisdiction or (y) the wrongful dishonor by Issuing Bank of a proper demand for
payment made under any L/C Guarantee issued by it.
8. Upon the termination of the Escrow Agreement and the
receipt by Collateral Agent of the various forms of Cash Collateral posted by
each Bank in connection with the Escrow Agreement, Collateral Agent shall
calculate and remit to each Bank such Bank's Pro Rata Share of actual interest
income earned on its posted Collateral. By way of example: if Bank A posted cash
collateral earning 3% interest, Bank A's Pro Rata Share of interest earned would
reflect such 3% interest rate, and if Bank B posted a municipal bond earning
interest at 9%, Bank B's Pro Rata Share of interest earned would reflect such 9%
interest rate.
9. INCREASED COSTS AND TAXES RELATING TO L/C GUARANTEES.
If Issuing Bank or any Bank shall determine (which determination shall, absent
manifest error, be final and conclusive and binding upon all parties hereto)
that any law, treaty or governmental rule, regulation or order, or any change
therein or in the interpretation, administration or application thereof
(including the introduction of any new law, treaty or governmental rule,
regulation or order), or any determination of a court or governmental authority,
in each case that becomes effective after the date hereof, or compliance by
Issuing Bank or any Bank with any guideline, request or directive issued or made
after the date hereof by any central bank or other governmental or
quasi-governmental authority (whether or not having the force of law):
(a) subjects Issuing Bank or any Bank (or its
applicable lending or letter of credit office) to any additional tax
(other than any tax on the overall net income of Issuing Bank or Bank)
with respect to the issuing or maintaining of any L/C Guarantee or the
purchasing or maintaining of any participations therein or any other
obligations under this Section 2.15, whether directly or by such being
imposed on or suffered by Issuing Bank;
(b) imposes, modifies or holds applicable any
reserve (including any marginal, emergency, supplemental, special or
other reserve), special deposit, compulsory loan, FDIC insurance or
similar requirement in respect of any L/C Guarantee issued by Issuing
Bank or participations therein purchased by any Bank; or
(c) imposes any other condition on or affecting
Issuing Bank or any Bank (or its applicable lending or letter of credit
office) regarding this Section 2.15 or any L/C Guarantee or any
participation therein;
46
and the result of any of the foregoing is to increase the cost to Issuing Bank
or any Bank of agreeing to obtain any Letter of Credit and/or issue any L/C
Guarantee or agreeing to purchase, purchasing or maintaining any participation
therein or to reduce any amount received or receivable by Issuing Bank or Bank
(or its applicable lending or letter of credit office) with respect thereto;
then, in any case, Company shall promptly pay to Issuing Bank or any such Bank,
upon receipt of the statement referred to in the next sentence, such additional
amount or amounts as may be necessary to compensate Issuing Bank or such Bank
for any such increased cost or reduction in amounts received or receivable
hereunder. Issuing Bank or any such Bank shall deliver to Company a written
statement, setting forth in reasonable detail the basis for calculating the
additional amounts owed to Issuing Bank or such Bank under this Section 2.15(k),
which statement shall be conclusive and binding upon all parties hereto absent
manifest error.
10. L/C GUARANTEES.
(a) Company agrees to be bound by the issuing bank's
regulations and interpretations of any letters of credit guarantied by
Issuing Bank pursuant to an L/C Guarantee and opened to or for
Company's account or by Issuing Bank's interpretations of any Letter of
Credit issued by issuing bank to or for Company's account, even though
this interpretation may be different from Company's own, and Company
understands and agrees that Issuing Bank shall not be liable for any
error, negligence, or mistake, whether of omission or commission, in
following Company's instructions or those contained in the Letter of
Credit or any modifications, amendments, or supplements thereto.
Company understands that the L/C Guarantees may require Issuing Bank to
indemnify the issuing bank for certain costs or liabilities arising out
of claims by Company against such other issuing bank. Company hereby
agrees to indemnify, save, defend, and hold Issuing Bank harmless with
respect to any loss, cost, expense (including reasonable attorneys
fees), or liability incurred by Issuing Bank under any L/C Guarantee as
a result of Issuing Bank's indemnification of any such issuing bank.
(b) Company hereby authorizes and directs any bank
that issues a letter of credit guaranteed by Issuing Bank to deliver to
Issuing Bank all instruments, documents, and other writings and
property received by the issuing bank pursuant to such Letter of
Credit, and to accept and rely upon Issuing Bank's instructions and
agreements with respect to all matters arising in connection with such
Letter of Credit and the related application. Company may or may not be
the "applicant" or "account party" with respect to such Letter of
Credit.
47
(c) Any and all charges, commissions, fees
(excluding issuance fees of third party issuers of Letters of Credit),
and costs incurred by Issuing Bank relating to the Letters of Credit
guaranteed by Issuing Bank shall be considered Obligations for purposes
of this Agreement and immediately shall be reimbursable by Company to
Issuing Bank.
III.
COLLATERAL
A. LIENS IN SUBSIDIARY STOCK, CONTRACT RECEIVABLES, REAL PROPERTY
AND PERSONAL PROPERTY.
To secure the prompt payment to Banks of the Obligations,
including the Loans, together with all costs, expenses and fees payable by
Company hereunder, Company has granted, and caused each Subsidiary to grant, to
Collateral Agent, for the ratable benefit of Agent, Collateral Agent, Issuing
Bank and Banks, a continuing Lien in and to all of the following property and
interests in property of Company and the Subsidiaries, except the Excluded
Property, whether now owned or existing or hereafter acquired or arising, or in
which Company and Subsidiaries now or hereafter have any rights, and wherever
located, and all proceeds thereof ("Collateral"):
1. the Subsidiary Stock;
2. the Homesite Contracts Receivable;
3. the Commercial Receivables;
4. the Real Property; and
5. the Personal Property.
At such times as any Excluded Property is freed of contractual or legal
restrictions against becoming subject to a Lien to secure the Obligations and
upon the distribution of any Trust Property to Company or a Subsidiary, such
property shall, automatically, become subject to the Liens created by the
Security Documents, and Company shall notify Agent in writing of such event and
take such further actions as may be required by Agent and/or Collateral Agent to
evidence and perfect such Liens; provided that, in no event, shall a Lien be
granted on any assets required to be placed in a Reserve Account pursuant to the
Reorganization Plan or the Homesite Program.
48
B. SECURITY DOCUMENTS.
To evidence and perfect the Liens of Collateral Agent and
Agent in the Collateral in accordance with applicable law, Company has executed
and deliveredand will execute and deliver and has caused the Subsidiaries to
execute and deliver and will cause the Subsidiaries to execute and deliver to
Collateral Agent the Security Documents, which Security Documents have been or
will be filed and recorded, and Company has delivered and will deliver and has
caused the Subsidiaries to deliver and will cause the Subsidiaries to deliver to
Collateral Agent any Collateral if the perfection of a Lien against such
Collateral requires possession thereof for purposes of perfecting such Liens,
all at the cost and expense of Company. Specifically, but without limiting the
generality of the foregoing, Company has or will, and has caused or will cause
the Subsidiaries to, do the following:
1. Stock Pledge. To evidence and perfect the Liens of
Collateral Agent in the Subsidiary Stock, Company and the Subsidiaries owning
other Subsidiaries, Excluded Subsidiaries, or Unrestricted Subsidiaries have
executed and delivered the Stock Pledge Agreement and have executed and
delivered and will execute and deliver related undated stock powers executed in
blank and have delivered and will deliver the original certificates representing
the Subsidiary Stock to Collateral Agent and have caused and will cause all
issuers of Subsidiary Stock to execute and deliver pledge acknowledgments
pursuant to the Stock Pledge Agreement.
2. Homesite Contracts Receivables and Commercial
Receivables. To evidence and perfect the Liens of Collateral Agent in the
Homesite Contracts Receivable and Commercial Receivables, Company and
Subsidiaries have executed and delivered, and will execute and deliver, to
Collateral Agent the Security Agreements, together with related financing
statements, which have been or will be filed and recorded in accordance with
applicable law, and Company and Subsidiaries have duly endorsed, and will duly
endorse, any and all promissory notes included in the Homesite Contracts
Receivable and Commercial Receivables to the order of Collateral Agent and have
delivered, and will deliver, such promissory notes and the related mortgages or
deeds of trust to Collateral Agent or its designee, and have executed and
delivered, and will deliver, assignments of promissory notes and mortgages or
deeds of trust, filed and recorded in accordance with applicable law, and, as to
Commercial Receivables acquired following the Effective Date, accompanied by
ALTA title insurance policies naming Collateral Agent as the insured mortgagee
thereunder.
3. Real Property. To evidence and perfect the liens of
Collateral Agent in the Real Property, Company and Subsidiaries have executed
and delivered, and will execute and deliver, to Collateral Agent the Mortgages
and Deeds of Trust and related financing statements encumbering such Real
Property, which have been or will
49
be filed and recorded in accordance withapplicable law, accompanied by ALTA
title insurance policies (if required) insuring Collateral Agent's Lien
represented thereby, and, if requested by Agent, surveys of such Real Property.
4. Joint Venture Pledge. To evidence and perfect the Liens
of Collateral Agent in the interests of the Venture Subsidiaries in the Joint
Ventures,Company has caused, and will cause, the Venture Subsidiaries to execute
and deliver the Joint Venture Pledge Agreement and all requisite consents in
respect of such Liens.
5. Personal Property. To evidence and perfect the Liens of
Collateral Agent or Agent in the Personal Property, Company and Subsidiaries
have executed and delivered, and will execute and deliver, to Collateral Agent
the Security Agreements, together with related financing statements, which have
been or will be filed and recorded in accordance with applicable law. To the
extent that the Personal Property comprised Investments or Bank Accounts,
Company and Subsidiaries shall take the following actions:
(a) with respect to any Investment or Bank Account
which is or becomes evidenced by an agreement, instrument, certificate
or document, including promissory notes, stock certificates, bonds,
debentures, securities and certificates of deposit, Company shall
deliver, or shall cause such Subsidiary to deliver, the original
thereof to Collateral Agent, together with appropriate assignments and
endorsements or other specific evidence of assignment thereof to
Collateral Agent, in form and substance acceptable to Collateral Agent;
(b) with respect to any Investment or Bank Account
which is not certificated or otherwise evidence as described in clause
(i) above, including uncertificated securities and depository and other
accounts maintained with financial institutions and any other Persons,
Company shall notify Agent thereof and take, or cause such Subsidiary
to take, any and all steps which are required by Agent for purposes of
perfecting Collateral Agent's Lien therein;
(c) Company shall keep Agent and Banks informed of
any and all Bank Accounts maintained by Company or any Subsidiary with
any financial institution or other Person and, if requested by Agent or
Required Banks, Company or such Subsidiary shall execute a cash
collateral account agreement in form and substance satisfactory to
Agent, pursuant to which the Lien of Collateral Agent in such Bank
Accounts is perfected and preserved; and
(d) if deemed by Agent or Required Banks, in its or
their sole discretion, to be necessary for purposes of perfecting the
Lien of Collateral Agent in any Bank Account, Company shall transfer to
and maintain in a cash
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collateral account and shall cause the Subsidiaries to transfer to and
maintain in a cash collateral account, the funds in each such Bank
Account and if deemed necessary by Agent shall cause such Subsidiary to
become party to a cash collateral account agreement in form and
substance reasonably satisfactory to Collateral Agent, pursuant to
which the Lien of Collateral Agent in such Bank Account shall be
perfected and preserved; provided, however, Company shall not be
required to deposit the residual, remainder or beneficial interest of
Company and its Subsidiaries in the Reserve Accounts, the Claims
Disbursement Accounts and other escrow, restricted, custodial and
fiduciary accounts until such time as all amounts required to be
disbursed to the intended beneficiaries thereof have been disbursed and
the residual and remainder is available to Company or any of its
Subsidiaries for deposit in an unrestricted account.
6. Additional Acts. Company shall, and shall cause the
Subsidiaries to, take all actions and execute all documents deemed necessary by
Agent or Collateral Agent to ensure that Collateral Agent, for the ratable
benefit of Agent, Collateral Agent, Issuing Bank and Banks, shall have a first
priority security interest in the Collateral granted by the Security Documents,
which security interest shall have the priority set forth in the Intercreditor
Agreement. In the event that the perfection or recordation of Collateral Agent's
or Agent's Lien pursuant hereto upon any Collateral acquired hereafter by
Company or any Subsidiary requires any additional act of possession or filing or
recordation of any Security Document, Company shall notify Agent of the
acquisition of such Collateral and at Agent's request Company shall execute and
deliver and shall cause the Subsidiaries to execute and deliver such Security
Documents for filing or recordation and deliver such items of Collateral as
Agent and Collateral Agent may reasonably request for purposes thereof and
Company shall pay the cost of any such Security Documents and the filing and
recordation thereof. Without limiting the generality of the foregoing, Company
agrees to, and to cause each Subsidiary (other than with respect to property
required to be released pursuant to Section 3.3) to, notify Agent upon the
acquisition of any Real Property acquired after the date hereof, except as
provided by Section 3.3, and upon request of Agent, to provide to Agent an
appraisal and an environmental report (each in form and substance satisfactory
to Agent) covering such property, and to cause such Real Property to be
subjected to a first priority Mortgage or Deed of Trust in favor of Collateral
Agent for the benefit of Banks, which Mortgage, or Deed of Trust shall have the
priority set forth in the Intercreditor Agreement. With respect to any such
Mortgages or Deeds of Trust, Company or such Subsidiary shall deliver to Agent
the following, all in form and substance satisfactory to Agent: (i) executed
Mortgages or Deeds of Trust and financing statements encumbering such property
and (ii) ▇▇▇▇ ▇▇▇▇▇' extended coverage policies of title insurance on such
property, in liability, amount and form and issued by a title company
satisfactory to Agent showing the Mortgage or Deed of Trust as a first
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lien uponthe property, subject only to Liens permitted pursuant to Section 7.3
and such other exceptions as may be approved by Agent in writing, together with
endorsements reasonably required by Agent and affirmative assurances that the
improvements are wholly located within the boundaries of the insured land.
C. SUBORDINATIONS AND RELEASES OF MORTGAGE LIENS.
1. [Intentionally Omitted].
2. At such times as Liens are granted by Company or any
Subsidiary, as permitted pursuant to Section 7.3(n), so long as no Default or
Event of Default has occurred and is continuing or would result therefrom and
provided Agent has received a certificate of a Responsible Officer certifying
and demonstrating that all of the conditions set forth in Section 7.3(n) have
been satisfied, Agent shall instruct Collateral Agent to and Collateral Agent
shall execute documentation subordinating the Lien of the Mortgages to such
Liens, in form and substance satisfactory to Collateral Agent, unless such Real
Property qualifies for the release provisions set forth in Section 3.3(c), in
which event the provisions of Section 3.3(c) shall apply.
3. At such time as Liens are granted by any Subsidiary, as
permitted by Section 7.3(n), so long as no Default or Event of Default has
occurred and is continuing or would result therefrom and provided Agent has
received a certificate of a Responsible Officer certifying and demonstrating
that all of the conditions set forth in Section 7.3(n) have been satisfied,
Agent shall instruct Collateral Agent to and Collateral Agent shall release the
Lien of the Mortgages on any Subsidiary Property Under Development if (i) (x)
such Real Property is financed under the acquisition and project financing
provisions of Section 7.2(e) or (h) and (y) the terms of such financing prohibit
subordinate Liens upon such Real Property or (ii) such Real Property is
contributed by Company to a Subsidiary pursuant to Section 7.9(g). Company shall
use reasonable efforts to cause any Bank/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 3.3(c), upon the request of Company, Agent shall instruct Collateral
Agent to, and Collateral Agent shall, release any Liens upon any Personal
Property related to and used or held for the use on the Real Property being
released; provided that Company provides a detailed list of such Personal
Property to be released in form and substance satisfactory to Agent. If such
Bank/seller will permit such subordination, then, notwithstanding the foregoing
provisions of this Section 3.3(c), Collateral Agent's Liens on such Subsidiary
Property
52
Under Development will not be released and will become subordinateLiens pursuant
to documentation in form and substance satisfactory to Agent.
4. At such time as any Lien is granted by a Subsidiary,
pursuant to and as permitted by Section 7.3(o), so long as no Default or Event
of Default has occurred and is continuing or would result therefrom, and
provided Agent has received a certificate of Responsible Officer certifying and
demonstrating that all ofthe conditions set forth in Section 7.3(o) have been
satisfied, Agent shall instruct Collateral Agent to and Collateral Agent shall
(i) release the Lien of the Mortgages on any Mezzanine Property Under
Development that is subject to the Lien so granted, (ii) release the stock of
the MPUD Subsidiary which owns such Mezzanine Property under Development, and of
all of such MPUD Subsidiary's Subsidiaries from the Stock Pledge Agreement (but
not the stock of the MPUD Holding Company), (iii) release all members of the
MPUD Subsidiary Group from the Guarantees and the Security Documents and release
the Lien on any Personal Property related to and used or held for use on the
Real Property being released, but each of the foregoing actions shall be
required only if and to the extent that (A) the Mezzanine Property Under
Development is financed under the acquisition and project financing provisions
of Section 7.2(e) or Section 7.2(h) and (B) the terms of such financing require
the MPUD Subsidiary Group structure, prohibit subordinate Liens upon such Real
Property, related Personal Property and the stock of the MPUD Subsidiary and
MPUD Subsidiary Subsidiaries and prohibit members of the MPUD Subsidiary Group
from signing Guarantees.
D. GUARANTEES.
The payment and performance by Company of its obligations
under this Agreement, including the repayment of all Obligations by Company, and
any and all other liabilities of Company to Banks, Agent, and Collateral Agent
whether now existing or hereafter created or acquired, shall be guaranteed by
any and all Subsidiaries, which shall be evidenced by guarantees in the form of
the Subsidiary Guarantees. Upon the formation or acquisition of any Subsidiary
(excluding all MPUD Subsidiary Group Members) Company shall, and shall cause
such Subsidiary to, enter into such documents as Agent may reasonably request to
further evidence such guarantee.
IV.
REPRESENTATIONS AND WARRANTIES
To induce Agent, Collateral Agent, Issuing Bank and Banks to
enter into this Agreement and to make the Loans, Company hereby represents and
warrants to Agent, Collateral Agent, Issuing Bank and each Bank that:
53
A. Financial Condition.
1. The consolidated balance sheets of Company and its
consolidated Subsidiaries as at December 31, 1997 and the related consolidated
statements of income and of cash flows for the fiscal year ended on such date,
reported on by Ernst & Young, copies of which have been furnished to each Bank,
fairly and accurately present the consolidated financial condition of Company
and its consolidated Subsidiaries as at such date, and the consolidated results
of their operations and their consolidated cash flows for the fiscal year then
ended.
2. The unaudited consolidated balance sheets of Company
and its consolidated Subsidiaries as at September 30, 1998 and the related
consolidated statements of income and of cash flows for the nine-month period
ended on such date, copies of which have been furnished to each Bank, fairly and
accurately present the consolidated financial condition of Company and its
consolidated Subsidiaries as at such date, and the consolidated results of their
operations and their consolidated cash flows for the fiscal year then ended
(subject to normal year-end audit adjustments).
