UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549
FORM 10-Q
(Mark One)
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
For the Quarter Ended June 30, 1998
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
For the transition period from to
Commission File No. 1-6442
ORANGE-CO, INC.
(Exact name of registrant as specified in its charter)
FLORIDA
(State or other jurisdiction of incorporation or organization)
59-0918547
(IRS Employer Identification Number)
2020 U.S. Highway 17 South, P. O. Box 2158, Bartow, Florida 33830
(Address of principal executive offices)
(941) 533-0551
(Registrant's telephone no.)
Indicate by check mark whether the Registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the Registrant was required to file
such reports), and (2) has been subject to such filing requirements
for the past 90 days.
Yes XX No
Number of shares outstanding of common stock, $.50 par value, as of
August 14, 1998: 10,309,975 shares
-1-
ORANGE-CO, INC. AND SUBSIDIARIES
FORM 10-Q
TABLE OF CONTENTS
PAGE NO.
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
Consolidated Balance Sheets 3
June 30, 1998 (unaudited) and September 30, 1997 (audited)
Consolidated Statements of Operations (unaudited) 4
Nine and Three Months ended June 30, 1998 and 1997
Consolidated Statements of Cash Flows (unaudited) 5
Nine Months ended June 30, 1998 and 1997
Notes to Consolidated Financial Statements (unaudited) 6-9
ITEM 2.
Management's Discussion and Analysis of Results of
Operations and Financial Condition 10-15
PART II. OTHER INFORMATION
ITEM 6
Exhibits and Reports on Form 8-K 16
SIGNATURES 17
-2-
<TABLE>
<CAPTION>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
ORANGE-CO, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands)
June 30, September 30,
1998 1997
ASSETS (unaudited) (audited)
<S> <C> <C>
Current assets:
Cash and short-term investments $ 432 $ 1,009
Receivables 13,052 8,441
Advances on fruit purchases 11 451
Inventories 55,696 47,089
Deferred income tax 2,882 2,398
Prepaid and other 193 683
---------- ----------
Total current assets 72,266 60,071
---------- ----------
Property and equipment, net 123,946 123,271
--------- ----------
Other assets:
Excess of cost over net assets of
acquired companies 10,742 11,024
Notes receivable 1,458 1,458
Other 6,121 5,305
---------- ----------
Total other assets 18,321 17,787
---------- ----------
Total assets $ 214,533 $ 201,129
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current installments on long-term debt $ 3,413 $ 7,276
Accounts payable 5,455 4,113
Accrued liabilities 11,065 9,154
---------- ----------
Total current liabilities 19,933 20,543
Deferred income taxes 23,005 23,676
Other liabilities 1,390 1,046
Long-term debt 63,305 46,764
---------- ----------
Total liabilities 107,633 92,029
---------- ----------
Stockholders' equity:
Preferred stock, $.10 par value,
10,000,000 shares authorized; none issued - -
Common stock, $.50 par value, 30,000,000
shares authorized; 10,349,399 issued 5,175 5,175
Capital in excess of par value 71,417 71,417
Retained earnings 30,682 32,887
---------- ----------
107,274 109,479
Less:
Treasury stock, at cost: 39,424 shares
at June 30, 1998 and 39,924 shares at
September 30, 1997 (374) (379)
---------- ----------
Total stockholders' equity 106,900 109,100
---------- ----------
Total liabilities and
stockholders' equity $ 214,533 $ 201,129
========== ==========
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
-3-
<TABLE>
<CAPTION>
ORANGE-CO, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE NINE AND THREE MONTHS ENDED JUNE 30, 1998 AND 1997
(unaudited)
(in thousands except for per share data)
Nine Months Three Months
1998 1997 1998 1997
<S> <C> <C> <C> <C>
Sales $88,934 $83,938 $31,418 $26,360
Cost of sales 85,598 75,479 26,557 25,362
-------- ------- -------- --------
Gross profit 3,336 8,459 4,861 998
Other costs and expenses, net:
Selling, general and
administrative (4,162) (4,247) (1,471) (928)
Gain(loss) on disposition of
property and equipment 122 (18) - -
Other (264) (9) - 47
Interest (2,389) (2,006) (799) (817)
-------- -------- -------- --------
Income(loss) before income taxes (3,357) 2,179 2,591 (700)
Income tax expense (benefit) (1,154) 819 935 (245)
-------- -------- -------- --------
Net income(loss) $(2,203) $ 1,360 $ 1,656 $ (455)
