CONSOLIDATED, AMENDED AND RESTATED REVOLVING CREDIT CONSTRUCTION LOAN AGREEMENT

 

<PAGE>

 

                                                                   EXHIBIT 10.22

 

                    SECOND CONSOLIDATED, AMENDED AND RESTATED

                  REVOLVING CREDIT CONSTRUCTION LOAN AGREEMENT

 

                                      among

 

                              WCI COMMUNITIES, INC.

                          and BAY COLONY-GATEWAY, INC.

                                  AS BORROWER,

 

                                       and

                      WACHOVIA BANK, NATIONAL ASSOCIATION,

                      AS ADMINISTRATIVE AGENT AND A LENDER,

 

                                       and

 

               BANK OF AMERICA, N.A., AMSOUTH BANK, SUNTRUST BANK,

             BANK UNITED, F.S.B., GUARANTY BANK, NATIONAL CITY BANK

                        AND KEYBANK, NATIONAL ASSOCIATION,

                                   AS LENDERS

 

                                       and

               WACHOVIA CAPITAL MARKETS, LLC, AS CO-LEAD ARRANGER

 

                                       and

                    BANK OF AMERICA, N.A., AS SYNDICATION AGENT

 

                                       and

               BANC OF AMERICA SECURITIES LLC, AS CO-LEAD ARRANGER

 

                          Dated as of December 31, 2004

 

<PAGE>

 

                    SECOND CONSOLIDATED, AMENDED AND RESTATED

 

                  REVOLVING CREDIT CONSTRUCTION LOAN AGREEMENT

 

            THIS SECOND CONSOLIDATED, AMENDED AND RESTATED REVOLVING CREDIT

CONSTRUCTION LOAN AGREEMENT (this "Agreement") is made as of the 31st day of

December, 2004, by and among WCI COMMUNITIES, INC., a Delaware corporation

("WCI"), and BAY COLONY-GATEWAY, INC., a Delaware corporation ("BCG"), each

having its principal place of business at 24301 Walden Center Drive, Bonita

Springs, Florida 34134, Attention: Legal Department (WCI and BCG being

hereinafter jointly and severally, collectively and singularly referred to as

"Borrower"); WACHOVIA BANK, NATIONAL ASSOCIATION, a national banking association

("Wachovia"), having an address of 5801 Pelican Bay Boulevard, Naples, Florida

34108, Attention: James Howard, BANK OF AMERICA, N.A., a national banking

association ("BOA"), AMSOUTH BANK, an Alabama state chartered bank, SUNTRUST

BANK, a Georgia corporation, BANK UNITED, F.S.B., a federal savings bank,

GUARANTY BANK, a federal savings bank, NATIONAL CITY BANK, and KEYBANK NATIONAL

ASSOCIATION, a national banking association, together with certain other lending

institutions which may become parties hereto pursuant to Section 20.13 (Wachovia

and the foregoing lending institutions are collectively referred to herein as

the "Lenders" and individually as "Lender"); WACHOVIA BANK, NATIONAL

ASSOCIATION, as Administrative Agent ("Agent") for itself and the other Lenders;

WACHOVIA CAPITAL MARKETS, LLC, as Co-Lead Arranger; BANK OF AMERICA, N.A., as

Syndication Agent; and BANC OF AMERICA SECURITIES LLC, as Co-Lead Arranger.

 

                                R E C I T A L S:

 

      WHEREAS, Fleet National Bank ("Fleet"), individually and as Agent,

Borrower and the Lenders (excluding BOA) entered into that certain Consolidated,

Amended and Restated Revolving Credit Construction Loan Agreement dated as of

March 30, 2004 (the "First Loan Agreement"), pursuant to which the Lenders

agreed to make available construction loans to the Borrower in an amount up to

$290,000,000.00; and

 

      WHEREAS, Fleet assigned the agency under the First Loan Agreement to

Wachovia pursuant to that certain Assignment and Assumption of Agency with

respect to Consolidated, Amended and Restated Revolving Credit Construction Loan

Agreement and Other Loan Documents dated as of October 1, 2004; and

 

      WHEREAS, Fleet assigned its Commitment under the First Loan Agreement to

BOA pursuant to that certain Assignment and Acceptance Agreement dated as of

October 1, 2004; and

 

      WHEREAS, the First Loan Agreement makes reference in certain provisions to

the defined term "Senior Unsecured Revolving Credit Agreement" which is defined

as that certain Senior Unsecured Revolving Credit Agreement dated as of June 28,

2002, among WCI as "Borrower", Fleet National Bank and certain other lending

institutions as "Lenders", Fleet National Bank, as "Lead Agent", Wachovia Bank,

N.A., as "Syndication Agent", and Fleet

 

<PAGE>

 

Securities, Inc., and Wachovia Bank, N.A., as "Co-Lead Arrangers", as amended,

modified, renewed or consolidated from time to time; and

 

      WHEREAS, the Senior Unsecured Revolving Credit Agreement was replaced by

that certain Senior Unsecured Revolving Credit Agreement dated as of August 13,

2004, among WCI as "Borrower", BOA as "Administrative Agent", "Swing Line

Lender" and an "L/C Issuer", the other "Lenders" party thereto, Wachovia as

"Syndication Agent", KeyBank National Association and Bank One, NA, as

"Co-Documentation Agents" and Banc of America Securities LLC and Wachovia

Capital Markets, LLC as "Joint Lead Arrangers" and "Joint Book Managers" (the

"BOA Senior Credit Agreement"); and

 

      WHEREAS, Agent, the Lenders and the Borrower desire to amend the First

Loan Agreement so that all references to the Senior Unsecured Revolving Credit

Agreement shall now refer to the BOA Senior Credit Agreement, and to amend

certain other provisions of the First Loan Agreement;

 

      NOW, THEREFORE, for and in consideration of the mutual benefits to be

received by the parties hereto and for other good and valuable consideration,

the receipt, adequacy and sufficiency of which are hereby expressly acknowledged

by the parties hereto, the parties do hereby amend and restate the First Loan

Agreement in its entirety and covenant and agree as follows:

 

                                   ARTICLE 1

                    DEFINITIONS AND RULES OF INTERPRETATION.

 

      1.1 DEFINITIONS. The following terms shall have the meanings set forth in

this Section 1.1 or elsewhere in the provisions of this Agreement or other Loan

Documents referred to below:

 

      ACCORDION NOTE. That certain Renewal Replacement Revolving Line of Credit

Note (Accordion) dated as of March 30, 2004, made by Borrower payable to the

order of Fleet National Bank, in the face principal amount of $50,000,000.00,

transferred by Allonge to Wachovia Bank, National Association, as of October 1,

2004, and any replacement notes therefor, to be held in accordance with the

provisions of Section 2.4 of this Agreement.

 

      ADDITIONAL COMMITMENT LENDER. See Section 4.6.4 of this Agreement.

 

      ACT. See Article 35 of this Agreement.

 

      ACTUAL KNOWLEDGE. See Section 20.10.1 of this Agreement.

 

      ADA. See Section 11.10 of this Agreement.

 

      ADJUSTED PROJECT COSTS. Project Costs less Required Equity Funds and

Escrow Deposits used in construction.

 

      ADJUSTED TANGIBLE NET WORTH. As defined in the Senior Unsecured Revolving

Credit Agreement.

 

                                      -2-

 

<PAGE>

 

      ADVANCE. Any disbursement of the proceeds of the Loan made or to be made

by the Lenders pursuant to the terms of this Agreement.

 

      AFFILIATE. As applied to any Person, any other Person that directly, or

indirectly through one or more intermediaries, Controls, or is Controlled by, or

is under common Control with the Person specified.

 

      AGENT. See preamble.

 

      AGENT'S OFFICE. Agent's address as set forth in Article 23, or such other

address as Agent may from time to time notify Borrower and the Lenders of.

 

      AGREEMENT. This Second Consolidated, Amended and Restated Revolving Credit

Construction Loan Agreement, including the Exhibits and Schedules attached

hereto, as amended, modified consolidated, supplemented or restated from time to

time.

 

      APPLICABLE RATE. At the time of determination thereof, a percentage per

annum determined by the Pricing Level in effect on such date as shown below:

 

<TABLE>

<CAPTION>

                          Senior

Pricing      Leverage      Unsecured    Eurodollar

  Level        Ratio       Debt Rating      Rate       Base Rate     Unused Fee

-------     ----------    -----------   ----------    ---------     ----------

<S>         <C>           <C>           <C>           <C>           <C>

   1           N/A        BBB-/Baa3       1.00%          0.00%         0.20%

                        or better

   2        Less than        N/A          1.05%          0.00%         0.25%

           or equal

            to 1.0:1

   3        Greater          N/A          1.25%          0.00%        0.275%

            than

           1.0:1 but

           less than

           or equal

           to 1.25:1

   4        Greater          N/A          1.50%          0.00%        0.275%

           than

           1.25:1

           but less

           than or

           equal to

           1.75:1

   5        Greater          N/A          1.75%          0.00%         0.30%

           than

           1.75:1

           but less

           than or

           equal to

           2.0:1

   6        Greater          N/A          2.00%          0.00%         0.35%

           than 2.0:1

</TABLE>

 

      Initially, the Applicable Rate shall be set at Level 4. Upon delivery of

the Compliance Certificate pursuant to Section 9.6.3, after the end of each

Fiscal Quarter (commencing with the Compliance Certificate delivered for the

Fiscal Quarter ending December 31, 2004), the Applicable Rate shall

automatically be adjusted to the rate corresponding to the Leverage Ratio set

forth in the table above, such automatic adjustment to take effect on the last

day that the

 

                                      -3-

 

<PAGE>

 

Compliance Certificate was required to be delivered, and shall remain in effect

until subsequently adjusted in accordance herewith upon the delivery of each

such subsequent Compliance Certificate. If Borrower fails to deliver such

Compliance Certificate with respect to any Fiscal Quarter within the period of

time required by Section 9.6.3, then the Applicable Rate shall automatically be

adjusted to that set forth in Level 6 as of the first (1st) Business Day after

the date on which such Compliance Certificate was required to be delivered until

Borrower delivers such Compliance Certificate with respect to such Fiscal

Quarter. Notwithstanding the foregoing, (a) for so long as WCI maintains an

Investment Grade Rating, the Applicable Rate as of any date of determination

thereof shall be set at Level 1, and (b) at all times while an Event of Default

exists, the Applicable Rate shall be set at Level 6. In the event that the Debt

Ratings are not equivalent, the Applicable Rate shall be based on the two (2)

highest Debt Ratings. Each change in the Applicable Rate resulting from a

publicly announced change in the Debt Rating shall be effective, in the case of

an upgrade, during the period commencing on the date of delivery by Borrower to

Agent of notice thereof pursuant to Section 9.7.6(c) and ending on the date

immediately preceding the effective date of the next such change and, in the

case of a downgrade, during the period commencing on the date of the public

announcement thereof and ending on the date immediately preceding the effective

date of the next such change.

 

      APPRAISALS. Collectively, those certain MAI appraisals of the Projects,

determined on a fair market value basis, prepared in accordance with all

applicable Federal banking regulations by a qualified independent appraiser

approved by Agent.

 

      APPRAISED VALUE. The "Discounted Bulk Sales Value" of a Project or

Proposed Project determined by the most recent Appraisal of such parcel or

update, subject, however, to such changes or adjustments to the value determined

thereby as may be required by the appraisal department of the Agent in its good

faith business judgment.

 

      ARCHITECTS. Collectively, the architects selected by Borrower with respect

to the design of the Projects and described on Part III of the Project Schedules

attached hereto as Exhibit A.

 

      ARCHITECTS' CONTRACTS. Collectively, the contracts between Borrower and

the Architects.

 

      ARRANGERS. Each of BAS and WCM in its capacity as Co-Lead Arranger.

 

      ASSIGNMENT AND ACCEPTANCE. See Section 20.13.1(e) of this Agreement.

 

      ASSIGNMENTS OF PROJECT DOCUMENTS. Collectively, the Collateral Assignments

of Project Documents made by Borrower in favor of Agent, including, without

limitation, the Consolidated, Amended and Restated Collateral Assignment of

Project Documents, dated as of March 30, 2004, pursuant to which Borrower

assigns and grants a security interest in Borrower's right, title and interest

in and to the Architects' Contracts, the Construction Contracts, the Plans and

Specifications and the Project Approvals, as the same may be modified or

amended.

 

      ASSIGNMENTS OF SALES CONTRACTS. Collectively, the Collateral Assignments

of Residence Purchase Agreements made by Borrower in favor of Agent, including,

without limitation, the Consolidated, Amended and Restated Collateral

Assignments of Residence Purchase Agreements, dated as of March 30, 2004,

pursuant to which Borrower assigns all of the sellers'

 

                                       -4-

 

<PAGE>

 

rights, title and interest in and to the Sales Contracts, the Escrow Deposits

and all proceeds, issues and profits therefrom, as the same may be modified or

amended.

 

      AUDITED FINANCIAL STATEMENTS. The audited consolidated balance sheet of

WCI and its Subsidiaries for the fiscal year ended December 31, 2003, and the

related consolidated statements of income or operations, shareholders' equity

and cash flows for such fiscal year of WCI and its Subsidiaries, including the

notes thereto.

 

      BAS. Banc of America Securities LLC and its successors.

 

      BASE RATE. For any day, a fluctuating rate per annum equal to the higher

of (a) the Federal Funds Rate plus 1/2 of 1% and (b) the rate of interest in

effect for such day as publicly announced from time to time by Agent as its

"prime rate." The "prime rate" is a rate set by Agent based upon various factors

including Agent's costs and desired return, general economic conditions and

other factors, and is used as a reference point for pricing some loans, which

may be priced at, above, or below such announced rate. Any change in such rate

announced by Agent shall take effect at the opening of business on the day

specified in the public announcement of such change.

 

       BASE RATE ADVANCE. Any Advance or portion of an Advance that bears

interest based at the Base Rate.

 

      BCG. See preamble.

 

      BOA. See preamble.

 

      BORROWER. See preamble.

 

      BORROWER MATERIALS. See Section 9.6 of this Agreement.

 

      BORROWER'S REQUEST TO ADD PROPOSED PROJECT. See Section 2.5.2(a) of this

Agreement.

 

      BORROWER'S REQUISITION FOR ADVANCE. See Section 3.1 of this Agreement.

 

      BORROWING BASE. At any time of determination, the sum of the following:

 

            (a) Project Costs. One hundred percent (100%) of the aggregate

Adjusted Project Costs; provided, that on and after the date that is ninety (90)

days after the Completion Date for Improvements at a Project, the Adjusted

Project Costs for such Project shall be excluded from computation in the

Borrowing Base under this subparagraph (a) and shall thereafter be included

under subparagraph (b) or (c) below; plus

 

            (b) Sold Units. With respect to Units subject to Sales Contracts

(but not yet closed) and as to which ninety (90) days have elapsed from the

Completion Date for the Improvements in which such Units are located,

seventy-five percent (75%) of the Adjusted Project Costs incurred by Borrower

with respect thereto; provided, that such Adjusted Project Costs shall be

excluded from computation in the Borrowing Base under this subparagraph (b) on

 

                                      -5-

 

<PAGE>

 

and after the date that is one hundred eighty (180) days from the Completion

Date and shall thereafter be included in subparagraph (c) below; plus

 

            (c) Unsold Units. With respect to Unsold Units as to which (90) days

have elapsed from the Completion Date for the Improvements in which such Units

are located, fifty percent (50%) of the Adjusted Project Costs incurred by

Borrower with respect thereto; provided, that such Adjusted Project Costs shall

be excluded from computation in the Borrowing Base under this subparagraph (c)

on and after the date that is one (1) year from the Completion Date;

 

provided, however, that:

 

                        (i) the cost basis for any Borrowing Base asset

described in subparagraphs (b) and (c) above shall not exceed its net realizable

value determined in accordance with GAAP;

 

                        (ii) for purposes of the cost calculations in the

Borrowing Base, capitalized costs such as corporate general and administrative

costs and marketing costs shall be excluded; and

 

                        (iii) the portion of the Borrowing Base attributable to

subparagraph (c) above shall not at any time exceed fifteen percent (15%) of the

total amount of the Borrowing Base.

 

      BORROWING BASE REPORT. A report with respect to the Borrowing Base in the

form attached hereto as Exhibit G and by this reference incorporated herein, or

in such other form and substance as may be reasonably requested by Agent,

including a certificate signed by an authorized officer of Borrower showing a

calculation of the Borrowing Base and attaching all documentation used in such

calculation.

 

      BUSINESS DAY. Any day other than a Saturday, Sunday, or other day on which

commercial banks are authorized or required to close under the Laws of the state

where the Agent's Office is located and the Laws of the United States of

America, and if the applicable day relates to a Eurodollar Rate Advance or an

Interest Period for a Eurodollar Rate Advance, the day on which dealings in

Dollar deposits are also carried on in the London interbank eurodollar market

and banks are open for business in London.

 

      CERCLA. See Section 8.15.1 of this Agreement.

