REVOLVING CREDIT CONSTRUCTION LOAN AGREEMENT

Exhibit 99.1

 

THIRD CONSOLIDATED, AMENDED AND RESTATED

REVOLVING CREDIT CONSTRUCTION LOAN AGREEMENT

 

among

 

WCI COMMUNITIES, INC.,

AS BORROWER,

 

BAY COLONY-GATEWAY, INC.,

and

RESORT AT SINGER ISLAND PROPERTIES, INC.,

EACH AS A GUARANTOR,

 

and

WACHOVIA BANK, NATIONAL ASSOCIATION,

AS ADMINISTRATIVE AGENT AND A LENDER,

 

and

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

BANKUNITED, F.S.B., GUARANTY BANK, U.S. BANK NATIONAL

ASSOCIATION, NATIONAL CITY BANK, KEYBANK, NATIONAL

ASSOCIATION, COMERICA BANK, BRANCH BANKING & TRUST CO.,

AND COLONIAL BANK,

AS LENDERS

 

and

WACHOVIA CAPITAL MARKETS, LLC, AS CO-LEAD ARRANGER

 

and

WACHOVIA SECURITIES, LLC, AS SYNDICATION AGENT

 

and

BANK OF AMERICA CAPITAL MARKETS, LLC, AS CO-LEAD

ARRANGER

 

Dated as of September 22, 2005

TABLE OF CONTENTS

 

 

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EXHIBITS AND SCHEDULES TO CONSTRUCTION LOAN AGREEMENT

 

Schedule 1.1 - Designation of Lenders

 

Exhibits

 

 

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THIRD CONSOLIDATED, AMENDED AND RESTATED

 

REVOLVING CREDIT CONSTRUCTION LOAN AGREEMENT

 

THIS THIRD CONSOLIDATED, AMENDED AND RESTATED REVOLVING CREDIT CONSTRUCTION LOAN AGREEMENT (this “Agreement”) is made as of the 22nd day of September 2005, by and among WCI COMMUNITIES, INC., a Delaware corporation (“WCI” or “Borrower”), BAY COLONY-GATEWAY, INC., a Delaware corporation (“BCG”), and RESORT AT SINGER ISLAND PROPERTIES, INC., a Florida corporation (“Resort at Singer”; BCG and Resort at Singer being hereinafter referred to individually and collectively as “Guarantor”), each having its principal place of business at 24301 Walden Center Drive, Bonita Springs, Florida 34134, Attention: Legal Department; 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, BANKUNITED, F.S.B., a federal savings bank, GUARANTY BANK, a federal savings bank, U.S. BANK NATIONAL ASSOCIATION, a national banking association, NATIONAL CITY BANK, KEYBANK NATIONAL ASSOCIATION, a national banking association, and COMERICA BANK, a Michigan banking corporation, BRANCH BANKING & TRUST CO., a North Carolina corporation, and COLONIAL BANK, an Alabama banking corporation, 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; WACHOVIA SECURITIES, LLC, as Syndication Agent; and BANK OF AMERICA CAPITAL MARKETS, LLC, as Co-Lead Arranger.

 

R E C I T A L S:

 

WHEREAS, Wachovia, as Agent, WCI, BCG and Wachovia, BOA, AmSouth Bank, SunTrust Bank, BankUnited, F.S.B., Guaranty Bank, National City Bank and KeyBank, National Association, as lenders, entered into that certain Second Consolidated, Amended and Restated Revolving Credit Construction Loan Agreement dated as of December 31, 2004 (as subsequently modified and amended, the “Tower Loan Agreement”), pursuant to which such lenders agreed to make available construction loans to WCI and BCG in an amount up to $290,000,000.00 in order to finance construction of the projects known as (i) Veracruz at Cape Marco, Collier County, Florida (“Veracruz”); (ii) Cambria at Hammock Dunes, Flagler County, Florida (“Cambria”); (iii) One Bal Harbour, Miami-Dade County, Florida (“One Bal Harbour”); (iv) Serano at Hammock Bay, Collier County, Florida (“Serano”); (v) Mosaic at Miami Beach, Miami-Dade County, Florida (“Mosaic”); (vi) One Singer Island, Palm Beach County, Florida (“One Singer Island”); (vii) Resort at Singer Island, Palm Beach County, Florida (“Resort at Singer Island”); (viii) Costa Verano, Duval County, Florida (“Costa Verano”); (ix) San Andres, Santo Amaro and La Salbodora at Lost Keys, Escambia County, Florida (“Lost Keys”); and (x) Grand Isle Towers III and IV at Prosperity Point at Burnt Store Marina, Lee County, Florida (“Grand Isle III & IV”); and

 

WHEREAS, Wachovia, as Agent, WCI, BCG and Wachovia, Colonial Bank, National City Bank, AmSouth Bank, CommerceBank, N.A., MidFirst Bank, Republic Bank, SunTrust Bank, BankUnited, F.S.B., Fleet National Bank and Union Planters Bank, N.A., as lenders, entered into that certain Credit Agreement Amended and Restated as Construction Loan Agreement dated as of October 30, 2002 (as subsequently modified and amended, the “Belize/BellaMare Loan Agreement”), pursuant to which such lenders agreed to make available

 

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construction loans to WCI (guaranteed by BCG) in an amount up to $187,000,000.00 in order to finance construction of the projects known as (i) Belize at Cape Marco, Collier County, Florida (“Belize”); and (ii) BellaMare at Williams Island, Miami-Dade County, Florida (“BellaMare”); and