3. All such financial statements described in clause (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
Company nor any of its consolidated Subsidiaries had, at the date of the most
recent balance sheet referred to above, any material Guarantee Obligation,
contingent liability or liability for taxes, or any long-term lease or unusual
forward or long-term commitment, including any interest rate or foreign currency
swap or exchange transaction, which is not reflected in the foregoing statements
or in the notes thereto or in Schedule 4.1. During the period from September 30,
1998 to and including the date hereof there has been no sale, transfer or other
disposition or agreement therefor by Company or any of its consolidated
Subsidiaries of any material part of its business or property and no purchase or
other acquisition of any business or property (including any capital stock of
any other Person) which is material in relation to the consolidated financial
condition of Company and its consolidated Subsidiaries at September 30, 1998,
except as described in Schedule 4.1.
B. NO MATERIAL ADVERSE CHANGE.
Since September 30, 1998, (a) there has been no development or
event nor any prospective development or event, which has had or could
reasonably be expected to have a Material Adverse Effect, except such
developments or events or prospective developments or events as have been
disclosed by Company in filings with the Securities and Exchange Commission made
prior to the date hereof and true and
54
correct copies of which have beendelivered to Banks or as set forth on Schedule
4.2, and (b) no dividends or other distributions have been declared, paid or
made upon the Capital Stock of Company nor has any of the Capital Stock of
Company been redeemed, retired, purchased or otherwise acquired for value by
Company or any of its Subsidiaries. As of the date hereof and the Effective
Date, no motion for the conversion of the case, appointment of a trustee, or
dismissal is pending or has been denied, the reversal of which on appeal would
affect the validity of this Agreement and no appeal has been taken from the
entry of the Confirmation Order in the Reorganization Proceedings, the reversal,
modification, or affirmance of which will affect the validity or enforceability,
or change the provisions, of this Agreement or any of the other Loan Documents.
C. CORPORATE EXISTENCE; COMPLIANCE WITH LAW.
Each of Company and its Subsidiaries (a) is duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
organization, except, in the case of any such Subsidiary, where all such
failures to be in good standing are not reasonably likely, in the aggregate, to
have a Material Adverse Effect, (b) has the corporate power and authority, and
the legal right, to own and operate its property, to lease the property it
operates as lessee and to conduct the business in which it is currently engaged,
(c) is duly qualified as a foreign corporation and in good standing under the
laws of each jurisdiction where its ownership, lease or operation of property or
the conduct of its business requires such qualification, except to the extent
that all such failures to be so qualified and in good standing are not
reasonably likely, in the aggregate, to have a Material Adverse Effect, and (d)
is in compliance with all Requirements of Law except to the extent that any
failures to comply therewith is not reasonably likely, in the aggregate, to have
a Material Adverse Effect.
D. CORPORATE POWER; AUTHORIZATION; ENFORCEABLE OBLIGATIONS.
1. Company. Company has the corporate power and authority, and
the legal right, to make, deliver and perform this Agreement, the Notes and
other Loan Documents, and to borrow hereunder and has taken all necessary
corporate action to authorize the borrowings on the terms and conditions of this
Agreement, and the Notes and to authorize the execution, delivery and
performance of this Agreement, the Notes and other Loan Documents. Except as set
forth on Schedule 4.4, no consent or authorization of, filing with or other act
by or in respect of, any Governmental Authority or any other Person is required
in connection with the borrowings hereunder or with the execution, delivery,
performance, validity or enforceability of this Agreement, the Notes or the
other Loan Documents, except such consents, authorizations, filings or other
acts as have been obtained, made or performed, as the case may be, prior to the
Effective Date and as remain in full force and effect or which
55
the failure toobtain, make or perform, as the case may be, could not reasonably
be expected to have a Material Adverse Effect or to impose any liability
whatsoever on Agent, Collateral Agent or any Bank. This Agreement and the other
Loan Documents to which the Company is party have been and all Loan Documents to
which Company hereafter becomes a party will be, duly executed and delivered on
behalf of the Company. This Agreement has been duly executed and delivered and
constitutes the, and each other Loan Document signed on the date hereof has been
duly executed and delivered and constitutes, and each other Loan Document when
executed and delivered will constitute, a legal, valid and binding obligation of
Company enforceable against Company in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, or similar laws affecting the enforcement of
creditors rights generally and by general equitable principals (whether
enforcement is sought by proceedings in equity or at law).
2. Subsidiaries. Each of the Subsidiaries (including
Unrestricted Subsidiaries and Excluded Subsidiaries) party to the Loan Documents
has the corporate power and authority, and the legal right, to make, deliver and
perform the Loan Documents to which it is a party and has taken all necessary
corporate action to authorize the execution, delivery and performance of the
Loan Documents to which it is a party. Except as set forth on Schedule 4.4, no
consent or authorization of, filing with or other act by or in respect of, any
Governmental Authority or any other Person is required in connection with the
execution, delivery, performance, validity or enforceability of the Loan
Documents to which it is a party, except such consents, authorizations, filings
or other acts as have been obtained, made or performed, as the case may be,
prior to the Effective Date and as remain in full force and effect or which the
failure to obtain, make or perform, as the case may be, could not reasonably be
expected to have a Material Adverse Effect. Each Loan Document to which any
Subsidiary (including Unrestricted Subsidiaries) is a party has been or will be
duly executed and delivered on behalf of each such Subsidiary. Each Loan
Document to which any Subsidiary (including Unrestricted Subsidiaries) is a
party, executed and delivered constitutes, or when executed and delivered will
constitute, a legal, valid and binding obligation of each such Subsidiary,
enforceable against each such Subsidiary in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, or similar laws affecting the enforcement of
creditors rights generally and by general equitable principles (whether
enforcement is sought by proceedings in equity or at law).
E. NO LEGAL BAR.
The execution, delivery and performance of this Agreement, the
Notes, the Guarantees and the other Loan Documents, the borrowings hereunder and
the use of the proceeds thereof will not violate any Requirement of Law or
Contractual Obligation
56
of Company or of any of its Subsidiaries, the violation of which could
reasonably be expected to have a Material Adverse Effect and will not result in,
or require, the creation or imposition of any Lien on any of its or their
respective properties or revenues pursuant to any such Requirement of Law or
Contractual Obligation.
F. NO MATERIAL LITIGATION.
As of the Effective Date, no litigation, investigation or
proceeding of or before any arbitrator or Governmental Authority is pending or,
to the knowledge of Company, threatened by or against Company or any of its
Subsidiaries or against any of its or their respective properties or revenues
(a) with respect to this Agreement, the Notes or other Loan Documents or any of
the transactions contemplated hereby or thereby or (b) which, if adversely
determined, is reasonably likely to have a Material Adverse Effect, which has
not been disclosed (including, estimates of the Dollar amounts involved) in
Company's filings with the Securities and Exchange Commission made prior to the
Effective Date, true and correct copies of which have been delivered to Banks or
on Schedule 4.6 hereto.
G. NO DEFAULT.
As of the Effective Date, neither Company nor any of its
Subsidiaries is in default under or with respect to any of its Contractual
Obligations in any respect which is reasonably likely to have a Material Adverse
Effect, except as disclosed, including estimates of the Dollar amounts involved,
in Company's filings with the Securities and Exchange Commission, true and
correct copies of which have been delivered to Banks or on Schedule 4.7. As of
the Effective Date, no Default or Event of Default has occurred and is
continuing. As of the Effective Date, no default has occurred and is continuing
under the Secured Agreement Documents.
H. OWNERSHIP OF PROPERTY; LIENS.
As of the Effective Date, each of Company and its
Subsidiaries, as the case may be, has good record and marketable title in fee
simple to, or a valid leasehold interest in, or a first mortgagee interest in,
all of the Collateral and all its other real property, and good title to all its
other property necessary for the operation of its business, and none of such
property of Company or such Subsidiaries is subject to any Lien except as
permitted by Section 7.3.
I. INTELLECTUAL PROPERTY.
Except as disclosed on Schedule 4.9, as of the Effective Date,
Company and each of its Subsidiaries owns, or is licensed to use, all
trademarks, tradenames,
57
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
Company know of any valid basis for any such claim. The use of such Intellectual
Property by Company and its Subsidiaries does not infringe on the rights of any
Person, except for such claims and infringements that, in the aggregate, do not
have a Material Adverse Effect. To the knowledge of Company, there exists no
infringement upon the Intellectual Property rights of Company and Subsidiaries
by any other Person.
J. TAXES.
As of the Effective Date, each of Company and its Subsidiaries
(including Unrestricted Subsidiaries and Joint Ventures) has filed or caused to
be filed all tax returns which, to the knowledge of Company, are required to be
filed and has paid all taxes shown to be due and payable on said returns or on
any assessments made against it or any of its property and all other taxes, fees
or other charges imposed on it or any of its property by any Governmental
Authority (other than any taxes, fees or other charges the amount or validity of
which are currently being contested in good faith by appropriate proceedings and
with respect to which reserves in conformity with GAAP have been provided on the
books of Company or its Subsidiaries (including Unrestricted Subsidiaries and
Joint Ventures), as the case may be) except tax claims which are to be paid on a
deferred basis pursuant to the Reorganization Plan; no tax Lien has been filed,
and, to the knowledge of Company, no claim is being asserted, with respect to
any such tax, fee or other charge, except as disclosed on Schedule 4.10.
K. FEDERAL REGULATIONS.
No part of the proceeds of any Loans will be used for
"purchasing" or "carrying" any "margin stock" within the respective meanings of
each of the quoted terms under Regulation 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.
L. ERISA.
Except as disclosed on Schedule 4.12, no Reportable Event has
occurred during the five-year period prior to the date on which this
representation is made or deemed made with respect to any Plan. Company and each
Commonly Controlled Entity are in substantial compliance with the applicable
provisions of ERISA with
58
respect to each Plan. The present value of all accruedbenefits 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 Effective 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 (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 $2,200,000. Neither Company
nor any Commonly Controlled Entity is liable under Title IV of ERISA by reason
of the termination of a Single Employer Plan or the withdrawal from a Single
Employer Plan in which it was a "substantial employer" within the meaning of
Section 4001(a)(2) of ERISA. Each Plan intended to be qualified under Section
401(a) of the Code, including each Single Employer Plan, is qualified in
operation under Section 401(a) of the Code and is qualified in form under
Section 401(a) of the Code, except with respect to any required amendments with
respect to which the remedial amendment period under Section 401(b) of the Code
has not expired. Neither Company nor any Commonly Controlled Entity has had a
complete or partial withdrawal from any Multiemployer Plan with respect to which
there remains any unpaid liability and neither Company nor any Commonly
Controlled Entity would become subject to any liability under ERISA if Company
or any such Commonly Controlled Entity were to withdraw from all Multiemployer
Plans in complete withdrawals within the meaning of Section 4203 of ERISA as of
the valuation dates for such plans most closely preceding the date on which this
representation is made or deemed made. No Multiemployer Plan is in
Reorganization or Insolvent. Neither the Company nor any Commonly Controlled
Entity is liable for fines, penalties, taxes or related charges under Chapter 43
of the Code or under Sections 409, 502(c), 502(i), 502(1) or 4071 of ERISA in an
amount exceeding $50,000 in the aggregate at any time. There are no material
claims (other than routine claims for benefits) against any Plan (other than a
Multiemployer Plan) or against Company or any Commonly Controlled Entity in
connection with any such Plan. Neither Company nor any Commonly Controlled
Entity is liable for post retirement benefits to be provided to their current
and former employees under Plans which are welfare benefit plans (as defined in
Section 3(1) of ERISA) except as required by Section 4980B of the Code and
Section 601 of ERISA.
M. INVESTMENT COMPANY ACT; OTHER REGULATIONS.
Company is not an "investment company," or a company
"controlled" by an "investment company," within the meaning of the Investment
Company Act of 1940, as amended. Company is not subject to regulation under any
Federal or state statute or regulation which limits its ability to incur
Indebtedness.
59
N. SUBSIDIARIES AND JOINT VENTURES.
As of the Effective Date, (a) the Subsidiaries (including
Unrestricted Subsidiaries and Excluded Subsidiaries) listed on Schedule 4.14(A)
constitute all of the Subsidiaries (including Unrestricted Subsidiaries and
Excluded Subsidiaries) and such schedule identifies the shareholders of such
Subsidiary, (b) the Joint Ventures listed on Schedule 4.14(B) constitute all of
the Joint Ventures and such schedule identifies all owners of the Joint Venture
interests thereof and the percentage equity ownership of such owners, and (c)
neither Company nor any Subsidiary (including Unrestricted Subsidiaries,
Excluded Subsidiaries, and Joint Ventures) other than a Venture Subsidiary owns
any Joint Venture interest.
O. 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 in the certificate regarding environmental matters
required pursuant to Section 5.1(i) or to the extent that the facts and
circumstances giving rise to any such failure to be so true and correct is not
reasonably likely to have a Material Adverse Effect and could not reasonably be
expected to impose any liability whatsoever on Agent, Collateral Agent or any
Bank:
1. The Real Property does not contain, and has not
previously contained, therein, thereon, or thereunder, including the soil and
groundwater thereunder, any Hazardous Materials in violation of any
Environmental Law.
2. Company, its Subsidiaries, the Real Property, and all
operations and facilities at the 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 Real Property or impair the fair saleable value of any thereof.
3. Neither Company nor any of its Subsidiaries 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 Real Property, nor is Company aware that any Governmental Authority is
contemplating delivering to Company or any of its Subsidiaries any such notice.
Neither Company nor any of its Subsidiaries has reported any releases of
Hazardous Materials to any Governmental Authority.
60
4. Hazardous Materials have not been generated, treated,
stored or disposed of, at, on or under any of the Real Property in violation of
any Environmental Law, nor have any Hazardous Materials been transferred from
the 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
Real Property requiring any approval or permit from any Governmental Authority.
Neither Company nor any of its Subsidiaries has ever owned or operated or
currently owns or operates any waste disposal or storage facilities, underground
storage tanks or surface impoundments.
5. There are no governmental or administrative actions or
judicial proceedings pending or, to the knowledge of Company, contemplated under
any Environmental Laws to which Company or any of its Subsidiaries is or, to the
knowledge of Company, will be named as a party with respect to the Real
Property, nor are there any consent decrees or other decrees, consent orders,
administrative orders or other orders, or other administrative or judicial
requirements outstanding under any Environmental Law with respect to Company or
any of its Subsidiaries or to any of the Real Property.
6. There is no environmental condition associated with any
of the 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.
7. Copies of all permits, authorizations and environmental
reports for or with respect to the Real Property have been made available to
Agent.
P. INDEBTEDNESS.
Schedule 4.16 lists all Indebtedness (including available
commitments) of Company and its Subsidiaries as existing on the Effective Date.
Q. CONTINGENT OBLIGATIONS.
Schedule 4.17 lists all guarantees by Company and all
guarantees by any of its Subsidiaries.
R. RESTITUTION PROGRAM AND FINAL JUDGMENT.
As of the Effective Date, Company and its Subsidiaries have
fully complied with the "Restitution Program" and have been released from the
"Final Judgment," as defined in the Reorganization Plan.
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S. CERTAIN FEES.
Other than fees payable to Anglo American Financial, no
broker's or finder's fee or commission will be payable with respect to this
Agreement or any of the transactions contemplated hereby, and Company hereby
indemnifies Agent, Collateral Agent and Banks against, and agrees that it will
hold Banks harmless from, any claim, demand or liability for any such broker's
or finder's fees alleged to have been incurred in connection herewith or
therewith and any expenses (including reasonable fees, expenses and
disbursements of counsel) arising in connection with any such claim, demand or
liability.
T. DISCLOSURE.
No representation or warranty of Company or any of its
Subsidiaries contained in any Loan Document or in any other document,
certificate or written statement furnished to Banks by or on behalf of Company
or any of its Subsidiaries for use in connection with the transactions
contemplated by this Agreement contains any untrue statement of a material fact
or omits to state a material fact (known to Company in the case of any document
not furnished by it) necessary in order to make the statements contained herein
or therein not misleading in light of the circumstances in which the same were
made. Any projections and pro forma financial information contained in such
materials are based upon good faith estimates and assumptions believed by
Company to be reasonable at the time made, it being recognized by Banks that
such projections as to future events are not to be viewed as facts and that
actual results during the period or periods covered by any such projections may
differ from the projected results. There are no facts known (or which should
upon the reasonable exercise of diligence be known) to Company (other than
matters of an economic nature) that, individually or in the aggregate, could
reasonably be expected to result in a Material Adverse Effect and have not been
disclosed herein or in such other writtendocuments, certificates and statements
furnished to Banks for use in connection with the transactions contemplated
hereby.
U. INSURANCE.
Company and each of its Subsidiaries maintain, with
financially sound and reputable insurers, insurance with respect to its
properties and business and the properties and business of its Subsidiaries,
against loss and damage of the kinds customarily insured against by corporations
of established reputation engaged in the same or similar business of such types
and in such amounts as are customarily carried under similar circumstances by
such other corporations. Attached as Schedule 4.21 is a complete and accurate
description of all policies of insurance that will be in effect as of the
Effective Date for Company and each of its Subsidiaries.
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V. REAL PROPERTY MATTERS.
Company and each of its Subsidiaries (including the Joint
Ventures) is in compliance with all development orders obtained by Company and
its Subsidiaries (including the Joint Ventures) with respect to any Real
Property, except to the extent noncompliance could not reasonably be expected to
have a Material Adverse Effect.
W. REORGANIZATION PROCEEDINGS.
Company has delivered to Agent, Collateral Agent, Issuing Bank
and Banks true, correct and complete copies of the Reorganization Plan and
Confirmation Order, together with copies of any modifications thereto.
X. EXCLUDED SUBSIDIARIES; UNRESTRICTED SUBSIDIARIES.
1. 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.
2. The Unrestricted Subsidiaries do not have, nor are they
anticipated to have, any asset or revenues other than the assets disclosed on
Part A of 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 Part A of Schedule 4.24 as being conducted by them.
Y. NO FURTHER AMOUNTS DUE UNDER UNSECURED 1996 NOTES.
There are no further amounts due from Company under the
Unsecured 1996 Notes and any unclaimed funds disbursed by The United States
Trust Company of New York to Company are owned free and clear of claims which
may be asserted thereto by third parties, including, without limitation, claims
by any state or other Governmental Authority that such unclaimed funds are
"abandoned property" under state escheat or other applicable laws.
Z. BANK ACCOUNTS.
Schedule 4.26 (as amended from time to time by written notice
to Agent) is a true and correct list of all Bank Accounts of Company and its
Subsidiaries.
AA. [INTENTIONALLY OMITTED].
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BB. MPUD SUBSIDIARY GROUPS.
Except as disclosed on Schedule 4.28, no Subsidiary is a
member of an MPUD Subsidiary Group.
CC. SPUD SUBSIDIARIES.
Except as disclosed on Schedule 4.29, no Subsidiary is a SPUD
Subsidiary.