 

      CHANGE OF CONTROL. An event or series of events by which:

 

                  (a) any "person" or "group" (as such terms are used in

Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, but excluding

any employee benefit plan of such person or its subsidiaries, and any person or

entity acting in its capacity as trustee, agent or other fiduciary or

administrator of any such plan) other than a Principal becomes the "beneficial

owner" (as defined in Rules 13d-3 and 13d-5 under the Securities Exchange Act of

1934, except that a person or group shall be deemed to have "beneficial

ownership" of all securities that such

 

                                      -6-

 

<PAGE>

 

person or group has the right to acquire (such right, an "option right"),

whether such right is exercisable immediately or only after the passage of

time), directly or indirectly, of fifty percent (50%) or more of the equity

securities of Borrower entitled to vote for members of the board of directors or

equivalent governing body of Borrower on a fully-diluted basis (and taking into

account all such securities that such person or group has the right to acquire

pursuant to any option right); or

 

                  (b) during any period of twelve (12) consecutive months, a

majority of the members of the board of directors or other equivalent governing

body of Borrower cease to be composed of individuals (i) who were members of

that board or equivalent governing body on the first day of such period, (ii)

whose election or nomination to that board or equivalent governing body was

approved by individuals referred to in clause (i) above constituting at the time

of such election or nomination at least a majority of that board or equivalent

governing body or (iii) whose election or nomination to that board or other

equivalent governing body was approved by individuals referred to in clauses (i)

and (ii) above constituting at the time of such election or nomination at least

a majority of that board or equivalent governing body (excluding, in the case of

both clause (ii) and clause (iii), any individual whose initial nomination for,

or assumption of office as, a member of that board or equivalent governing body

occurs as a result of an actual or threatened solicitation of proxies or

consents for the election or removal of one or more directors by any person or

group other than a solicitation for the election of one or more directors by or

on behalf of the board of directors); or

 

                  (c) any Person other than a Principal or two (2) or more

Persons other than Principals acting in concert shall have acquired by contract

or otherwise, or shall have entered into a contract or arrangement that, upon

consummation thereof, will result in its or their acquisition of the power to

exercise, directly or indirectly, a controlling influence over the management or

policies of Borrower, or control over the equity securities of Borrower entitled

to vote for members of the board of directors or equivalent governing body of

Borrower on a fully-diluted basis (and taking into account all such securities

that such Person or group has the right to acquire pursuant to any option right)

representing fifty percent (50%) or more of the combined voting power of such

securities; or

 

                  (d) for any reason a "change in control" or similar event

shall occur as provided in any agreement governing any "Senior Notes", any

"Senior Subordinated Notes", or any "Subordinated Debt", as such terms are

defined in the Senior Unsecured Revolving Credit Agreement.

 

      CLOSING DATE. December 31, 2004.

 

      CODE. The Internal Revenue Code of 1986, as amended.

 

      COLLATERAL. All of the property, rights and interests of Borrower that are

subject to the security interests, assignments, and Liens created by the

Security Documents, including, without limitation, the Projects and Sales

Contracts.

 

        COMMITMENT. With respect to each Lender, the obligation to make loans to

Borrower under this Agreement up to the amount set forth on Schedule 1.1 as the

amount of such Lender's

 

                                      -7-

 

<PAGE>

 

commitment to make loans to Borrower, as the same may be reduced from time to

time or increased from time to time in accordance with Section 2.4 hereof.

 

      COMPLETION DATE. With respect to each Project, the date the Certificate of

the applicable surveyor that the Improvements have been completed is recorded in

the official records of the county in which the Project is located in accordance

with Fla. Stat. Sections 718.104(4)(e) (or the substantial equivalent to such

certificate in any other applicable state is filed or recorded in accordance

with such state's Requirements).

 

      COMPLIANCE CERTIFICATE. A certificate substantially in the form of Exhibit

I.

 

      CONDOMINIUM ACT. As to Projects located in the State of Florida, the

Florida Condominium Act, Fla. Stat. Ch. 718 (2003), as amended from time to

time, and as to Projects located outside the State of Florida, the condominium

act of such state applicable to such Project, as each such act is amended from

time to time.

 

      CONFIDENTIAL INFORMATION. See Section 20.26 of this Agreement.

 

      CONSOLIDATED GROUP. Collectively, Borrower and its Subsidiaries.

 

      CONSTRUCTION CONTRACTS. Collectively, the contracts between Borrower and

each of the Contractors, providing for the construction of each of the

Improvements on their respective Land.

 

      CONSTRUCTION INSPECTOR. At Agent's option, either a qualified officer or

employee of Agent or consulting architects, engineers or inspectors appointed by

Agent from time to time.

 

      CONSTRUCTION SCHEDULES. Collectively, the schedules of the estimated dates

of commencement and completion of construction of each of the respective

Improvements, prepared by each of the respective Contractors, approved by Agent

and contained in Part VI of the Project Schedules attached hereto as Exhibit A.

 

      CONTINGENCY RESERVES. Collectively, the amounts allocated as contingency

reserves in each of the Project Budgets, to be advanced only in accordance with

the provisions of Section 2.11 hereof.

 

      CONTRACTORS. Collectively, the general contractors selected by Borrower

with respect to the construction of the Projects and described in Part II of the

Project Schedules attached hereto as Exhibit A.

 

      CONTROL. The possession, directly or indirectly, of the power to direct or

cause the direction of the management or policies of a Person, whether through

the ability to exercise voting power, by contract or otherwise. CONTROLLING and

CONTROLLED have meanings correlative thereto.

 

      CONVERT, CONVERSION and CONVERTED. The conversion of Base Rate Advances or

Eurodollar Rate Advances to another Type of Advance.

 

                                      -8-

 

<PAGE>

 

      CORE BUSINESSES. The business of planning, designing, engineering,

developing, constructing, marketing, selling, financing, managing and operating

real estate including business and commercial projects, office buildings,

residential subdivisions, condominiums (including low-, mid- and high-rise

condominiums), villa developments, single family residences, timeshares, hotels,

and related amenity improvements, which include golf clubs, marinas, tennis

facilities, and restaurants. In connection with the activities described above,

the Consolidated Group engages in planning, designing and engineering, land

development, construction/home building, marketing, real estate sales and

brokerage, mortgage brokerage and finance, title insurance, property management,

management of homeowner/condominium associations, fee based property development

and construction management services, real estate franchise brokerage business

and the operation of golf clubs, restaurants, marinas, conservation areas, rest

areas, hotels and health care facilities. The Consolidated Group may also engage

in various service business activities ancillary to and consistent with its

ownership and operation of real estate, such as pest control and security

services.

 

      CUSTOMARY CLOSING COSTS. Reasonable and customary closing costs and

commissions paid for at the time of the closing of the sale of Units, not to

exceed in the aggregate six percent (6%) of the Total Price of each such Unit.

 

      DEBTOR RELIEF LAWS. The Bankruptcy Code of the United States, and all

other liquidation, conservatorship, bankruptcy, assignment for the benefit of

creditors, moratorium, rearrangement, receivership, insolvency, reorganization,

or similar debtor relief Laws of the United States or other applicable

jurisdictions from time to time in effect and affecting the rights of creditors

generally.

 

      DEBT RATING. As of any date of determination by a Rating Agency, (a) the

rating of the Obligations under this Agreement, or (b) if such Rating Agency

does not publicly announce the rating described in clause (a) above, the rating

of the obligations under the Senior Unsecured Revolving Credit Agreement, or (c)

if such Rating Agency does not publicly announce the rating described in clauses

(a) or (b) above, such Rating Agency's rating of Borrower's non-credit-enhanced

senior unsecured long term debt, or (d) if such Rating Agency does not publicly

announce the rating described in clauses (a), (b) or (c) above, such Rating

Agency's publicly announced corporate rating of WCI.

 

      DEFAULT. A condition or event which, with either notice or passage of time

or both, would constitute an Event of Default.

 

      DEFAULT RATE. When used with respect to Obligations other than Eurodollar

Rate Advances, an interest rate equal to (a) the Base Rate plus (b) the

Applicable Rate, if any, applicable to Base Rate Advances plus (c) four percent

(4%) per annum; provided, however, that with respect to a Eurodollar Rate

Advance, the Default Rate shall be an interest rate equal to the interest rate

(including any Applicable Rate) otherwise applicable to such Advance plus four

percent (4%) per annum.

 

      DEFAULTED ADVANCE. See Section 20.14.1 of this Agreement.

 

      DEFAULTING LENDER. See Section 20.14.1 of this Agreement.

 

                                       -9-

 

<PAGE>

 

      DIRECT COSTS. With respect to each Project, the costs of the Land, the

Personal Property, and all labor, materials, fixtures, machinery and equipment

required to construct, equip and complete the Improvements in accordance with

the Plans and Specifications, including, without limitation, the line item cost

breakdown of "Direct Costs" by Construction Contract trades, job and

subcontractors, as set forth in each Project Budget.

 

      DISTRIBUTIONS. The declaration or payment of any distribution of cash or

cash flow from the Projects to Borrower or to the shareholders of Borrower.

 

      DOLLAR OR $. Lawful money of the United States of America.

 

      DRAWDOWN DATE. The date on which any Advance is made or is to be made.

 

      DRAW REQUEST. With respect to each Advance, Borrower's Requisition for

Advance for such Advance, the Draw Request Summary and the other documents

required by this Agreement to be furnished to Agent as a condition to such

Advance.

 

      DRAW REQUEST SUMMARY. The Draw Request Summary with respect to any

applicable Project in the form attached hereto as Exhibit H and by this

reference incorporated herein.

 

      EFFECTIVE DATE. The date upon which this Agreement shall become effective

pursuant to Article 11.

 

      ELIGIBLE ASSIGNEE. Any of (a) a Lender; (b) an Affiliate of a Lender; and

(c) any other Person (other than a natural person) approved by (i) Agent, and

(ii) unless an Event of Default has occurred and is continuing, Borrower (each

such approval by Agent and Borrower not to be unreasonably withheld or delayed);

provided that notwithstanding the foregoing, "Eligible Assignee" shall not

include (A) Borrower or any of Borrower's Affiliates or Subsidiaries or (B) any

other Person that conducts (or is an Affiliate of a Person that conducts) any

businesses that are substantially similar to any of the Core Businesses and

would reasonably be deemed to be a competitor of Borrower.

 

      ENVIRONMENTAL LAWS. See Section 8.15.1 of this Agreement.

 

      ERISA. The Employee Retirement Income Security Act of 1974, as amended and

in effect from time to time.

 

      ERISA AFFILIATE. Any trade or business (whether or not incorporated) under

common control with Borrower within the meaning of Section 414(b) or (c) of the

Code (and Sections 414(m) and (o) of the Code for purposes of provisions

relating to Section 412 of the Code).

 

      ERISA EVENT. Any of (a) a Reportable Event with respect to a Pension Plan;

(b) a withdrawal by Borrower or any ERISA Affiliate from a Pension Plan subject

to Section 4063 of ERISA during a plan year in which it was a substantial

employer (as defined in Section 4001(a)(2) of ERISA) or a cessation of

operations that is treated as such a withdrawal under Section 4062(e) of ERISA;

(c) a complete or partial withdrawal by Borrower or any ERISA Affiliate from a

Multiemployer Plan or notification that a Multiemployer Plan is in

reorganization; (d) the filing of a notice of intent to terminate, the treatment

of a Plan amendment

 

                                       -10-

 

<PAGE>

 

as a termination under Sections 4041 or 4041A of ERISA, or the commencement of

proceedings by the PBGC to terminate a Pension Plan or Multiemployer Plan; (e)

an event or condition which constitutes grounds under Section 4042 of ERISA for

the termination of, or the appointment of a trustee to administer, any Pension

Plan or Multiemployer Plan; or (f) the imposition of any liability under Title

IV of ERISA, other than for PBGC premiums due but not delinquent under Section

4007 of ERISA, upon Borrower or any ERISA Affiliate.

 

      ESCROW ACCOUNTS. The accounts with respect to each of the Projects

described in Part IV of the Project Schedules attached hereto as Exhibit A.

 

      ESCROW AGENT. With respect to each Project, the escrow agent(s) designated

under the Sales Contracts and not affiliated with Borrower and approved by Agent

for purposes of holding the Escrow Deposits.

 

      ESCROW DEPOSITS. All earnest money, escrow deposits, additional deposits,

or good faith deposits required from the purchasers under Sales Contracts, to be

held in the Escrow Accounts and disbursed in accordance with applicable

Requirements and the terms hereof.

 

      EURODOLLAR RATE. For any Interest Period with respect to a Eurodollar Rate

Advance, the rate per annum equal to the British Bankers Association LIBOR Rate

("BBA LIBOR"), as published by Reuters (or other commercially available source

providing quotations of BBA LIBOR as designated by Agent from time to time) at

approximately 11:00 a.m., London time, two (2) Business Days prior to the

commencement of such Interest Period, for Dollar deposits (for delivery on the

first day of such Interest Period) with a term equivalent to such Interest

Period. If such rate is not available at such time for any reason, then the

"Eurodollar Rate" for such Interest Period shall be the rate per annum

determined by Agent to be the rate at which deposits in Dollars for delivery on

the first day of such Interest Period in same day funds in the approximate

amount of the Eurodollar Rate Loan being made, continued or converted by Agent

and with a term equivalent to such Interest Period would be offered by Agent's

London branch to major banks in the London interbank eurodollar market at their

request at approximately 11:00 a.m. (London time) two (2) Business Days prior to

the commencement of such Interest Period.

 

      EURODOLLAR RATE ADVANCE. Any Advance or portion of an Advance that bears

interest at the Eurodollar Rate.

 

      EVENT OF DEFAULT. See Section 13.1 of this Agreement.

 

      EXISTING MATURITY DATE. See Section 4.6.1 of this Agreement.

 

      EXPENSES. See Section 20.12 of this Agreement.

 

      EXTENSION NOTICE DATE. See Section 4.6.2 of this Agreement.

 

      EXTENSION REQUEST DATE. See Section 4.6.1 of this Agreement.

 

      FEDERAL FUNDS RATE. For any day, the rate per annum equal to the weighted

average of the rates on overnight Federal funds transactions with members of the

Federal Reserve System arranged by Federal funds brokers on such day, as

published by the Federal Reserve Bank of

 

                                      -11-

 

<PAGE>

 

New York on the Business Day next succeeding such day; provided that (a) if such

day is not a Business Day, the Federal Funds Rate for such day shall be such

rate on such transactions on the next preceding Business Day as so published on

the next succeeding Business Day, and (b) if no such rate is so published on

such next succeeding Business Day, the Federal Funds Rate for such day shall be

the average rate (rounded upward, if necessary, to a whole multiple of 1/100 of

1%) charged to Agent on such day on such transactions as determined by Agent.

 

      FHA. See Section 11.10 of this Agreement.

 

      FINANCING STATEMENTS. Collectively, the Uniform Commercial Code Financing

Statements from Borrower in favor of Agent, giving notice of a security interest

in the Collateral, such financing statements to be in form and substance

satisfactory to Agent.

 

      FIRST LOAN AGREEMENT. See recitals.

 

      FISCAL QUARTER. The fiscal quarter of Borrower consisting of a three (3)

month fiscal period ending on each March 31, June 30, September 30 and December

31 of each Fiscal Year.

 

      FISCAL YEAR. The fiscal year of Borrower consisting of a twelve (12) month

fiscal period ending on each December 31.

 

      FITCH. Fitch IBCA, Duff & Phelps, a division of Fitch, Inc. and any

successor thereto.

 

      FLEET. See preamble.

 

      FLORIDA UNIFORM LAND SALES PRACTICES LAW. The Florida Uniform Land Sales

Practices Law, Fla. Stat. Ch. 498 (2003), as amended from time to time.

 

      GAAP. Principles that are consistent with the principles promulgated or

adopted by the Financial Accounting Standards Board and its predecessor or

successor organizations, as in effect from time to time; provided that a

certified public accountant would, insofar as the use of such accounting

principles is pertinent, be in a position to deliver an unqualified opinion

(other than a qualification regarding changes in GAAP) as to financial

statements in which such principles have been properly applied; provided, that

if any changes in GAAP with which the independent certified accountants of

Borrower concur result in a change in the basis of calculating any of the

financial covenants, standards or terms contained in this Agreement, Borrower

and Agent agree to amend such covenant calculations, standards or terms to

reflect such changes in GAAP so that the criteria for evaluating the financial

condition of Borrower shall be the same after such changes as if such changes

had not been made; and provided, further that this definition of GAAP shall not

include the application of FASB Interpretation No. 46 or similar pronouncements

issued by the Financial Accounting Standards Board in January, 2003, as such

interpretations or pronouncements may be amended or modified from time to time.

 

      GOVERNMENTAL AUTHORITY. The United States of America, the State of

Florida, or any political subdivision thereof, any other state, county or

municipality in which any of the Projects are located, or any agency, authority,

department, commission, board, bureau, or instrumentality of any of them.

 

                                      -12-

 

<PAGE>

 

      GUARANTOR. See Section 6.2 of this Agreement.

 

      GUARANTY. See Section 6.2 of this Agreement.

 

      HAZARDOUS MATERIALS. See Section 8.15.2 of this Agreement.

 

      HUD. The United States Department of Housing and Urban Development and any

successor thereto.

 

      IMPROVEMENTS. Collectively and individually, as the context requires, the

improvements described in Part I of the Project Schedules attached hereto as

Exhibit A.

 

      INCREASING LENDER. See Section 2.4 of this Agreement.

 

      INDEBTEDNESS. All obligations, contingent and otherwise, that in

accordance with GAAP should be classified upon the obligor's balance sheet as

liabilities, or to which reference should be made by footnotes thereto,

including in any event and whether or not so classified:

 

                  (a) all debt and similar monetary obligations, whether direct

or indirect;

 

                  (b) all liabilities secured by any mortgage, pledge, security

interest, lien, charge, or other encumbrance existing on property owned or

acquired subject thereto, whether or not the liability secured thereby shall

have been assumed; and

 

                  (c) all guarantees, endorsements and other contingent

obligations whether direct or indirect in respect of indebtedness of others,

including any obligation to supply funds to or in any manner to invest in,

directly or indirectly, the debtor, to purchase indebtedness, or to assure the

owner of indebtedness against loss, through an agreement to purchase goods,

supplies, or services for the purpose of enabling the debtor to make payment of

the indebtedness held by such owner or otherwise, and the obligations to

reimburse the issuer in respect of any letters of credit.

 

      INDEMNITY AGREEMENTS. Collectively, the Indemnity Agreements Regarding

Hazardous Materials made by Borrower in favor of Agent and Lenders, including,

without limitation, the Consolidated, Amended and Restated Indemnity Agreement

Regarding Hazardous Materials, dated as of March 30, 2004, pursuant to which

Borrower agrees to jointly and severally indemnify Agent and Lenders with

respect to Hazardous Materials and Environmental Laws, as the same may be

modified or amended.