======== ======== ======== ========
Net income (loss) per common and
common equivalent shares: $ (.21) $ .13 $ .16 $ (.04)
======== ======== ======== ========
Average number of common and
common equivalent shares
outstanding 10,310 10,306 10,310 10,309
======== ======== ======== ========
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
-4-
<TABLE>
<CAPTION>
ORANGE-CO, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED JUNE 30, 1998 AND 1997
(unaudited)
(in thousands)
1998 1997
CASH FLOWS FROM OPERATING ACTIVITIES:
<S> <C> <C>
Net (loss)income $ (2,203) $ 1,360
--------- --------
Adjustments to reconcile net income to net
cash provided by (used for) operating activities:
Depreciation and amortization 5,229 4,288
Increase(decrease) in deferred income taxes (1,155) 327
(Gain)loss on disposition of property
and equipment and other (122) 18
Change in assets & liabilities:
(Increase)decrease in receivables (4,611) 5,283
Decrease in advances on fruit purchases 440 717
(Increase) in inventory (8,607) (16,355)
(Increase)decrease in prepaid and other 490 (174)
Increase(decrease) in accounts payable and
accrued liabilities 2,731 (4,470)
Increase(decrease) in income taxes payable 523 (1,468)
Other, net 33 63
--------- ----------
Total adjustments (5,049) (11,771)
--------- ----------
Net cash (used for) operating activities (7,252) (10,411)
--------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sale of property & equipment 859 8
Decrease in note & mortgage receivables - 692
Additions to property & equipment (6,263) (6,460)
(Increase) in other assets (602) (655)
--------- ----------
Net cash (used for) investing activities (6,006) (6,415)
--------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Issuance of treasury stock 3 38
Cash dividends paid - (1,031)
Proceeds from short-term debt - 3,000
Proceeds from long-term debt 12,678 14,587
--------- ----------
Net cash provided by financing activities 12,681 16,594
--------- ----------
NET (DECREASE) IN CASH AND CASH EQUIVALENTS (577) (232)
--------- ----------
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 1,009 1,508
--------- ----------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 432 $ 1,276
========= ==========
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
-5-
ORANGE-CO, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
1. MANAGEMENT'S OPINION
The Consolidated Financial Statements include the accounts of
Orange-co, Inc. and Subsidiaries (the "Company"), after elimination
of material intercompany accounts and transactions.
In the opinion of the management of the Company, the
accompanying financial statements reflect adjustments, consisting
only of normal recurring adjustments unless otherwise disclosed,
which are necessary to present fairly the financial position,
results of operations and cash flows for the periods presented:
- Unaudited Consolidated Balance Sheet at June 30, 1998
- Audited Consolidated Balance Sheet at September 30, 1997
- Unaudited Consolidated Statements of Operations for the nine
and three month periods ended June 30, 1998 and 1997
- Unaudited Consolidated Statements of Cash Flows for the nine
month periods ended June 30, 1998 and 1997
2. NOTES PAYABLE AND LONG-TERM DEBT
As of June 30, 1998, the Company had a $45 million working
capital line of credit payable in April 2000. Accordingly, the
balance at June 30, 1998 was classified as long-term. This facility
is collateralized by most of the Company's current assets. The
outstanding balance at June 30, 1998 was approximately $34,603,000
leaving approximately $7,997,000 additional funds available under a
borrowing base calculation. The interest rate is variable based
upon the financial institution's cost of funds plus a margin.
Additionally, as of June 30, 1998 the Company had a $10,000,000
short-term capital revolving credit facility. As of June 30, 1998
there was no outstanding balance on this facility. The interest
rate on this facility is also variable based upon the financial
institution's cost of funds plus a margin.
As of June 30, 1998, the Company's outstanding long-term debt
(including the $34,603,000 balance on the working capital line of
credit) was approximately $66,718,000 of which $3,413,000 matures in
the next twelve months and the remainder matures at various times
over the subsequent ten years.
