Exhibit 10.12
ASSUMPTION AND MODIFICATION OF NOTE AND LOAN AGREEMENT
THIS ASSUMPTION AND MODIFICATION OF
NOTE AND LOAN AGREEMENT (“Agreement”) executed this 25
th day
of October 2007, by and among LEVITT AND SONS, LLC, a Florida
limited liability company (“Original Borrower”), LEVITT
CORPORATION, a Florida corporation (“New Borrower”),
and AMTRUST BANK, a federal savings bank, f/k/a OHIO SAVINGS BANK,
a federal savings bank (“Lender”).
WITNESSETH:
WHEREAS, Original Borrower executed
and delivered to Lender a Revolving Promissory Note dated
March 21, 2007 in the original principal amount of One Hundred
Million Dollars ($100,000,000) (“Original Note”);
and
WHEREAS, in connection with the
Original Note the Original Borrower and Lender executed a Revolving
Working Capital, Land Acquisition and Development and Residential
Construction Borrowing Base Facility Agreement dated March 21,
2007 in connection with Loan No. 1001839 (“Loan
Agreement”); and
WHEREAS, the Original Note is secured
by a Mortgage and Security Agreement dated March 22, 2007
executed by Levitt and Sons of Jasper County, LLC, a South Carolina
limited liability company (“Mortgagor”) recorded in OR
Volume 531, Page 168 of the Public Records of Jasper County, South
Carolina (“Mortgage”), and an Assignment of Rents and
Leases and Agreements Effecting Real Estate executed by Mortgagor
in favor of Lender dated March 21, 2007, recorded in OR Volume
531, Page 179 of the Public Records of Jasper County, South
Carolina (“Assignment of Rents and Leases”); and
WHEREAS, New Borrower has acquired
all of the issued and outstanding membership interest in Mortgagor
(“Membership Interest”) and the Lender has consented to
the transfer of such Membership Interest from Original Borrower to
New Borrower; and
WHEREAS, New Borrower, by and through
the conveyance of the Membership Interest from Original Borrower,
is desirous of assuming all of Original Borrower’s rights,
interest and obligations under the Original Note, the Loan
Agreement and the other Loan Documents (as hereinafter defined) as
such documents have been modified simultaneously herewith
(collectively “Other Loan Documents”);
NOW, THEREFORE, in consideration of
the premises and for Ten and 00/100 Dollars ($10.00) and other good
and valuable consideration, receipt of which is hereby
acknowledged, the parties hereto covenant and agree as
follows:
1. The New Borrower hereby
assumes all of Original Borrower’s obligations under the
Original Note, the Loan Agreement and the Other Loan Documents all
as modified by this Agreement and agrees to pay Lender the
outstanding principal balance due on the Original Note secured by
the Mortgage and Assignment of Rents and Leases. As of the date
hereof, the current
aggregate outstanding principal balance under the Original Note is
Thirty-Four Million One Hundred Seven Thousand Nine Hundred Dollars
($34,107,900) which includes the Fifteen Million Dollars
($15,000,000) outstanding pursuant to the Working Capital Line and
advances under the Loan Agreement. New Borrower agrees to repay
such principal indebtedness and all interest which accrues thereon
in accordance with the terms of the Original Note as modified
hereby and as hereafter evidenced by that certain Amended and
Restated Note in the amount of One Hundred Million Dollars
($100,000,000). Original Borrower and New Borrower acknowledge and
agree that as of the date hereof there is no default under the
Note, Loan Agreement, the Mortgage, Assignment of Rents and Leases
or any other document executed in connection with the Note
(collectively, “Loan Documents”). Original Borrower and
New Borrower waive any claims under the Loan Documents and release
the Lender for any claims thereunder (other than the obligations of
the Lender under the Loan Documents to be performed after the date
hereof).
2. Simultaneous with the
execution of this Agreement, the New Borrower shall execute and
deliver to Lender an amended and restated promissory note
evidencing the assumption of the Original Note set forth herein
(“Amended and Restated Note”), which Amended and
Restated Note shall be in the form of Exhibit A
attached hereto.
3. The Loan Agreement is amended
as follows:
(i) Omitted
Intentionally.
(ii) The
Borrower is hereby amended from Levitt and Sons, LLC to Levitt
Corporation.
(iii) Omitted
Intentionally.
(iv) Sections 1.31
and 2.4 are deleted in their entirety. Accordingly, the Expiration
Date shall be March 20, 2009 and the Maturity Date shall be
March 20, 2011.
(v) Section 1.34
is amended to read: Guaranty means the Unconditional Continuing
Guaranty And Indemnity Agreement executed by the Project Guarantors
as required herein and shall no longer apply to the Unconditional
Continuing Limited Guaranty of the Working Capital Line
Guarantor.