 

      INDIRECT COSTS. With respect to each Project, title insurance premiums,

survey charges, engineering fees, architectural fees, real estate taxes,

appraisal costs, commitment fees and interest payable under the Loan, premiums

for other insurance, marketing, advertising and leasing costs, brokerage

commissions, legal fees, accounting fees, Construction Inspector fees, permit

and other governmental fees and charges, impact fees, utility access or

connection fees, overhead and administrative costs, and all other expenses which

are expenditures relating to such Project and are not Direct Costs, in each

instance as set forth in the applicable Project Budget.

 

                                       -13-

 

<PAGE>

 

      INSIDER SALES. Sales of Units pursuant to sales contracts with parties

affiliated with or employed by Borrower or any of its Subsidiaries or

Affiliates.

 

      INSTALLMENT AMOUNT. See Section 4.11.1 of this Agreement.

 

      INTEREST PAYMENT DATE. Three (3) Business Days after interest is billed by

Agent, which billing shall be made on or about the following dates:

 

                  (a) as to each Base Rate Advance, the first day of each

calendar month after the making of such Base Rate Advance; and

 

                  (b) with respect to each Eurodollar Rate Advance:

 

                        (i)    with respect to any Interest Period that is either

                              seven (7) days, fourteen days, one (1) month, two

                               (2) months or three (3) months, the last day of

                              such Interest Period; and

 

                        (ii)   with respect to any Interest Period that is six

                              (6) months, the last day of the third and sixth

                              months of such Interest Period.

 

      INTEREST PERIOD. With respect to each Eurodollar Rate Advance:

 

                  (a) initially, the period (i) commencing on the date of such

Eurodollar Rate Advance or, in the case of a Conversion to a Eurodollar Rate

Advance pursuant to Section 4.8 of this Agreement, commencing on the date of

such Conversion, and (ii) ending on the date seven (7) days, fourteen (14) days,

or one (1), two (2), three (3) or six (6) months thereafter, as the case may be,

as determined in accordance with the provisions of this Agreement; and

 

                  (b) thereafter, each subsequent Interest Period for such

Eurodollar Rate Advance shall begin on the last day of the preceding Interest

Period for such Advance and shall end on the date seven (7) days, fourteen (14)

days, or one (1), two (2), three (3), or six (6) months thereafter as Borrower

may select pursuant to Section 4.9 of this Agreement.

 

The number of days in each Interest Period and the particular day on which each

Interest Period ends and the next begins shall be fixed by Agent in accordance

with Agent's generally accepted practice in the applicable London interbank

market; provided that

 

                         (i)    any Interest Period which would otherwise end on a

                              day which is not a Business Day shall end and the

                              next Interest Period shall be extended to the next

                              succeeding Business Day unless such Business Day

                              falls in another calendar month, in which case

                              such Interest Period shall end on the next

                              preceding Business Day;

 

                         (ii)   any Interest Period that begins on the last

                              Business Day of a calendar month (or on a day for

                              which there is no numerically corresponding day in

                              the calendar month at the end of such

 

                                      -14-

 

<PAGE>

 

                              Interest Period) shall end on the last Business

                              Day of the calendar month at the end of such

                               Interest Period; and

 

                        (iii) no Interest Period for a Eurodollar Rate Advance

                              shall extend beyond the Maturity Date.

 

      INTERSTATE LAND SALES FULL DISCLOSURE ACT. The Interstate Land Sales Full

Disclosure Act, 15 U.S.C.Section .1701-1720 (2003), as amended from time to

time.

 

      INVESTMENT GRADE RATING. That at least two of the three following Debt

Ratings exist at the same time: (a) a Moody's Debt Rating of Baa3 or better; (b)

a S & P Debt Rating of BBB- or better; and (c) a Fitch Debt Rating of BBB- or

better.

 

      IRS. The United States Internal Revenue Service.

 

      KNOWLEDGE. With respect to Borrower, the actual knowledge (but not imputed

knowledge until known) of all executive officers of WCI, the vice president in

charge of the Florida Tower Division of WCI and the equivalent officers in

charge of tower development for WCI in any other states, and the respective

project managers for the respective Projects.

 

      LAND. Collectively, the real property and appurtenant easements described

in the Security Instruments.

 

      LAWS. Collectively, all international, foreign, Federal, state and local

statutes, treaties, rules, guidelines, regulations, ordinances, codes and

administrative or judicial precedents or authorities, including the

interpretation or administration thereof by any Governmental Authority charged

with the enforcement, interpretation or administration thereof, and all

applicable administrative orders, directed duties, requests, licenses,

authorizations and permits of, and agreements with, any Governmental Authority,

in each case whether or not having the force of law.

 

      LENDERS. The Lenders, now or hereafter parties to this Agreement pursuant

to Section 20.13, which Lenders, as of the Closing Date, are listed on Schedule

1.1 attached hereto and by this reference incorporated herein, which Schedule

1.1 may be amended from time to time by Agent in conjunction with a sale of a

Lender's Commitment by noting the change of Lenders, Loan Percentages and/or

Commitments and forwarding a copy of such revised Schedule 1.1 to Borrower and

Lenders.

 

      LEVERAGE RATIO. As of any date, the ratio of (a) Total Debt as of such

date to (b) Adjusted Tangible Net Worth as of such date.

 

      LIEN. Any mortgage, pledge, hypothecation, assignment, deposit

arrangement, encumbrance, lien (statutory or other), charge, or preference,

priority or other security interest or preferential arrangement in the nature of

a security interest of any kind or nature whatsoever (including any conditional

sale or other title retention agreement, any easement, right of way or other

encumbrance on title to real property, and any financing lease having

substantially the same economic effect as any of the foregoing).

 

                                      -15-

 

<PAGE>

 

      LOAN. The revolving construction loan which is the subject of this

Agreement.

 

      LOAN AMOUNT. The aggregate amount of all of the Commitments as shown in

Schedule 1.1 hereto, as same may be modified from time to time in accordance

with the provisions of this Agreement.

 

      LOAN AMOUNT PROJECT ALLOCATIONS. The portions of the Loan Amount allocated

to each Project as shown on the cover page for the Project Schedules, which

shall be equivalent to the Adjusted Project Costs for each Project.

 

      LOAN CHECKING ACCOUNT. See Section 3.3 of this Agreement.

 

      LOAN DOCUMENTS. This Agreement, the Notes, the Guaranties, the Indemnity

Agreements and the Security Documents, and all other agreements, documents and

instruments now or hereafter evidencing, securing, guaranteeing or otherwise

relating to the Loan, as the same may be modified or amended from time to time.

 

      LOAN PERCENTAGE. The percentage interest of a Lender in the Loan

calculated by dividing such Lender's Commitment by the aggregate amount of all

the Commitments, as rounded as shown on Schedule 1.1 hereto.

 

      MAJORITY LENDERS. As of any date of determination prior to termination of

the Commitments, Lenders (excluding Defaulting Lenders) whose aggregate Loan

Percentages constitute more than fifty percent (50%) of the Commitments held by

Non-Defaulting Lenders. As of any date of determination occurring after the

termination of the Commitments, Lenders (excluding Defaulting Lenders) holding

more than fifty percent (50%) of the outstanding principal balance of the Loan

held by Non-Defaulting Lenders.

 

      MATERIAL ADVERSE CHANGE. Any circumstances or event of whatever nature

(including the filing of, or any adverse determination or development in, any

litigation) occurs which

 

                  (a) impairs the validity or enforceability of any Loan

Document with respect to a material term thereof;

 

                  (b) materially and adversely affects or changes the condition

(financial or otherwise), operations, business, management or assets of Borrower

and its Subsidiaries, taken as a whole, or the Projects taken as a whole; or

 

                  (c) impairs the ability of Borrower to make any payment of

principal or interest due on the Notes or to fulfill any other material

Obligation.

 

      MATURITY DATE. Four (4) years from the Closing Date, unless extended in

accordance with Section 4.6 of this Agreement, or such earlier date as the

Obligations are accelerated or the Commitments are terminated pursuant to the

terms hereof.

 

      MOODYS. Moody's Investors Service, Inc. and any successor thereto.

 

                                      -16-

 

<PAGE>

 

      MULTIEMPLOYER PLAN. Any employee benefit plan of the type described in

Section 4001(a)(3) of ERISA, to which Borrower or any ERISA Affiliate makes or

is obligated to make contributions, or during the preceding five plan years, has

made or been obligated to make contributions.

 

      NET SALES PROCEEDS (ACTUAL). The actual sales price of each unreleased

Unit, cabana or other appurtenance thereto as reflected in the respective Sales

Contract therefor, less only Customary Closing Costs and the portion of the

Escrow Deposits for such Unit which are allowed to be used, and have been used,

in accordance with applicable Requirements to fund a portion of the Project

Costs of the applicable Improvements.

 

      NET SALES PROCEEDS (PROJECTED). The Total Price of each unreleased Unit,

cabana or other appurtenance thereto as reflected in Part VIII of the Project

Schedules (as modified or updated from time to time pursuant to Section 9.6.4 as

Sales Contracts are entered into), less only Customary Closing Costs and the

portion of the Escrow Deposits for such Unit which are allowed to be used in

accordance with applicable Requirements to fund a portion of the Project Costs

of the applicable Improvements.

 

      NON-DEFAULTING LENDERS. See Section 20.14.1 of this Agreement.

 

      NON-EXTENDING LENDER. See Section 4.6.2 of this Agreement.

 

      NON-EXTENDING LENDER TREASURY NOTE. See Section 4.6.6(j) of this

Agreement.

 

      NON-INDEMNITOR LENDER. See Section 20.20.6 of this Agreement.

 

      NOTES. Collectively, the Consolidated Renewal Replacement Revolving Line

of Credit Notes and the Renewal Replacement Revolving Line of Credit Notes in

the aggregate principal face amount of the Loan Amount, dated as of March 30,

2004, made by Borrower to the order of the Agent and/or the Lenders, any

substitute or replacement notes therefor and any new Notes issued in connection

with the increase of the Loan Amount pursuant to Section 2.4. Subject to the

provisions of Section 2.4 and 4.1 of this Agreement, the defined term "Notes"

shall include the Accordion Note and the Treasury Note.

 

      NOTICE DATE. See Section 20.10.2 of this Agreement.

 

      NOTICE OF BORROWING. See Section 4.7.1 of this Agreement.

 

      NOTICE OF CONVERSION. See Section 4.8.2 of this Agreement.

 

      OBLIGATIONS. All indebtedness, obligations and liabilities of Borrower to

Agent and the Lenders pursuant to this Agreement or any of the other Loan

Documents or in respect of any of the Advances or the Notes or other instruments

at any time evidencing any thereof, existing on the date of this Agreement or

arising thereafter, direct or indirect, joint or several, absolute or

contingent, matured or unmatured, liquidated or unliquidated, secured or

unsecured, arising by contract, operation of Law or otherwise, and including

interest and fees that accrue after the commencement by or against Borrower of

any proceeding under any Debtor Relief Law naming

 

                                      -17-

 

<PAGE>

 

Borrower as the debtor in such proceeding, regardless of whether such interest

or fees are allowed claims in such proceeding.

 

       OUTSTANDING ADVANCES. The aggregate unpaid principal of the Advances as of

any date of determination.

 

      PAYMENT AND PERFORMANCE BONDS. Collectively, the dual-obligee payment and

performance bonds on the Contractors, naming Agent as dual-obligee, each in an

amount not less than the full contract price for each Project (unless a lesser

amount is approved by the Majority Banks) and otherwise reasonably acceptable to

Agent.

 

      PBGC. The Pension Benefit Guaranty Corporation and any successor entity or

entities having similar responsibilities.

 

      PENSION PLAN. Any "employee pension benefit plan" (as such term is defined

in Section 3(2) of ERISA), other than a Multiemployer Plan, that is subject to

Title IV of ERISA and is sponsored or maintained by Borrower or any ERISA

Affiliate or to which Borrower or any ERISA Affiliate contributes or has an

obligation to contribute, or in the case of a multiple employer or other plan

described in Section 4064(a) of ERISA, has made contributions at any time during

the immediately preceding five plan years.

 

      PERMITTED LIENS. Only those Liens, security interests and other

encumbrances as permitted and defined in the Security Instruments.

 

      PERSON. Any individual, corporation, partnership, trust, unincorporated

association, business, or other legal entity, and any Governmental Authority.

 

      PERSONAL PROPERTY. All materials, furnishings, fixtures, furniture,

machinery, equipment and all items of tangible personal property now or

hereafter owned or acquired by Borrower, wherever located, and either to be

located on or incorporated into the Land or the Improvements.

 

      PLAN. Any "employee benefit plan" (as such term is defined in Section 3(3)

of ERISA) established by Borrower or, with respect to any such plan that is

subject to Section 412 of the Code or Title IV of ERISA, any ERISA Affiliate.

 

      PLANS AND SPECIFICATIONS. Collectively, the plans and specifications for

the Improvements prepared by the Architects and more particularly identified in

Part XV of the Project Schedules attached hereto as Exhibit A.

 

      PLATFORM. See Section 9.6.9 of this Agreement.

 

      POST-CLOSING ESCROW DEPOSITS. The amount of any and all Escrow Deposits

due and payable under the Sales Contracts which are entered into on or after the

date of this Agreement.

 

      PRINCIPALS. Alfred Hoffman, Jr., Don E. Ackerman, any spouse or immediate

family member of either Alfred Hoffman, Jr. or Don E. Ackerman, or any trust or

other entity Controlled by either Alfred Hoffman, Jr. or Don E. Ackerman, and

"PRINCIPAL" means any one of the Principals.

 

                                      -18-

 

<PAGE>

 

      PRO FORMA DRAW SCHEDULES. Collectively, the schedules for the Projects of

the estimated amounts of Advances anticipated to be requisitioned each month

during the term of construction of the respective Improvements (including an

itemization of Direct Costs and Indirect Costs to be included in each such

requisition), approved by the Lenders and contained in Part VII of the Project

Schedules attached hereto as Exhibit A.

 

      PROJECTS. Collectively, the Land, Improvements and Personal Property. At

any time, the Projects shall be as described on the cover page to the Project

Schedules attached hereto as Exhibit A.

 

      PROJECT APPROVALS. Collectively, all approvals, consents, waivers, orders,

agreements, acknowledgments, authorizations, permits and licenses required under

applicable Requirements necessary to complete, occupy, operate and use the

respective Project in accordance with its intended purpose or under the terms of

any restriction, covenant or easement affecting the Projects, or otherwise

necessary for the ownership and acquisition of the Land and the Improvements,

the construction and equipping of the Improvements, and the use, occupancy and

operation of the Projects following completion of construction of the

Improvements, whether obtained from a Governmental Authority or any other

Person.

 

      PROJECT BUDGETS. Collectively, the budgets for total estimated Project

Costs, submitted by Borrower, approved by Agent, the Lenders and the

Construction Inspector, and contained in Part IX of the Project Schedules

attached hereto as Exhibit A, which include for each such Project: (a) Direct

Costs; (b) a line item cost breakdown for Indirect Costs; and (c) a schedule of

the sources of funds to pay Project Costs, indicating by item the portion of

Project Costs to be funded through the Loan, Required Equity Funds, any other

equity funds of Borrower and Escrow Deposits.

 

      PROJECT COSTS. Collectively, the sum of all Direct Costs and Indirect

Costs that will be incurred by Borrower in connection with the acquisition of

the Land, the construction, equipping and completion of the Improvements, the

marketing of space in the Improvements, and the operation and carrying of the

Projects through the Maturity Date.

 

      PROJECT SCHEDULES. Collectively, the schedules of information with respect

to each of the Projects attached hereto as Exhibit A and by this reference

incorporated herein. Agent and the Lenders acknowledge and agree that the

Project Schedules attached hereto with respect to the Projects known as

Aversana, Treviso, One Bal Harbour, Veracruz, Cambria and Grand Isle III and IV

are dated as of March 30, 2004.

 

      PROPOSED PROJECT. See Section 2.5 of this Agreement.

 

      PUBLIC LENDER. See Section 9.6 of this Agreement.

 

      PURCHASE PRICE. See Section 20.10.3 of this Agreement.

 

      RATING AGENCY. Any of Moody's, S&P, or Fitch.

 

      REAL ESTATE. All real property at any time owned, leased (as lessee or

sublessee) or operated by WCI, BCG or any of their respective Subsidiaries.

 

                                      -19-

 

<PAGE>

 

      RECORD. The record maintained by Agent with respect to the Loan and

Advances under the Notes.

 

      REEMPLOYMENT PERIOD. See Section 4.11.1.

 

      RELEASE. See Section 8.15.3 of this Agreement.

 

      REPORTABLE EVENT. Any of the events set forth in Section 4043(c) of ERISA,

other than events for which the thirty (30) day notice period has been waived.

 

      REPRESENTATIVES. See Section 20.15 of this Agreement.

 

      REQUESTED MATURITY DATE. See Section 4.6.1 of this Agreement.

 

      REQUIRED EQUITY FUNDS. Collectively, the value of the Land before any

construction of any Improvements, free and clear of any Liens and encumbrances

other than the Security Documents and Permitted Liens, and such other amounts

required pursuant to Section 2.10 and as Agent and Lenders shall determine from

time to time pursuant to Section 9.15 hereof.

 

      REQUIRED LENDERS. As of any date of determination prior to termination of

the Commitments, Lenders (excluding Defaulting Lenders) whose aggregate Loan

Percentages constitute at least sixty-six and two-thirds percent (66 2/3%) of

the Commitments held by Non-Defaulting Lenders. As of any date of determination

occurring after the termination of the Commitments, Lenders (excluding

Defaulting Lenders) holding at least sixty-six and two-thirds percent (66 2/3%)

of the outstanding principal balance of the Loan held by Non-Defaulting Lenders.

 

      REQUIREMENTS. Any Law of any Governmental Authority required in connection

with the acquisition and ownership of the Projects, the construction of the

Improvements, or the use, occupancy and operation of the Projects following the

completion of construction of the Improvements, including those relating to

subdivision control, zoning, building, use and occupancy, fire prevention,

health, safety, sanitation, handicapped access, historic preservation and

protection, tidelands, wetlands, endangered species, flood control, access and

earth removal, and all Environmental Laws.