During the third quarter of fiscal 1998 the Company increased
its mortgages by approximately $12,500,000. These funds were
utilized to pay down the long-term working capital line of credit
and the short-term capital revolving credit facility.
Interest paid, net of amounts capitalized, was approximately
$2,412,000 and $1,994,000 for the nine months ended June 30, 1998
and 1997, respectively. Interest capitalized was approximately
$401,000 and $569,000 for the nine months ended June 30, 1998 and
1997, respectively.
Certain mortgage agreements contain loan covenants. At June
30, 1998 the Company was out of compliance with loan covenants
related to debt service coverage and debt to equity ratios. (See
Management's Discussion and Analysis - Liquidity and Capital
Resources.) Waivers were obtained from these financial institutions.
-6-
3. INVENTORIES
<TABLE>
<CAPTION>
The major components of inventory are summarized as follows (in thousands):
June 30, September 30,
1998 1997
<S> <C> <C>
Finished goods $44,953 $32,095
Fruit-on-tree 8,164 10,514
Other 2,579 4,480
------- -------
Total $55,696 $47,089
======= =======
</TABLE>
As of June 30, 1998 the Company held contracts for frozen
concentrated orange juice ("FCOJ") futures positions and net options
totaling approximately $14,023,000 and $53,000 respectively, with
unrealized losses on futures of approximately $401,000 and
unrealized gains on options of approximately $9,000. Exposure to off-
balance sheet risk related to these positions results from market
fluctuations of FCOJ future prices relative to the Company's open
positions. Cash deposit requirements with brokers as of June 30,
1998 totaled approximately $401,000 and will vary with market price
fluctuations.
4. OTHER
The Company operates in one industry segment, "Citrus".
Substantially all sales are to entities that market citrus beverages
and related products.
During the nine and three month periods ended June 30, 1998, the
Company had two customers who individually accounted for
approximately 19.7% and 14.5%, and 20.1% and 16.7% of total sales
for the respective periods. During the nine and three month periods
ended June 30, 1997, the Company had two customers who individually
accounted for approximately 20.5% and 14.0%, and 23.8% and 12.5% of
total sales for the respective periods.
5. INCOME TAXES
Income tax expense is calculated using the asset and liability
method prescribed by Statement of Financial Accounting Standards No.
109 "Accounting for Income Taxes" ("FAS No. 109"). Under this
method deferred tax assets and liabilities are recognized for the
future tax consequences attributable to differences between the
financial statement carrying amounts of existing assets and
liabilities and their respective tax bases. Deferred tax assets and
liabilities are measured using enacted tax rates expected to apply
to taxable income in the years in which those temporary differences
are expected to be recovered or settled. Under FAS No. 109, the
effect on deferred tax assets and liabilities of a change in tax
rates or a deferred tax asset valuation reserve is recognized in
income in the period that includes the enactment or revaluation
date.