(vi) The
A&D Addendum for Tradition South Carolina consisting of
approximately one hundred fifty (150) acres within a master
plan community located in the City of Hardeeville, Jasper County,
South Carolina is hereby amended to be in the form of the A&D
Project Allocation set forth on Exhibit B
attached hereto and made a part hereof.
(vii) Section 1.42
is amended to reflect that the Amended and Restated Note is a Note.
The Note evidences all monies owed pursuant to the Loan including
the outstanding balance of the Working Capital Line. The Note
(which includes the outstanding amount of the Working Capital Line)
shall be secured by the Mortgage and Assignment of Rents and
Leases.
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(viii) Section 1.48
is amended to add the term “Released Property”. The
term “Released Property” shall mean any portion of the
Property encumbered by any Mortgage which is released from the lien
and encumbrance of the Mortgage.
(ix) Sections 1.56,
1.59 and 1.60 are all deleted in their entirety.
(x) The
provisions of Sections 1.22, 1.54, 5.7 and 5.9 and other
applicable sections of the Loan Agreement are amended to reflect
that the time period for proceeding with development and/or
construction and with respect to any Curtailment Requirements
(including the dates for Curtailment) and Maximum Holding Periods
shall be abated until Borrower or Project Guarantor, with
Lender’s consent, commences construction of improvements,
other than the up to the 14 models and infrastructure improvements,
and at which time all abated time periods shall be extended by a
time to be reasonably determined by the Lender (“Abatement
Period”). If the Borrower commences construction of any
model(s), the Borrower or Project Guarantor shall proceed
diligently to complete such model. The Borrower shall determine in
its business judgment what portions of the infrastructure
improvements it shall construct.
(xi) Section 2.6
is amended to reflect that the Working Capital Line shall remain in
full force and effect; provided, however, simultaneous with the
execution of this Agreement, the Working Capital Line shall no
longer be a revolving line and there shall be no additional
advances of the Working Capital Line after the date hereof but
shall be paid as provided in the Note, the Working Capital Line
guarantor’s guaranty has been terminated and the
Lender’s security interest in the Working Capital Line
Collateral has been terminated and released.
(xii) Section 4.4.1
is amended to reflect that the Lender will fund one hundred percent
(100%) of the hard and soft costs incurred from time to time in
connection with the Project (subject to the appraisal tests as set
forth in the Loan Agreement) and the Borrower is not required to
fund twenty percent (20%) of Equity Funds (except to the extent the
appraisal test would require the Borrower to fund to satisfy such
appraisal requirement for a funding).
(xiii) Sections 5.5
is deleted in its entirety.
(xiv)
Partial Releases. In addition to the provisions already set
forth in Paragraph 6, the Borrower shall be entitled to release
portions of the Property encumbered by the Mortgage upon payment to
Lender of a partial release price equal to the greater of:
(i) the “Minimum Amount” (as hereinafter defined);
or (ii) sixty-five percent (65%) of the sales price paid for
such portion of the Property (if applicable) without regard to
whether or not the Property being released or remaining to be
released has been legally subdivided; provided that the Property
remaining to be released after the release of any Property from the
lien of the Mortgage shall be a commercially developable parcel
having access for ingress, egress and utilities over dedicated
roads and/or perpetual easements. The “Minimum Amount”
shall mean an amount reasonably agreed to by Borrower and Lender,
which amount is one hundred twenty percent (120%) of the product of
(a) the “Collateral Reduction Percentage,”
multiplied by (b) the then outstanding principal balance of
the Loan (excluding the Working Capital Line portion of the Note).
As used herein, the term “Collateral Reduction
Percentage” shall mean the percentage equal to (a) the
appraised value of the Released Property, divided by (b) the
appraised value of
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all of
the Property then encumbered by the Mortgage, each as determined by
a current Appraisal. The parties agree to act reasonably to compute
the Minimum Amount. It is the intent of the parties that the Lender
will not be funding any Units other than up to fourteen
(14) models as contemplated by the Budget.
The
Lender acknowledges that a plat in the form of
Exhibit J has been recorded. The Lender consents
to Mortgagor exchanging deeds in the form of deeds attached as
Exhibit J and will release the portion of the
Property being conveyed to Core Communities of South Carolina, LLC
(“Core”) on Exhibit J at such time
as Core conveys to the Mortgagee the property as provided on
Exhibit J (“Extra Land”) free of
mortgages subject to exceptions to title similar to the balance of
the Property and the Extra Land is spread and encumbered by the
Loan Documents including the Mortgage and Assignment of Rents and
Leases. The exchange contemplated in this section is subject to the
Lender’s reasonable approval of the lands being
exchanged.