 

      RESPONSIBLE OFFICER. The chief executive officer, president, chief

financial officer, treasurer or the general counsel of a Borrower or Guarantor

or any Person designated by a Responsible Officer to act on behalf of a

Responsible Officer; provided that such designated Person may not designate any

other Person to be a Responsible Officer. Any document delivered hereunder that

is signed by a Responsible Officer of a Borrower or Guarantor shall be

conclusively presumed to have been authorized by all necessary corporate,

partnership and/or other action on the part of such Borrower or Guarantor and

such Responsible Officer shall be conclusively presumed to have acted on behalf

of such Borrower or Guarantor.

 

      RETAINAGE. See Section 2.8.2 of this Agreement.

 

      S&P. Standard & Poor's Ratings Services, a division of The McGraw-Hill

Companies, Inc. and any successor thereto.

 

                                       -20-

 

<PAGE>

 

      SALES CONTRACTS. Collectively, all the purchase and sale agreements for

the sale of Units in each Project listed in Part X of the Project Schedules

attached hereto as Exhibit A, and any additional sales contracts providing for

the sale of any Unit and appurtenances thereto in the Projects hereafter entered

into in accordance with the provisions of Section 10.1.

 

      SEC. The Securities and Exchange Commission, or any Governmental Authority

succeeding to any of its principal functions.

 

      SECURITY DOCUMENTS. The Security Instruments, the Assignments of Project

Documents, the Assignments of Sales Contracts and the Financing Statements, and

any other agreement, document or instrument now or hereafter securing the

Obligations.

 

      SECURITY INSTRUMENTS. Collectively, the mortgages, deeds to secure debt,

deeds of trust and/or other security instruments made by Borrower in favor of

Agent, including, without limitation, the Consolidated, Amended and Restated

Mortgage and Security Agreement, dated as of March 30, 2004, and as subsequently

modified, amended, renewed, supplemented, consolidated, extended or spread after

the date thereof, pursuant to which Borrower grants a first priority security

title or Lien and security interest in and to the Projects.

 

      SENIOR UNSECURED REVOLVING CREDIT AGREEMENT. That certain Senior Unsecured

Revolving Credit Agreement dated as of August 13, 2004, among WCI as "Borrower",

BOA as "Administrative Agent", "Swing Line Lender" and an "L/C Issuer", the

other "Lenders" party thereto, Wachovia as "Syndication Agent", KeyBank National

Association and Bank One, NA, as "Co-Documentation Agents" and BAS and WCM as

"Joint Lead Arrangers" and "Joint Book Managers", as amended, restated, modified

or consolidated from time to time.

 

      STORED MATERIALS. See Section 2.12.1 of this Agreement.

 

      SUBSEQUENT LENDER. See Section 2.4 of this Agreement.

 

      SUBSIDIARY. With respect to any Person, a corporation, partnership, joint

venture, limited liability company or other business entity (except for joint

ventures or similar arrangements which would not be considered a Subsidiary of

such Person but for the application of FASB Interpretation No. 46 or similar

pronouncements regarding consolidation issued by the Financial Accounting

Standards Board in January, 2003, as such interpretations or pronouncements may

be amended or modified from time to time) of which a majority of the shares of

securities or other interests having ordinary voting power for the election of

directors or other governing body (other than securities or interests having

such power only by reason of the happening of a contingency) are at the time

beneficially owned, or the management of which is otherwise controlled,

directly, or indirectly through one or more intermediaries, or both, by such

Person. Unless otherwise specified, all references herein to a "Subsidiary" or

to "Subsidiaries" shall refer to a Subsidiary or Subsidiaries of Borrower. This

definition of Subsidiary, as it relates to the Consolidated Group, shall

expressly exclude any not-for-profit golf clubs and common interest realty

associations owned by any member of the Consolidated Group.

 

      SURVEYS. Collectively, the surveys of the Land and the Improvements

prepared in accordance with ALTA/ACSM Requirements for Land Title Surveys (1999)

(or latest revision date) and including Items 1-15, inclusive of Table "A"

thereof or their equivalents, if amended,

 

                                      -21-

 

<PAGE>

 

and meeting or exceeding the minimum requirements/accuracy standards for a

Category I Urban Land Survey, such surveys to be reasonably satisfactory to

Agent in form and substance.

 

      SURVEYOR CERTIFICATE. With respect to any Survey, a certificate executed

by the surveyor who prepares such Survey dated as of a recent date and

containing such information relating to the applicable Project as Agent or the

Title Insurance Company may require, such certificate to be reasonably

satisfactory to Agent and Title Insurance Company in form and substance.

 

      TAKING. With respect to any Project, any condemnation for public use of,

or damage by reason of, the action of any Governmental Authority, or any

transfer to a Governmental Authority by private sale in lieu thereof, either

temporarily or permanently, which affects any material portion of the

Improvements on the Land, five percent (5%) or more of the parking on such

Project, or which materially, adversely affects access to such Project.

 

      TITLE INSURANCE COMPANY. Chicago Title Insurance Company, a Missouri

corporation, with a place of business at Fairfax Center I, 4210 Metro Parkway,

Suite 130, Ft. Myers, Florida 33916, or such other title insurance company or

companies approved by Agent.

 

      TITLE POLICY. With respect to each Project, an ALTA Loan Policy (1992

form) (or if such form is not available, an equivalent form of or legally

promulgated form of mortgagee title insurance policy acceptable to Agent) issued

by the Title Insurance Company (with such reinsurance or co-insurance as Agent

may reasonably require, any such reinsurance to be with direct access

endorsements), in such amount as Agent may reasonably require, and insuring the

priority of the applicable Security Instrument and that Borrower owns marketable

fee simple title to such Project, subject only to the Permitted Liens, and which

shall not contain exceptions for mechanics liens, persons in occupancy or

matters which would be shown by a survey, shall not insure over any matter

except to the extent that any such affirmative insurance is acceptable to Agent

in its reasonable discretion, and shall contain a pending disbursements clause

or endorsement and such other applicable endorsements and affirmative insurance

as Agent in its reasonable discretion may require and that are available in the

State in which such Project is located, including, without limitation (a) a

Form-9 or comprehensive endorsement, (b) a variable rate of interest

endorsement, (c) a revolver endorsement, (d) a Form 5.1 (PUD) endorsement, (e)

an environmental protection lien endorsement, (f) a navigational servitude

endorsement, (g) a same as survey endorsement, (h) a variable rate of interest

endorsement, (i) a usury endorsement, (j) a doing business endorsement, (k) an

ALTA Form 3.1 zoning endorsement, (l) a "tie-in" or "aggregation" endorsement,

(m) a "first loss" endorsement, (n) a "last dollar" endorsement, and (o) an

access endorsement. The term "Title Policy" shall also include all construction

loan update endorsements and Title Policy Endorsements thereto.

 

      TITLE POLICY ENDORSEMENT. With respect to each Proposed Project added as a

Project pursuant to Section 2.5 and located in the State of Florida, that

certain policy endorsement issued by the Title Insurance Company in favor of

Agent with respect to the Title Policy pursuant to a Commitment to Endorse, and

providing coverage for the Proposed Project equivalent to that contained in the

Title Policy.

 

      TOTAL DEBT. As defined in the Senior Unsecured Revolving Credit Agreement.

 

                                       -22-

 

<PAGE>

 

      TOTAL PRICE. The gross sales price for each Unit, cabana or other

appurtenance within each Project in an amount not less than the amount shown for

each Unit, cabana or other appurtenance in Part VIII of the Project Schedules

attached hereto as Exhibit A (as modified or updated from time to time pursuant

to Section 9.6.4 as Sales Contracts are entered into).

 

      TRANSFER. See Section 20.13.1 of this Agreement.

 

      TREASURY NOTE. That certain Renewal Replacement Revolving Line of Credit

Note (Treasury) dated as of March 30, 2004, made by Borrower payable to the

order of Fleet National Bank, in the face principal amount of $16,220,000.00,

transferred by Allonge to Wachovia Bank, National Association as of October 1,

2004, and any replacement notes therefor, to be held in accordance with the

provisions of Section 4.1 of this Agreement.

 

      TYPE OF ADVANCE. A Base Rate Advance or a Eurodollar Rate Advance, as the

case may be.

 

      UNFUNDED PENSION LIABILITY. The excess of a Pension Plan's benefit

liabilities under Section 4001(a)(16) of ERISA, over the current value of that

Pension Plan's assets, determined in accordance with the assumptions used for

funding the Pension Plan pursuant to Section 412 of the Code for the applicable

plan year.

 

      UNITS. The condominium units at the Projects, whether completed or under

construction, held by the Borrower for sale in the ordinary course of business,

and in which the rights of ownership and occupancy are to be sold other than on

a time-sharing or periodic basis.

 

      UNSOLD UNIT. A Unit with respect to which construction has begun on the

Improvements (measured by the commencement of the construction of vertical

improvements beyond the foundation), but for which a Sales Contract has not been

entered into (or has been entered into but has terminated).

 

      UNUSED FEE. See Section 2.3 of this Agreement.

 

      UNUSED FEE AVAILABILITY. See Section 2.3 of this Agreement.

 

      WACHOVIA. Wachovia Bank, National Association, and its successors.

 

      WCI. See preamble.

 

      WCM. Wachovia Capital Markets, LLC and its successors.

 

      1.2 RULES OF INTERPRETATION.

 

            1.2.1 A reference to any agreement, budget, document or schedule

shall include such agreement, budget, document or schedule as revised, amended,

modified or supplemented from time to time in accordance with its terms and the

terms of this Agreement.

 

            1.2.2 The singular includes the plural and the plural includes the

singular.

 

                                      -23-

 

<PAGE>

 

            1.2.3 A reference to any Law includes any amendment or modification

to such Law.

 

            1.2.4 A reference to any Person includes its permitted successors

and permitted assigns.

 

             1.2.5 The words "include", "includes" and "including" are not

limiting.

 

            1.2.6 The words "approval" and "approved", as the context so

determines, means an approval in writing given to the party seeking approval

after full and fair disclosure to the party giving approval of all material

facts necessary in order to determine whether approval should be granted.

 

            1.2.7 Reference to a particular "Section" refers to that section of

this Agreement unless otherwise indicated.

 

             1.2.8 The words "herein", "hereof", "hereunder" and words of like

import shall refer to this Agreement as a whole and not to any particular

section or subdivision of this Agreement.

 

      1.3 ACCOUNTING TERMS.

 

            1.3.1 Generally. All accounting terms not specifically or completely

defined herein shall be construed in conformity with, and all financial data

(including financial ratios and other financial calculations) required to be

submitted pursuant to this Agreement shall be prepared in conformity with, GAAP

applied on a consistent basis, as in effect from time to time, applied in a

manner consistent with that used in preparing the Audited Financial Statements,

except as otherwise specifically prescribed herein.

 

            1.3.2 Changes in GAAP. If at any time any change in GAAP would

affect the computation of any financial ratio or requirement set forth in any

Loan Document, and either Borrower or the Required Lenders shall so request,

Agent, the Lenders and Borrower shall negotiate in good faith to amend such

ratio or requirement to preserve the original intent thereof in light of such

change in GAAP (subject to the approval of the Required Lenders); provided that,

until so amended, (i) such ratio or requirement shall continue to be computed in

accordance with GAAP prior to such change therein and (ii) Borrower shall

provide to Agent and the Lenders financial statements and other documents

required under this Agreement or as reasonably requested hereunder setting forth

a reconciliation between calculations of such ratio or requirement made before

and after giving effect to such change in GAAP.

 

      1.4 ROUNDING. Any financial ratios required to be maintained by Borrower

pursuant to this Agreement shall be calculated by dividing the appropriate

component by the other component, carrying the result to one place more than the

number of places by which such ratio is expressed herein and rounding the result

up or down to the nearest number (with a rounding-up if there is no nearest

number).

 

                                       -24-

 

<PAGE>

 

      1.5 TIMES OF DAY. Unless otherwise specified, all references herein to

times of day shall be references to Eastern time (daylight or standard, as

applicable).

 

                                   ARTICLE 2

                    AGREEMENT TO MAKE ADVANCES: LIMITATIONS.

 

      2.1 AGREEMENT TO MAKE ADVANCES. Subject to the terms and conditions of

this Agreement, the Lenders, each to their respective Commitment, agree to lend

to Borrower and Borrower may borrow, prepay and reborrow from time to time after

the Effective Date and upon submission by Borrower of a Draw Request in

accordance with Section 3.1, such amounts as are requested by Borrower to pay

for Project Costs actually incurred by Borrower and reflected in and with

respect to the Project Budgets as being funded by the Loan, provided that the

sum of the Outstanding Advances (after giving effect to all amounts requested)

shall not at any time exceed the lesser of (i) the Loan Amount or (ii) the

Borrowing Base; provided, however, that Advances will be funded in the following

sequence subject to such overall limitations:

 

            (a)    the Lenders shall advance up to $240,000,000;

 

            (b)    Borrower shall fund the next $50,000,000; and

 

             (c)    after Borrower has funded $50,000,000, the Lenders shall make

                  additional Advances up to $50,000,000.00.

 

Each Draw Request for an Advance hereunder shall constitute a representation and

warranty by Borrower that, with respect to the applicable Projects, the

conditions set forth in Article 11, in the case of the initial Advance, and

Article 12, in the case of all other Advances, have been satisfied on the date

of such Draw Request. The parties hereto agree that each Lender's obligation to

make Advances under the Loan is limited to each such Lender's respective

Commitment. The Commitments shall terminate, and the Loan shall mature and

become due and payable on the Maturity Date or on such earlier date on which

Borrower terminates the Commitments hereunder or on which the maturity thereof

is accelerated pursuant to the provisions of Section 13.2. Borrower agrees to

pay all Obligations on the Maturity Date, to the extent not paid earlier as

required herein.

 

      2.2 LOAN AMOUNT PROJECT ALLOCATIONS.

 

            2.2.1 For the purpose of allocating the use of the Loan Amount,

Borrower and Lenders agree that the Loan Amount Project Allocations shall be as

shown in the Project Schedules attached hereto as Exhibit A. Borrower

acknowledges and agrees that, notwithstanding that the amount of the aggregate

Loan Amount Project Allocations may exceed the Loan Amount, it is anticipated

that the Projects will be in varying stages of completion at any given time and,

thus, the Loan Amount Project Allocations will not be fully funded or some will

be repaid or partially repaid as to certain Projects before the Loan Amount

Project Allocations as to certain other Projects are fully funded.

 

            2.2.2 Borrower recognizes and agrees that the Lenders made the Loan

secured by all Projects based on the Lenders' valuation of all Projects combined

having sufficient value

 

                                      -25-

 

<PAGE>

 

to support the Loan; therefore, it is the intention of Borrower, Agent, and

Lenders that the Loan is secured in whole by all the property described in the

Security Instruments, including all of the Projects.

 

            2.2.3 Notwithstanding the foregoing provisions of this Section 2.2,

the parties agree that they have not "designated a portion of the construction

loan proceeds" within the meaning of Fla. Stat. Sections 713.3471 (2003), and

that any disbursement of the proceeds of the Loan shall be subject to and

conditioned on compliance with the applicable terms, covenants, conditions and

provisions of this Agreement and the other Loan Documents.

 

      2.3 UNUSED FEE. Borrower shall pay to Agent an unused fee ("Unused Fee")

quarterly in arrears on the first Business Day after the end of each March,

June, September and December, commencing with the first such date to occur after

the Closing Date, and on the Maturity Date. The Unused Fee shall be distributed

to the Lenders (excluding Defaulting Lenders) pro rata in accordance with their

respective Loan Percentage. The amount of the Unused Fee shall be calculated for

any Fiscal Quarter by multiplying the Applicable Rate specified for the Unused

Fee times a fraction the numerator of which is the sum of the calculations of

the Unused Fee Availability for each day in such period and the denominator of

which is the number of days in such period. For the purposes of this

calculation, the term "Unused Fee Availability" shall mean, as of any date, the

first fifty percent (50%) of the Loan Amount minus the Outstanding Advances. The

Unused Fee shall be calculated quarterly in arrears, and if there is any change

in the Applicable Rate during any quarter, the actual daily amount shall be

computed and multiplied by the Applicable Rate separately for each period during

such quarter that such Applicable Rate was in effect.

 

      2.4 INCREASE IN TOTAL COMMITMENT. At any time prior to the last twelve

(12) months of the term of this Agreement, as same may be extended pursuant to

Section 4.6, Agent may in its discretion (which discretion shall not be

arbitrarily or unreasonably exercised so long as the conditions set forth below

are satisfied), from time to time at the request of Borrower, increase the Loan

Amount by (i) admitting additional Lenders hereunder (each a "Subsequent

Lender"), or (ii) increasing the Commitment of any Lender (each an "Increasing

Lender"), subject to the following conditions:

 

            2.4.1 each Subsequent Lender is an Eligible Assignee;

 

            2.4.2 the Borrower executes in replacement of the Accordion Note (i)

a new Note payable to the order of each Subsequent Lender, or a replacement Note

payable to the order of each Increasing Lender; and (ii) to the extent the

amount of the increase is less than the then current face amount of the

Accordion Note, a replacement Accordion Note payable to the order of the Agent;

 

            2.4.3 each Subsequent Lender executes and delivers to Agent a

signature page to this Agreement;

 

            2.4.4 Borrower and Agent shall have executed modifications of the

Security Instruments and other Loan Documents to reflect the increase in the

Loan Amount and Borrower shall have paid to Agent any and all documentary stamp

tax, non-recurring intangible tax or

 

                                      -26-

 

<PAGE>

 

other taxes imposed in connection with the recording of such modifications of

the Security Instruments or increase in the Loan Amount;

 

            2.4.5 Borrower shall have delivered to Agent endorsements to the

Title Policies increasing the amount of the Title Policies to the new Loan

Amount and insuring Agent and the Lenders that the Security Instruments, as

modified to reflect the increase in the Loan Amount, shall continue to

constitute a first priority lien on the Projects (subject to customary pending

disbursements language in such Title Policies);

 

            2.4.6 after giving effect to the admission of any Subsequent Lender

or the increase in the Commitment of any Increasing Lender, the Loan Amount does

not exceed $340,000,000.00;

 

            2.4.7 each increase in the Loan Amount shall be in the amount of at

least $10,000,000.00 for Subsequent Lenders, or at least $5,000,000.00 for

Increasing Lenders, or, in either case, a greater integral multiple of

$5,000,000.00;

 

            2.4.8 no admission of any Subsequent Lender shall increase the

Commitment of any existing Lender without the written consent of such Lender;

 

            2.4.9 no Default or Event of Default exists nor would occur after

giving effect to such increase;

 

            2.4.10 no Lender shall be an Increasing Lender without the written

consent of such Lender; and

 

            2.4.11 Borrower shall have executed such other modifications and

documents and made such other deliveries as Agent may reasonably require and

shall pay or reimburse Agent for all reasonable expenses and costs it incurs in

connection with the foregoing and Borrower shall also pay such Loan fees and

placement fees, if any, as may be required for such increase in the Loan Amount.