DD. DRI AND ZONING MATTERS.
The representations and warranties set forth in Schedule 4.30
are by this reference incorporated herein as though fully set forth and made in
this Section 4.30.
EE. BANKRUPTCY MATTERS.
Neither the Company nor any of its Subsidiaries has any
continuing liabilities arising out of or in connection with the Reorganization
Proceedings or the Reorganization Plan which would have a Material Adverse
Effect.
FF. SERIES A PREFERRED STOCK.
The rights, obligations and duties of Company, its
Subsidiaries and the holders of the Series A Preferred Stock are set forth
exclusively in the Series A Statement, the Secured Agreement and the Investment
Agreement, both as amended through the Effective Date, and the other documents
described therein (the "Series A Documents"), and there is no note, debt
instrument or other security or collateral of any kind whatsoever given by
Company or any Subsidiary, other than as described in the Series A Documents, to
secure the repayment or performance of any of the obligations of Company or any
Subsidiary with respect to the Series A Preferred Stock.
GG. SERIES B PREFERRED STOCK.
The rights, obligations and duties of Company, its
Subsidiaries and the holders of the Series B Preferred Stock are set forth
exclusively in the Series B Statement and the Securities Purchase Agreement
dated as of June 24, 1997. There is no note, debt instrument or other security
or collateral of any kind whatsoever given by Company or any Subsidiary to
secure the repayment or performance of any of the obligations of Company or any
Subsidiary with respect to the Series B Preferred Stock.
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V.
CONDITIONS PRECEDENT
The effectiveness of this Agreement and the obligations of
Banks to make Loans hereunder are subject to the prior or concurrent
satisfaction of all the following conditions:
A. CONDITIONS TO EFFECTIVENESS OF THIS AGREEMENT.
1. Loan Documents. Agent shall have received (i) this
Agreement, executed and delivered by a duly authorized officer of Company, with
a counterpart for each Bank, (ii) for the account of each Bank, a Note, (iii)
each other Loan Document, required to be delivered hereunder, conforming to the
requirements hereof and executed and delivered by a duly authorized officer of
Company or each of its Subsidiaries (including, the Unrestricted Subsidiaries
and the Excluded Subsidiaries, in each case as to their respective
acknowledgments under the Stock Pledge Agreement), as the case may be, which are
parties to such Loan Document, with a counterpart for each Bank, (iv) Funds Flow
Memo, executed and delivered by a duly authorized officer of each party thereto,
and (v) copies, certified as true and correct copies by a Responsible Officer,
of the Security Documents, as amended through the Effective Date listed in
Schedule I to the Acknowledgment Agreement.
Agent and Collateral Agent shall have received (vi) in form
and substance satisfactory to Agent and Collateral Agent, a duly executed
agreement with Annis, Mitchell, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇, P.A. of Tampa, Florida
with respect to certain services to be provided thereby to Agent and Collateral
Agent, respectively, and (vii) the Funds Flow Memo.
2. Corporate Proceedings of Company. Agent shall have
received, with a counterpart for each Bank, a copy of the resolutions, in form
and substance satisfactory to Agent, of the Board of Directors of Company
authorizing the execution, delivery and performance of this Agreement, the Notes
and the other Loan Documents to which it is a party, certified by the Secretary
or an Assistant Secretary of the Company as of the Effective Date, which
certificate shall state that the resolutions thereby certified have not been
amended, modified, revoked or rescinded and are in full force and effect and
shall be in form and substance satisfactory to Agent.
3. Corporate Proceedings of the Subsidiaries. Agent shall
have received, with a counterpart for each Bank, a copy of the resolutions, in
form and substance satisfactory to Agent, of the Board of Directors of each
Subsidiary of Company which is a party to any Loan Document authorizing the
execution, delivery and performance of the Loan Documents to which it is a
party, certified by the
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secretary or an assistant secretary of each Subsidiary as of the Effective Date,
which certificate shall state that the resolutions thereby certified have not
been amended, modified, revoked or rescinded and are in full force and effect.
4. Corporate Documents. Agent shall have received, with a
counterpart for each Bank, true and complete copies of (i) the certificate or
articles of incorporation of the Company and each of its Subsidiaries which is a
party to any Loan Document certified by the Secretary of State of their
respective jurisdictions of incorporation as of a recent date prior to the
Effective Date, (ii) the Bylaws of the Company and each of its Subsidiaries
which is a party to any Loan Document certified as of the Effective Date by its
secretary or an assistant secretary, (iii) good standing certificates,
including, in states which provide such certificates, certification of tax
status, of the Company and each of its Subsidiaries which is a party to any Loan
Document certified by the Secretary of State of their respective jurisdictions
of incorporation and of each jurisdiction in which they are qualified to do
business as a foreign corporation dated as of a recent date prior to the
Effective Date and (iv) incumbency and signature certificates for Company and
each Subsidiary executing any Loan Documents as of the Effective Date.
5. Other Documents. Agent shall have received, with a
counterpart for each Bank, copies, certified as true, correct, and complete by a
Responsible Officer, of (i) the Anglo American Loan Agreement and the other
Anglo American Loan Documents, (ii) the Secured Agreement and the Investment
Instruments, (iii) the Secured Note, and (iv) the Business Plan, together with
evidence satisfactory to the Agent that the Anglo American Loan Agreement and
the Secured Agreement have become fully effective and available for utilization
or will become so effective and available simultaneously with the effectiveness
of this Agreement.
6. No Violation. The consummation of the transactions
contemplated hereby and by the other Loan Documents shall not contravene,
violate or conflict with, nor involve Agent or any Bank in any violation of, any
Requirement of Law.
7. Consents, Authorizations, and Filings. Agent shall have
received, with a counterpart for each Bank, a certificate of a Responsible
Officer (i) attaching copies of all consents, authorizations, and filings
referred to in Section 4.4 and in any similar provision of any of the other
Loan Documents, and (ii) stating that such consents, authorizations, and filings
are in full force and effect and each such consent, authorization, and filing
shall be in form and substance satisfactory to Agent.
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8. Legal Opinions. Agent shall have received, with a
counterpart for each Bank, opinions of the several counsel of Company and its
Subsidiaries, in each case, in form and substance satisfactory to Banks in their
sole discretion.
9. Certification as to Environmental Matters. Agent shall
have received, with a counterpart for each Bank, a certificate of a Responsible
Officer (i) stating that Company is not aware of any environmental matters in
connection with any of the Real Property which could reasonably be expected to
result in a liability to Company or any Subsidiary in excess of $200,000 except
as listed on a schedule attached to such certificate and (ii) certifying that
Company has made, and agreeing that Company will continue to make, available to
Agent promptly after receipt thereof copies of 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 Real
Property, and any report or audit prepared by a private company with respect
thereto.
10. Continued Perfection of Security Interests. Company and
its Subsidiaries party to any of the Security Documents shall have taken or
cause to be taken all such actions deemed necessary or desirable by Collateral
Agent to ensure that Collateral Agent or Agent has and continues to have a valid
and perfected first priority security interest in the Collateral granted by the
Security Documents (which security interest shall have the priority set forth in
the Intercreditor Agreement) subject to the Liens permitted pursuant to this
Agreement and the Security Documents (and Agent and Collateral Agent shall have
received satisfactory evidence thereof). Such action shall include: (i) the
delivery by Company pursuant to the Stock Pledge Agreement of certificates
(which certificates shall be registered in the name of Collateral Agent or
properly endorsed in blank for transfer or accompanied by irrevocable undated
stock powers duly endorsed in blank, all in form and substance satisfactory to
Collateral Agent and Agent) representing all Subsidiary Stock; (ii) the delivery
to Collateral Agent of Uniform Commercial Code financing statements, executed by
each of Company and each of its Subsidiaries as to the Collateral granted by
each such party for all jurisdictions as may be necessary or desirable to
perfect or continue the perfection of Collateral Agent's security interest in
such Collateral; (iii) the delivery by Company and its Subsidiaries of original
documents relative to Homesite Contract Receivables and Commercial Receivables,
including appropriate endorsements or assignments, all in form and substance
satisfactory to Collateral Agent and Agent, as may be necessary or desirable to
perfect or continue the perfection of Collateral Agent's security interest in
such Collateral; and (iv) evidence reasonably satisfactory to Collateral Agent
and Agent that all other filings, recordings and other actions Collateral Agent
and Agent deems necessary or advisable to establish, preserve and perfect the
Liens and the priority thereof granted to Collateral Agent and Agent hereunder
shall have been made.
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11. Real Property Matters. Agent shall have received: (i)
such new Mortgages and Deeds of Trust or such amendments to the existing
Mortgages and Deeds of Trust as may be requested by Agent, in each case in form
and substance satisfactory to Agent and its local counsel, to protect and
preserve the Lien and priority of the Mortgages and Deeds of Trust as they
secure the Loans and other amounts due hereunder, together with new ALTA Bank's
extended coverage policies of title insurance or amendments of the existing ALTA
Bank's extended coverage policies of title insurance on the Real Property
encumbered by the Mortgages and Deeds of Trusts in liability, amount and form
issued by a title company satisfactory to Agent showing the Mortgages and Deeds
of Trust as first Liens upon the respective Real Property, subject only to Liens
permitted hereunder and thereunder and such other exceptions or exclusions as
may be approved by Agent in its sole discretion, together with any endorsements
reasonably required by Agent, and affirmative assurance that the improvements
are fully located within the boundaries of the insured land; and (ii) in respect
of the Real Property listed on Schedule 5.1(k), copies of such appraisals,
surveys, environmental audit reports, satisfactory evidence of entitlements
(including so-called "zoning letters"), and other documents as Agent may
request, each as specified or contemplated on Schedule 5.1(k), and each prepared
by consultants or other experts satisfactory to Agent.
12. Evidence of Insurance. Company shall have delivered to
Agent certificates of insurance naming Collateral Agent on behalf of Banks as
loss payee under the casualty and surety policies required pursuant to Section
6.5.
13. No Material Adverse Effect. On the Effective Date,
Agent shall have received an officer's certificate executed by a Responsible
Officer stating that no Material Adverse Effect has occurred since September 30,
1998, except as disclosed in Company's Form 10-Q for the quarter ended as of
September 30, 1998 or except as disclosed on Schedule 5.1(m).
14. Intercreditor Agreement. The Intercreditor Agreement
shall have been executed and delivered by each of the parties thereto, and Agent
shall have received a fully executed copy thereof in form and substance
satisfactory to Agent.
15. Fees, Costs, and Expenses. As of the Effective Date,
Company shall have paid: (i) to the Agent all fees, costs, and expenses of Agent
and its counsel incurred in connection with the preparation, negotiation, and
execution of this Agreement, the Intercreditor Agreement, and any other
documents executed in connection herewith and therewith; and (ii) to the
Collateral Agent, the Anglo American Collateral Agent and Secured Agreement
Collateral Agent all fees, costs, and expenses thereof and of counsel thereof
incurred in connection with the preparation, negotiation, and execution of the
Anglo American Loan Agreement, the
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Secured Debt Documents and the Intercreditor Agreement, and any other documents
executed in connection herewith and therewith.
16. Recapitalization Transactions. Each of the
Recapitalization Transactions shall have been consummated in accordance with all
applicable law, the underlying transaction documents, and the Funds Flow Memo,
and Agent shall have received evidence of such consummation satisfactory to
Agent.
17. Amendment of Certain Loan Documents. The Security
Documents and other Loan Documents shall have been amended in form and substance
satisfactory to Agent.
18. [Intentionally Omitted].
19. Updated Field Survey. Agent shall have completed an
updated field survey with respect to the Collateral, and the results thereof
shall be acceptable to Agent in its sole discretion.
20. Collateral Appraisals. Agent shall have received
appraisals of the Collateral from an appraiser satisfactory to Agent, in form
and substance and prepared by appraisers satisfactory to Agent, and the results
thereof shall be satisfactory to Agent.
21. Business Plan. Agent shall have received (i) Company's
Business Plan as of the Effective Date, which shall be in form and substance
satisfactory to Banks, and (ii) evidence, satisfactory to Banks, that Company
has sufficient funds, or availability to sufficient funds, necessary to carry
out such Business Plan.
22. Effective Date. The Effective Date shall have occurred
on or before February 1, 1999.
23. Reorganization Proceedings. Agent shall have received
copies of the Reorganization Plan and Confirmation Order, together with copies
of any modifications thereto, in each case, certified by the Secretary of the
Company as true, correct and complete as of the Effective Date.
24. Other Matters. All other documents and legal matters in
connection with the transactions contemplated by this Agreement shall have been
executed, delivered, or recorded, and shall be in form and substance
satisfactory to Agent, the Banks, and their respective counsel.
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B. CONDITIONS TO EACH LOAN AND ISSUANCE OF EACH LETTER OF CREDIT.
The effectiveness of this Agreement and the agreement of each
Bank to make any Loan requested to be made by it on any Loan Borrowing Date, and
of Agent to issue each L/C Guarantee is subject to the satisfaction of the
further conditions precedent:
1. Representations and Warranties. Each of the
representations and warranties made by Company and its Subsidiaries in or
pursuant to each of the Loan Documents shall be true, correct and complete in
all material respects on and as of the date of such extension of credit, with
such exceptions, amendments or modifications as may be approved in writing by
Agent. For the purposes hereof with respect to any request for a Loan or
issuance of L/C Guarantee, any and all representations and warranties made by
Company or any of its Subsidiaries which are made "as of the Effective Date"
shall be required to be true and correct "as of the Loan Borrowing Date," or
date of issuance of the L/C Guarantee rather than "as of the Effective Date."
2. No Default. No Default or Event of Default shall have
occurred and be continuing as of the date of such extension of credit, as the
case may be, after giving effect to the Loans requested to be made or the L/C
Guarantee requested to be issued on such date.
3. Additional Security Documents; Other Documents. Agent
shall have received each additional Security Document as may be required
pursuant to Section 3.2 and each additional Guarantee required by Section 3.4,
in each case with a counterpart for each Bank, and each additional document,
instrument, legal opinion or item of information reasonably requested by it or
the Required Banks, with a counterpart for each Bank, including a copy of any
debt instrument, security agreement or other material contract to which Company
may be a party.
4. Officer's Certificate. In the case of any Loan or L/C
Guarantee requested by Company, Agent shall have received the certificate
required by Section 2.3, as the case may be, with a counterpart for each Bank.
5. Additional Matters. All corporate and other
proceedings, and all documents, instruments and other legal matters in
connection with the transactions contemplated by this Agreement and the other
Loan Documents shall be satisfactory in form and substance to Agent, and Agent
shall have received such other documents and legal opinions in respect of any
aspect or consequence of the transactions contemplated hereby or thereby as it
or the Required Banks shall reasonably request, with a counterpart for each
Bank.
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Each borrowing by Company or issuance of L/C Guarantee
hereunder shall constitute a representation and warranty by Company, as of the
date of such borrowing or issuance of L/C Guarantee, that the conditions
contained in this Section 5.2 have been satisfied.
C. CONDITIONS SUBSEQUENT.
As a condition subsequent to the making of the Loans, Company
shall perform or cause to be performed the following (and the failure by Company
to so perform or so cause to be performed shall constitute an Event of Default):
1. Tax Servicing Contracts. No later than 60 days after
the Effective Date, Agent and Collateral Agent shall have received a tax
servicing contract in respect of such portion of the Real Property located in
Florida as shall be satisfactory to Agent and Collateral Agent, in form and
substance satisfactory to Agent and Collateral Agent, among Company, Agent,
Collateral Agent, and a tax servicing firm satisfactory to Agent and Collateral
Agent.
2. Company Operating Account Control Agreement. Within 30
days following the Effective Date, Company, Collateral Agent, and Operating
Account Bank shall have executed and delivered the Company Operating Account
Control Agreement.
3. Other Account Control Agreements. Within 30 days
following the Effective Date, Company shall have furnished to Collateral Agent
such additional control agreements in form and substance satisfactory to
Collateral Agent and shall have taken all such other actions as Collateral Agent
or Agent deems necessary or desirable to ensure that Collateral Agent, on behalf
of Agent and Lenders, holds a perfected security interest in all of the deposit
accounts identified on Schedule 5.3(c) hereof.
VI.
AFFIRMATIVE COVENANTS
Company hereby agrees that, so long as the Commitments remain
in effect or any L/C Guarantee remains outstanding, or any Obligation remains
outstanding and unpaid or any other amount is owing to any Bank, Agent,
Collateral Agent or Issuing Bank hereunder, Company shall, and shall cause each
of its Subsidiaries to:
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A. FINANCIAL STATEMENTS.
FURNISH TO EACH BANK:
1. as soon as available, but in any event not later than
90 days after the end of each fiscal year of Company, a copy of the consolidated
balance sheet of Company and its consolidated Subsidiaries (including
Unrestricted Subsidiaries) as at the 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, reported on without a "going concern" or like qualification or
exception, or qualification arising out of the scope of the audit, by Ernst &
Young or other independent certified public accountants of nationally recognized
standing acceptable to the Required Banks;
2. as soon as available, but in any event not later than
90 days after the end of each fiscal year of Company, a copy of the
consolidating balance sheet of Company and its consolidated Subsidiaries
(including Unrestricted Subsidiaries) as at the end of such year and the related
consolidating statements of income and retained earnings and of cash flows for
such year, setting forth in each case in comparative form the figures for the
previous year, certified by a Responsible Officer as being fairly stated in all
material respects;
3. as soon as available, but in any event not later than
45 days after the end of each of the first three quarterly periods of each
fiscal year of Company, the unaudited consolidated and consolidating balance
sheet of Company and its consolidated Subsidiaries (including Unrestricted
Subsidiaries) as at the end of such quarter and the related unaudited
consolidated and consolidating statements of income and retained earnings and of
cash flows of Company and its consolidated Subsidiaries (including Unrestricted
Subsidiaries) for such quarter and the portion of the fiscal year through the
end of such quarter, setting forth in each case in comparative form the figures
for the previous year, certified by a Responsible Officer as being fairly stated
in all material respects when considered in relation to the consolidated and
consolidating financial statements of Company and its consolidated Subsidiaries
(subject to normal year-end audit adjustments);
4. as soon as available, but in any event not later than
30 days after the end of each calendar month, the unaudited consolidated balance
sheet of Company and its consolidated Subsidiaries (including Unrestricted
Subsidiaries) as at the end of such month and the related unaudited consolidated
statements of income and retained earnings and of cash flows of Company and its
consolidated Subsidiaries (including Unrestricted Subsidiaries) for such month,
setting forth in each case in comparative form the figures for such month as set
forth on the Business Plan and, with a
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comparison to the same calendar month of the preceding fiscal year, certified by
a Responsible Officer as being fairly stated in all material respects when
considered in relation to the consolidated financial statements of Company and
its consolidated Subsidiaries (including Unrestricted Subsidiaries) (subject to
nominal year-end audit adjustments); and
5. as soon as available, but in any event not later than
45 days after the end of each fiscal quarter, projections by Company of the
operating cash flow budget of Company and its Subsidiaries for (i) the following
two fiscal quarters, prepared on a monthly basis and (ii) the two fiscal
quarters thereafter, prepared on a quarterly basis, certified by a Responsible
Officer as being prepared in good faith on the basis of the assumptions stated
therein, which assumptions were reasonable in light of conditions existing at
the time of delivery thereof and represented, at the time of delivery, Company's
best estimate of its future financial performance;
in each case, 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).;
all such financial statements to be complete and correct in all material
respects and to be prepared in reasonable detail and (except in the case of cash
flows in (d) and (e) above) 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).