(xv) Section 6.10
is amended to add that the Lender hereby consents to the creation
of a municipal improvement district (“MID”) with
respect to the Property encumbered by the Mortgage in accordance
with the notice of proposed creation of municipal improvement
district, a copy of which is attached hereto and made a part hereof
as Exhibit C .
(xvi) Section 7.4,
8.1, 8.10, 9.2 and 12 are amended to reflect that the Lender
consents to the creation of MID and such lien is a Permitted
Exception under the Loan Documents.
(xvii) Section 7.7
is amended to reflect and consent to any litigation set forth in
the Borrower’s SEC filings. There is no litigation against
New Borrower that would have a Material Adverse Effect.
(xviii) Sections 9.1,
9.3, 9.4 and 9.5 are all deleted in their entirety.
(xix) Omitted
Intentionally.
(xx) Schedule 1
of the Loan Agreement is deleted in its entirety and
Exhibit D attached hereto and made a part hereof
is substituted in lieu thereof as the Schedule 1
.
(xxi) Schedule 2
of the Loan Agreement is deleted in its entirety and the following
Exhibit E attached hereto and made a part hereof
is substituted in lieu thereof as the Schedule 2
.
(xxii) Exhibit A
to the Loan Agreement is deleted and Exhibit F
attached hereto and made a part hereof is inserted in lieu thereof
as Exhibit A to the Loan Agreement.
(xxiii) Exhibit B
to the Loan Agreement is deleted and Exhibit G
attached hereto and made a part hereof is substituted in lieu
thereof as Exhibit B.
(xxiv) Exhibit C
to the Loan Agreement is deleted in its entirety and
Exhibit H attached hereto and made a part hereof
is substituted in lieu thereof as Exhibit C.
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(xxv) The
Collateral Verification Certificate is amended to delete reference
to Levitt and Sons, Inc. and to substitute Levitt Corporation in
lieu thereof.
(xxvi) Exhibit D
to the Loan Agreement is deleted in its entirety and
Exhibit I attached hereto and made a part hereof
is substituted in lieu thereof as Exhibit D.
4. The parties hereto intend
that except as provided in this Agreement this Agreement shall not
disturb the existing priority of the Mortgage and Loan Documents
which this Agreement modifies as described above. The parties
hereto further intend that this Agreement shall not constitute a
novation and shall in no way adversely affect or impair the lien
priority of the Mortgage or Assignment of Rents and Leases.
5. Unless otherwise specifically
provided herein, all notices to be given hereunder shall be in
writing and sent to the parties as hereinafter provided, certified
mail, return receipt requested, postage prepaid. Unless otherwise
specifically provided herein, said notices shall be effective on
the day such notice is deposited in the United States mails. No
change of address shall be valid unless forwarded in accordance
with the provisions of this Paragraph.
Notices as to
New Borrower shall be sent to:
Levitt
Corporation
2200 W. Cypress Creek Road
Fort Lauderdale, FL 33309
Attention: Seth Wise, President
Notices as to
Lender shall be sent to:
AmTrust
Bank
200 AmTrust Center
1801 East Ninth Street
Cleveland, OH 44114
Attn: Frank J. Bolognia, Senior Executive Vice President
6. Lender hereby releases the
Original Borrower from its obligations under the Note and all Loan
Documents and Original Borrower is no longer a Borrower or maker
under the Note or other Loan Documents.