 

After adding the Commitment of any Increasing Lender or Subsequent Lender, Agent

shall promptly provide each Lender and Borrower with a new Schedule 1.1 to this

Agreement (and each Lender acknowledges that its Loan Percentage under Schedule

1.1 and allocated portion of the Outstanding Advances will change in accordance

with its pro rata share of the increased Loan Amount). Until the Total

Commitment has been increased in accordance with this Section 2.4, Borrower

shall not be permitted to request any Advances against the face amount of the

Accordion Note.

 

      2.5 ADDING CONDOMINIUM PROJECTS. Borrower may request the addition, from

time to time, of other condominium projects to this Loan (a "Proposed Project")

on the following terms and conditions:

 

            2.5.1 Subject to Section 2.5.2(c) and Section 2.5.3 below, the

Majority Lenders have agreed, in their sole and absolute discretion, to the

addition of the Proposed Project on either of the following bases: (i) a

reallocation of one or more of the Loan Amount Project Allocations in order that

the reallocated Loan Amount Project Allocations for the Projects and

 

                                      -27-

 

<PAGE>

 

the Proposed Project are sufficient, when combined with the Required Equity

Funds, any additional equity funds of Borrower and that portion of the Escrow

Deposits which can be used for construction costs under the Sales Contracts and

the sales contracts for the Proposed Project, to cover the total Project Costs

and the project costs for such Proposed Project, or (ii) one or more of the

Projects has been completed and Borrower requests a reborrowing of all or a

portion of the funds previously allocated and disbursed for such completed

Project or Projects and repaid to Lenders by Borrower, which reborrowing shall

be for the purpose of financing the Proposed Project.

 

            2.5.2 For the Proposed Project to be added to this Loan, such

addition shall be evidenced by, and not effective until, the following

requirements have been met:

 

                  (a) Borrower has submitted to Agent a request to add the

Proposed Project in the form of Exhibit C attached hereto and by this reference

incorporated herein (the "Borrower's Request to Add Proposed Project");

 

                  (b) if the Proposed Project is located outside of the State of

Florida, the sum of the proposed Loan Amount Project Allocation therefor and the

other Loan Amount Project Allocations with respect to the Projects located

outside of the State of Florida, if any, does not exceed thirty percent (30%) of

the aggregate Commitments;

 

                   (c) if the Proposed Project is located outside of the State of

Florida, its addition has been approved by the Required Lenders, notwithstanding

the provisions of Section 2.5.1 above;

 

                  (d) the Net Sales Proceeds (Projected) of Sales Contracts from

the Proposed Project and the remaining Projects in the aggregate are at least

ninety percent (90%) of the aggregate Loan Amount Project Allocations for the

Proposed Project and the remaining Projects;

 

                  (e) the Loan Amount as of the date of the request is at least

1.15 times the maximum projected balance of the Outstanding Advances as shown on

the Pro Forma Draw Schedules (which shall reflect that all Net Sales Proceeds

(Projected) of Sales Contracts in excess of the aggregate Loan Amount Project

Allocations shall be applied to the repayment of such projected Outstanding

Advances);

 

                  (f) the aggregate Loan Amount Project Allocations (including

the proposed Loan Amount Project Allocation for the Proposed Project) do not

exceed two hundred percent (200%) of the Loan Amount;

 

                  (g) the planned Completion Date for the Proposed Project is at

least one hundred twenty (120) days prior to the Maturity Date (as same may be

extended pursuant to Section 4.6);

 

                  (h) if the Proposed Project is owned by a Subsidiary of

Borrower rather than by Borrower, Borrower has provided Agent with the name of

the proposed Guarantor and the equivalent items for such Guarantor described in

Sections 11.6, 11.7 and 11.8 below;

 

                                      -28-

 

<PAGE>

 

                  (i) Agent, Borrower and Guarantor, as applicable, shall have

executed (i) a Mortgage Modification and Spreader Agreement and Financing

Statements if the Proposed Project is located in Florida, or a new Security

Instrument and other Security Documents if the Proposed Project is located in a

state other than Florida or is owned by a Guarantor, (ii) a Guaranty and

Indemnity Agreement if the Proposed Project is owned by a Guarantor, and (iii)

such other additional Loan Documents and modifications to the existing Loan

Documents adding the Proposed Project as security for the Loan,

cross-collateralizing and cross-defaulting the Proposed Project to the other

Projects, and incorporating such other terms and conditions related to such

Proposed Project as Agent may reasonably require;

 

                  (j) Agent shall have received and approved the Project

Schedules for the Proposed Project in substantially the same format as the

Project Schedules attached hereto as Exhibit A, which will be incorporated into

the Agreement upon approval of the Proposed Project;

 

                  (k) Borrower shall have delivered the due diligence materials

and satisfied the conditions precedent with respect to the Proposed Project as

set forth in Article 11 of this Agreement (including, without limitation, the

delivery of a Title Policy Endorsement or new Title Policy with tie-in or

aggregation endorsements to existing Title Policies, as applicable); and

 

                  (l) Borrower shall have executed such other modifications and

documents and made such other deliveries as Agent may reasonably require and

shall pay or reimburse Agent for all reasonable expenses and costs it incurs in

connection with the foregoing.

 

            2.5.3 Notwithstanding Section 2.5.1 above, but subject to

satisfaction of the requirements contained in Section 2.5.2 above, Proposed

Projects which meet all of the following criteria, as determined by Agent in the

exercise of its sole discretion, will be added to this Loan without the

requirement of approval by the Majority Lenders:

 

                  (a) The proposed Loan Amount Project Allocation for the

Proposed Project shall not exceed (i) seventy percent (70%) of the Appraised

Value of the Proposed Project; nor (ii) eighty percent (80%) of the total

Project Costs for such Proposed Project;

 

                  (b) The proposed Loan Amount Project Allocation for the

Proposed Project shall not equal or exceed $100,000,000.00;

 

                  (c) Borrower shall have entered into Sales Contracts for Units

in the Proposed Project which produce Net Sales Proceeds (Projected) in excess

of seventy-five percent (75%) of the proposed Loan Amount Project Allocation for

the Proposed Project;

 

                  (d) The Sales Contracts counted for purposes of determining

compliance with the requirement in subparagraph 2.5.3(c) above must require

Escrow Deposits of at least twenty percent (20%) of the purchase price (provided

that such requirement shall not prohibit Borrower from entering into Sales

Contracts that require less Escrow Deposits, although such Sales Contracts will

not be counted for purposes of determining compliance with pre-sales coverage

requirements in this Agreement);

 

                                      -29-

 

<PAGE>

 

                  (e) The Proposed Project must be a high-rise condominium tower

located in the State of Florida;

 

                  (f) All governmental approvals and entitlements required for

the commencement of construction shall have been obtained and issued;

 

                  (g) Borrower shall have entered into a maximum guaranteed

price construction contract with a financially sound and reputable bonded

contractor;

 

                  (h) If the projected Completion Date for the Proposed Project

is in excess of twenty-two (22) months, Borrower shall have completed the

registration with HUD.

 

            If Borrower fails to satisfy any of the criteria above, then the

consent of the Majority Lenders (or the Required Lenders if the Proposed Project

is located outside of the State of Florida) shall be required to add the

Proposed Project.

 

            2.5.4 Upon receipt of the Borrower's Request to Add Proposed Project

and the other items described in Section 2.5.2 above in form reasonably

satisfactory to Agent, and, unless Borrower shall have satisfied the

requirements of Section 2.5.3 above, approval of such Borrower's Request to Add

Proposed Project by the Majority Lenders or Required Lenders, as applicable,

Agent will promptly notify Borrower and the Lenders in writing of same and

provide each party with a set of the Project Schedules for such Proposed

Project. For such proposed projects, Agent, Lenders and Borrower acknowledge and

agree that the Project Schedules shall be incorporated into this Agreement for

such Proposed Project and the Proposed Project shall constitute a Project

hereunder for all purposes without the necessity for any formal modification of

this Agreement.

 

            2.5.5 With respect to Projects added after the Effective Date of

this Agreement and owned by Guarantors, all of the agreements, undertakings,

representations, warranties, and covenants of and provisions relating to or

affecting Borrower hereunder shall be equally applicable to and enforceable

against each such Guarantor regardless of whether specifically referenced in

this Agreement or in any of the other Loan Documents.

 

            2.5.6 Borrower, Agent and the Lenders acknowledge and agree that,

with respect to the eight Projects being added to the Loan on the Closing Date

(Serano at Hammock Bay; Mosaic at Miami Beach; One Singer Island at Singer

Island; Resort at Singer Island at Singer Island; Costa Verano at Jacksonville

Beach; San Andres at Lost Key; Santa Amaro at Lost Key; and LaSalbadora at Lost

Key), the items, conditions or requirements described on Exhibit J attached

hereto and by this reference incorporated herein with respect to each Project

have not been provided to Agent or satisfied by Borrower as of the Closing Date;

provided that such acknowledgement on the part of Agent and the Lenders shall

not constitute a waiver of any of the requirements or conditions precedent to

the addition of a Proposed Project set forth in this Agreement. Accordingly, no

Advance shall be made by Agent and the Lenders with respect to any of such

Projects until satisfaction of each of the conditions outlined on Exhibit J with

respect to such Project, as determined by Agent, in its sole discretion, and

provided no Event of Default has occurred and is continuing. To the extent the

delivery of any such items after the Closing Date creates the need to modify any

of the legal descriptions on the Security Instruments or to

 

                                      -30-

 

<PAGE>

 

satisfy any title or survey matters, Borrower agrees to cooperate with Agent in

reviewing, executing, delivery and recording any and all such further documents,

instruments, certificates or other writings which Agent deems necessary or

desirable in order to effectuate the provisions of this Agreement and the other

Loan Documents. Furthermore, the parties acknowledge and agree that (i) upon

review of the Appraisals for such Projects, adjustments to the respective Loan

Amount Project Allocations for such Projects may be necessary; and (ii) with

respect to complying with Section 2.10.1 below, the Project Budgets submitted to

the Lenders with the final Project Schedules shall be the operative Project

Budgets rather than any preliminary drafts of budgets provided to the Lenders.

 

      2.6 REDUCTION OF LOAN AMOUNT. Provided that no Event of Default exists or

would exist as a result of such action, Borrower may elect, at its option and

without the consent of Agent or the Lenders, upon three (3) Business Days prior

written notice to the Agent to reduce or terminate by $5,000,000.00 or an

integral multiple of $500,000.00 in excess thereof, the unused portion of the

Loan Amount, whereupon the Commitments of the Lenders shall be reduced pro rata

in accordance with their respective Loan Percentages. Upon the effective date of

any such reduction or termination, Borrower shall pay to Agent for the account

of the Lenders the full amount of any accrued but unpaid Unused Fee.

 

      2.7 PROJECT BUDGETS. Each of the Project Budgets reflects, by category and

line items, the purposes and the estimated amounts for which funds to be

advanced by Agent and Lenders under this Agreement are to be used. Agent and

Lenders shall not be required to disburse for any category or line item more

than the amount specified therefor in the applicable Project Budget, except as

provided in Sections 2.10 and 2.11 hereof.

 

      2.8 AMOUNT OF ADVANCES.

 

            2.8.1 With respect to each Project and subject to the limitations

contained in Section 2.1 above, in no event shall Agent and the Lenders be

obligated to advance more than the least of (i) the applicable Loan Amount

Project Allocation for such Project, (ii) the aggregate Adjusted Project Costs

actually incurred by Borrower for such Project, or (iii) the Borrowing Base for

such Project.

 

            2.8.2 With respect to each Project, in no event shall any Advance

for Direct Costs of constructing the Improvements of such Project exceed an

amount equal to the total costs of the labor, materials (including Stored

Materials pursuant to Section 2.12.1 below), fixtures, machinery and equipment

completed, approved and incorporated into the Land of such Project or the

Improvements of such Project prior to the date of the Draw Request for such

Advance, less (a) retainage in the amount specified in the applicable

Construction Contract ("Retainage"), (b) the total amount of any Advances

previously made by the Lenders for such Direct Costs of such Project, and (c)

any Escrow Deposits used in the construction of such Project.

 

            2.8.3 With respect to each Project, Retainage shall be advanced by

Agent to Borrower upon satisfaction of the conditions set forth in the

applicable Construction Contract (as approved by Agent); provided, that if no

Event of Default has occurred and is continuing, Agent shall permit disbursement

of Retainage for specific subcontractors upon Agent's receipt of the following:

(i) evidence of compliance with the subcontract; (ii) approval by the surety

under the

 

                                       -31-

<PAGE>

 

applicable Payment and Performance Bond, if required thereunder; (iii)

Construction Inspector's approval; (iv) final lien waivers for work completed;

and (v) approval from any Governmental Authority required to inspect such work.

 

            2.8.4 With respect to any other Direct Costs of any Project and all

Indirect Costs of any Project, in no event shall any Advance exceed an amount

equal to the amount of such Direct Costs and Indirect Costs approved by Agent,

incurred by Borrower prior to the date of the Draw Request for such Advance, and

theretofore paid or to be paid with the proceeds of such Advance, less the total

amount of any Advances previously made by the Lenders for such Direct Costs and

Indirect Costs.

 

      2.9 QUALITY OF WORK. No Advance with respect to work at a Project shall be

disbursed unless, at the date the Draw Request for such Advance is submitted,

such work is completed without material defects, as confirmed by the report of

the Construction Inspector.

 

       2.10 COST OVERRUNS; CHANGE ORDERS.

 

            2.10.1 If Borrower becomes aware of any change in Project Costs

which will increase the corresponding Project Budget (as the Project Budgets are

revised from time to time and approved by Agent) by more than five percent (5%)

of the total of such Project Budget, Borrower shall immediately notify Agent in

writing and shall promptly submit to Agent for its approval a revised Project

Budget. In such event, no further Advances with respect to such Project need be

made by the Lenders unless and until (i) the revised Project Budget so submitted

is approved by Agent, (ii) Borrower has deposited with Agent any Required Equity

Funds or additional equity funds to offset such increase or Agent has otherwise

approved a timetable for the making of such deposits, or (iii) the Majority

Lenders have approved an adjustment to the Loan Amount Project Allocations to

offset such increase.

 

            2.10.2 Subject to the provisions of Section 2.10.1 above, Borrower

may reallocate amounts between categories or line items in a Project Budget

without the consent of Agent or the Lenders.

 

            2.10.3 Provided no Event of Default has occurred and is continuing,

Borrower may make change orders to any Plans and Specifications without the

consent of Agent or the Lenders. Notwithstanding the foregoing, the prior

written consent of Agent shall be required for any change orders to any Plans

and Specifications which would (i) materially and substantially change the Plans

and Specifications; (ii) increase construction costs of any Project by more than

five percent (5%) (after application of any Contingency Reserve in the

applicable Project Budget); or (iii) delay completion of any Project beyond the

Completion Date. No change orders shall be made without the prior approval of

the surety under any Payment and Performance Bond if required thereunder.

 

      2.11 CONTINGENCY RESERVES. Upon notice to Agent and provided no Event of

Default exists, the amount allocated as Contingency Reserve in the respective

Project Budgets may be disbursed for other line items in such Project Budget.

 

                                      -32-

 

<PAGE>

 

      2.12 STORED MATERIALS; DEPOSITS.

 

            2.12.1 Agent shall permit disbursements from the Loan for on-site

and off-site storage of materials to be used and incorporated in the

construction of the Projects ("Stored Materials"), provided that all of the

following conditions are satisfied:

 

                  (a) the Stored Materials are owned by Borrower and are

specifically identified to Agent;

 

                  (b) Agent will hold a perfected first priority security

interest in the Stored Materials for the benefit of the Lenders;

 

                  (c) the Stored Materials are insured under the Builder's Risk

Insurance Policy required under Section 8 of the Security Instruments or such

other policies as may be necessary in order to fully insure such on-site and

off-site materials for full replacement value; and

 

                  (d) all Stored Materials stored off-site shall be segregated

and held in insured warehouses and Borrower shall provide Agent with a UCC

financing statement or such other assurances as Agent may request regarding such

Stored Materials which grants Agent, for the benefit of the Lenders, a first

priority security interest in all such off-site Stored Materials.

 

            2.12.2 Agent and Lenders shall also permit disbursement from the

Loan for deposits required in connection with furniture, landscaping and art

work for the Projects, if paid to a reputable supplier with normal safeguards

made by Borrower for such deposits.

 

                                   ARTICLE 3

                              MAKING THE ADVANCES.