B. CERTIFICATES; OTHER INFORMATION.
1. Furnish to each Bank:
(a) 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;
(b) concurrently with the delivery of the financial
statements referred to in Sections 6.1(a), (b) and (c), a certificate
of a Responsible Officer stating that, to the best of such Responsible
Officer's knowledge, Company and each Subsidiary during such period has
observed or performed the covenants of Sections 7.1, 7.2, 7.3, 7.6,
7.8, 7.9, 7.15, 7.16, and 7.17 and all other of its
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covenants and other agreements, and satisfied every condition,
contained in this Agreement and in the Notes and in the other Loan
Documents to which it is a party to be observed, performed or satisfied
by it, and that such Officer has obtained no knowledge that a Default
or Event of Default has occurred and is continuing except as specified
in such certificate, and, if a Default or Event of Default exists,
stating the details thereof and what actions Company proposes to take
with respect thereto;
(c) within five Business Days after the same are
sent, copies of all financial statements and reports which Company
sends to its stockholders and all financial statements and reports
which Company or any of its Subsidiaries sends to the holders or
trustee of any Public Debt Securities, and within five Business Days
after the same are filed, copies of all financial statements and
reports which Company may make to, or file with, the Securities and
Exchange Commission or any successor or analogous Governmental
Authority;
(d) within 10 Business Days after the same are
delivered, copies of all financial statements and all material reports,
management letters or other financial information prepared for its
Board of Directors; and
(e) promptly, such additional financial and other
information as any Bank may from time to time reasonably request (which
may include, without limitation, new appraisals (no more frequently
than annually) and detailed ongoing information as to the real estate
underlying any Commercial Receivables, which are not Eligible
Commercial Receivables, absorption, sales and other related matters).
2. FURNISH TO AGENT:
(a) 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 of the Real Property included
directly or indirectly in the Borrowing Base, 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 (z) a summary aging,
by vendor, of Company's accounts payable and any book overdraft; in
each case, in form satisfactory to Agent, a monthly lot closing report
with respect to each project; and
(b) promptly, such additional financial and other
information as any Bank may from time to time reasonably request.
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C. PAYMENT OF OBLIGATIONS.
Pay, discharge or otherwise satisfy at or before maturity or
before they become delinquent, as the case may be, all its obligations of
whatever nature, except where the amount or validity thereof is currently being
contested in good faith by appropriate proceedings, and reserves in conformity
with GAAP with respect thereto have been provided on the books of Company or its
Subsidiaries, as the case may be or where the terms of this Agreement or the
Reorganization Plan would prohibit such payment, discharge, or satisfaction.
D. CONDUCT OF BUSINESS AND MAINTENANCE OF EXISTENCE.
Subject to Sections 7.5, 7.6, 7.7 and 7.9: (a) continue to
engage in business of the same general type as now conducted by it and preserve,
renew and keep in full force and effect its corporate existence and take all
reasonable action to maintain all rights, privileges and franchises necessary or
desirable in the normal conduct of its business; and (b) to comply with all
Contractual Obligations and Requirements of Law except to the extent that
failure to comply therewith is not reasonably likely to, in the aggregate, have
a Material Adverse Effect.
E. MAINTENANCE OF PROPERTY; INSURANCE.
Keep all property useful and necessary in its business in good
working order and condition; maintain with financially sound and reputable
insurance companies insurance on all its property in at least such amounts and
against at least such risks as are usually insured against in the same general
area by companies engaged in the same or a similar business; and furnish to each
Bank, upon written request, full information as to the insurance carried. Such
insurance in any event shall include, without limitation, shall cover all
replacement costs associated with building collapse, whether caused by
earthquake or structural defects or otherwise, on all Real Property of the
Borrower and each of its Subsidiaries. Each such policy of insurance shall name
Collateral Agent as a loss payee thereunder and shall provide for at least
thirty days prior written notice to Agent of any material modification or
cancellation of such policies. On the Effective Date and on each anniversary
thereafter, Company and its Subsidiaries shall submit to Agent certificates of
insurance evidencing compliance with this Section 6.5.
F. INSPECTION OF PROPERTY; BOOKS AND RECORDS; APPRAISALS.
Keep proper books of records and account in which full, true
and correct entries in conformity with GAAP and all Requirements of Law shall be
made of all dealings and transactions in relation to its business and
activities; and permit
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representatives of Agent, and each Bank, with respect to Company and its
Subsidiaries, to visit and inspect any of the Collateral and related properties
and examine and make abstracts from any of its books and records at any
reasonable time and as often as may reasonably be desired and to discuss the
business, operations, properties and financial and other condition of Company
and its Subsidiaries with officers and employees of Company and such
Subsidiaries and with its independent certified public accountants. From time to
time, if Agent determines that obtaining appraisals is necessary or appropriate,
Agent will either cause its personnel to appraise, or obtain appraisal reports
from appraisers satisfactory to Agent, stating the then current fair market
values of all or any portion of the Real Property. Anything herein to the
contrary notwithstanding, Company shall not be obligated to reimburse Agent with
respect to appraisals of the same particular item of Real Property that occur
more frequently than once in any 6 consecutive month period, unless an Event of
Default has occurred and is continuing or there has occurred a material adverse
change in the value of the Collateral, in which case Company shall be obligated
to reimburse Agent with respect to as many appraisals as Agent deems necessary
to conduct.
G. NOTICES.
Promptly give notice to Agent and each Bank of:
1. the occurrence of any Default or Event of Default;
2. any (i) default or event of default under any
Contractual Obligation of Company or, to the knowledge of Company, any of its
Subsidiaries or (ii) litigation, investigation or proceeding which may exist at
any time between Company or, to the knowledge of Company, any of its
Subsidiaries and any Governmental Authority, which in either case, if not cured
or if adversely determined, as the case may be, would have a Material Adverse
Effect;
3. any litigation or proceeding affecting Company or, to
the knowledge of Company, any of its Subsidiaries in which the amount involved
is $250,000 or more and, not covered by insurance or in which injunctive or
similar relief is sought;
4. as soon as possible and in any event within 30 days
after Company knows or has reason to know thereof, the occurrence or expected
occurrence of any event or condition described in Section 4.12 which could
reasonably be expected to result in liability of Company or any Commonly
Controlled Entity in excess of $100,000 and which is not reflected in the
financial statements most recently delivered to Banks pursuant to Section 6.1;
and
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5. any development or event which could reasonably be
expected to have a Material Adverse Effect.
Each notice pursuant to this Section shall be accompanied by a statement of a
Responsible Officer setting forth details of the occurrence referred to therein
and stating what action Company proposes to take with respect thereto.
H. ENVIRONMENTAL LAWS.
1. 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;
2. Conduct and complete all investigations, studies,
sampling and testing, and all remedial, removal and other actions required under
Environmental Laws and promptly comply with all lawful orders and directives of
all Governmental Authorities respecting Environmental Laws, except to the extent
that the same are being contested in good faith by appropriate proceedings and
the pendency of such proceedings could not reasonably be expected to have a
Material Adverse Effect, and develop and maintain a system, satisfactory to
Agent, for performing periodic environmental compliance reviews with respect to
all of its properties, and for reporting such reviews to Agent and Banks; and
3. Defend, indemnify and hold harmless Agent and Banks,
and their respective employees, agents, officers and directors, from and against
any and all claims, demands, penalties, fines, liabilities, settlements,
damages, costs and expenses of whatever kind or nature known or unknown,
contingent or otherwise, arising out of, or in any way relating to, the
violation of or noncompliance with any Environmental Laws applicable to the real
property owned or operated by Company or any of its Subsidiaries, or any orders,
requirements or demands of Governmental Authorities related thereto, including
attorney's and consultant's fees, investigation and laboratory fees, court costs
and litigation expenses, except to the extent that any of the foregoing arise
out of the gross negligence or willful misconduct of the party seeking
indemnification therefor. The agreements in this Section shall survive the
payment of the Notes and all other amounts payable hereunder.
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I. BUSINESS PLAN.
Furnish to each Bank on or before the tenth day following
approval by Company's Board of Directors, but in no event later than December 31
of each fiscal year and within 10 days (after approval by Company's Board of
Directors, if applicable) of any amendment, modification or update thereto, a
Business Plan of Company and its Subsidiaries for the next succeeding fiscal
year in a form and in substance satisfactory to the Required Banks setting forth
in reasonable detail a projected statement for such fiscal year's income and
cash flow with a projected balance sheet as of the close of the succeeding
fiscal year end, accompanied by a statement of a Responsible Officer that the
Business Plan projected statements of income, cash flow and balance sheet for
the succeeding fiscal year have been adopted by the Board of Directors of
Company. Company and its Subsidiary shall at all times conduct their business
substantially in accordance with the Business Plan and shall not materially
modify or deviate from such Business Plan without the prior written approval of
Agent and the Required Banks.
J. AUTHORIZATIONS.
Company will, and will cause each of its Subsidiaries to, use
its good faith diligent best efforts to promptly obtain and maintain in full
force and effect, all licenses, consents, permits, authorizations and filings
(collectively, "Governmental Approvals") necessary to develop, lease or own all
of its properties, and, upon obtaining the foregoing, Company will, and will
cause each of its Subsidiaries to, maintain the Governmental Approvals in full
force and effect and comply with the terms thereof, except only to the extent
that failure to maintain the Governmental Approvals and comply therewith is not
reasonably likely to have a Material Adverse Effect or result in any liability
to Agent, Collateral Agent or any Bank (prior to Agent, Collateral Agent or any
Bank exercising any of their remedies against the Collateral as provided for
herein or in the other Loan Documents).
K. DIVIDENDS FROM SUBSIDIARIES.
Cause the Subsidiaries to pay dividends to Company from the
Net Cash Proceeds of any sales of assets (including Real Property Sales) to the
extent not prohibited by law, including the proceeds of any utility
condemnations; provided that proceeds from the sale of residential units, lots
or tracts by Subsidiaries (a) from developed phases of a multi-phase project
comprising Subsidiary Property Under Development or Mezzanine Property Under
Development may be used to pay all costs associated with development of the same
phase or additional phases of the same project, including reasonable reserves
for such anticipated costs during the period commencing on the date of sale to
the date 180 days after the date of sale (excluding any costs which are an
allocated share of corporate general and administrative expenses of Company or
any Subsidiary), and (b) from single phase projects comprising Subsidiary
Property Under Development or Mezzanine 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
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are an allocated share of corporate general and administrative expenses of
Company or any other Subsidiary), in either case until the conclusion of the
project, at and following which time all such proceeds shall be distributed to
Company. For purposes hereof, "conclusion of the project" shall mean the
completion of structure or infrastructure development of the project (or, with
multi-phase projects: (i)(y) the final phase of the project, or (z) the sale of
substantially all units thereon; and (ii) the payment of the Indebtedness and
the Guarantee Obligations in respect of Subsidiary Property Under Development or
Mezzanine Property Under Development that prohibits such distributions) in
accordance with the requirements of applicable laws and regulations.
L. SUPPLEMENTAL REPORTS REGARDING REAL PROPERTY.
1. Furnish to Agent such supplemental title reports on the
Real Property subject to the Deeds of Trust and Mortgages as Agent and Required
Banks may reasonably request from time to time; provided Company shall not be
required to provide such supplemental reports more than once per quarter.
2. No later than 60 days after the Effective Date, Company
shall deliver to Agent such third party appraisals, environmental reports,
surveys, and ALTA title policies, as would have complied with the provisions of
Section 5.1(k) if delivered on the Effective Date with respect to all Real
Property to the extent such reports were not required by Banks to be delivered
on or prior to the Effective Date.
3. Without limiting the generality of Section 4.10,
Company shall cause all assessments and taxes, whether real, personal, or
otherwise, due or payable by, or imposed, levied, or assessed against any Real
Property located in Tennessee and Texas to be paid in full before delinquency or
before the expiration of any extension period and promptly shall execute and
deliver to Agent and Collateral Agent appropriate certificates attesting to the
payment thereof or deposit with respect thereto; provided, however, that in the
case of Real Property with a Fair Market Value less than or equal to the
assessments or taxes with respect thereto, the Company may decide not to pay
such assessments or taxes. At any time during the existence of an Event of
Default, Agent and Collateral Agent shall have the right to require the
execution and delivery of a tax servicing contract in respect of the Real
Property located in Tennessee and Texas, in form and substance satisfactory to
Agent and Collateral Agent, among
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Company, Agent, Collateral Agent, and a tax servicing firm satisfactory to Agent
and Collateral Agent.
M. COMPLIANCE WITH LAWS.
Company shall, and shall cause each of its Subsidiaries to
comply with the requirements of all applicable laws, rules, regulations and
orders of any Governmental Authority, noncompliance with which would or could be
reasonably expected to cause a Material Adverse Effect.
N. OTHER NOTICES.
Promptly give notice to Agent of:
1. the creation of any new deposit account; and
2. the organization or formation of any new Venture
Subsidiary, any other Subsidiary, any Unrestricted Subsidiary, or any Joint
Venture; or the disposition or dissolution of any Excluded Subsidiary;
in each case, together with such information related thereto as Agent may
request.
O. COMPANY OPERATING ACCOUNT CONTROL AGREEMENT.
At all times from and after the date of its execution and
delivery, maintain in full force and effect the Company Operating Account
Control Agreement. At all times from and after the Effective Date, Company shall
continue to maintain Company's cash management system substantially as such
system exists on the Effective Date after giving effect to the consummation of
the transactions contemplated to occur on such date, and shall continue to
concentrate the funds of Company into the Company Operating Account except to
the extent that such funds reasonably are required to be held in other accounts
for permitted uses by Company, and except to the extent that such funds are
invested in investments permitted by Section 7.9.
P. INDEMNIFICATION BY COMPANY.
Company agrees to and does hereby indemnify, hold harmless and
defend Banks from and against all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses, and disbursements of any
kind or nature whatsoever which are imposed on, incurred by, or asserted against
Banks in any way relating to or arising out of any failure of Company to comply
with the terms of, or complete, the Reorganization Plan.
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Q. EXECUTIVE OFFICERS.
1. Company shall inform the Agent of the occurrence of an
event described in Item 401(f)(2) of Regulation S-K of the Securities Exchange
Act of 1934 (an "Event") within twenty-four (24) hours after the Company has
actual knowledge of the occurrence of such Event.
2. Company shall (i) promptly consult with Agent regarding
such Event and (ii) within five (5) Business Days after Company has actual
knowledge of the occurrence of such Event, notify Agent of any action proposed
to be taken by Company with respect to such Event.
3. If the occurrence of an "Event" could reasonably be
expected to have a Material Adverse Effect, Company shall promptly take such
corrective action with respect to such Event as may, in its reasonable judgment,
be required to avoid a Material Adverse Effect.
VII.
NEGATIVE COVENANTS
Company hereby agrees that, so long as the Commitments remain
in effect or any Obligations remain outstanding and unpaid or any other amount
is owing to any Bank or Agent hereunder, Company shall not, and shall not permit
any of its Subsidiaries to, directly or indirectly:
A. MAINTENANCE OF CONSOLIDATED NET WORTH.
Permit Consolidated Net Worth at any time to be less than the
amounts set forth below (hereinafter referred to as the "Minimum Consolidated
Net Worth"): (a) from the Effective Date through December 31, 1999, $40,000,000
and (b) at any time thereafter, the sum of (i) $40,000,000; and (ii) 50% of the
Annual Net Income for the prior fiscal year; provided, however, that the amount
determined under this clause (b) shall never be less than zero.
To demonstrate compliance with the Minimum Consolidated Net
Worth covenant set forth in this Section, Company shall furnish to Banks (i)
within 45 days of the close of each calendar quarter a certificate of a
Responsible Officer setting forth Minimum Consolidated Net Worth for such date
calculated in accordance with this Section 7.1, and the calculation upon which
it is based; and (ii) within 90 days of the close of each fiscal year, a
certificate of a Responsible Officer setting forth Minimum Consolidated Net
Worth as of the such date calculated in accordance with this Section
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7.1 and the calculation upon which it is based, reflecting in such annual
certificate any addition to the Minimum Consolidated Net Worth that Company is
required to maintain resulting from the Annual Net Income for the fiscal year
then ended, but only as calculated under clause (b) of this Section 7.1.
B. LIMITATION OF INDEBTEDNESS.
Create, incur, assume or suffer to exist any Indebtedness,
except:
1. Indebtedness in respect of the Loans;
2. Indebtedness in respect of the Anglo American Loan or
any permitted replacement thereof on terms no less favorable to the Banks, so
long as the Intercreditor Agreement remains in full force and effect;
3. secured Indebtedness in respect of the Secured Note;
4. Indebtedness of the Company in respect of Apollo's 20%
Profits Interest;
5. Indebtedness of Company not otherwise permitted under
this Section 7.2(e) and Indebtedness of its Subsidiaries which is recourse to
the Company, at any time outstanding, whether incurred in connection with
Subsidiary Property Under Development or otherwise, not exceeding $80,000,000
(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;
6. Indebtedness of Company to any Subsidiary or of any
Subsidiary to Company; provided that (i) such inter-company Indebtedness shall
not be evidenced by promissory notes or other instruments and (ii) all
Indebtedness of Subsidiaries to Company shall not exceed an aggregate principal
amount of $4,000,000 at any time, of which no more than $1,000,000 in the
aggregate may be Indebtedness of MPUD Subsidiary Group members, SPUD
Subsidiaries, Venture Subsidiaries and Unrestricted Subsidiaries;
7. Intentionally omitted;
8. 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") or in connection
with
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Mezzanine Property Under Development of the Subsidiary (any Subsidiary incurring
such Indebtedness shall be referred to in this Section 7.2(h) as an "MPUD
Subsidiary"; provided that (i) neither Company nor any Subsidiary other than
that SPUD Subsidiary or MPUD Subsidiary, as the case may be, is liable for such
Indebtedness in respect of that Subsidiary Property Under Development or
Mezzanine Property Under Development, as the case may be, directly or pursuant
to a Guarantee Obligation or otherwise, (ii) the aggregate amount of all
Indebtedness permitted pursuant to this Section 7.2(h) at any one time
outstanding shall not exceed $170,000,000 minus all other outstanding
Indebtedness of Company and Subsidiaries permitted pursuant to Section 7.2(e),
and (iii) the shares of capital stock and other ownership interests of such MPUD
Subsidiary shall at all times be owned solely by a single MPUD Holding Company;
9. [Intentionally Omitted];
10. [Intentionally Omitted]; and
11. Indebtedness of Subsidiaries for the development of
infrastructure, common areas, or recreational facilities owing to
quasi-governmental entities such as community development and special districts
to the extent financed through the issuance of industrial revenue bonds or other
similar public financing; provided that (except for Liens permitted pursuant to
Section 7.3(q)) there is no direct or indirect recourse to Company with respect
to such Indebtedness (other than inchoate Liens arising by operation of law in
respect of such Indebtedness) and such Indebtedness shall not exceed $50,000,000
in the aggregate at any one time outstanding; provided further that Company
shall give Agent prior written notice of the incurrence of any such Indebtedness
under this Section 7.2(k).