7. AS A MATERIAL INDUCEMENT FOR
LENDER TO EXECUTE THIS AGREEMENT, ORIGINAL BORROWER AND NEW
BORROWER DO HEREBY RELEASE, WAIVE, DISCHARGE, COVENANT NOT TO SUE,
ACQUIT, SATISFY AND FOREVER DISCHARGE LENDER, ITS OFFICERS,
DIRECTORS, EMPLOYEES, AND AGENTS AND ITS AFFILIATES AND ASSIGNS
FROM ANY AND ALL LIABILITY, CLAIMS, COUNTERCLAIMS, DEFENSES,
ACTIONS, CAUSES OF ACTION, SUITS, CONTROVERSIES, AGREEMENTS,
PROMISES AND DEMANDS WHATSOEVER IN LAW OR IN EQUITY WHICH THE
ORIGINAL BORROWER OR NEW BORROWER EVER HAD, NOW HAVE, OR WHICH ANY
PERSONAL REPRESENTATIVE, SUCCESSOR, HEIR OR ASSIGN OF ORIGINAL
BORROWER OR NEW BORROWER HEREAFTER
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CAN,
SHALL OR MAY HAVE AGAINST LENDER, ITS OFFICERS, DIRECTORS,
EMPLOYEES, AND AGENTS, AND ITS AFFILIATES AND ASSIGNS, FOR, UPON OR
BY REASON OF ANY MATTER, CAUSE OR THING WHATSOEVER THROUGH THE DATE
HEREOF (OTHER THAN THE OBLIGATIONS OF THE LENDER UNDER THE LOAN
DOCUMENTS TO BE PERFORMED AFTER THE DATE HEREOF). ORIGINAL BORROWER
AND NEW BORROWER FURTHER EXPRESSLY AGREE THAT THE FOREGOING RELEASE
AND WAIVER AGREEMENT IS INTENDED TO BE AS BROAD AND INCLUSIVE AS
PERMITTED BY THE LAWS OF THE STATE OF FLORIDA. SUBJECT TO THE
PROVISIONS OF PARAGRAPH 6 ABOVE AS TO THE ORIGINAL BORROWER, IN
ADDITION TO, AND WITHOUT LIMITING THE GENERALITY OF THE FOREGOING,
AND IN CONSIDERATION OF LENDER’S EXECUTION OF THIS AGREEMENT,
ORIGINAL BORROWER AND NEW BORROWER COVENANT WITH AND WARRANT UNTO
LENDER, AND ITS AFFILIATES AND ASSIGNS, THAT THERE EXIST NO CLAIMS,
COUNTERCLAIMS, DEFENSES, OBJECTIONS, OFFSETS OR CLAIMS OF OFFSETS
AGAINST LENDER OR THE OBLIGATION OF ORIGINAL BORROWER OR NEW
BORROWER TO PAY THE LOAN TO LENDER WHEN AND AS THE SAME BECOMES DUE
AND PAYABLE, RECOGNIZING THE ORIGINAL BORROWER IS BEING RELEASED OF
ANY OBLIGATIONS UNDER THE LOAN DOCUMENTS.
8. THE UNDERSIGNED AND LENDER
WAIVE THE RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING
BASED UPON, OR RELATED TO, ANY ASPECT OF THE TRANSACTION IN
CONNECTION WITH WHICH THIS DOCUMENT IS BEING GIVEN OR ANY DOCUMENT
EXECUTED OR DELIVERED IN CONNECTION WITH SUCH TRANSACTION. THIS
WAIVER IS KNOWINGLY, INTENTIONALLY AND VOLUNTARILY MADE BY THE
UNDERSIGNED AND THE UNDERSIGNED ACKNOWLEDGE THAT NO ONE HAS MADE
ANY REPRESENTATIONS OF FACT TO INDUCE THIS WAIVER OF TRIAL BY JURY
OR IN ANY WAY TO MODIFY OR NULLIFY ITS EFFECT. THE UNDERSIGNED AND
LENDER FURTHER ACKNOWLEDGE HAVING BEEN REPRESENTED IN CONNECTION
WITH THE TRANSACTION WITH RESPECT TO WHICH THIS DOCUMENT IS BEING
GIVEN AND IN THE MAKING OF THIS WAIVER BY INDEPENDENT LEGAL
COUNSEL, SELECTED BY THE UNDERSIGNEDS’ OWN FREE WILL, AND
THAT THE UNDERSIGNED HAVE HAD THE OPPORTUNITY TO DISCUSS THIS
WAIVER WITH SUCH COUNSEL. THE UNDERSIGNED AND LENDER FURTHER
ACKNOWLEDGE HAVING READ AND UNDERSTOOD THE MEANING AND
RAMIFICATIONS OF THIS WAIVER PROVISION.
9. New Borrower shall promptly
cause this Agreement to be filed, registered or recorded in such
manner and in such places as may be required by any present or
future law in order to publish notice of and fully to protect the
lien of the Mortgage upon, and the interest of Lender in, the
Premises. All documentary stamp taxes and intangible taxes due on
the Original Note have been paid and affixed to the Mortgage.
Borrower will pay all filing, administration, and recording fees,
and all expenses incident to the preparation, execution and
acknowledgment of this Agreement, and all Federal, state, county
and municipal taxes, duties, assessments and charges now or
hereafter arising out of or in connection with the filing,
registration, recording, execution and delivery of this Agreement,
including, without limitation, any and all documentary stamps
and/or intangible taxes. Borrower agrees to hold harmless and
indemnify Lender against
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any
liability incurred by reason of the imposition of any such tax,
duty, assessment or charge. Borrower shall pay such sums
immediately upon receipt of notice of such amounts from the
authority to which they are due and paya
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