-7-
<TABLE>
<CAPTION>
Income tax expense (benefit) for the nine and three month periods
ended June 30, 1998 and 1997 consists of the following (in thousands):
Nine Months Three Months
Ended June 30, Ended June 30,
1998 1997 1998 1997
<S> <C> <C> <C> <C>
Current:
Federal income tax(benefit) $ - $ 365 $ - $ (293)
State income tax - 128 - 1
-------- ------- ------- -------
Total $ - $ 493 $ - $ (292)
-------- ------- ------- --------
Deferred:
Federal income tax(benefit) $(1,043) $ 365 $ 845 $ 71
State income tax(benefit) (111) (39) 90 (24)
-------- ------- ------- --------
Total $(1,154) $ 326 $ 935 $ 47
-------- ------- ------- --------
Income tax expense(benefit) $(1,154) $ 819 $ 935 $ (245)
======== ======= ======= ========
</TABLE>
<TABLE>
<CAPTION>
Following is a reconciliation of the expected income tax expense
(benefit) computed at the U.S. Federal statutory rate of 34% and the
actual income tax expense (benefit) for the nine and three month
periods ended June 30, 1998 and 1997 (in thousands):
Nine Months Three Months
Ended June 30, Ended June 30,
1998 1997 1998 1997
<S> <C> <C> <C> <C>
Expected income tax(benefit) $(1,141) $741 $881 $(238)
Increase(decrease)resulting from:
Permanent items and other 44 17 (1) 11
State income taxes, and other,
net of federal tax benefit (57) 61 55 (18)
-------- ----- ----- ------
Total provision for income
tax (benefit) $(1,154) $819 $935 $(245)
======== ===== ===== ======
</TABLE>
-8-
6. CHANGES IN STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
The following table reflects the changes in Stockholders' Equity
since September 30, 1997 as a result of net income(loss), dividends
paid, and treasury stock transactions (in thousands):
Treasury
September 30, Net Stock June 30,
1997 (Loss) Issued 1998
<S> <C> <C> <C> <C>
Common stock $ 5,175 $ - $ - $ 5,175
Capital in excess
of par value 71,417 - - 71,417
Retained earnings 32,887 (2,203) (2) 30,682
Treasury stock (379) - 5 (374)
--------- -------- ------ ---------
Total stockholders'
equity $109,100 $(2,203) $ 3 $106,900
========= ======== ====== =========
</TABLE>
7. APPLICATION OF ACCOUNTING STANDARDS
Effective for interim and annual financial statements for fiscal periods
ending after December 15, 1997, the Financial Accounting Standards Board
("FASB") issued Statement of Financial Accounting Standards No. 128 "Earnings
per Share" (SFAS 128). SFAS 128 requires the calculation of the Basic Earnings
per Share and the Diluted Earnings per Share. The Company adopted SFAS 128
at the beginning of fiscal 1998 ended December 31, 1997, the effect of which
was immaterial.
Additionally, the Company adopted SFAS 129 "Disclosure of Information
about Capital Structure". The effect of adopting SFAS 129 was immaterial.
-9-
ORANGE-CO, INC. AND SUBSIDIARIES
PART I - ITEM 2
Management's Discussion and Analysis of
Financial Condition and Results of Operations
Fiscal 1998 versus Fiscal 1997
The following is management's discussion and analysis of
significant factors that have affected the Company's operations
during the periods included. It compares the Company's operations
for the nine and three-month periods ended June 30, 1998 to
operations for the nine and three month periods ended June 30, 1997.
The following table reflects changes in sales, cost of sales and
gross profit by division and other changes in the Statements of
Operations through net income (loss) between the respective periods.
<TABLE>
<CAPTION>
Nine Months (YTD) and Three Months (QTR) Ended June 30, 1998
vs Nine Months (YTD) and Three Months (QTR) Ended June 30, 1997
Increases/(Decreases)
(in thousands)
Sales Cost of Sales Net Change
YTD QTR YTD QTR YTD QTR
<S> <C> <C> <C> <C> <C> <C>
Beverage Division $ 5,229 $ 5,221 $10,343 $ 1,500 $(5,114) $ 3,721
Grove Management Division (233) (163) (224) (305) (9) 142
-------- -------- -------- -------- -------- -------
Total $ 4,996 $ 5,058 $10,119 $ 1,195 (5,123) 3,863
======== ======== ======== ========
Other costs and expenses net:
Selling, general and administrative 85 (543)
Gain on disposition of property and equipment 140 -
Other income and expense (255) (47)
Interest (383) 18
-------- -------
Income(loss) before income taxes (5,536) 3,291
Provision for income taxes 1,973 (1,180)
-------- -------
Net income(loss) $(3,563) $2,111
======== =======
</TABLE>
SALES
Sales for the nine and three month periods ended June 30, 1998
increased approximately $4,996,000 or 6.0% and approximately
$5,058,000 or 19.2%, respectively compared to the same periods in
the prior year. The Beverage Division accounted for the principal
increases for the nine and three month periods with increases in
sales of approximately $5,229,000 and $5,221,000, respectively.
Grove Management Division sales decreased by approximately $233,000
and $163,000 for the current nine and three month respective periods
compared to the same periods in the prior year.