Anything to the contrary notwithstanding, in no event shall Company or any
Subsidiary co-make, endorse, guarantee (except to the extent permitted under
Section 7.4(c)), or otherwise become liable or have any recourse with respect to
any Indebtedness of any of the Unrestricted Subsidiaries.
C. 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:
1. Liens securing Indebtedness permitted by Section
7.2(a);
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2. Liens in favor of the Collateral Agent securing
Indebtedness permitted by Section 7.2(b), so long as the Intercreditor Agreement
remains in full force and effect;
3. Liens in favor of the Collateral Agent securing the
Secured Agreement Obligations, so long as the Intercreditor Agreement remains in
full force and effect
4. Liens in favor of Apollo securing Indebtedness
permitted by Section 7.2(d);
5. Liens for taxes (i) which are not yet delinquent or
(ii) which are, not in an aggregate amount, as to Company and all Subsidiaries,
of greater than $1,000,000 or (iii) which are being contested in good faith by
appropriate proceedings; provided that adequate reserves with respect thereto
are maintained on the books of Company or its Subsidiaries, as the case may be,
in conformity with GAAP;
6. carriers, warehousemen's, mechanics', 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;
7. 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;
8. 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;
9. easements, rights-of-way, restrictions, development
orders, plats, and other similar encumbrances incurred in the ordinary course of
business which, in the aggregate, are not substantial in amount and which do not
in any case materially detract from the value of the property subject thereto or
materially interfere with the ordinary conduct of the business of Company or
such Subsidiary;
10. Liens granted by Company or any Subsidiary, as lessee,
in the ordinary course of business on leased equipment, leasehold improvements
and furnishings;
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11. 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;
12. other Liens in existence on the Effective Date, listed
on Schedule 7.3; provided that no such Lien is spread to cover any additional
property after the Effective Date and that the amount of any Indebtedness or
other obligations secured thereby is not increased;
13. Liens granted pursuant to Section 7.7 of the
Reorganization Plan;
14. Liens granted by Company or Subsidiaries upon Real
Property and related Personal Property which is Subsidiary Property Under
Development and which is either financed by Indebtedness incurred by
Subsidiaries pursuant to Section 7.2(e) or 7.2(h), or contributed by Company to
a Subsidiary pursuant to Section 7.9(g);
15. Liens granted by Company or Subsidiaries upon Real
Property and related Personal Property which is Mezzanine Property Under
Development and which is either financed by Indebtedness incurred by
Subsidiaries pursuant to Section 7.2(e) or (h), or contributed by Company to a
Subsidiary pursuant to Section 7.9(g);
16. [Intentionally Omitted];
17. inchoate Liens solely arising by operation of law in
respect of Indebtedness incurred pursuant to Section 7.2(k).
D. LIMITATION ON GUARANTEE OBLIGATIONS.
Create, incur, assume or suffer to exist any Guarantee
Obligation, except: (a) the Guarantee Obligations listed on Schedule 4.17; (b)
Guarantee Obligations made in the ordinary course of its business by Company of
obligations (other than Indebtedness) of any of its Subsidiaries, which
obligations are otherwise permitted under this Agreement; (c) Guarantee
Obligations by Company of Indebtedness of any Subsidiary, Unrestricted
Subsidiary, or Joint Venture; provided, however, that any outstanding Guarantee
Obligations permitted under this Section 7.4(c) in respect of Indebtedness of
any Unrestricted Subsidiary or Joint Venture shall reduce on a dollar-for-dollar
basis the $80,000,000 limitation otherwise available for Indebtedness permitted
under Section 7.2(e) and that the sum of all Indebtedness
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permitted under Section 7.2(e) and all Guarantee Obligations permitted pursuant
to this Section 7.4(c) shall not exceed $80,000,000 in the aggregate; provided
further, that Company may not incur any Guarantee Obligation with respect to
Indebtedness of any Subsidiary permitted pursuant to Section 7.2(h); and (d)
Guarantee Obligations of the Subsidiaries of Company in respect of the Anglo
American Loan Obligations and the Secured Agreement Obligations, so long as the
Intercreditor Agreement remains in full force and effect.
E. LIMITATIONS ON FUNDAMENTAL CHANGES.
Except to the extent such merger, consolidation, or
amalgamation is of a Subsidiary with and into Company, or between or among
wholly owned Subsidiaries, enter into any merger, consolidation or amalgamation,
or liquidate, wind up or dissolve itself (or suffer any liquidation or
dissolution), or convey, sell, lease, assign, transfer or otherwise dispose of,
all or substantially all of its property, business or assets; provided that
Company or any Subsidiary may convey, sell, assign, 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.
F. LIMITATION ON SALE OF ASSETS.
So long as no Default or Event of Default has occurred and is
continuing or would result therefrom (unless the Permitted Sale Asset is the
subject of a binding written contract of sale with an unaffiliated third party
entered into prior to the first date on which the applicable Default or Event of
Default occurred)), convey, sell, lease, assign, transfer or otherwise dispose
of any of its property, business or assets (including receivables and leasehold
interests), whether now owned or hereafter acquired, except the following
("Permitted Sale Assets"):
1. raw land;
2. homes or homesites in the ordinary course of its
business;
3. obsolete or worn out property disposed of in the
ordinary course of business;
4. Commercial Real Estate;
5. the sale or discount without recourse of Commercial
Receivables or Homesite Contract Receivables in the ordinary course of business
6. [Intentionally Omitted];
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7. sales or other transfers of any partnership interests
or joint venture interests in entities that are not wholly owned, collectively,
by Company and its Subsidiaries; and
8. transactions permitted under Section 7.5.
Upon any permitted sale as aforesaid, Collateral Agent shall execute releases of
Collateral Agent's Lien upon the Collateral included in any such sale; provided
that there exists no Default or Event of Default hereunder and no Default or
Event of Default would result therefrom; and provided further, that Collateral
Agent's Lien shall continue against the proceeds of such sale, as evidenced by
any and all documents and filings as may be required by Agent. Notwithstanding
anything in this Section 7.6 to the contrary, Company shall not convey, sell,
lease, assign, transfer or otherwise dispose of any Eligible Subdivision Project
(other than the Riverwalk Tower project and the Trails of West Frisco project)
for consideration less than 75% of the Net Equity in respect of such Eligible
Subdivision Project.
G. LIMITATION ON DIVIDENDS.
Declare or pay any dividend (other than dividends payable
solely in common stock or preferred stock of Company) on, or, except for the
Reverse Stock Split, make any payment on account of, or set apart assets for a
sinking or other analogous fund for, the purchase, redemption, defeasance,
retirement or other acquisition of, any Capital Stock of Company including the
Preferred Stock, whether now or hereafter outstanding, or make any other
distributions in respect thereof, either directly or indirectly, whether in cash
or property (other than distributions or dividends in the form of common stock
or preferred stock of Company) or in obligations of Company or any Subsidiary,
except for: (a) dividends declared and paid by any Subsidiary to Company or any
Subsidiary and (b) dividends to the extent permitted by Section 4.14 of the
Intercreditor Agreement.
H. LIMITATION ON CAPITAL EXPENDITURES.
Make, or enter into any agreement the performance of the terms
of which would require Company or any Subsidiary to make (by way of the
acquisition of securities of a Person or otherwise), any expenditures in respect
of the purchase or other acquisition of fixed or capital assets (excluding any
such asset acquired in connection with nominal replacement and maintenance
programs properly charged to current operations), exceeding in the aggregate
$50,000,000 for Company and its Subsidiaries during any 12-month period from and
after the Effective Date.
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I. 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:
1. extensions of trade credit in the ordinary course of
business;
2. investments in Cash Equivalents;
3. (i) loans and advances to employees of Company or its
Subsidiaries for travel, entertainment and relocation expenses and for advances
on salary prior to, and otherwise payable during, an employee's vacation, in the
ordinary course of business in an aggregate amount for Company and its
Subsidiaries not to exceed $500,000 at any one time outstanding and (ii) loans
to J. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, the President and Chief Executive Officer of the
Company, evidenced by the obligations described on Schedule 7.9(c);
4. [Intentionally Omitted.]
5. (i) loans by Company to its Subsidiaries (other than
Venture Subsidiaries, SPUD Subsidiaries, MPUD Subsidiary Group members and
Unrestricted Subsidiaries) or by any Subsidiary to Company to the extent such
Indebtedness is permitted pursuant to Section 7.2(f); and (ii) capital
contributions to Subsidiaries (other than Venture Subsidiaries, SPUD
Subsidiaries, MPUD Subsidiary Group members and Unrestricted Subsidiaries) so
long as Company or its Subsidiary making the capital contribution receives stock
equal to the value of the capital contributed as determined in accordance with
GAAP; provided, that Collateral Agent's Lien shall continue against such stock
received by Company or its Subsidiary as aforesaid, which Lien shall be
evidenced by any and all documents and filings as may be required by Collateral
Agent and Agent;
6. extensions of credit for sales of assets which require
a mandatory reduction of the Maximum Permissible Loan Amount pursuant to
Sections 2.5(c), (d) and (e); and
7. capital contributions to Venture Subsidiaries for the
purpose of making investments in Joint Ventures, to SPUD Subsidiaries, to MPUD
Subsidiary Group members and to Unrestricted Subsidiaries so long as Company or
its Subsidiary making the capital contribution receives stock, partnership
interests, joint venture interests, or beneficial interests, respectively, equal
to the value of the capital
88
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, subject to the provisions of Section 3.3(d), Collateral Agent's Lien shall
continue against such stock or other interests received by Company or its
Subsidiary as aforesaid, which Lien shall be evidenced by any and all documents
and filings as may be required by Collateral Agent and Agent, and (iii) from and
after the Effective Date, the aggregate "net amount" of such capital
contributions shall be limited to (y) with respect to capital contributions to
Venture Subsidiaries, SPUD Subsidiaries, MPUD Subsidiary Group members and
Unrestricted Subsidiaries in existence on the Effective Date, assets (including
cash) having fair market values not greater than $4,700,000, and (z) with
respect to the Apollo Beach project, the Rayland project, the Grand Oaks
project, the West Bay Club Condominium project, and that certain project located
in Orlando, Florida, commonly known as the "Naval Training Center" under
consideration by Orlando NTC Partners, a Florida general partnership (the "NTC
Project"), capital contributions to Venture Subsidiaries, SPUD Subsidiaries,
MPUD Subsidiary Group members and Unrestricted Subsidiaries which acquire such
property after the Effective Date, assets (including cash) having fair market
values not greater than $5,500,000 (provided that no more than $300,000 of this
amount may be contributed with respect to the NTC Project). For purposes of this
Section 7.9(g), the "net amount" shall be equal to the aggregate amount of all
capital contributions less any dividends paid to the Company and/or
Subsidiaries, as the case may be, by the Venture Subsidiaries, SPUD
Subsidiaries, MPUD Subsidiary Group members and/or Unrestricted Subsidiaries.
Notwithstanding anything to the contrary in this Section 7.9,
no Subsidiary which owns any project may invest in any Subsidiary which has no
interest in such project.
J. LIMITATION ON OPTIONAL PAYMENTS AND MODIFICATIONS OF DEBT
INSTRUMENTS.
1. Make any optional payment or optional prepayment on, or
optional redemption of, any Indebtedness (including any payments on the Anglo
American Loan Obligations, and Secured Note Obligations) except: (i) payments on
the Loans; (ii) payment of the 20% Profits Interest; or (iii) so long as no
Event of Default has occurred and is continuing or would result therefrom,
payments made pursuant to Indebtedness permitted pursuant to Section 7.2(e),
(f), (h), or (k);
2. Amend, modify, or change, or consent or agree to any
amendment, modification or change to any of the terms of the Anglo American Loan
Obligations, the Secured Agreement Obligations, or any other agreement executed
in
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connection with the foregoing or otherwise in connection with any Indebtedness
(other than: (1) Indebtedness permitted to be incurred pursuant to subsections
7.2(e) and (f), (but exclusive of Indebtedness permitted pursuant thereto
consisting of intercompany Indebtedness among Company and its Subsidiaries and
Financing Leases), (h), and (k); and (2) any such amendment, modification, or
change to any such other Indebtedness which would extend the maturity or reduce
the amount of any payment of principal thereof or which would reduce the rate or
the amount of interest payable or extend the date for payment of interest
thereon; but in the case of either (1) or (2), solely to the extent the
amendment, modification, or change to any such Indebtedness is not prohibited by
any other provision in this Agreement or the other Loan Documents or in the
Intercreditor Agreement); and
3. Amend any subordination provisions of any instrument
governing any Indebtedness (except for amendments pursuant to this Agreement and
the other Loan Documents or pursuant to the Intercreditor Agreement).
K. TRANSACTIONS WITH AFFILIATES.
Enter into any transaction, including any purchase, sale,
lease or exchange of property or the rendering of any service, with any
Affiliate (other than any Subsidiary of Company), unless such transaction is
otherwise permitted under this Agreement, is in the ordinary course of Company's
or such Affiliate's business and is upon fair and reasonable terms no less
favorable to Company or such Affiliate, as the case may be, than it would obtain
in a comparable arms length transaction with a Person not an Affiliate.
L. SALE AND LEASEBACK.
Enter into any Sale and Leaseback to the extent the aggregate
Book Value of all assets sold and leased under all such transactions exceeds
$2,000,000 during the term of this Agreement.
M. FISCAL YEAR.
Permit the fiscal year of Company to end on a day other than
December 31.
N. LIMITATION ON NEGATIVE PLEDGE CLAUSES.
Enter into any agreement, other than any Secured Debt
Documents, industrial revenue bonds, community development district financing,
purchase money mortgages, Financing Leases, or agreements executed in connection
with Indebtedness
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incurred in connection with Subsidiary Property Under Development permitted by
this Agreement (in which cases, any prohibition or limitation shall only be
effective against the assets financed thereby), with any Person other than Banks
pursuant hereto which prohibits or limits the ability of Company or any of its
Subsidiaries to create, incur, assume or suffer to exist any Lien upon any of
its property, assets or revenues, whether now owned or hereafter acquired.
O. DEVIATION FROM BUSINESS PLAN.
Allow the total actual Net Cash Flow for any fiscal quarter,
including major asset dispositions, to deviate from the quarterly Net Cash Flow
projected under the Business Plan for such quarter by a negative margin equal to
or greater than forty percent (40%) or $3,000,000, whichever is greater.
Notwithstanding the foregoing, the first period tested will be the period
commencing on February 1, 1999 and ending on June 30, 1999.
P. INTER PROJECT LOANS, MERGERS, CONSOLIDATIONS AND INVESTMENTS.
Allow any Subsidiary which owns any project to borrow from or
lend to, merge, consolidate with or invest in any other Subsidiary which has no
interest in such project.
Q. LIMITATION OF BANK ACCOUNTS.
So long as any Obligations or Commitments are outstanding,
allow cash and Cash Equivalents maintained in Bank Accounts of Company and
Subsidiaries other than in the Cash Collateral Account and the restricted
accounts set forth in Schedule 7.17 (including any beneficial interest therein),
less the amount of checks outstanding to pay current expenses in the ordinary
course of business or to prepay expenses to be incurred in the immediately
subsequent three-month period consistent with past practices, to exceed
$5,000,000 in the aggregate at any time. Company and its Subsidiaries shall
deposit in the Company Operating Account, after application pursuant to Section
2.5 (b), all remaining cash of Company and its Subsidiaries in excess of amounts
permitted to be maintained in accounts other than a Cash Collateral Account
under this Section 7.17.
R. VENTURE SUBSIDIARIES AND JOINT VENTURES.
1. 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) as modified from time to
time after the Effective Date to include any new Joint Venture interests and the
revenues arising from such revenue.
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2. Cause, suffer, or permit any Venture Subsidiary to
create, incur, assume, or suffer to exist any Lien (other than Liens in favor of
the Collateral Agent, the Anglo American Collateral Agent or the Secured
Agreement Collateral Agent) upon any of such Venture Subsidiary's property,
assets, or revenues, whether now owned or hereafter acquired (including the
Joint Venture interests owned by such Venture Subsidiary as disclosed on
Schedule 4.14(B) and the revenues arising from such revenue).
S. EMPLOYEE BENEFITS.
1. Fail to comply in all material respects with the
applicable provisions of ERISA and the Code to the extent that such failure
results or could reasonably be expected to result in a Material Adverse Effect
and (b) Fail to furnish the Agent as soon as possible after, and in any event
within 10 days after any Responsible Officer of the Company or any Commonly
Controlled Entity knows or has reason to know that any ERISA Event has occurred
that, alone or together with any other ERISA Events that have occurred could
reasonably be expected to result in a Material Adverse Effect, a statement by a
Responsible Officer of the Company setting forth details as to such ERISA Event
and the action, if any, that the Company and/or the Subsidiaries propose to take
with respect thereto.
T. CHARTER DOCUMENTS.
Amend or modify the Series A Statement or the Series B
Statement or any other provision of its charter, certificate of incorporation or
other organizational documents relating to preferred stock (whether now
outstanding or hereafter issued) without obtaining the prior written consent of
Agent.
VIII.