 

      3.1 DRAW REQUEST. At such time as Borrower shall desire to obtain an

Advance for a particular Project, in addition to satisfying the conditions set

forth in Article 12 hereof on a Project-by-Project basis, and providing to Agent

and Lenders the items set forth in Section 12.5 hereof on a Project-by-Project

basis, Borrower shall complete, execute and deliver to Agent, Borrower's

Requisition for Advance in the form of Exhibit B attached hereto and by this

reference incorporated herein (hereinafter referred to as "Borrower's

Requisition for Advance"). Each Borrower's Requisition for Advance shall be

accompanied by the following items in form reasonably acceptable to Agent:

 

            3.1.1 If Borrower's Requisition for Advance includes Direct Costs to

be paid to a Contractor under the applicable Construction Contract, a completed

and fully itemized Application and Certificate for Payment (AIA Document G702

and G703) containing the certification of Borrower, such Contractor and the

applicable Architect as to the accuracy of same, and a payment requisition and

lien affidavit signed by such Contractor and Borrower, respectively, in the

forms of Exhibits D and E attached hereto and by this reference incorporated

herein;

 

                                      -33-

<PAGE>

 

            3.1.2 If Borrower's Requisition for Advance includes payments for

Indirect Costs in excess of the amount described in Section 2.10.1 above, a

completed Indirect Cost statement executed by Borrower;

 

            3.1.3 A Draw Request Summary for each applicable Project;

 

            3.1.4 If Borrower's Requisition for Advance includes Project Costs

under subparagraphs (b) or (c) of the definition of "Borrowing Base", a current

Borrowing Base Report;

 

            3.1.5 An affidavit and partial waiver of lien in the form of Exhibit

F attached hereto and by this reference incorporated herein from the applicable

Contractor and such laborers, subcontractors and materialmen for work done and

materials supplied by them since the previous Draw Request;

 

            3.1.6 An inspection report and certification from Construction

Inspector, at Borrower's expense; and

 

            3.1.7 Such other information, documentation and certification as

Agent and Lenders (acting through Agent) shall reasonably request.

 

      3.2 NOTICE, FREQUENCY, AND AMOUNT OF ADVANCES; EFFECT OF DRAW REQUEST.

Each Draw Request shall be submitted to Agent at least five (5) Business Days

prior to the date of the requested Advance, and no more frequently than once

each month for each of the Projects. As required in Section 12.3 below, each

Draw Request submitted to Agent and Lenders as provided in Section 3.1 hereof

shall constitute an affirmation that the representations and warranties

contained in Article 8 of this Agreement and in the other Loan Documents remain

true and correct as of the date thereof; and, unless Agent and Lenders are

notified in writing to the contrary prior to the Drawdown Date of the requested

Advance or any portion thereof, shall constitute an affirmation that the same

remain true and correct in all material respects on the Drawdown Date (except to

the extent of changes resulting from transactions contemplated or permitted by

the Loan Documents and changes occurring in the ordinary course of business that

either individually or in the aggregate do not result in a Material Adverse

Change); provided, however, that (i) the representations and warranties

contained in Sections 8.3 and 8.4 below shall refer back to the date of the most

recent audited financial statements of Borrower as of the Drawdown Date rather

than December 31, 2003; (ii) the representations and warranties contained in

Section 8.30 below shall refer back to the date of the most recent sales report

for the Projects provided by Borrower pursuant to Section 9.6.4 below; and (iii)

the affirmation as to representations and warranties relating to the Projects

shall only be made with respect to Projects covered by each Draw Request.

 

      3.3 DEPOSIT OF FUNDS ADVANCED. Except as otherwise provided for in this

Section 3.3 and Section 3.4 hereof, Agent shall deposit the proceeds of each

Advance into Borrower's general operating account with Agent and Borrower hereby

authorizes such deposits by Agent. At the request of Agent following an Event of

Default, Borrower shall open and maintain a non-interest bearing loan checking

account with Agent (the "Loan Checking Account"), and during the continuance of

such Event of Default, Agent shall deposit the proceeds of each Advance into

 

                                      -34-

 

<PAGE>

 

the Loan Checking Account, and Borrower hereby authorizes such deposits by

Agent. Agent shall disburse any Advance from the Loan Checking Account in

accordance with the provisions of this Agreement. During the continuance of such

Event of Default, Net Sales Proceeds (Actual) paid to Agent pursuant to Section

6.3.1 and not applied against payment of the Outstanding Advances shall also be

deposited into the Loan Checking Account.

 

      3.4 ADVANCES TO TITLE INSURANCE COMPANY OR TO OTHERS. At its option, Agent

may make any or all Advances through the Title Insurance Company and any portion

of the Loan so disbursed by Agent shall be deemed disbursed as of the date on

which Agent makes such disbursement. At its option, Agent may make Advances to

any Person to whom Agent in good faith determines payment is due and any portion

of the Loan so disbursed by Agent shall be deemed disbursed as of the date on

which Agent makes such disbursement. Agent shall endeavor to give Borrower five

(5) days prior written notice of each such Advance unless the giving of such

notice is impractical for reasons of safety or preservation of Collateral. The

execution of this Agreement by Borrower shall, and hereby does, constitute an

irrevocable authorization so to advance the proceeds of the Loan. No further

authorization from Borrower shall be necessary to warrant such direct Advances

and all such Advances shall satisfy the obligations of Agent and Lenders

hereunder and shall be secured by the Security Instruments and the other

Security Documents as fully as if made directly to Borrower.

 

      3.5 ADVANCES DO NOT CONSTITUTE A WAIVER. No Advance made by Agent and

Lenders shall constitute a waiver of any of the conditions to the Lenders'

obligation to make further Advances nor, in the event Borrower fails to satisfy

any such condition, shall any such Advance have the effect of precluding Agent

and Lenders from thereafter declaring such failure to satisfy a condition to be

an Event of Default.

 

                                   ARTICLE 4

                  THE NOTES; INTEREST; MATURITY AND PREPAYMENT.

 

      4.1 THE NOTES. The obligation of Borrower to pay the Loan Amount or, if

less, the aggregate unpaid principal amount of all Advances made by Agent and

Lenders hereunder, plus accrued interest thereon, shall be evidenced by the

Notes. In the event any of the Notes is lost, destroyed or mutilated at any time

prior to payment in full of the indebtedness evidenced thereby, Borrower shall,

upon certification of such loss, destruction or mutilation by the applicable

Lender and such Lender's agreement to reimburse Borrower for any reasonable

out-of-pocket attorneys' fees and costs related thereto, execute a new note

substantially in the form of such lost, destroyed or mutilated Note and

designated as a replacement note for such lost, destroyed or mutilated Note. The

Notes shall not be necessary to establish the indebtedness of Borrower to Agent

and Lenders on account of Advances made under this Agreement. As part of any

amendment, restatement or modification of this Agreement and the issuance of the

new Notes pursuant thereto, each Lender agrees to promptly surrender its

respective Note to Agent upon request therefor. With regard to the Treasury

Note, Borrower shall not be permitted to draw any Advances with respect thereto

unless the Lenders have unanimously agreed to increase the Total Commitment

beyond the amount of the increase which Borrower is permitted to request

pursuant to Section 2.4 of this Agreement, and the other conditions described in

Section 2.4 with respect to such request have been satisfied.

 

                                      -35-

 

<PAGE>

 

      4.2 THE RECORD. Borrower irrevocably authorizes Agent to make or cause to

be made, at or about the time of the Drawdown Date of any Advance or at the time

of receipt of any payment of the principal of the Notes, an appropriate notation

on Agent's Record reflecting the making of such Advance or (as the case may be)

the receipt of such payment. The outstanding amount of the Loan set forth on

Agent's Record shall be prima facie evidence of the principal amount thereof

owing and unpaid to Agent, but the failure to record, or any error in so

recording, any such amount on Agent's Record shall not limit or otherwise affect

the Obligations of Borrower hereunder or under the Notes to make payments of

principal or interest on the Notes when due.

 

      4.3 INTEREST ON ADVANCES. From and after the date hereof (until maturity

or the occurrence of an Event of Default as provided hereinafter) interest shall

accrue on the principal amount of the Notes which is outstanding from time to

time at a rate per annum equal to the Base Rate or the Eurodollar Rate, as

selected by Borrower, plus the Applicable Rate for Base Rate Advances or

Eurodollar Rate Advances, as applicable, subject to and in accordance with the

provisions of this Agreement. Accrued but unpaid interest on each Base Rate

Advance and Eurodollar Rate Advance shall be due and payable in arrears on each

Interest Payment Date applicable thereto.

 

      4.4 MATURITY. The entire outstanding principal of the Notes, together with

all accrued and unpaid interest thereon, shall be due and payable in full,

unless sooner paid, on the Maturity Date. Borrower promises to pay to the

Lenders on the Maturity Date, and there shall become absolutely due and payable

on the Maturity Date, all of the Advances outstanding on such date, together

with any and all accrued and unpaid interest thereon and all other sums and fees

due and payable to Lenders hereunder or any other Loan Documents.

 

      4.5 REPAYMENTS. Borrower may, on any Business Day, repay the outstanding

aggregate principal amount of a Type of Advance extended to Borrower, in whole

at any time, or ratably in part from time to time; provided, however, that:

 

                  (a) With respect to a repayment of a Base Rate Advance: (i)

Borrower gives same day written notice to Agent not later than 12:00 noon of any

such repayment specifying the principal amount to be repaid; and (ii) accrued

interest to the date of such repayment on the principal amount repaid shall be

billed to Borrower by Agent and paid by Borrower on the next Interest Payment

Date; and

 

                  (b) With respect to a repayment of a Eurodollar Rate Advance,

Borrower may repay a Eurodollar Rate Advance only upon at least three (3)

Business Days prior written notice to Agent (which notice shall be irrevocable),

and unless such repayment shall occur on the last day of the Interest Period for

such Eurodollar Rate Advance, Borrower shall pay such sums as may be due

pursuant to Section 4.11 below. Subject to the provisions of this Agreement,

Amounts repaid may be reborrowed.

 

      4.6 EXTENSION OF MATURITY DATE. The Maturity Date may be extended for

successive periods of one (1) year each so as to provide for a continuous four

(4) year term, provided the following conditions are met by Borrower:

 

                                      -36-

 

<PAGE>

 

            4.6.1 Requests for Extension. Borrower may, by notice to Agent (who

shall promptly notify the Lenders) (the "Extension Request Date") request at any

time (but not more than once during any Fiscal Year) that each Lender extend

such Lender's Maturity Date (the "Existing Maturity Date") for an additional one

(1) year period from the Existing Maturity Date (the "Requested Maturity Date");

provided that the first such Extension Request Date shall not be earlier than

August 31, 2005.

 

            4.6.2 Lender Elections to Extend. Each Lender, acting in its sole

and individual discretion, shall, by notice to Agent given not later than the

date (the "Extension Notice Date") that is thirty (30) days after the Extension

Request Date, advise Agent whether or not such Lender agrees to such extension

(and each Lender that determines not to so extend its Maturity Date (a

"Non-Extending Lender") shall notify Agent of such fact promptly after such

determination (but in any event no later than the Extension Notice Date), and

any Lender that does not so advise Agent on or before the Extension Notice Date

shall be deemed to be a Non-Extending Lender. The election of any Lender to

agree to such extension shall not obligate any other Lender to so agree.

 

            4.6.3 Notification by Agent. Agent shall notify Borrower of each

Lender's determination under this Section 4.6 no later than the date five (5)

days after the Extension Notice Date (or, if such date is not a Business Day, on

the next preceding Business Day).

 

            4.6.4 Additional Commitment Lenders. Borrower shall have the right

on or before the Existing Maturity Date to replace each Non-Extending Lender

with, and add as "Lenders" under this Agreement in place thereof, one or more

Eligible Assignees (each, an "Additional Commitment Lender"), each of which

Additional Commitment Lenders shall have entered into an Assignment and

Acceptance pursuant to which such Additional Commitment Lender shall, effective

as of the Existing Maturity Date, undertake a Commitment (and, if any such

Additional Commitment Lender is already a Lender, its Commitment shall be in

addition to such Lender's Commitment hereunder on such date).

 

            4.6.5 Minimum Extension Requirement. If (and only if) the total of

the Commitments of the Lenders that have agreed so to extend their Maturity Date

and the additional Commitments of the Additional Commitment Lenders shall

constitute the Required Lenders, then Agent shall notify Borrower and the

Lenders that the Maturity Date of each Extending Lender and of each Additional

Commitment Lender is extended to the Requested Maturity Date (except that, if

such date is not a Business Day, such Maturity Date as so extended shall be the

next preceding Business Day) and each Additional Commitment Lender shall

thereupon become a "Lender" for all purposes of this Agreement. The date of each

such notice from Agent shall constitute the effective date of each such change

in the Maturity Date (the "Extension Effective Date"). Agent shall note the

Maturity Date of each Lender on the Record.

 

            4.6.6 Conditions to Effectiveness of Extensions. Notwithstanding the

foregoing, the extension of the Maturity Date pursuant to this Section 4.6 shall

not be effective with respect to any Lender unless:

 

                                      -37-

 

<PAGE>

 

                  (a) No Default or Event of Default shall have occurred and be

continuing under this Agreement or the other Loan Documents as of the Extension

Request Date or the Extension Effective Date.

 

                  (b) The representations and warranties in the Loan Documents

shall be true and correct and in all material respects on the Extension Request

Date and on the Extension Effective Date.

 

                  (c) No mechanic's or materialmen's lien or other encumbrance

(excluding Permitted Liens) likely to result in a Material Adverse Change shall

have been filed and remain in effect against any of the Projects.

 

                  (d) The Title Policies shall have been endorsed and down-dated

in a manner satisfactory to Agent with no additional title change or exception,

except the matters permitted in Section 10.3 or specifically approved in writing

by Agent, which approval shall not be unreasonably withheld.

 

                  (e) As of the Extension Request Date and the Extension

Effective Date, there is no Material Adverse Change.

 

                  (f) As of the Extension Request Date, the Loan Amount shall

not exceed seventy percent (70%) of the aggregate Appraised Value of the

Projects (excluding any Units released from the Security Instruments) and

Borrower shall have delivered to Agent such other information, documents, and

supplemental legal opinions as may be reasonably required by Agent.

 

                  (g) Borrower shall execute such modifications and other

documents that Agent may reasonably require and shall pay or reimburse Agent for

all expenses and costs it incurs in connection with such extension.

 

                  (h) As of the Extension Request Date, the Net Sales Proceeds

(Projected) from Sales Contracts from the unreleased Projects are at least

ninety percent (90%) of the aggregate Loan Amount Project Allocations with

respect to unreleased Projects.

 

                  (i) Borrower shall pay to Agent on the Extension Effective

Date for the account of each Extending Lender and Additional Commitment Lender

any extension fee agreed to by Borrower and such Lenders.

 

                  (j) On the Maturity Date of each Non-Extending Lender,

Borrower shall prepay to each Non-Extending Lender its respective Loan

Percentage of any Advances outstanding on such date (and pay any additional

amounts required pursuant to Section 4.11) to the extent necessary to keep

outstanding Advances ratable with any revised Loan Percentages of the respective

Lenders effective as of such date. To the extent any Non-Extending Lender is not

replaced by an Additional Commitment Lender as of the Existing Maturity Date,

the Commitment and Note of the Non-Extending Lender shall be assigned to Agent

and held as a treasury note (a "Non-Extending Lender Treasury Note"). Borrower

shall not be permitted to draw any Advances with respect to any Non-Extending

Lender Treasury Note until such time as an additional Commitment Lender assumes

such Commitment from Agent and receives a replacement Note with

 

                                      -38-

 

<PAGE>

 

respect to such Commitment. Neither the Loan Amount nor the ability of Borrower

to receive an increase in the Loan Amount pursuant to Section 2.4 shall be

affected by the withdrawal of a Non-Extending Lender.

 

      4.7 INTEREST RATE SELECTION.

 

            4.7.1 Borrower agrees that each Borrower's Requisition for Advance

submitted to Agent pursuant to Section 3.1 of this Agreement shall be

accompanied by a written notice of Borrower (a "Notice of Borrowing") specifying

(i) the requested Type of Advance comprising such Advance, (ii) in the case of a

Eurodollar Rate Advance, the initial Interest Period, and (iii) the amount of

each Type of Advance; provided, however, that each Eurodollar Rate Advance shall

be in an amount of $1,000,000 or whole multiple of $100,000 in excess thereof,

and each borrowing of or conversion to Base Rate Advance shall be in an amount

of $500,000 or a whole multiple of $50,000 in excess thereof. Notwithstanding

anything to the contrary herein, the obligation of Agent and Lenders to make any

and all Advances is subject to Section 4.10 of this Agreement and to the other

terms and conditions of this Agreement.

 

            4.7.2 A Notice of Borrowing with respect to a Eurodollar Rate

Advance shall be irrevocable and binding on Borrower. If the information

described in Section 4.7.1 above is not specified by Borrower, Borrower shall be

deemed to have selected a Base Rate Advance.

 

            4.7.3 If after giving a Notice of Borrowing, Borrower fails to

borrow any Eurodollar Rate Advance, Borrower shall indemnify Agent and Lenders

against any loss or expense incurred by Agent and Lenders as a result of such

failure as provided for in Section 4.11 below.

 

      4.8 CONVERSION OF ADVANCES.

 

            4.8.1 Subject to the terms and conditions of this Agreement, upon

notice given by Borrower to Agent not later than 12:00 noon (i) in the case of

Conversions into Base Rate Advances, on the date of the proposed Conversion, and

(ii) in the case of Conversions into Eurodollar Rate Advances, three (3)

Business Days prior to the date of the proposed Conversion, Borrower may

Convert, on any Business Day, one Type of Advance made to Borrower into another

Type of Advance; provided, however, that (a) any Conversion of Eurodollar Rate

Advances may be made only on the last day of the respective Interest Period for

such Advances, (b) any Advance Converted to a Base Rate Advance shall be in an

amount of $500,000 or a whole multiple of $50,000 in excess thereof, (c) any

Advance Converted to a Eurodollar Rate Advance shall be in an amount of

$1,000,000 or a whole multiple of $100,000 in excess thereof, and (d) no Advance

may be Converted to a Eurodollar Rate Advance during the continuance of any

event which would entitle Agent to accelerate the maturity of the Notes pursuant

to Section 13.2 hereof.