-10-
BEVERAGE DIVISION The Beverage Division sales increased
approximately $5,229,000 or 6.6% and $5,221,000 or 20.9% in the
current nine and three month periods respectively compared to the
same periods in the prior year as a result of offsetting increases
and decreases.
Revenues from the sale of the Company's bulk citrus juice
products increased approximately $7,792,000 during the current nine-
month period and approximately $5,599,000 during the current three-
month period compared to the same periods in the prior year. As
part of the increase during the current nine-month period, revenues
from the volume of bulk citrus juice products sold increased
approximately $15,003,000. However, this increase in volume during
the current nine-month period was partially offset by decreased
prices for bulk citrus juice products of approximately $7,211,000
compared to the same period in the prior year. During the current
three-month period an increase in prices resulted in an increase in
revenues of approximately $2,626,000 for bulk citrus juice products
compared to the same period in the prior year. Additionally, the
volume of bulk citrus juice products sold during the current three-
month period increased revenues approximately $2,973,000 compared
to the same period in the prior year.
As the Company entered the 1997-98 season, the United States
Department of Agriculture ("USDA") announced in October 1997 a
significantly increased crop estimate of approximately 254,000,000
boxes of round oranges. The final crop was 244,000,000 boxes of
round oranges, which provided the largest Florida crop in history.
The expectation of this record crop resulted in sharply decreased
prices of bulk FCOJ. The Florida citrus industry is highly cyclical
subject to varying weather conditions and other natural phenomena
sometimes creating wide swings in economic conditions and
opportunities.
Sales of the Company's packaged citrus juice products decreased
approximately $1,728,000 and $721,000 during the current nine and
three month respective periods compared to the same periods in the
prior year. Contributing to these decreases in revenues were lower
prices for the packaged citrus juice products sold during the
current nine and three month periods of approximately $1,808,000 and
$807,000 respectively. Partially offsetting these decreases were
increases in volumes of approximately $80,000 and $86,000 during the
current nine and three month respective periods.
The Company's non-orange packaged juices and drink base product
sales increased approximately $470,000 and $243,000 during the
current nine and three month periods compared to the same periods in
the prior year. Increases in the volume of sales of these products
accounted for increases of approximately $417,000 and $53,000 during
the current nine and three month periods. Additionally, increases
in prices contributed approximately $53,000 and $190,000 to
increased revenues during the current nine and three month
respective periods compared to the same periods in the prior year.
Revenues from the sale of the Company's citrus by-products,
including feed, pulp cells, and citrus oils, decreased approximately
$1,141,000 and $832,000 during the current nine and three month
periods compared to the same periods in the prior year. Of these
decreases, revenues from by-products decreased approximately
$1,957,000 and $551,000 during the current nine and three month
periods as a result of lower prices for by-products sold compared to
the same periods in the prior year. Partially offsetting this
decrease in revenues during the current nine-month period was an
increase in revenues due to an increase in the volume of by-products
sold of approximately $816,000. However, during the current
three-month period revenues decreased by approximately $281,000
as a result of decreased volumes of by-products sold.
-11-
Storage, handling, processing citrus for customers under
contract, and other revenues decreased approximately $164,000 and
increased approximately $932,000 during the current nine and three
month periods respectively compared to the same periods in the prior
year. The decrease in the current nine months was due primarily to
decreases in the volume of these services performed compared to the
same period in the prior year. However, during the current three-
month period there was an increase in the volume of these services.
GROVE MANAGEMENT DIVISION Grove Management Division sales decreased
approximately $233,000 or 5.4% and $163,000 or 12.3% for the current
nine and three month periods compared to the same periods in the
prior year. The principal decrease in revenues of approximately
$142,000 during the current nine-month period resulted principally
from a reduction in the price of fruit sold to third party packers
and processors. However, during the current three-month period
revenues for fruit sold to third party packers and processors
increased by approximately $35,000 due to an increase in the volume
of fruit sold. During the current nine and three month periods
revenues decreased by approximately $30,000 and $136,000,
respectively, as a result of a decrease in the volume of harvesting
services performed. Additionally, revenues from grove management
services provided also decreased by approximately $61,000 and
$62,000 during the current nine and three month periods as a
combined result of a decrease in the price and volume of these
services provided.