EVENTS OF DEFAULT; REMEDIES
A. EVENTS OF DEFAULT; REMEDIES.
If any of the following events ("Events of Default") shall
occur and be continuing:
1. Company shall fail to pay any principal when due of any
Obligation in accordance with the terms hereof; or Company shall fail to pay any
interest due on any Obligation or any other amount payable hereunder within
three (3) days after the date any such interest or other amount becomes due in
accordance with the terms thereof or hereof; or
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2. Any representation or warranty made or deemed made by
Company or any of its Subsidiaries herein or in any other Loan Document or which
is contained in any certificate, document or financial or other statement
furnished at any time under or in connection with this Agreement shall prove to
have been incorrect in any material respect on or as of the date made or deemed
made; or
3. Company shall default in the observance or performance
of any agreement contained in Section 7; or
4. Company or any Subsidiary shall default in the
observance or performance of any other agreement contained in this Agreement
(other than as provided in paragraphs (a) through (c) of this Section) or in any
other Loan Document, and such default shall continue unremedied for a period of
30 days; or
5. Company shall fail to pay any principal of or interest
on any Anglo American Loan Obligations or any Secured Agreement Obligations
(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 relevant agreement or instrument relating to such
obligations; or there shall occur any other "default" or "event of default" (as
defined in the Anglo American Loan Documents or the Secured Agreement Documents
or any other event that accelerates, or permits the acceleration, of any Anglo
American Loan Obligations or any Secured Agreement Obligations; or
6. Any Anglo American Loan Obligations or Secured
Agreement Obligations shall be declared to be due and payable, or required to be
prepaid prior to the stated maturity thereof; or
7. Any Subsidiary of Company shall fail to pay any
principal of, or interest on, any Indebtedness or any Guarantee Obligation
(other than any Guarantee Obligation created pursuant to any Loan Document) in
excess of $1,000,000, when due and payable (whether at scheduled maturity or by
required prepayment, acceleration, demand or otherwise) and such failure shall
continue after the applicable grace period, if any, specified in the agreement
or instrument under which such Indebtedness or Guarantee Obligation was created
and, if such agreement or instrument permits the acceleration of the maturity of
such Indebtedness or Guarantee Obligation as a result of 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
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8. Company shall (i) default in any payment of principal
of or interest on any Indebtedness (other than any Obligations, the Anglo
American Loan Obligations or the Secured Agreement Obligations) or in the
payment of any Guarantee Obligation in excess of $1,000,000, beyond the period
of grace, if any, provided in the instrument or agreement under which such
Indebtedness or Guarantee Obligation was created; or (ii) default in the
observance or performance of any other agreement or condition relating to any
such Indebtedness or Guarantee Obligation or contained in any instrument or
agreement evidencing, securing or relating thereto, or any other event shall
occur or condition exist, the effect of which default or other event or
condition is to cause, or permit the holder or holders of such Indebtedness or
beneficiary or beneficiaries of such Guarantee Obligation (or a trustee or agent
on behalf of such holder or holders or beneficiary or beneficiaries) to cause,
with the giving of notice if required, such Indebtedness to become due prior to
its stated maturity or such Guarantee Obligation to become payable; or
9. (i) Company or any of its Subsidiaries shall commence
any case, proceeding or other action (x) under any existing or future law of any
jurisdiction, domestic or foreign, relating to bankruptcy, insolvency,
reorganization or relief of debtors, seeking to have an order for relief entered
with respect to it, or seeking to adjudicate it a bankrupt or insolvent, or
seeking reorganization, arrangement, adjustment, winding-up, liquidation,
dissolution, composition or other relief with respect to it or its debts, or (y)
seeking appointment of a receiver, trustee, custodian or other similar official
for it or for all or any substantial part of its assets, or Company or any of
its Subsidiaries shall make a general assignment for the benefit of its
creditors; or (ii) there shall be commenced against Company or any of its
Subsidiaries any case, proceeding or other action of a nature referred to in
clause (i) above which (x) results in the entry of an order for relief or any
such adjudication or appointment or (y) remains undismissed, undischarged or
unbonded for a period of 60 days; or (iii) there shall be commenced against
Company or any of its Subsidiaries any case, proceeding or other action seeking
issuance of a warrant of attachment, execution, distraint or similar process
against all or any substantial part of its assets which results in the entry of
an order for any such relief which shall not have been vacated, discharged, or
stayed or bonded pending appeal within 60 days from the entry thereof; or (iv)
Company or any of its Subsidiaries shall take any action in furtherance of, or
indicating its consent to, approval of, or acquiescence in, any of the acts set
forth in clause (i), (ii), or (iii) above; or (v) Company or any of its
Subsidiaries shall generally not, or shall be unable to, or shall admit in
writing its inability to, pay its debts as they become due, provided that
Company or any of its Subsidiaries may admit in writing that it is "insolvent"
as such term is defined in, and for purposes of, Section 108(a)(1)(8) of the
Code; or (vi) Company or any of its Subsidiaries shall cause to be reinstated
the Reorganization Proceedings; or
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10. The Confirmation Order shall be reversed, withdrawn, or
modified (in any manner adverse to Company or any of its Subsidiaries), or any
rehearing shall be ordered with respect thereto by the Bankruptcy Court or by
any court having jurisdiction over Company; or
11. (i) There occurs one or more events or conditions
described in Section 4.12 or an ERISA Event which individually or in the
aggregate result in liability of Company or any Commonly Controlled Entity in
excess of $5,000,000; or the present value of all accrued benefits under each
Single Employer Plan (based on the reasonable assumptions used by the
independent actuary for such Plan for purposes of establishing the minimum
funding requirements under Section 412 of the Code), as of the last annual
valuation date, exceed the value of the assets of such plan allocable to such
accrued benefits, individually or in the aggregate for all Single Employer Plans
with respect to which the value of the assets exceed the present value of the
accrued benefits, by more than $5,000,000; or
12. One or more judgments or decrees shall be entered
against Company or any of its Subsidiaries involving in the aggregate a
liability (not paid or fully covered by insurance) of $500,000 or more in the
case of Company or any of its Subsidiaries and all such judgments or decrees
shall not have been vacated, discharged, stayed or bonded pending appeal within
60 days from the entry thereof; or
13. (i) Any of the Guarantees, Security Documents, or other
Loan Documents hereunder shall cease, for any reason, to be in full force and
effect or Company or any of its Subsidiaries, as the case may be, party thereto
shall so assert in writing, or (ii) any Security Document shall cease to be
effective to grant a perfected Lien on the collateral described therein with the
priority purported to be created thereby (other than as a result of any action
or inaction on the part of Agent or Banks or their agents or bailees or other
than with respect to Collateral having an aggregate value of $100,000 or less);
or
14. Any event or change shall occur that has caused or
evidences, either in any case or in the aggregate, a Material Adverse Effect; or
15. There shall occur any defined "Event of Default" under
any Secured Debt Documents other than the Loan Documents; or
16. There shall occur any defined "Event of Default" as
defined in the Series A Statement or the Series B Statement; or
17. There shall occur any event that results in the
accumulation of, or the right of "Holders" (as such term is defined and used in
the Series A Statement or
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the Series B Statement of the Series A or Series B Preferred Stock to receive
dividends at the "Default Dividend Rate" as defined therein; or
18. A Change of Control shall occur; or
19. Company shall fail to perform its agreements in Section
6.17, and such failure could reasonably be expected to have a Material Adverse
Effect.
20. If funds in excess of $100,000 are paid over pursuant
to the resolution of any claim asserted by any third party, including claims by
any state or other Governmental Authority, that any unclaimed funds disbursed by
the United States Trust Company of New York to Company out of the proceeds of
the Unsecured 1996 Notes are "abandoned property" under state escheat or other
applicable laws; or
21. There shall occur any transfer of any shares of Series
A Preferred Stock under circumstances in which the transferee does not become
bound by all of the provisions of the Intercreditor Agreement which, immediately
prior to such transfer, were applicable to the Secured Agreement Obligees; or
22. The occurrence or failure to occur of any act or event
which occurrence or failure to occur could give rise to the right on the part of
the Class A Preferred Shareholders and/or the Class B Preferred Shareholders to
require Company to repurchase such shares or any portion thereof;
then, and in any such event, (a) if such event is an Event of Default specified
in clause (i), (ii), (iv), (v) or (vi) of paragraph (i) above, (i) the
Commitments shall automatically immediately terminate, and (ii) the Loans
hereunder (with accrued interest thereon) and all other Obligations shall
immediately become due and payable in full, and Agent and Collateral Agent shall
have all rights and remedies given to Agent and Collateral Agent pursuant to the
Loan Documents and all rights of a secured party, mortgagee and pledgee under
applicable law, all of which rights and remedies shall be cumulative and
non-exclusive, to the extent permitted by law; and (b) if such event is any
other Event of Default, either or both of the following actions may be taken:
(i) with the consent of the Required Banks, Agent may, or upon the request of
the Required Banks, Agent shall, by notice to Company declare the Commitments to
be terminated forthwith, whereupon the Commitments shall immediately terminate;
and (ii) with the consent of the Required Banks, Agent may, or upon the request
of the Required Banks, Agent shall, by notice of default to Company, declare the
Loans hereunder (with accrued interest thereon) and all other Obligations to be
due and payable in full, and Agent shall have all rights and remedies given to
Agent and Collateral Agent pursuant to the Loan 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
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extent permitted by law; provided, however, with regard to clause (b) hereof,
that unless and until Agent shall have received such directions, Agent may (but
shall not be obligated to) take such action, or refrain from taking such action,
with respect to such Default or Event of Default as it shall deem advisable in
the best interests of Banks.
IX.
AGENTS
A. APPOINTMENT OF AGENT.
Each Bank hereby irrevocably designates and appoints ▇.▇.
▇▇▇▇▇▇▇▇ & Co., LLC as Agent of such Bank under this Agreement and the other
Loan Documents, and ▇.▇. ▇▇▇▇▇▇▇▇ & Co., LLC hereby accepts such appointment,
subject to the terms and provisions of this Agreement and the other Loan
Documents. Each Bank irrevocably authorizes ▇.▇. ▇▇▇▇▇▇▇▇ & Co., LLC as Agent
for such Bank, to take such action on its behalf under the provisions of this
Agreement and the other Loan Documents and to exercise such powers and perform
such duties as are expressly delegated to Agent by the terms of this Agreement
and the other Loan Documents together with such other powers as are reasonably
incidental thereto. Agent may appoint sub-agents to assist Agent in its duties
as Agent.
Each Bank hereby further authorizes Agent to enter into the
Security Documents to be executed and delivered by Agent, on behalf of and for
the benefit of Banks, on the Effective Date and agrees to be bound by the terms
thereof. Each Bank irrevocably authorizes Agent to take such action on its
behalf under the provisions of the Security Documents, and to exercise such
powers and perform such duties as are expressly delegated to Agent by the terms
of the Security Documents, together with such other powers as are reasonably
incidental thereto; provided that Agent shall not enter into any consent to any
amendment, modification, termination or waiver of any provision contained in any
Security Document to which it is party without the prior written consent of
Required Banks. Each Bank agrees that no Bank shall have any right individually
to realize upon the collateral granted by the Security Documents (including
through the exercise of a right of set-off against call deposits, if any, of
such Bank in which any funds on deposit in the Cash Collateral Accounts may from
time to time be invested), it being understood and agreed that such rights and
remedies may be exercised only by Agent at the direction of Required Banks, for
the benefit of Banks, in accordance with the terms of such agreements. Each Bank
hereby authorizes Agent to release Collateral only as expressly permitted or
required under this Agreement or the Security Documents, and agrees that a
certificate executed by Agent evidencing such release of Collateral shall be
conclusive evidence of such release to any third party.
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B. APPOINTMENT OF COLLATERAL AGENT.
Each Bank hereby irrevocably designates and appoints ▇.▇.
▇▇▇▇▇▇▇▇ & Co., LLC as Collateral Agent of such Bank under this Agreement and
the Security Documents to which ▇.▇. ▇▇▇▇▇▇▇▇ & Co., LLC is a party, and ▇.▇.
▇▇▇▇▇▇▇▇ & Co., LLC hereby accepts such appointment, subject to the terms and
provisions of this Agreement and the Security Documents to which it is a party.
Each Bank hereby further authorizes Collateral Agent to enter into the Security
Documents to be executed and delivered by Collateral Agent on the Effective Date
and agrees to be bound by the terms thereof. Each Bank irrevocably authorizes
▇.▇. ▇▇▇▇▇▇▇▇ & Co., LLC, as Collateral Agent for such Bank, to take such action
on its behalf under the provisions of this Agreement and the Security Documents
to which Collateral Agent is a party, and to exercise such powers and perform
such duties as are expressly delegated to Collateral Agent by the terms of this
Agreement and the Security Documents to which it is a party, together with such
other powers as are reasonably incidental thereto; provided that Collateral
Agent shall not enter into any consent to any amendment, modification,
termination or waiver of any provision contained in any Security Document to
which it is party without the prior written consent of Required Banks. Each Bank
agrees that no Bank shall have any right individually to realize upon the
security granted by the Security Documents to which Collateral Agent is party,
it being understood and agreed that such rights and remedies may be exercised
only by Collateral Agent at the direction of Agent on behalf of Required Banks,
for the benefit of Banks, in accordance with the terms of such agreements. Each
Bank hereby authorizes Collateral Agent to release Collateral only as expressly
permitted or required under this Agreement or the Security Documents and agrees
that a certificate executed by Collateral Agent evidencing such release of
Collateral shall be conclusive evidence of such release to any third party.
Collateral Agent shall not subordinate or release any Liens under any of the
Security Documents except as provided in this Agreement or upon the written
direction of Agent on behalf of the Required Banks. All notices and directions
to Collateral Agent shall be given by Agent on behalf of and at the direction of
Required Banks.
C. APPOINTMENT OF ISSUING BANK.
Each Bank hereby irrevocably designates and appoints DK
Acquisition Partners, L.P. as the Issuing Bank under this Agreement and the
other Loan Documents, and DK Acquisition Partners, L.P. hereby accepts such
appointment, subject to the terms and provisions of this Agreement and the other
Loan Documents. Each Bank irrevocably authorizes DK Acquisition Partners, L.P.,
as Issuing Bank, to issue and perform under each L/C Guarantee, to take such
action on its behalf under the provisions of the L/C Guarantees, this Agreement
and the other Loan Documents and to exercise such powers and perform such duties
as are expressly delegated to Issuing
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Bank by the terms of each L/C Guarantee, this Agreement and the other Loan
Documents together with such other powers as are reasonably incidental thereto.
Each Bank irrevocably authorizes Issuing Bank to take such
action on its behalf under the provisions of the L/C Guarantees, and to exercise
such powers and perform such duties as are expressly delegated to Issuing Bank
by the terms of the L/C Guarantees, together with such other powers as are
reasonably incidental thereto; provided that Issuing Bank shall not enter into
any consent to any amendment, modification, termination or waiver of any
provision contained in any L/C Guarantee to which it is party without the prior
written consent of Required Banks.
D. DELEGATION OF DUTIES.
Agent, Collateral Agent and Issuing Bank may execute any of
their respective duties under this Agreement and the other Loan Documents by or
through agents or attorneys-in-fact and shall be entitled to advice of counsel
concerning all matters pertaining to such duties. Neither Agent nor Collateral
Agent nor Issuing Bank shall be responsible for the negligence or misconduct of
any agents or attorneys-in-fact selected by it with reasonable care.
Notwithstanding any provision to the contrary elsewhere in this Agreement,
neither Agent nor Collateral Agent nor Issuing Bank shall have any duties or
responsibilities, except those expressly set forth herein, or any fiduciary
relationship with any Bank, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or any other Loan Document or otherwise exist against Agent or
Collateral Agent or Issuing Bank; and Agent, Collateral Agent and Issuing Bank
are acting hereunder and under the other Loan Documents solely as the agent and
collateral agent, respectively, of Banks pursuant hereto and thereto, and
neither Agent nor Collateral Agent nor Issuing Bank is acting as trustee for
Banks.
E. EXCULPATORY PROVISIONS.
Neither Agent, Collateral Agent nor Issuing Bank, nor any of
their respective officers, directors, employees, agents, attorneys-in-fact or
Affiliates shall be (a) liable for any action lawfully taken or omitted to be
taken by it or such Person under or in connection with this Agreement or any
other Loan Document (except for its or such Persons own gross negligence or
willful misconduct) or (b) responsible in any manner to any of Banks for any
recitals, statements, representations or warranties made by Company or any third
party or any officer of any thereof contained in this Agreement or any other
Loan Document or in any certificate, report, statement or other document
referred to or provided for in, or received by Agent under or in connection
with, this Agreement or any other Loan Document or for the value, validity,
effectiveness, genuineness, enforceability or sufficiency of this Agreement or
the Notes
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or any other Loan Document or for any failure of Company to perform its
obligations hereunder or thereunder. Neither Agent nor Collateral Agent nor
Issuing Bank shall be under any obligation to any Bank to ascertain or to
inquire as to the observance or performance of any of the agreements contained
in, or conditions to, this Agreement or any other Loan Document or as to the use
of proceeds of the Loans or of the existence or possible existence of a Default
or Event of Default, or to inspect the properties, books or records of Company.
Notwithstanding anything herein to the contrary, neither Agent nor Collateral
Agent nor Issuing Bank shall have any liability arising from confirmations of
the amount of outstanding Loans or L/C Guarantees.
F. RELIANCE BY AGENT, COLLATERAL AGENT AND ISSUING BANK.
1. Each of Agent, Collateral Agent and Issuing Bank shall
be entitled to rely, and shall be fully protected in relying, upon any Note,
writing, resolution, notice, consent, certificate, affidavit, letter, cablegram,
telegram, telecopy, telex or teletype message, statement, order or other
document or conversation believed by it to be genuine and correct and to have
been signed, sent or made by the proper Person or Persons and upon advice and
statements of legal counsel (including counsel to Company), independent
accountants and other experts selected by Agent, Collateral Agent and Issuing
Bank, as the case may be. Agent, Collateral Agent and Issuing Bank may deem and
treat the payee of any Note as the owner thereof for all purposes unless a
written notice of assignment, negotiation or transfer thereof shall have been
filed with Agent.
2. Each of Agent, Collateral Agent and Issuing Bank shall
be fully justified in failing or refusing to take any action under this
Agreement or any other Loan Document unless (i) it shall first receive such
advice or concurrence as it deems appropriate from Agent, in the case of
Collateral Agent or from any Bank, Banks or Required Banks in the case of Agent,
as may be required pursuant to this Agreement for such action, or (ii) it shall
first be indemnified to its satisfaction by such Banks against any and all
liability and expense which may be incurred by it by reason of taking or
continuing to take any such action, except in the case of Agent's or Collateral
Agent's or Issuing Bank's, as the case may be, gross negligence or willful
misconduct. Each of Agent and Collateral Agent and Issuing Bank shall in all
cases be fully protected in acting, or in refraining from acting, under this
Agreement, the Notes and the other Loan Documents in accordance with a request
of any Bank, Banks or Required Banks in the case of Agent, or Agent in the case
of Collateral Agent, or its own discretion in the case of the Issuing Bank, as
required pursuant hereto and such request and any action taken or failure to act
pursuant thereto shall be binding upon all Banks and all future holders of the
Notes.
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G. NOTICE OF DEFAULT.
Neither Agent nor Collateral Agent nor Issuing Bank shall be
deemed to have knowledge or notice of the occurrence of any Default or Event of
Default unless Agent or Collateral Agent, as the case may be, has received
notice from a Bank or Company referring to this Agreement, describing such
Default or Event of Default and stating that such notice is a "notice of
default." If Agent receives such a notice, Agent shall promptly give notice
thereof to Banks and Collateral Agent. If Collateral Agent or Issuing Bank
receives such a notice, Collateral Agent or Issuing Bank, as the case may be,
shall give notice thereof to Agent. Agent and Collateral Agent shall take such
action with respect to such Default or Event of Default as shall be directed by
Agent in the case of Collateral Agent and by any Bank, Banks or Required Banks
in the case of Agent, as required pursuant hereto (subject to the provisions of
Section 9.5(b)); provided that unless and until Agent or Collateral Agent, as
the case may be, shall have received such directions, Agent or Collateral Agent,
as the case may be, may (but shall not be obligated to) take such action, or
refrain from taking such action, with respect to such Default or Event of
Default as it shall deem advisable in the best interests of Banks.