 

             4.8.2 Each such notice of Conversion (a "Notice of Conversion")

shall be by telephone, telecopy, telex or cable, in each case confirmed

immediately in writing in the manner specified in Article 23 of this Agreement,

and shall, within the restrictions specified above, specify (i) the date of such

Conversion, (ii) the Advances to be Converted, and (iii) if such Conversion is

to Eurodollar Rate Advances the duration of the initial Interest Period for such

 

                                      -39-

 

<PAGE>

 

Advances. Each Notice of Conversion with respect to Eurodollar Rate Advances

shall be irrevocable and binding on Borrower. Any part of the Loan outstanding

which is not accruing interest at Eurodollar Rate or the Default Rate shall

accrue interest at the Base Rate.

 

      4.9 INTEREST PERIOD SELECTION; ALTERNATIVE INTEREST RATES, ETC.

 

            4.9.1 Borrower shall have the option to select Interest Periods (i)

in accordance with Section 4.7 of this Agreement with respect to the duration of

an initial Advance; and (ii) in accordance with Section 4.8 of this Agreement

with respect to the duration of a Converted Advance. As to subsequent Interest

Periods applicable to such Advances, Borrower may select the duration of the

Interest Period by giving notice (which may be by telephone, telecopy, telex or

cable, in each case confirmed immediately in writing in the manner specified in

Article 23 of this Agreement) to Agent not less than three (3) Business Days

prior to the first day of such subsequent Interest Period in the case of

Eurodollar Rate Advances. If no such notice is received with respect to an

outstanding Advance, Borrower shall be deemed to have elected to Convert the

Advance into a Base Rate Advance.

 

            4.9.2 Notwithstanding anything to the contrary contained herein, in

no event may Borrower have more than six (6) Eurodollar Rate Advances in effect

at any one time, which number shall be in addition to any Base Rate Advances.

 

      4.10 ILLEGALITY. Notwithstanding any other provision of this Agreement,

(a) if the introduction of or any change in any Law (or change in the

interpretation thereof) applicable to Agent, its Agent's Office or to a Lender

shall make it unlawful, or (b) if any central agency or other Governmental

Authority having jurisdiction over Agent, its Agent's Office or a Lender shall

assert that it is unlawful for Agent or its Agent's Office to make Eurodollar

Rate Advances to Borrower or to continue to fund or maintain Eurodollar Rate

Advances to Borrower, then, on giving notice (which may be by telephone,

telecopy, telex or cable, in each case confirmed immediately in writing in the

manner specified in Article 23 of this Agreement) thereof by Agent to Borrower,

(i) the obligation of Agent and Lenders to Borrower to make Eurodollar Rate

Advances and to Convert Advances into Eurodollar Rate Advances shall terminate,

and (ii) each Eurodollar Rate Advance will automatically, on the last day of the

then current Interest Period thereof or within such earlier period as may be

required by Law, Convert into a Base Rate Advance.

 

      4.11 INDEMNIFICATION. If, due to payments or Conversion to Types of

Advances made by Borrower pursuant to this Agreement or due to acceleration of

the maturity of the Advances pursuant to this Agreement or due to any other

reason, including without limitation (i) the events specified in Section 4.10

above, (ii) any failure by Borrower to borrow a Eurodollar Rate Advance on the

date specified in Borrower's written notice, or (iii) any failure by Borrower to

pay a Eurodollar Rate Advance on the date for payment specified in Borrower's

written notice, Agent receives payments of principal of, or is subject to a

Conversion of a Eurodollar Rate Advance into another Type of Advance, other than

on the last day of an Interest Period relating thereto, Borrower shall, upon

demand by Agent, pay to Agent any amounts required to compensate Agent and

Lenders for any losses, costs or expenses incurred as a result of such payment

or Conversion, including, without limitation, any loss, costs or expenses

incurred by reason of the liquidation or reemployment of deposits or other funds

acquired by Agent and

 

                                      -40-

 

<PAGE>

 

Lenders to fund or maintain such Advances. Such compensation, and the

compensation provided for elsewhere in this Agreement shall include, without

limitation, an amount calculated as follows:

 

            4.11.1 First, Agent shall determine the amount by which (i) the

total amount of interest which would have otherwise accrued hereunder on each

installment of principal so paid or not borrowed, during the period beginning on

the date of such payment or failure to borrow and ending on the date such

installment would have been due (the "Reemployment Period"), exceeds (ii) the

total amount of interest which would accrue, during the Reemployment Period, on

any readily marketable bond or other obligation of the United States of America

designated by Agent in its sole discretion at or about the time of such payment,

such bond or other obligation of the United States of America to be in an amount

equal (as nearly as may be) to the amount of principal so paid or not borrowed

and to have a maturity comparable to the Reemployment Period, and the interest

to accrue thereon to take account of amortization of any discount from par or

accretion of premium above par at which the same is selling at the time of

designation. Each such amount is hereafter referred to as an "Installment

Amount."

 

            4.11.2 Second, each Installment Amount shall be treated as payable

as of the date on which the related principal installment would have been

payable by Borrower had such principal installment not been prepaid or not

borrowed.

 

            4.11.3 Third, the amount to be paid on each such date shall be the

present value of the Installment Amount determined by discounting the amount

thereof from the date on which such Installment Amount is to be treated as

payable, at the same annual interest rate as that payable upon the bond or other

obligation of the United States of America designated as aforesaid by Agent.

 

      4.12 LATE CHARGE. Without limiting the right of Agent and Lenders to

accelerate the maturity of the Notes or to exercise any other right hereunder or

under the other Loan Documents, if any payment under the Notes or any of the

other Loan Documents is not received by Agent and Lenders within ten (10) days

of the date such payment is due, without notice or demand, Borrower shall pay to

Agent and Lenders a late charge equal to four percent (4%) of the amount of such

payment; provided, that, in connection with the acceleration of the maturity of

the Notes, the late charge shall not be collected on the aggregate amount of the

accelerated Obligations.

 

      4.13 INTEREST AFTER DEFAULT.

 

             4.13.1 Any amount of principal of the Notes or other amounts due

under the Loan Documents which is not paid when due (whether at stated maturity,

by acceleration or otherwise and subject to any applicable notice and/or cure

periods contained herein or in any of the Loan Documents) and, to the extent

permitted by applicable Law, any amount of interest under the Notes or other

Loan Documents which is not paid when due, subject to any applicable notice

and/or cure periods contained herein or in any of the Loan Documents, shall bear

interest, from the date on which such overdue amount shall have become due and

payable by Borrower until payment in full of the amount then due (whether before

or after judgment), payable on demand, at a rate per annum equal to the Default

Rate, or if such increased rate of interest may

 

                                      -41-

 

<PAGE>

 

not be collected under applicable Law, then at the maximum rate of interest, if

any, which may be collected from Borrower under applicable Law.

 

       4.14 INTEREST NOT TO EXCEED MAXIMUM ALLOWABLE AMOUNTS. Notwithstanding any

provision in this Agreement, the Notes, or in any instrument securing the Notes,

the total liability for payments legally regarded as interest shall not exceed

the maximum amounts allowed by applicable Law, and any payment of same in excess

of the amount allowed thereby shall, as of the date of such payment,

automatically be deemed to have been applied to the payment of the principal

indebtedness evidenced hereby, or, if same has been fully repaid, shall be

repaid to Borrower. Any notation or record of Agent with respect to such

required application which is inconsistent with the provisions of this Section

shall be disregarded for all purposes and shall not be binding upon either Agent

or Lenders.

 

      4.15 UNCONDITIONAL LIABILITY. From time to time, without affecting the

obligation of Borrower or any sureties, guarantors, endorsers, accommodation

parties or other persons liable or to become liable on the Notes to pay the

outstanding principal balance of the Notes and observe the covenants of Borrower

contained herein, without giving notice to or obtaining the consent of Borrower

or any such sureties, guarantors, endorsers, accommodation parties or other

persons, and without liability on the part of Agent and Lenders, Agent and

Lenders may, at the option of Agent and Lenders, grant extensions or

postponements of the time for payment of said outstanding principal balance,

interest or any part thereof, release anyone liable on any of said outstanding

principal balance, accept a renewal of the Notes, release or accept a

substitution of all or any collateral given to secure the Notes, join in any

extension or subordination agreement, agree in writing with Borrower to modify

the rate of interest or terms and time of payment of said outstanding principal

balance or period of amortization of the Notes or change the amount of the

monthly installments payable hereunder, or grant any other indulgence or

forbearance whatsoever. No one or more of such actions shall constitute a

novation.

 

      4.16 INABILITY TO DETERMINE RATES. If the Required Lenders determine that

for any reason in connection with any request for a Eurodollar Rate Advance or a

Conversion to or continuation thereof that (a) Dollar deposits are not being

offered to banks in the London interbank eurodollar market for the applicable

amount and Interest Period of such Eurodollar Rate Advance, (b) adequate and

reasonable means do not exist for determining the Eurodollar Rate for any

requested Interest Period with respect to a proposed Eurodollar Rate Advance, or

(c) the Eurodollar Rate for any requested Interest Period with respect to a

proposed Eurodollar Rate Advance does not adequately and fairly reflect the cost

to such Lenders of funding such Loan, Agent will promptly so notify Borrower and

each Lender. Thereafter, the obligation of the Lenders to make or maintain

Eurodollar Rate Advances shall be suspended until Agent (upon the instruction of

the Required Lenders) revokes such notice. Upon receipt of such notice, Borrower

may revoke any pending request for a borrowing of, Conversion to or continuation

of Eurodollar Rate Advances or, failing that, will be deemed to have Converted

such request into a request for a Prime Base Rate Advance in the amount

specified therein.

 

                                      -42-

<PAGE>

 

                                   ARTICLE 5

                  PAYMENTS AND COMPUTATIONS; CAPITAL ADEQUACY.

 

      5.1    FUNDS FOR PAYMENTS.

 

            5.1.1 All payments of principal, interest, fees and any other

amounts due under the Notes or under any of the other Loan Documents shall be

made to Agent at Agent's Office, or at such other location in the continental

United States that Agent may from time to time designate, in each case not later

than 2:00 p.m. on the day when due in immediately available funds in lawful

money of the United States.

 

            5.1.2 All payments by Borrower under the Notes and under any of the

other Loan Documents shall be made without setoff or counterclaim and free and

clear of and without deduction for any taxes, levies, imposts, duties, charges,

fees, deductions, withholdings, compulsory loans, restrictions or conditions of

any nature now or hereafter imposed or levied by any jurisdiction or any

political subdivision thereof or taxing or other authority therein unless

Borrower is compelled by Law to make such deduction or withholding. If any such

obligation to deduct or withhold is imposed upon Borrower with respect to any

amount payable by it under the Notes or under any of the other Loan Documents,

Borrower will pay to Agent, on the date on which such amount is due and payable

under the Notes or under such other Loan Document, such additional amount as

shall be necessary to enable the Lenders to receive the same amount which the

Lenders would have received on such due date had no such obligation been imposed

upon Borrower, subject to the provisions of Sections 5.2 and 5.3 below. Borrower

will deliver promptly to Agent certificates or other valid vouchers for all

taxes or other charges deducted from or paid with respect to payments made by

Borrower under the Notes or under such other Loan Document.

 

      5.2    COMPUTATIONS.

 

            5.2.1 All computations of interest hereunder shall be made by Agent

on the basis of a year of three hundred sixty (360) days for the actual number

of days (including the first day but excluding the last day) elapsed. The

outstanding amount of the Advances as reflected on Agent's records from time to

time shall be presumed to be correct and binding on Borrower unless within

twenty (20) days after receipt by Borrower of any notice from Agent of such

outstanding amount, Borrower notifies Agent to the contrary.

 

            5.2.2 Any change in the rate of interest payable hereunder resulting

from a change in the Base Rate shall become effective as of the opening of

business on the day on which such change in the Base Rate becomes effective.

 

            5.2.3 Each determination of an interest rate by Agent pursuant to

the Notes and this Agreement shall be conclusive and binding on Borrower in the

absence of error.

 

            5.2.4 Whenever any payment to be made hereunder shall be stated to

be due on a day other than a Business Day, such payment shall be made on the

next succeeding Business Day (except as provided in the definition of Interest

Period), and such extension of time shall in such case be included in the

computation of payment of interest.

 

                                      -43-

<PAGE>

 

       5.3    ADDITIONAL COSTS. Notwithstanding anything herein to the contrary,

if any present or future applicable Law, which expression, as used herein,

includes statutes, rules and regulations thereunder and interpretations thereof

by any competent court or by any Governmental Authority charged with the

administration or the interpretation thereof and requests, directives,

instructions and notices at any time or from time to time hereafter made upon or

otherwise issued to Agent or Lenders by any central bank or other fiscal,

monetary or other authority (whether or not having the force of Law), shall:

 

                  (a)    subject Agent or Lenders to any tax, levy, impost, duty,

charge, fee, deduction or withholding of any nature with respect to this

Agreement, the other Loan Documents, the Loan or the Advances (other than taxes

based upon or measured by the income or profits of such Agent or Lenders); or

 

                  (b)    materially change the basis of taxation (except for

changes in taxes on income or profits) of payments to Agent or Lenders of the

principal of or the interest on any Advances or any other amounts payable to

Agent or Lenders under this Agreement or the other Loan Documents; or

 

                  (c)    impose or increase or render applicable (other than to

the extent specifically provided for elsewhere in this Agreement) any special

deposit, reserve, assessment, liquidity, capital adequacy or other similar

requirements (whether or not having the force of Law) against assets held by, or

deposits in or for the account of, or loans by, or commitments of an office of

Agent or Lenders; or

 

                  (d)    impose on Agent or Lenders any other conditions or

requirements with respect to this Agreement, the other Loan Documents, the Loan,

or any of the Advances;

 

and the result of any of the foregoing is

 

                        (i)    to increase the cost to Agent or Lenders of

making, funding, issuing, renewing, extending or maintaining any of the Advances

or the Loan; or

 

                         (ii)   to reduce the amount of principal, interest or

other amount payable to Agent or Lenders hereunder on account of any of the

Advances or the Loan; or

 

                        (iii) to require Agent or Lenders to make any payment or

to forego any interest or other sum payable hereunder, the amount of which

payment or foregone interest or other sum is calculated by reference to the

gross amount of any sum receivable or deemed received by Agent and Lenders from

Borrower hereunder;

 

then, and in each such case under the foregoing subparagraphs (i), (ii) and

(iii) of this Section 5.3, Borrower will, upon prompt written demand made by

Agent or Lenders at any time and from time to time and as often as the occasion

therefor may arise, pay to Agent and the Lenders such additional amounts as will

be sufficient to compensate Agent and the Lenders for such additional cost,

reduction, payment or foregone interest or other sum. Notwithstanding the

foregoing, Borrower shall not be required to reimburse any Lender organized or

formed under the Laws of any jurisdiction outside of the United States for any

such amounts imposed upon

 

                                      -44-

<PAGE>

 

such Lender by virtue of its alien status and not generally imposed on Lenders

organized or formed under the Laws of the United States or any state or

jurisdiction thereof.

 

      5.4    CAPITAL ADEQUACY. Agent or any Lender shall promptly notify Borrower

if Agent or Lenders shall have determined that the adoption of any applicable

Law, rule, regulation, guideline, directive or request (whether or not having

force of Law) regarding capital requirements for banks or bank holding companies

as a whole, or any change therein or in the interpretation or administration

thereof of any Governmental Authority, central bank or comparable agency charged

with the interpretation or administration thereof, or compliance by Agent or

Lenders with any of the foregoing imposes or increases a requirement by Agent or

Lenders to allocate capital resources to Agent or Lenders' commitment to make

Advances under this Agreement which has or would have the effect of reducing the

return on Agent and Lenders' capital to a level below that which Agent and

Lenders could have achieved (taking into consideration Agent and Lenders' then

existing policies with respect to capital adequacy and assuming full utilization

of Agent and Lenders' capital) but for such applicability, change,

interpretation, administration or compliance, by any amount deemed in good faith

by such Lender or Agent to be material, and which is not reflected in an

increase in the Base Rate or Eurodollar Rate, as the case may be. Borrower and

such Lender shall thereafter attempt to negotiate in good faith an adjustment to

the compensation payable hereunder which will adequately compensate such Lender

for such modification. If Borrower and such Lender are unable to agree to such

adjustment within ninety (90) days of the day on which Borrower shall receive

such written notice, then commencing on the date of such notice (but not earlier

than the effective date of any such applicability, change, interpretation,

administration or compliance), then the fees payable hereunder shall increase by

an amount which will, in the reasonable determination of such Lender, compensate

such Lender for such modification. In determining the amount of income, such

Lender may use any reasonable and equitable methods of averaging, allocating or

attributing such modification among its customers. The affected Lender shall

deliver to Borrower a certificate demonstrating the calculation of the amount of

such increased fees. Borrower shall be required to pay the increased amount

within fifteen (15) days after its receipt of such certificate.

 

      5.5    RESERVES ON EURODOLLAR RATE ADVANCES. Borrower shall pay to each

Lender, as long as such Lender shall be required to maintain reserves with

respect to liabilities or assets consisting of or including Eurocurrency funds

or deposits (currently known as "Eurocurrency liabilities"), additional interest

on the unpaid principal amount of each Eurodollar Rate Advance equal to the

actual costs of such reserves allocated to such Advance by such Lender (as

determined by such Lender in good faith, which determination shall be

conclusive), which shall be due and payable on each date on which interest is

payable on such Advance, provided Borrower shall have received at least ten (10)

days' prior notice (with a copy to Agent) of such additional interest from such

Lender. If a Lender fails to give notice ten (10) days prior to the relevant

Interest Payment Date, such additional interest shall be due and payable ten

(10) days from receipt of such notice.

 

                                      -45-

<PAGE>

 

                                   ARTICLE 6

                          COLLATERAL SECURITY; GUARANTIES

 

      6.1    COLLATERAL. The Obligations shall be secured by a perfected first

priority lien or security title and security interest in the Collateral, whether

now owned or hereafter acquired, pursuant to the terms of the Security

Documents.