GROSS PROFIT
Gross profit for the current nine and three month periods ended
June 30, 1998 decreased approximately $5,123,000 or 60.6% and
increased approximately $3,863,000 or 386.9% compared to the same
periods in the prior year. The principal decrease of approximately
$5,114,000 during the current nine-month period and the principal
increase of approximately $3,721,000 during the current three-month
period occurred in the Beverage Division. Gross profit for the
Grove Management Division decreased during the current nine-month
period by approximately $9,000 and increased by approximately
$142,000 during the current three-month period compared to the same
periods in the prior year.
BEVERAGE DIVISION Gross profit of the Beverage Division decreased
approximately $5,114,000 or 63.5% and increased approximately
$3,721,000 or 365.0% during the current nine and three month
respective periods compared to the same periods in the prior year.
Sales of bulk citrus juice products contributed to the decrease in
gross profit during the current nine-month period of approximately
$3,434,000 and increased approximately $2,136,000 during the current
three-month period compared to the same periods in the prior year.
Of the decreases in gross profit from the bulk citrus juice products
during the current nine-month period, approximately $7,211,000
resulted from decreased prices for these products. However, during
the current three-month period gross profit increased approximately
$2,626,000 as a result of increased prices for bulk citrus juice
products. Additionally, during the current nine and three month
periods gross profit increased approximately $596,000 and $362,000
respectively as a result of increases in sales volumes of bulk
citrus juice products sold during the current periods compared to
the same periods in the prior year. Gross profit also increased
approximately $3,181,000 during the current nine-month period due to
lower cost of production principally as a result of lower costs of raw
fruit and concentrate. However, during the current three-month
period gross profit decreased approximately $852,000 as a result of
higher costs of raw fruit and concentrate compared to the same period
in the prior year.
-12-
The Company utilizes the FCOJ futures market to hedge fruit
inventory, anticipated requirements and sales commitments of FCOJ.
The effects of this hedging activity, if any, flow through the
Consolidated Statements of Operations as the associated products are
sold. As of June 30, 1998 the Company held contracts for FCOJ
futures with unrealized losses of approximately $401,000 which would
have been realized if said positions had been prematurely liquidated
on that date. These unrealized losses are based upon the closing
market prices of equivalent futures obligations and do not
necessarily represent prices at which the Company expects to sell
the FCOJ.
Gross profit on sales of packaged citrus juice products decreased
approximately $1,900,000 and $602,000 during the current nine and
three month respective periods compared to the same periods in the
prior year. Lower prices during the current nine and three month
periods accounted for decreases in gross profit of approximately
$1,808,000 and $807,000 respectively. Additionally, during the
current nine-month period gross profit decreased approximately
$92,000 as a result of higher cost of production of packaged citrus
juices sold. However, during the current three-month period gross
profit increased approximately $205,000 as a result of lower costs
of production of packaged citrus juices sold compared to the same
period in the prior year.
Gross profit from the sale of the Company's non-orange packaged
juices and drink base products increased approximately $64,000 and
$865,000 during the current nine and three month respective periods
compared to the same periods in the prior year. Gross profit
increased approximately $54,000 and $190,000 during the current nine
and three month periods as a result of increased prices.
Additionally, gross profit increased approximately $10,000 during
the current nine-month period as a result of increases in sales
volumes. During the current three-month period gross profit
increased approximately $675,000 as a combined result of increases
in sales volumes and lower costs of production.
Gross profit from citrus by-products, including feed, pulp cells,
and citrus oils, decreased approximately $703,000 during the current
nine-month period and increased approximately $607,000 during the
current three-month period. Lower prices for by-products sold
during the current nine and three month periods resulted in
decreases in gross profit of approximately $1,956,000 and $552,000
during the respective current periods compared to the same periods
in the prior year. During the current nine and three month periods
lower costs of production for by-products sold resulted in increases
in gross profit of approximately $1,253,000 and $1,159,000 respectively.
Gross profit from storage, handling, and other activities
increased by approximately $859,000 and $715,000 during the current
nine and three month periods principally due to a decrease in the costs of
providing these services performed compared to the same periods in the prior
year.