H. NON-RELIANCE ON AGENTS, ISSUING BANK AND OTHER BANKS.
Each Bank expressly acknowledge that none of Agent, Collateral
Agent, Issuing Bank nor any of their respective officers, directors, employees,
agents, attorneys-in-fact or Affiliates has made any representations or
warranties to it and that no act by Agent or Collateral Agent or Issuing Bank
hereinafter taken, including any review of the affairs of Company or any of its
Subsidiaries, shall be deemed to constitute any representation or warranty by
Agent or Collateral Agent or Issuing Bank to any Bank. Each Bank represents to
Agent and Collateral Agent and Issuing Bank that it has, independently and
without reliance upon Agent or Collateral Agent or Issuing Bank or any other
Bank, 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 Company and its
Subsidiaries and made its own decision to make its Loans hereunder and enter
into this Agreement. Each Bank also represents that it will, independently and
without reliance upon Agent, Collateral Agent, Issuing Bank or any other Bank,
and based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit analysis, appraisals and decisions in
taking or not taking action under this Agreement and the other Loan Documents,
and to make such investigation as it deems necessary to inform itself as to the
business, operations, property, financial and other condition and
creditworthiness of Company and its Subsidiaries. Except for notices, reports
and other documents expressly required to be furnished to Banks by Agent
hereunder, neither Agent nor Collateral Agent nor Issuing Bank shall have any
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duty or responsibility to provide any Bank with any credit or other information
concerning the business, operations, property, condition (financial or
otherwise), prospects or creditworthiness of Company or any of its Subsidiaries
which may come into the possession of Agent, Collateral Agent or Issuing Bank or
any of their respective officers, directors, employees, agents,
attorneys-in-fact or Affiliates.
I. INDEMNIFICATION.
Banks agree to indemnify each of Agent, Collateral Agent and
Issuing Bank in their respective capacities as such (to the extent not
reimbursed by Company and without limiting the obligation of Company to do so),
ratably according to the respective outstanding principal amounts of their
Commitments, from and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind whatsoever which may at any time (including at any time following
the payment of the Notes) be imposed on, incurred by or asserted against Agent
or Collateral Agent or Issuing Bank in any way relating to or arising out of
this Agreement, any of the other Loan Documents or any documents contemplated by
or referred to herein or therein or the transactions contemplated hereby or
thereby or any action taken or omitted by Agent or Collateral Agent or Issuing
Bank under or in connection with any of the foregoing; provided that no Bank
shall be liable for the payment of any portion of such liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements resulting solely from Agent's or Collateral Agent's or Issuing
Bank's gross negligence or willful misconduct. Anything in this Agreement or the
other Loan Documents to the contrary notwithstanding, in no event may Collateral
Agent seek indemnification from Company or any Bank, nor shall Company or any
Bank be obligated for indemnification, under this Agreement for any matters in
relation to foreclosure or exercise of remedies in Collateral or any of its
other duties as Collateral Agent unless the Collateral Agent has completed
foreclosure of the security interest in all of the Collateral and application of
the proceeds thereof as provided in the Intercreditor Agreement, and its costs
and expenses remain unpaid. The agreements in this Section 9.9 shall survive the
payment of the Obligations and all other amounts payable hereunder.
J. [INTENTIONALLY OMITTED].
K. AGENTS AND ISSUING BANK IN INDIVIDUAL CAPACITY.
Agent and its Affiliates may make loans to, accept deposits
from and generally engage in any kind of business with Company as though Agent
were not Agent hereunder and under the other Loan Documents. With respect to its
Loans made or renewed by it and any Note issued to it, Agent shall have the same
rights and powers under this Agreement and the other Loan Documents as any Bank
and may exercise the
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same as though it were not Agent, and the terms "Bank" and "Banks" shall include
Agent in its individual capacity.
Collateral Agent and its Affiliates may make loans to, accept
deposits from and generally engage in any kind of business with Company as
though Collateral Agent were not Collateral Agent hereunder and under the other
Loan Documents. With respect to its Loans made or renewed by it and any Note
issued to it, Collateral Agent shall have the same rights and powers under this
Agreement and the other Loan Documents as any Bank and may exercise the same as
though it were not Agent, and the terms "Bank" and "Banks" shall include
Collateral Agent in its individual capacity.
Issuing Bank and its Affiliates may make loans to, accept
deposits from and generally engage in any kind of business with Company as
though Issuing Bank were not Issuing Bank hereunder and under the other Loan
Documents. With respect to its Loans made or renewed by it and any Note issued
to it, Issuing Bank shall have the same rights and powers under this Agreement
and the other Loan Documents as any Bank and may exercise the same as though it
were not Issuing Bank, and the terms "Bank" and "Banks" shall include Issuing
Bank in its individual capacity.
L. SUCCESSOR AGENTS.
Each of Agent and Collateral Agent may resign as Agent or
Collateral Agent, as the case may be, upon 30 days notice to Agent in the case
of Collateral Agent and to Banks in the case of Agent. In addition, at any time
after repayment in full of the Obligations, the Collateral Agent may be removed
by Agent or the Required Banks by giving notice of such removal to Collateral
Agent. If Agent or Collateral Agent shall resign as Agent or Collateral Agent,
as the case may be, or if Collateral Agent shall be removed, under this
Agreement and the other Loan Documents, then the Required Banks shall appoint
from among Banks a successor agent or collateral agent for Banks, which
successor agent or collateral agent, except if an Event of Default shall have
occurred and be continuing, shall be approved by Company (which approval shall
not be unreasonably withheld), whereupon, effective upon acceptance of its
appointment as successor agent or collateral agent, such successor agent or
collateral agent shall succeed to the rights, powers and duties of Agent or
Collateral Agent, as the case may be, and the terms "Agent" and "Collateral
Agent" shall mean such successor agent or collateral agent, as the case may be,
and the former Agent's or Collateral Agent's rights, powers and duties as Agent
or Collateral Agent, as the case may be, shall be terminated, without any other
or further act or deed on the part of such former Agent or Collateral Agent or
any of the parties to this Agreement or any holders of the Notes. If the
Required Banks fail to appoint a successor or collateral agent for Banks as
provided above within 30 days after the resignation of Agent or Collateral Agent
or removal of Collateral Agent as aforesaid, then Agent or Collateral Agent, as
the case
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may be, may appoint a successor agent or collateral agent for Banks, which
successor agent or collateral agent, except if an Event of Default shall have
occurred and be continuing, shall be approved by Company (which approval shall
not be unreasonably withheld), whereupon, effective upon acceptance of its
appointment as successor agent or collateral agent, such successor agent or
collateral agent shall succeed to the rights, powers and duties of Agent or
Collateral Agent, as the case may be, and the terms "Agent" and "Collateral
Agent" shall mean such successor agent or collateral agent and the former
Agent's or Collateral Agent's rights, powers and duties as Agent or Collateral
Agent, as the case may be, shall be terminated, without any other or further act
or deed on the part of such former Agent or Collateral Agent or any of the
parties to this Agreement or any holders of the Notes. After any retiring
Agent's or Collateral Agent's resignation as Agent or Collateral Agent, as the
case may be, the provisions of this Section 9 shall inure and survive to its
benefit as to any actions taken or omitted to be taken (or any matter related
thereto) by it while it was Agent or Collateral Agent under this Agreement and
the other Loan Documents. Notwithstanding anything herein to the contrary, the
resignation of Agent or Collateral Agent or removal of Collateral Agent shall
not be effective unless and until a successor agent or collateral agent has been
appointed and has accepted such appointment. The retiring Collateral Agent shall
take all steps necessary to transfer to any new Collateral Agent all Liens in
favor of the Collateral Agent, and all Collateral then in Collateral Agent's
physical possession.
M. CO-AGENT AND/OR CO-COLLATERAL AGENT.
1. Agent or Collateral Agent, as the case may be, without
the consent of Banks, from time to time may appoint a Co-Agent or Co-Collateral
Agent, as the case may be, to perform such functions as Agent or Collateral
Agent, as the case may be, may determine. Upon acceptance of its appointment as
such by the new Co-Agent or Co-Collateral Agent, as the case may be, the rights,
obligations, exculpations and indemnities of the Agent or Collateral Agent, as
the case may be, shall apply equally to the Co-Agent or the Co-Collateral Agent,
as the case may be.
2. Without the consent of Banks, from time to time, Agent
and/or Collateral Agent, as the case may be, may elect to act as Agent or
Collateral Agent, as the case may be, through a different office, branch or
Affiliate by giving notice to the Banks in accordance with Section 10.2.
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X.
MISCELLANEOUS
A. AMENDMENTS AND WAIVERS.
Neither this Agreement, any Note, any other Loan
Document, nor any terms hereof or thereof may be amended, supplemented or
modified except in accordance with the provisions of this Section. With the
prior written consent of the Required Banks, Agent and Company may, from time to
time, enter into written amendments, supplements or modifications hereto and to
the Notes and the other Loan Documents for the purpose of adding any provisions
to this Agreement or the Notes, or the other Loan Documents or changing in any
manner the rights of Banks or of Company hereunder or thereunder or waiving, on
such terms and conditions as Agent may specify in such instrument, any of the
requirements of this Agreement or the Notes or the other Loan Documents or any
Default or Event of Default and its consequences; provided, however, that no
such waiver and no such amendment, supplement or modification shall (a) reduce
the amount of the Obligations or extend the maturity of the Obligations, or
reduce the rate or extend the time of payment of interest thereon, or reduce the
amount or extend the time of payment of any fee payable to any Bank hereunder or
change the amount of any Bank's Commitments, reduces the amount or postpones the
due date of any amount payable in respect of, in each case without the consent
of Bank affected thereby, or (b) amend, modify or waive any provision of this
Section or reduce the percentage specified in the definition of Required Banks,
or consent to the assignment or transfer by Company of any of its rights and
obligations under this Agreement and the other Loan Documents, or release and/or
subordinate the Liens with respect to any Collateral in excess of 5% of the
aggregate value of the Collateral on a Book Value basis during the term of this
Agreement (except as expressly required or provided for hereunder, including as
provided in Section 7.3(n), or in the Security Documents or as otherwise
required by law), or release any Subsidiary from its Guarantee, or amend, modify
or waive the provisions of Sections 2.1, 2.5, 2.6, 2.8, 2.9, 2.11, 2.13, 3.1,
3.2, 3.4, 5.2, or 10.5 (or any of the defined terms used in such Sections) or
any provision hereof or of any other Loan Document which, by its terms, shall be
taken or permitted only with the consent of all Banks, or extend the Maturity
Date, in each case without the written consent of all Banks, (c) amend, modify
or waive any provision of Section 9, without the written consent of the then
Agent or Collateral Agent or Issuing Bank affected thereby, or (d) in any way
change the duties or liabilities or rights of the Issuing Bank without the
written consent of the Issuing Bank. Any such waiver and any such amendment,
supplement or modification shall apply equally to each of Banks and shall be
binding upon Company, Banks, Agent, Collateral Agent, Issuing Bank and all
future holders of the Notes. In the case of any waiver, Company, Banks, Agent,
Collateral Agent and Issuing Bank shall be restored to their former position and
rights hereunder and under the
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outstanding Notes and any other Loan Documents, and any Default or Event of
Default waived shall be deemed to be cured and not continuing; but no such
waiver shall extend to any subsequent or other Default or Event of Default, or
impair any right consequent thereon.
B. 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 of a written copy of such notice; provided
that any notice, request or demand to or upon Agent, Collateral Agent, Issuing
Bank or Banks shall not be effective until received. For the purposes hereof,
the addresses of the parties hereto (until a notice of change thereof is
delivered as provided in this Section 10.2) shall be as set forth under each
party's name on the signature pages hereof.
C. NO WAIVER: CUMULATIVE REMEDIES.
No failure to exercise and no delay in exercising, on the part
of Agent, Collateral Agent, Issuing Bank or any Bank, any right, remedy, power
or privilege hereunder shall operate as a waiver thereof; nor shall any single
or partial exercise of any right, remedy, power or privilege hereunder preclude
any other or further exercise thereof or the exercise of any other right,
remedy, power or privilege. The rights, remedies, powers and privileges herein
provided are cumulative and not exclusive of any rights, remedies, powers and
privileges provided by law.
D. SURVIVAL OF REPRESENTATIONS AND WARRANTIES.
All representations and warranties made hereunder and in any
document, certificate or statement delivered pursuant hereto or in connection
herewith shall survive the execution and delivery of this Agreement and the
Notes.
E. PAYMENT OF EXPENSES AND TAXES.
Company agrees (a) to pay or reimburse Agent, Collateral
Agent, Issuing Bank and each Bank for all its out-of-pocket costs and expenses
incurred in connection with the development, preparation and execution of, and
any amendment, supplement or modification to, this Agreement, the Notes, the
Intercreditor Agreement, and the other Loan Documents and any other documents
prepared in connection herewith or therewith, and the consummation of the
transactions contemplated hereby
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and thereby, including, without limitation (1) the reasonable fees and
disbursements of counsel to Agent, counsel to Collateral Agent, counsel to
Issuing Bank and the several counsels to Banks and the reasonable allocated
costs of in-house counsel to Agent, in-house counsel to Collateral Agent,
in-house counsel to Issuing Bank, and the several in-house counsel to Banks and
(2) the fees and expenses of all appraisers, engineers and other consultants in
connection with the Loan Documents, all recording costs, search fees and filing
fees, (b) to pay or reimburse each Bank, Agent, Collateral Agent and Issuing
Bank for all its costs and expenses incurred in connection with the enforcement
or preservation of any rights under this Agreement, the Notes, the Intercreditor
Agreement, the other Loan Documents and any such other documents, including fees
and disbursements of counsel to Agent, counsel to Collateral Agent, and to the
several counsel to Banks, and the reasonable allocated costs of in-house counsel
to Agent and in-house counsel to Collateral Agent and in-house counsel to
Issuing Bank, (c) to pay, indemnify, and hold each Bank, Agent, Collateral Agent
and Issuing Bank harmless from, any and all recording and filing fees, any and
all Florida documentary stamp taxes and Florida intangible personal property
taxes and any and all other stamp, excise and other taxes (other than any taxes
which are determined based solely upon the income or revenues of any such Bank,
Agent, Collateral Agent or Issuing Bank), if any, which may be payable or
determined to be payable in connection with the execution and delivery of, or
consummation of any of the transactions contemplated by this Agreement,
including any and all advances of the Loans pursuant hereto, the Notes, the
other Loan Documents, and any such other documents, and any and all liabilities
with respect to, or resulting from any delay in paying any of such fees and
taxes, (d) to pay the costs of furnishing all opinions of counsel for Company,
or obtaining technical assistance advisories, required hereunder, (e) to pay the
costs of obtaining any required consents, amendments, waivers or other
modifications to the agreements governing the Anglo American Loan Obligations,
the Secured Agreement Obligations, and any other agreements, (f) to pay the
costs and expenses incurred to continue the perfection of any Liens in favor of
Agent and Collateral Agent pursuant to any of the Security Documents, including
the costs of title searches, title insurance premiums, UCC searches and UCC
filing charges, and (g) to pay, indemnify, defend and hold each Bank, Agent and
the Collateral Agent harmless from and against any and all other liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever with respect to the
execution, delivery, enforcement, performance and administration of this
Agreement, the Notes, the Intercreditor Agreement, the other Loan Documents, the
other Secured Debt Documents, and any such other documents(all the foregoing,
collectively, the "indemnified liabilities"); provided, that Company shall have
no obligation hereunder to Agent, the Collateral Agent or any Bank with respect
to indemnified liabilities arising from the gross negligence or willful
misconduct of Agent, the Collateral Agent or such Bank, as the case may be. The
agreements in this Section shall survive repayment to the Notes and all other
amounts payable hereunder.
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F. SUCCESSORS AND ASSIGNS: PARTICIPATIONS; PURCHASING BANKS.
1. This Agreement shall be binding upon and inure to the
benefit of Company, Banks, Agent, Collateral Agent, Issuing Bank all future
holders of the Notes and their respective successors and assigns, except that
Company may not assign or transfer any of its rights or obligations under this
Agreement and the other Loan Documents without the prior written consent of each
Bank.
2. Any Bank may, in accordance with applicable law, at any
time sell to one or more banks or other entities ("Participants") participating
interests in any Loan owing to such Bank, any Note held by such Bank, any
Commitment of such Bank, such Bank's participation in L/C Guarantees or any
other interest of such Bank hereunder and under the other Loan Documents. In the
event of any such sale by a Bank of participating interest to a Participant,
such Bank's obligations under this Agreement to the other parties to this
Agreement shall remain unchanged, such Bank shall remain solely responsible for
the performance thereof, such Bank shall remain the holder of any such Note for
all purposes under this Agreement and the other Loan Documents, and Company and
Agent shall continue to deal solely, and directly with such Bank in connection
with such Bank's rights and obligations under this Agreement and the other Loan
Documents. Company agrees that if amounts outstanding under this Agreement and
the Notes are due or unpaid, or shall have been declared or shall have become
due and payable upon the occurrence of an Event of Default, each Participant
shall be deemed to have the right of setoff in respect of its participating
interest in amounts owing under this Agreement and any Note to the same extent
as if the amount of its participating interest were owing directly to it as a
Bank under this Agreement or any Note; provided that such Participant shall only
be entitled to such right of setoff if it shall have agreed in the agreement
pursuant to which it shall have acquired its participating interest to share
with Banks the proceeds thereof as provided in Section 10.7. Company also agrees
that each Participant shall be entitled to the benefits of Sections 2.12, 2.13
and 10.5 with respect to its participation in the Commitments and the Loans
outstanding from time to time; provided, that no Participant shall be entitled
to receive any greater amount pursuant to such Sections than the transferor Bank
would have been entitled to receive in respect of the amount of the
participation transferred by such transferor Bank to such Participant had no
such transfer occurred. Participants shall not be entitled to require the
applicable Bank to take or omit to take any action hereunder except with respect
to amendments or waivers resulting in (i) the extension of the regularly
scheduled maturity dates of any portion of the principal of or interest on a
Loan in which such Participant is participating, (ii) a reduction of the
principal amount of, or the rate of interest (except in connection with a waiver
of the applicability of any post-default increase in interest rates or margins)
or fees payable on the Loans in which such participant is participating, (iii)
the release of a substantial
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portion of the Collateral or any of the Guarantees (except as otherwise
expressly provided in the Loan Documents) or (iv) an increase in the Commitments
in which such Participant is participating.