 

WHEREAS, WCI has completed, or substantially completed, the construction of Grand Isle III & IV, has sold substantially all of the units in such completed projects, and has paid down the “Loan Amount Project Allocations”, as defined in the Tower Loan Agreement, with respect to such completed projects; and

 

WHEREAS, WCI and BCG have completed, or substantially completed, the construction of Belize and BellaMare, have sold substantially all of the units in such completed projects, and have paid down the “Loan Amount Project Allocations”, as defined in the Belize/BellaMare Loan Agreement, with respect to such completed projects; and

 

WHEREAS, WCI and BCG have requested a release of Grand Isle III & IV, Belize and BellaMare; and

 

WHEREAS, Wachovia, individually and as Agent under both the Tower Loan Agreement and the Belize/BellaMare Loan Agreement, the Lenders under the Tower Loan Agreement, the Lenders under the Belize/BellaMare Loan Agreement, WCI, BCG and Resort at Singer desire to consolidate, amend and restate the Tower Loan Agreement and the Belize/BellaMare Loan Agreement in order to provide increased capacity for revolving construction loan facilities;

 

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 consolidate, amend and restate the Tower Loan Agreement and the Belize/BellaMare Loan Agreement in their 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 of even date herewith, made by Borrower payable to the order of Wachovia, as Agent, in the face principal amount of $50,000,000, and any replacement notes therefor, to be held in accordance with the provisions of Section 2.4 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.

 

Additional Commitment Lender. See Section 4.6.4 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.

 

Advance . Any disbursement of the proceeds of the Loan made or to be made by the Lenders pursuant to the terms of this Agreement.

 

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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 Third 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:

 

 

Initially, the Applicable Rate shall be set at Level 5 . 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 September 30, 2005), 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 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 (1 ^st ) 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

 

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long as Borrower 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 made by the appraiser 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 and Guarantor 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 or Guarantor 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 and Guarantor in favor of Agent, including, without limitation, the Second Consolidated, Amended and Restated Collateral Assignment of Project Documents, dated of even date herewith, pursuant to which Borrower and Guarantor assign and grant a security interest in Borrower’s and Guarantor’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 and Guarantor in favor of Agent, including, without limitation, the Second Consolidated, Amended and Restated Collateral Assignments of Residence Purchase Agreements, dated of even date herewith, pursuant to which Borrower and Guarantor assign all of the sellers’ 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 Borrower and its Subsidiaries for the fiscal year ended December 31, 2004, and the related consolidated statements of income or operations, shareholders’ equity and cash flows for such fiscal year of Borrower 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.

 

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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 or Guarantor with respect thereto; provided, that such Adjusted Project Costs shall be excluded from computation in the Borrowing Base under this subparagraph (b) on 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 or Guarantor 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 as Exhibit 1 to Exhibit B attached hereto 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.

 

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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 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 or Guarantor entitled to vote for members of the board of directors or equivalent governing body of Borrower or Guarantor 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 or Guarantor 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 Guarantor, or control over the equity securities of Borrower or Guarantor entitled to vote for members of the board of directors or equivalent governing body of Borrower or Guarantor 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.

 

Notwithstanding the foregoing, none of the events or series of events described above with respect to a Guarantor (excluding subparagraph (d) above) shall constitute a “Change of Control” if such Guarantor shall thereafter continue to be Controlled by Borrower or an Affiliate of Borrower.

 

Closing Date . September 22, 2005.

 

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

 

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Collateral . All of the property, rights and interests of Borrower and Guarantor 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 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 earlier of (i) the date that is ninety (90) days immediately following 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. §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), or (ii) the date on which the closings under Sales Contracts for at least twenty-five percent (25%) of the Units at such Project have been consummated.

 

Compliance Certificate. A certificate substantially in the form of Exhibit D .

 

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 (including Guarantor).

 

Construction Contracts . Collectively, the contracts between Borrower or Guarantor 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 or Guarantor 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.

 

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,

 

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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, brokerage of homeowners and property 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 Borrower.

 

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.

 

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, permit fees, impact fees and other governmental fees and charges and 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 Guarantor or to the shareholders of Borrower or Guarantor.

 

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.

 

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Draw Request Summary . The Draw Request Summary with respect to any applicable Project in the form attached as Exhibit 2 to Exhibit B attached hereto and by this reference incorporated herein.

 

Effective Date . The date upon which this Agreement shall become effective pursuant to Article 11.

 

Eligible Assignee . As of the date of determination, any of (a) a Lender that is a party to this Agreement; (b) an Affiliate of such 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 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.

 

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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 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 and Guarantor 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.

 

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.

 

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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.

 

Guarantor . See preamble and Sections 2.5.2(g) and 6.2.1 of this Agreement.

 

Guaranty . See Section 6.2.1 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 and Guarantor in favor of Agent and Lenders, including, without limitation, the Second Consolidated, Amended and Restated Indemnity Agreement Regarding Hazardous Materials, dated of even date herewith, pursuant to which Borrower and Guarantor agree 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, 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.

 

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.

 

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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 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. §§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.

 

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Knowledge . With respect to Borrower and the applicable Guarantor, the actual knowledge (but not imputed knowledge until known) of all executive officers of Borrower and such Guarantor, the vice president in charge of the Florida Tower Division of Borrower and the equivalent officers in charge of tower development for Borrower 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).

 

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

 

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(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 (including Guarantor), 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 . December 31, 2008, 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.

 

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 of even date herewith, made by Borrower to the order of 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

 

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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 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