 

      6.2    GUARANTY. Each Subsidiary of Borrower owning a Project (a

"Guarantor") shall execute and deliver to Agent and the Lenders an Unconditional

Guaranty of Payment and Performance (a "Guaranty") in form reasonably acceptable

to Agent, as more particularly described in Section 2.5.2(i) above. Each

Guarantor shall be jointly and severally liable with Borrower and any other

Guarantors for the repayment of the Obligations.

 

      6.3    PAYMENT OF PROCEEDS; RELEASE OF COLLATERAL.

 

            6.3.1 Borrower shall pay to Agent for the benefit of Lenders one

hundred percent (100%) of the Net Sales Proceeds (Actual) of each sold Unit,

cabana or other appurtenance in a Project, which will be applied first to

payment of the Outstanding Advances with respect to such Project and any

remainder shall be applied against payment of the Outstanding Advances with

respect to the other Projects. Upon completion of a Project, consummation of the

closing of the respective Sales Contracts with respect to such Project pursuant

to the terms thereof and upon receipt by Agent of the Net Sales Proceeds

(Actual) of each such sold Unit, cabana or other appurtenance thereto in such

Project, and provided Agent has not commenced the exercise of any remedies under

this Agreement or any of the other Loan Documents, Agent shall execute a partial

release from the lien of the applicable Security Instrument for such sold Unit,

cabana or other appurtenance thereto in such Project.

 

            6.3.2 With respect to any Project, at such time as the Net Sales

Process (Actual) received by Agent with respect to such Project exceeds the Loan

Amount Project Allocation with respect to such Project and Agent is satisfied

that:

 

                  (i)    the Net Sales Proceeds (Projected) of Sales Contracts

from the remaining Projects in the aggregate are at least one hundred thirty

percent (130%) of the aggregate Loan Amount Project Allocations for the

remaining Projects;

 

                  (ii)   the aggregate Loan Amount Project Allocations for the

remaining Projects are in balance with the aggregate cost to complete as

provided in the Project Budgets for the remaining Projects (taking into

consideration Required Equity Funds and any additional equity contributions by

Borrower); and

 

                  (iii) no Default or Event of Default has occurred and is

continuing;

 

then Agent shall, at the option of Borrower, execute partial releases from the

applicable Security Instrument for the remainder of the Units of such Project or

remove the Project in its entirety from the Loan. Calculations demonstrating

compliance with the requirements contained in clauses (i), (ii) and (iii) above

shall be current within thirty (30) days of the requested release

 

                                       -46-

<PAGE>

 

date. Upon the full and complete release of a Project owned by a Guarantor,

Agent and the Lenders shall release such Guarantor from its Guaranty (but not

under its applicable Indemnity Agreement), assuming such Guarantor does not own

any other Projects at the time of such release.

 

            6.3.3 Notwithstanding the requirement in clause (i) of Section 6.3.2

above, but subject to the requirements in clauses (ii) and (iii) of Section

6.3.2, if Borrower is requesting the release of a Project that has no value for

purposes of calculation of the Borrowing Base, Borrower shall not be required to

show compliance with the requirement contained in clause (i) of Section 6.3.2 in

order to obtain a release of the remaining Units of such Project.

 

            6.3.4 Notwithstanding the requirement in clause (i) of Section 6.3.2

above, but subject to the requirements in clauses (ii) and (iii) of Section

6.3.2, if the Net Sales Proceeds (Projected) of Sales Contracts from the

remaining Projects do not provide the required coverage levels described in

Section 6.3.2, then Borrower may make such cash payment against the outstanding

balance of the Loan as may be necessary to comply with such required coverage

levels.

 

                                   ARTICLE 7

                            CERTAIN RIGHTS OF AGENT.

 

      7.1    RIGHT TO RETAIN THE CONSTRUCTION INSPECTOR. Agent shall have the

right to retain, at Borrower's cost and expense, the Construction Inspector to

perform all or any of the following services on behalf of the Lenders:

 

            7.1.1 to review and advise the Lenders whether in the opinion of the

Construction Inspector, each of the Project Budgets accurately reflects all

applicable Project Costs;

 

            7.1.2 to review and advise the Lenders whether, in the opinion of

the Construction Inspector, the applicable Plans and Specifications are

satisfactory for the intended purposes thereof;

 

            7.1.3 to make periodic inspections (approximately at the date of

each Draw Request) for the purpose of assuring that construction of the

Improvements to date is in accordance with the applicable Plans and

Specifications and to approve Borrower's then current Draw Request as being

consistent with the applicable Project Budget and Borrower's obligations under

this Agreement, and to advise the Lenders of the anticipated cost of and time

for completion of construction of the Improvements and the adequacy of any

Contingency Reserve;

 

            7.1.4 to review and advise the Lenders on any proposed change orders

or construction change directives requiring Agent's consent; and

 

            7.1.5 to review the Construction Contracts and subcontracts, for the

purpose of providing the Lenders with an opinion as to the cost of construction

to be incurred to complete the Projects, and also for the purpose of assuring

that all such subcontracts are for work required by the applicable Plans and

Specifications to be performed.

 

                                      -47-

<PAGE>

 

            The reasonable fees of the Construction Inspector shall be paid by

Borrower forthwith upon billing therefor and the reasonable expenses incurred by

Agent and Lenders on account thereof shall be reimbursed to Agent and Lenders

forthwith upon request therefor, but neither Agent, the Lenders nor the

Construction Inspector shall have any liability to Borrower on account of the

services performed by the Construction Inspector, any neglect or failure on the

part of the Construction Inspector to properly perform its services, or any

approval by the Construction Inspector of construction of the Improvements.

Neither Agent, the Lenders nor the Construction Inspector assumes any obligation

to Borrower or any other Person concerning the quality of construction of the

Improvements or the absence therefrom of defects.

 

      7.2    RIGHT TO OBTAIN APPRAISALS. Agent shall have the right to obtain,

from time to time, at Borrower's cost and expense, updated Appraisals of the

Projects, provided that so long as no Event of Default shall have occurred and

be continuing, Borrower shall only be obligated to pay for the costs and

expenses associated with one such Appraisal of each of the Projects during any

twenty-four (24) month period, except for any such Appraisal obtained by Agent

in connection with the extension contemplated by Section 4.6 hereof. The

reasonable costs and expenses incurred by Agent in obtaining such Appraisals

shall be paid by Borrower forthwith upon billing or request by Agent for

reimbursement therefor.

 

      7.3    CHARGES AGAINST LOAN CHECKING ACCOUNT. After the occurrence of an

Event of Default, Agent shall have the right, and Borrower hereby irrevocably

authorizes Agent, to charge the Loan Checking Account held with Agent without

the further approval of Borrower, for any installment of interest due under the

Notes, any reasonable costs or expenses incurred by Agent and Lenders which are

to be paid or reimbursed by Borrower under the terms of this Agreement or any of

the other Loan Documents (including, without limiting the generality of the

foregoing, all Construction Inspector, Appraisal and reasonable attorneys'

fees), and all principal and interest and all other sums due to Agent and

Lenders under the Notes, this Agreement or any of the other Loan Documents, all

to the extent that the same are not paid by the respective due dates thereof. If

the balance of the Loan Checking Account is not sufficient to satisfy the

foregoing obligations on the respective due dates thereof and so long as an

Event of Default is continuing, the Agent shall have the right, and Borrower

hereby irrevocably authorizes Agent, to fund Advances into the Loan Checking

Account to satisfy such foregoing obligations.

 

                                   ARTICLE 8

                         REPRESENTATIONS AND WARRANTIES.

 

            Except as such statements may be qualified in Part XI of the Project

Schedules attached hereto as Exhibit A with respect to any Project, Borrower

represents and warrants to Agent and Lenders as follows:

 

      8.1    ORGANIZATION; AUTHORITY; ETC.

 

            8.1.1 Organization; Good Standing. Borrower (i) is a corporation

duly organized and validly existing and in good standing under the Laws of the

State of Delaware; (ii) has all requisite power to own its property and conduct

its business as now conducted and as presently contemplated; and (iii) is duly

authorized to do business in the State of Florida and in each other jurisdiction

where such qualification is necessary except where a failure to be so

 

                                       -48-

<PAGE>

 

qualified in such other jurisdiction would not result in a Material Adverse

Change. BCG's federal taxpayer identification number is 36-4025714 and its

correct legal name is "Bay Colony-Gateway, Inc.". WCI's federal taxpayer

identification number is 59-2857021 and its correct legal name is "WCI

Communities, Inc.".

 

            8.1.2 Authorization. The execution, delivery and performance of this

Agreement and the other Loan Documents to which Borrower is or is to become a

party and the transactions contemplated hereby and thereby are within the

authority of Borrower, have been duly authorized by all necessary proceedings on

the part of Borrower, do not conflict with or result in any breach or

contravention of any provision of Laws, statute, rule or regulation to which

Borrower is subject or any judgment, order, writ, injunction, license or permit

applicable to Borrower and do not conflict with any provision of the articles of

incorporation or by-laws of Borrower or any agreement or other instrument

binding upon Borrower, and do not require the approval or consent of, or filing

with, any Governmental Authority other than those already obtained and the

filing of the Security Instruments and the Financing Statements in the

appropriate public records with respect thereto.

 

            8.1.3 Enforceability. The execution and delivery of this Agreement

and the other Loan Documents to which Borrower is or is to become a party will

result in valid and legally binding obligations of Borrower enforceable against

Borrower in accordance with the respective terms and provisions hereof and

thereof, except as enforceability is limited by any Debtor Relief Laws.

 

      8.2    TITLE TO PROJECTS. Borrower makes any representations and warranties

regarding title to the Projects as provided in the Security Instruments.

 

      8.3    FINANCIAL STATEMENTS. Borrower has furnished to Agent the Audited

Financial Statements. The Audited Financial Statements were prepared in

accordance with GAAP, are true and correct in all material respects, and fairly

represent the financial condition of WCI and its Subsidiaries as at the close of

business on the dates thereof and the results of operations for the fiscal year

or quarter, as applicable, then ended. As of the date of this Agreement and

except for the matters disclosed in writing to Agent and the Lenders or in the

Audited Financial Statements, there are no additional material contingent

liabilities of WCI and its Subsidiaries on a consolidated basis known to the

senior credit officer of WCI or any of its Subsidiaries which could reasonably

be expected to result in a Material Adverse Change if adversely determined.

 

      8.4    NO MATERIAL ADVERSE CHANGE. Since December 31, 2003, there has

occurred no Material Adverse Change.

 

      8.5    FRANCHISES, PATENTS, COPYRIGHTS, ETC. Borrower possesses all

franchises, patents, copyrights, trademarks, trade names, licenses and permits,

and rights in respect of the foregoing, adequate for the conduct of its business

substantially as now conducted without known conflict with any rights of others.

 

      8.6    LITIGATION. There are no actions, suits, proceedings or

investigations of any kind pending or, to the best of Borrower's Knowledge,

overtly threatened in writing against Borrower or its Subsidiaries before any

court, tribunal or administrative agency or board that, if adversely

 

                                      -49-

<PAGE>

 

determined, either in any case or in the aggregate, could reasonably be expected

to result in a Material Adverse Change.

 

      8.7    RESTRICTIONS, JUDGMENTS, CONTRACTS, ETC. Borrower is not subject to

any charter, corporate or other legal restriction, or any judgment, decree,

order, rule or regulation that has or is expected in the future to result in a

Material Adverse Change. Borrower is not a party to any contract or agreement

that has resulted or, to Borrower's Knowledge, is expected to result in a

Material Adverse Change.

 

      8.8    COMPLIANCE WITH OTHER INSTRUMENTS, LAWS, ETC. Borrower has no

Knowledge of any material violation of any provision of its organizational

documents, by-laws, or any agreement or instrument to which it may be subject or

by which it or any of its properties may be bound or any decree, order,

judgment, statute, license, rule or regulation, in any of the foregoing cases in

a manner that could result in a Material Adverse Change.

 

      8.9    TAX STATUS. Borrower has made or filed all federal and state income

and all other tax returns, extensions, reports and declarations required by any

jurisdiction to which it is subject, has paid all taxes and other governmental

assessments and charges shown or determined to be due on such returns, reports

and declarations, except those being contested in good faith and by appropriate

proceedings, and has set aside on its books provisions reasonably adequate for

the payment of all taxes for periods subsequent to the periods to which such

returns, reports or declarations apply. Except for taxes being validly contested

in the manner required by the Security Instruments, there are no unpaid taxes in

any material amount claimed to be past due by the taxing authority of any

jurisdiction, and Borrower has no Knowledge of any basis for any such claim.

 

      8.10   NO EVENT OF DEFAULT. No Default or Event of Default has occurred and

is continuing.

 

      8.11   INVESTMENT COMPANY ACT. Neither WCI nor BCG is an "investment

company," or an "affiliated company" or a "principal underwriter" of an

"investment company," as such terms are defined in the Investment Company Act of

1940.

 

      8.12   ABSENCE OF FINANCING STATEMENTS, ETC. There is no financing

statement, security agreement, chattel mortgage, real estate mortgage, deed to

secure debt, deed of trust or other document filed or recorded with any filing

records, registry, or other public office, that purports to cover, affect or

give notice of any present or possible future lien on, or security interest in,

any Collateral except for the Permitted Liens and any Liens being contested in

the manner required by the Security Instruments.

 

      8.13   SETOFF, ETC. The Collateral and the Lenders' rights with respect to

the Collateral are not subject to any setoff, claims, withholdings or other

defenses of Borrower. Borrower is the owner of the Collateral free from any

Lien, security interest, encumbrance and any other claim or demand, other than

the Permitted Liens.

 

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      8.14   ERISA COMPLIANCE.

 

            8.14.1 Each Plan is in compliance in all material respects with the

applicable provisions of ERISA, the Code and other Federal or state Laws. Each

Plan that is intended to qualify under Section 401(a) of the Code has received a

favorable determination letter from the IRS or an application for such a letter

is currently being processed by the IRS with respect thereto and, to Borrower's

Knowledge, nothing has occurred which would prevent, or cause the loss of, such

qualification. Borrower and each ERISA Affiliate have made all required

contributions to each Plan subject to Section 412 of the Code, and no

application for a funding waiver or an extension of any amortization period

pursuant to Section 412 of the Code has been made with respect to any Plan.

 

            8.14.2 There are no pending or, to the Borrower's Knowledge,

threatened claims, actions or lawsuits, or action by any Governmental Authority,

with respect to any Plan that would reasonably be expected to result in a

Material Adverse Change. There has been no prohibited transaction or violation

of the fiduciary responsibility rules with respect to any Plan that has resulted

or would reasonably be expected to result in a Material Adverse Change.

 

            8.14.3 (i) No ERISA Event has occurred or is reasonably expected to

occur; (ii) no Pension Plan has any Unfunded Pension Liability; (iii) neither

Borrower nor any ERISA Affiliate has incurred, or reasonably expects to incur,

any liability under Title IV of ERISA with respect to any Pension Plan (other

than premiums due and not delinquent under Section 4007 of ERISA); (iv) neither

Borrower nor any ERISA Affiliate has incurred, or reasonably expects to incur,

any liability (and no event has occurred which, with the giving of notice under

Section 4219 of ERISA, would result in such liability) under Sections 4201 or

4243 of ERISA with respect to a Multiemployer Plan; and (v) neither Borrower nor

any ERISA Affiliate has engaged in a transaction that could be subject to

Sections 4069 or 4212(c) of ERISA.

 

      8.15   ENVIRONMENTAL COMPLIANCE. Borrower has taken all reasonably prudent

steps to investigate the past and present condition and usage of the Projects

including, without limitation, the operations conducted thereon and, based upon

such diligent investigation, makes the following representations and warranties

to Agent and the Lenders:

 

            8.15.1 With respect to the Projects, to Borrower's Knowledge,

neither Borrower, nor any operations thereon is in violation, or alleged

violation, of any judgment, decree, order, Law, license, rule or regulation

pertaining to environmental matters, including, without limitation, those

arising under the Resource Conservation and Recovery Act, the Comprehensive

Environmental Response, Compensation and Liability Act of 1980 as amended

("CERCLA"), the Superfund Amendments and Reauthorization Act of 1986, the

Federal Clean Water Act, the Federal Clean Air Act, the Toxic Substances Control

Act, or any state or local statute, regulation, ordinance, order or decree

relating to health, safety or the environment (hereinafter collectively, as the

same may be amended from time to time, the "Environmental Laws"), which

violation could reasonably be expected to have a material adverse effect on the

environment or result in a Material Adverse Change.

 

            8.15.2 With respect to the Projects, Borrower has not received

notice from any third party including, without limitation, any Governmental

Authority, that (i) it has been

 

                                      -51-

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identified by the United States Environmental Protection Agency ("EPA") as a

potentially responsible party under CERCLA with respect to a site listed on the

National Priorities List, 40 C.F.R. Part 300 Appendix B (1986), which could

reasonably be expected to result in a Material Adverse Change; (ii) any

hazardous waste, as defined by 42 U.S.C. Section 9601(5), any hazardous

substances as defined by 42 U.S.C. Section 9601(14), any pollutant or

contaminant as defined by 42 U.S.C. Section 9601(33) or any toxic substances,

oil or hazardous materials or other chemicals or substances regulated by any

Environmental Laws (hereinafter, collectively, as such definitions may be

amended from time to time, "Hazardous Materials"), which it has generated,

transported or disposed of, have been found at any site at which a federal,

state or local agency or other third party has conducted or has ordered that

Borrower conduct a remedial investigation, removal or other response action

pursuant to any Environmental Law, which could reasonably be expected to result

in a Material Adverse Change; or (iii) it is or shall be a named party to any

claim, action, cause of action, complaint, or legal or administrative proceeding

(in each case, contingent or otherwise) arising out of any third party's

incurrence of costs, expenses, losses or damages of any kind whatsoever in

connection with the Release of Hazardous Materials, which could reasonably be

expected to result in a Material Adverse Change.

 

            8.15.3 That (i) no portion of the Projects has been used for the

handling, processing, storage or disposal of Hazardous Materials except in

accordance wit