3. Any Bank may, in accordance with applicable law and
with the prior written consent of Issuing Bank, at any time sell to any Bank or
any Affiliate thereof or to one or more banks or financial institutions
("Purchasing Banks") all or any part of its rights and obligations under this
Agreement, the Notes and other Loan Documents pursuant to a Commitment Transfer
Supplement, substantially in the form of Exhibit 10.6, executed by such
Purchasing Bank and such transferor Bank, and delivered to Agent for its
acceptance and recording in the Register. Upon such execution, delivery,
acceptance and recording, from and after the transfer effective date determined
pursuant to such Commitment Transfer Supplement (the "Transfer Effective Date"),
(i) the Purchasing Bank thereunder shall be a party hereto and, to the extent
provided in such Commitment Transfer Supplement, have the rights and obligations
of a Bank hereunder and under the other Loan Documents, and (ii) the transferor
Bank thereunder shall, to the extent provided in such Commitment Transfer
Supplement, be released from its obligations under this Agreement and under the
other Loan Documents (and, in the case of a Commitment Transfer Supplement
covering all or the remaining portion of a transferor Bank's rights and
obligations under this Agreement and under the other Loan Documents, such
transferor Bank shall cease to be a party hereto and thereto). Such Commitment
Transfer Supplement shall be deemed to amend this Agreement to the extent, and
only to the extent, necessary to reflect the addition of such Purchasing Bank
and the resulting adjustment of Commitment and Loan percentages arising from the
purchase by such Purchasing Bank of all or a portion of the rights and
obligations of such transferor Bank under this Agreement, the Notes and other
Loan Documents. At the request of Purchasing Bank, Company and Agent shall
negotiate in good faith with Purchasing Bank to accommodate Purchasing Bank's
reasonable requests with respect to the timing of the obligations of Company,
Agent and Banks set forth in Section 2.3. On or prior to the Transfer Effective
Date determined pursuant to such Commitment Transfer Supplement, Company, at its
own expense, shall execute and deliver to Agent in exchange for the surrendered
Note(s), new renewal Note(s) to the order of such Purchasing Bank in an amount
equal to the Commitment assumed by it pursuant to such Commitment Transfer
Supplement and, if the transferor Bank has retained a Commitment hereunder, new
Note(s) to the order of the transferor Bank in an amount equal to the Commitment
retained by it. Such new Note(s) shall be dated the Transfer Effective Date and
shall otherwise be in the form of the Note(s) replaced thereby. The Note(s)
replaced by such new Note(s), marked "renewed," shall be attached to such new
Note(s); and a copy thereof shall be sent to Company.
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4. Agent shall maintain at its address referred to in
Section 10.2 a copy of each Commitment Transfer Supplement delivered to it and a
register (the "Register") for the recordation of the names and addresses of
Banks and the Commitments of, and principal amount of the Loans owing to, each
Bank from time to time. The entries in the Register shall be conclusive, in the
absence of manifest error, and Company, Agent, Collateral Agent, Issuing Bank
and Banks may treat each Person whose name is recorded in the Register as the
owner of the Loans recorded therein for all purposes of this Agreement. The
Register shall be available for inspection by Company or any Bank at any
reasonable time and from time to time upon reasonable prior notice.
5. Upon its receipt of a Commitment Transfer Supplement
executed by a transferor Bank and Purchasing Bank, Agent shall (i) promptly
accept such Commitment Transfer Supplement, (ii) forward a copy of such
Commitment Transfer Supplement to Company and (iii) on the Transfer Effective
Date determined pursuant thereto record the information contained therein in the
Register and give notice of such acceptance and recordation to Banks and
Company.
6. Subject to Section 10.16, Company authorizes each Bank
to disclose to any Participant or Purchasing Bank (each, a "Transferee") and any
prospective Transferee any and all financial information in such Bank's
possession concerning Company and its Affiliates which has been delivered to
such Bank by or on behalf of Company pursuant to this Agreement or which has
been delivered to such Bank by or on behalf of Company in connection with such
Bank's credit evaluation of Company and its Affiliates prior to becoming a party
to this Agreement; provided, however, that such Transferee agrees in writing to
be bound by the terms of Section 10.16.
7. If, pursuant to this Section 10.6, any interest in this
Agreement or any Note is transferred to any Purchasing Bank which is organized
under the laws of any jurisdiction other than the United States or any state
thereof, Company will not be required to pay any increased withholding taxes of
the United States or any political subdivision thereof unless, prior to the date
of transfer, the transferor Bank shall cause such Purchasing Bank to comply with
the requirements of Section 2.13(b).
8. Nothing herein shall prohibit any Bank from pledging or
assigning any Note to any Federal Reserve Bank in accordance with applicable
law.
9. Notwithstanding the foregoing provisions of this
Section 10.6, no holder of any Note shall transfer such Note in a manner which
would violate any Requirement of Law.
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G. ADJUSTMENTS; SET-OFF.
1. If any Bank (which term, for purposes of this Section
10.7(a) shall not include Issuing Bank) (a "Benefited Bank") shall at any time
receive any payment of all or part of its Loans owing to it, or interest
thereon, or receive any collateral in respect thereof (whether voluntarily or
involuntarily, by set-off, pursuant to events or proceedings of the nature
referred to in the last paragraph of Section 8.1, or otherwise), in a greater
proportion than any such payment to or collateral received by, any other Bank,
if any, in respect of such other Bank's Loans owing to it, or interest thereon,
or fees due to it hereunder, such benefitted Bank shall purchase for cash from
the other Banks such portion of each such other Banks' Loans, or make such
payment on account of such fees, or shall provide such other Banks with the
benefits of any such collateral, or the proceeds thereof as shall be necessary
to cause such benefitted Bank to share the excess payment or benefits of such
collateral or proceeds ratably with each of Banks; provided, however, that if
all or any portion of such excess payment or benefits is thereafter recovered
from such benefitted Bank, such purchase shall be rescinded, and the purchase
price and benefits returned, to the extent of such recovery, but without
interest. Company agrees, that each Bank so purchasing a portion of another
Bank's Loan owing to it may exercise all rights of payment (including rights of
set-off) with respect to such portion as fully as if such Bank were the direct
holder of such portion.
2. In addition to any rights and remedies of Banks
provided by law, each Bank shall have the right, without prior notice to
Company, any such notice being expressly waived by Company to the extent
permitted by applicable law, upon any Obligations (whether at the stated
maturity, by acceleration or otherwise) to set-off and appropriate and apply
against such amount any and all deposits (general or special, time or demand,
provisional or final), in any currency, and any other credits, indebtedness or
claims, in any currency, in each case whether direct or indirect, absolute or
contingent, matured or unmatured, at any time held or owing by such Bank to or
for the credit or the account of Company. Each Bank agrees promptly to notify
Company and Agent after any such set-off and application made by such Bank;
provided that the failure to give such notice shall not affect the validity of
such set-off and application.
H. APPOINTMENT OF AGENT AS COMPANY'S LAWFUL ATTORNEY.
Company irrevocably designates, makes, constitutes and
appoints Agent (and all Persons designated by Agent) as Company's true and
lawful attorney (and agent-in-fact) coupled with an interest, with the power to
sign the name of Company on any instruments, documents and agreements, including
security agreements, pledge agreements, mortgages, and financing statements, as
deemed by Agent as necessary or reasonably required by Agent to grant, perfect,
maintain and continue the Liens in the
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Collateral or to monitor or administer the Loans, together with any and all
amendments, modifications, extensions, substitutions and renewals thereof and
deliver any of such instruments, documents and agreements to such persons as
Agent, in its sole discretion, may elect, and in such event copies thereof shall
be delivered to Company.
I. 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 Company and Agent.
J. 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.
K. INTEGRATION.
This Agreement, together with the other Loan Documents,
represents the entire agreement of Company, Agent, Collateral Agent, Issuing
Bank and Banks and supersedes all prior agreements with respect to the subject
matter hereof or thereof, and there are no promises, undertakings,
representations or warranties by Agent, Collateral Agent, Issuing Bank or any
Bank relative to subject matter hereof or thereof not expressly set forth or
referred to herein or in the other Loan Documents.
L. GOVERNING LAW.
THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS (UNLESS AND TO THE
EXTENT EXPRESSLY PROVIDED TO THE CONTRARY IN SUCH OTHER LOAN DOCUMENT WITH
RESPECT TO SUCH OTHER LOAN DOCUMENT), AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HEREUNDER AND THEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND
ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK
(INCLUDING SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW
YORK), WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES.
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M. SUBMISSION TO JURISDICTION; WAIVERS.
COMPANY HEREBY IRREVOCABLY AND UNCONDITIONALLY:
1. SUBMITS FOR ITSELF AND ITS PROPERTY IN ANY LEGAL ACTION
OR PROCEEDING RELATING TO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS TO WHICH
IT IS A PARTY, OR FOR RECOGNITION AND ENFORCEMENT OF ANY JUDGMENT IN RESPECT
THEREOF, TO THE NON-EXCLUSIVE GENERAL JURISDICTION OF THE COURTS OF THE STATE OF
NEW YORK, THE COURTS OF THE UNITED STATES OF AMERICA FOR THE SOUTHERN DISTRICT
OF NEW YORK AND APPELLATE COURTS FROM ANY THEREOF, AND AGREES THAT ANY SUIT,
ACTION OR PROCEEDING ARISING OUT OF THIS AGREEMENT, THE NOTES OR ANY OF THE
OTHER LOAN DOCUMENTS MAY BE BROUGHT IN ANY OF THE AFORESAID COURTS, AS AGENT,
COLLATERAL AGENT, ISSUING BANK OR ANY BANK MAY ELECT IN ITS SOLE DISCRETION;
2. 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;
3. AGREES THAT SERVICE OF PROCESS IN ANY SUCH ACTION OR
PROCEEDING MAY BE EFFECTED BY MAILING A COPY THEREOF BY REGISTERED OR CERTIFIED
MAIL (OR ANY SUBSTANTIALLY SIMILAR FORM OF MAIL) POSTAGE PREPAID, TO COMPANY AT
ITS ADDRESS SET FORTH ON THE SIGNATURE PAGES HEREOF OR AT SUCH OTHER ADDRESS OF
WHICH AGENT SHALL HAVE BEEN NOTIFIED PURSUANT THERETO;
4. AGREES THAT NOTHING HEREIN SHALL AFFECT THE RIGHT TO
EFFECT SERVICE OF PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT
THE RIGHT TO ▇▇▇ IN ANY OTHER JURISDICTION;
5. WAIVES (I) PRESENTMENT, DEMAND AND PROTEST AND NOTICE
OF PRESENTMENT, PROTEST, DEFAULT, NON-PAYMENT, MATURITY, RELEASE, COMPROMISE,
SETTLEMENT, EXTENSION OR RENEWAL OF THE NOTES AND ALL OTHER LOAN DOCUMENTS AND
HEREBY RATIFIES AND CONFIRMS WHATEVER BANKS, AGENT OR
113
COLLATERAL AGENT MAY DO IN THIS REGARD; (II) ALL RIGHTS TO NOTICE OF A HEARING
PRIOR TO BANKS' OR AGENT'S OR COLLATERAL AGENT'S ATTACHMENT OR LEVY UPON THE
COLLATERAL, AND ANY BOND OR SECURITY WHICH MIGHT BE REQUIRED BY ANY COURT PRIOR
TO ALLOWING BANKS, AGENT, COLLATERAL AGENT OR ISSUING BANK TO EXERCISE ANY OF
BANKS' OR AGENT'S OR COLLATERAL AGENT'S OR ISSUING BANK'S REMEDIES; AND (III)
THE BENEFIT OF ALL VALUATION, APPRAISEMENT AND EXEMPTION LAWS; AND
6. 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.
N. ACKNOWLEDGMENTS.
Each party hereto hereby acknowledges that;
1. it has been advised by counsel in the negotiation,
execution and delivery of this Agreement, the Notes, and the other Loan
Documents;
2. none of Agent, Collateral Agent, Issuing Bank or any
Bank has any fiduciary relationship to Company, and the relationship between
Agent, Collateral Agent, Issuing Bank and Banks, on one hand, and Company, on
the other hand, is solely that of creditor and debtor, and
3. no joint venture exists among Banks or among Company
and Banks.
O. WAIVERS OF ANY JURY TRIAL.
EACH OF THE PARTIES TO THIS AGREEMENT HEREBY AGREES TO WAIVE
ITS RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON
OR ARISING OUT OF THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. The
scope of this waiver is intended to be all encompassing of any and all disputes
that may be filed in any court and that relate to the subject matter of this
Agreement, including contract claims, tort claims, breach of duty claims, and
all other common law and statutory claims. Each party hereto acknowledges that
this waiver is a material inducement to enter into a business relationship, that
each has already belied on this waiver in entering into this Agreement, and that
each will continue to rely on this waiver in entering into any further
documentation related to the transactions
114
contemplated hereby and otherwise in their related future dealings. Each party
hereto further warrants and represents that it has reviewed this waiver with its
legal counsel and that it knowingly and voluntarily waives its jury trial rights
following consultation with legal counsel. THIS WAIVER IS IRREVOCABLE, MEANING
THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING, AND THIS WAIVER SHALL
APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO
THIS AGREEMENT OR ANY OTHER DOCUMENTS OR AGREEMENTS RELATING TO THE TRANSACTIONS
CONTEMPLATED BY THIS AGREEMENT. In the event of litigation, this Agreement may
be filed as a written consent to a trial by the court.
P. CONFIDENTIALITY.
Each Bank agrees to take normal and reasonable precautions and
exercise due care to maintain the confidentiality of all non-public information
provided to it by Company or any of its Subsidiaries, or by Agent or Collateral
Agent on Company's behalf, in connection with this Agreement or any other Loan
Document and agrees and undertakes that neither it nor any of its Affiliates
shall use any such information for any purpose or in any manner other than
pursuant to the terms contemplated by this Agreement. Any Bank may disclose such
information (a) at the request of any regulatory authority or in connection with
an examination of such Bank by any such authority; (b) pursuant to subpoena or
other court process; (c) when required to do so in accordance with the
provisions of any applicable law; (d) at the express direction of any other
agency of any State of the United States of America or of any other
jurisdiction, in which such Bank conducts its business; (e) to such Bank's
independent auditors and other professional advisors; (f) following an Event of
Default, in connection with the sale or other realization on the collateral
under the Security Documents; (g) in connection with any litigation or dispute
between (i) such Bank and (ii) Company and/or any Subsidiary; and (h) in
connection with any litigation or dispute involving such Bank if the disclosure
is determined by such Bank to be necessary for the defense or protection of such
Bank's rights and/or interests. Each Bank further agrees, upon receipt by such
Bank of a request to disclose any information to a Governmental Authority or
courts (other than governmental bank examiners and independent auditors of such
Bank), to notify Company of such request and to permit, to the extent
practicable, Company to seek a protective order with respect thereto; provided
however that no Bank shall be requested to notify Company of any such request if
(i) it is not permitted to do so by applicable law and regulations, (ii) it is
requested not to notify Company by any Person acting or purporting to act on
behalf of a Governmental Authority, or (iii) it otherwise reasonably believes
that it is not permitted to so notify Company.
115
Q. FURTHER ASSURANCES.
Company shall, and shall cause its Subsidiaries to, promptly
(a) cure any defects in the execution and delivery of Loan Documents and (b)
execute and deliver, or cause to be executed and delivered, all such other
documents, agreements and instruments as Agent may reasonably request to further
evidence and more fully describe the Collateral for the Loan to correct any
omissions in the Loan Documents, to perfect, protect or preserve any liens
created under any of the Loan Documents, or to make any recordings, file any
notices, or obtain any consents, as may be necessary or appropriate in
connection therewith.
R. CONTROLLING AGREEMENT.
In the event of any conflict between the terms and provisions
of this Agreement and the terms and provisions of any other Loan Document, the
terms and provisions of this Agreement shall control.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and delivered by their proper and duly authorized
officers as of the day and year first above written.
ATLANTIC GULF COMMUNITIES
CORPORATION
By:__________________________________________
Name:
Title:
Notice Address:
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Chief Financial Officer
116
▇.▇. ▇▇▇▇▇▇▇▇ & CO., LLC, as Collateral
Agent and as Agent
By:__________________________________________
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
Title: Managing Member
Notice Address:
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇
DK ACQUISITION PARTNERS, L.P.,
as Issuing Bank and as a Bank
By: ▇.▇. ▇▇▇▇▇▇▇▇ & Co., its sole general
partner
By:__________________________________________
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
Title:
Notice Address:
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇
117
HALCYON DISTRESSED SECURITIES, L.P.,
as a Bank,
HALCYON PRIVATE PAPER, L.P., as a Bank
HALCYON EVENT-DRIVEN STRATEGIES
FUND, L.P., as a Bank
By: Halcyon/▇▇▇▇ ▇. ▇▇▇▇▇▇ Management
Company LLC, Managing General Partner
By: ▇▇▇▇ ▇. ▇▇▇▇▇▇ & Company Limited,
its Managing Member
By:__________________________________________
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
Title: Treasurer
Notice Address:
c/o Halcyon/▇▇▇▇ ▇. ▇▇▇▇▇▇ Management
Company LLC
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇
118
GRYPHON HIDDEN VALUES LIMITED, as a
Bank
GRYPHON HIDDEN VALUES II LIMITED, as
a Bank
By: Halcyon/▇▇▇▇ ▇. ▇▇▇▇▇▇ Management
Company LLC, Investment Manager
By: ▇▇▇▇ ▇. ▇▇▇▇▇▇ & Company
Limited, its Managing Member
By: __________________________________
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
Title: Treasurer
Notice Address:
c/o Halcyon/▇▇▇▇ ▇. ▇▇▇▇▇▇ Management
Company LLC
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇
GRYPHON HIDDEN VALUES III LIMITED, as
a Bank
By: Halcyon/▇▇▇▇ ▇. ▇▇▇▇▇▇ Management
Company LLC, its Investment Manager
By: ▇▇▇▇ ▇. ▇▇▇▇▇▇ & Company
Limited, its Managing Member
By: __________________________________
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
Title: Treasurer
119
Notice Address:
c/o Halcyon/▇▇▇▇ ▇. ▇▇▇▇▇▇ Management Company
LLC
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇
HALCYON OFFSHORE EVENT-DRIVEN STRATEGIES FUND,
as a Bank
By: Halcyon Offshore Management Company
LLC, its Investment Manager
By: _________________________________________
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
Title: Chief Financial Officer
Notice Address:
c/o Halcyon/▇▇▇▇ ▇. ▇▇▇▇▇▇ Management Company
LLC
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇
STONEHILL INSTITUTIONAL PARTNERS, L.P., as a
Bank
By: _________________________________________
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
General Partner
120
Notice Address:
c/o Stonehill Investment Corporation
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇
STONEHILL PARTNERS, L.P., as a Bank
By: _____________________________________________
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
General Partner
Notice Address:
c/o Stonehill Investment Corporation
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇
---------------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇, as a Bank
Notice Address:
c/o East West Partners
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇
121
COMAC ACQUISITION CO., L.P., as a Bank
By: CoMac Advisers, Inc., its general partner
By: _________________________________________
Name:
Title:
Notice Address:
▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
With a copy to:
▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
ANGLO AMERICAN FINANCIAL, as a Bank
By: _________________________________________
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: General Partner
THIRD AMENDED AND RESTATED
REVOLVING LOAN AGREEMENT
DATED AS OF DECEMBER 31, 1998
SCHEDULE 2.1
REVOLVING COMMITMENTS
[ATTACHED BEHIND]
THIRD AMENDED AND RESTATED
REVOLVING LOAN AGREEMENT
DATED AS OF DECEMBER 31, 1998
SCHEDULE 4.30
Representations and Warranties regarding DRI and Zoning Matters
[TO BE REPLACED WITH NEW SCHEDULE]