GROVE MANAGEMENT DIVISION Grove Management Division gross profit
decreased approximately $9,000 or 1.3% during the current nine-month
period and increased approximately $142,000 or 191.8% during the
current three-month period compared to the same periods in the prior
year. The primary decrease in gross profit during the current nine-
month period of approximately $183,000 was a combined result of a
reduction in prices and higher cost of fruit sold to third party
packers and processors. Partially offsetting the decrease in gross
profit during the current nine-month period was an increase
of approximately $166,000 resulting from a decrease in the
cost of harvesting services provided during the current period.
Gross profit also increased approximately $8,000 during
the current nine month period primarily due to a decrease
in the cost of grove management services provided.
-13-
During the current three-month period gross profit increased
approximately $113,000 as a result of a decrease in the cost of fruit
sold to third party packers and processors. Additionally, during the
current three month period gross profit increased by approximately $29,000
as a result of increased prices charged for harvesting services combined
with decreases in the cost of harvesting and grove management services.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
Selling, general and administrative expenses decreased
approximately $85,000 or 2.0% and increased approximately $543,000
or 58.5% for the current nine and three month periods respectively
compared to the same periods in the prior year. Of the decrease in
the current nine-month period, approximately $97,000 resulted from
a reduction in other costs. Offsetting this decrease was an increase
in salary and benefit costs of approximately $12,000. In the current
three-month period an increase of approximately $540,000 resulted
primarily from an increase in other costs. Also, salary and benefit
costs increased approximately $3,000.
GAIN/(LOSS) ON DISPOSITION OF PROPERTY AND EQUIPMENT AND OTHER
The increased gain on the disposition of property and equipment
of approximately $140,000 for the current nine-month period
ending June 30, 1998 compared to the same period in the prior year
was principally due to the gain from insurance proceeds on damage to
the product storage warehouse previously reported. There was no
comparable event in the same period of the prior year.
Other expenses increased approximately $255,000 during the current
nine-month period as compared to the same period in the prior year.
This increase resulted primarily from an increase of approximately
$180,000 in the provision for doubtful notes receivable.
INTEREST EXPENSE
Interest expense increased approximately $383,000 or 19.1% and
decreased approximately $18,000 or 2.2% during the current nine and
three month respective periods compared to the same periods in the
prior year. During the current nine-month period, increases of
approximately $182,000 and $168,000 were due to increases in the
average interest rate and decreases in capitalized interest respectively.
Also during the current nine-month period deferred loan costs and other
charges increased approximately $33,000. During the current three-month
period a decrease of $153,000 and an increase of $152,000 were due
to decreases in the average outstanding debt and increases in
interest rates respectively compared to the same period in the prior
year. Also deferred loan costs and other charges decreased approximately
$8,000. Increases in capitalized interest resulted in decreased interest
expense of approximately $9,000.
LIQUIDITY AND CAPITAL RESOURCES
The Company's Bartow processing plant normally operates from
early November through late May or June. While the plant is in
operation, the inventory of processed juice increases to a level
which will cover anticipated sales until the following November when
the plant begins operation again. The Company's working capital
credit facility is generally utilized to finance these inventories.
Borrowings under this credit facility normally peak in late May or
June. The Company began processing activities for the 1997-98
season in November.
-14-
The Company's ability to generate cash adequate to meet its
needs, including the financing of its inventories and trade
receivables, has been supported primarily by cash flow from
operations and periodic borrowings under its primary $45 million
credit facility. This facility is principally secured by
substantially all of the Company's current assets. The outstanding
balance at June 30, 1998 was approximately $34,603,000. The
interest rate is variable based upon the financial institution's
cost of funds plus a margin. The terms of the agreement call for
repayment of the principal amount in April 2000; accordingly, it is
classified as long-term debt. The Company anticipates that the
working capital facility will be adequately serviced with cash
proceeds from operations.
Additionally, as of June 30, 1998 the Company had a $10 million
short-term capital revolving credit facility. As of June 30, 1998
there was no outstanding balance on this facility. The interest
rate on this facility is variable based upon the financial
institution's cost of funds plus a margin.
Current assets increased approximately $12,195,000 as of June 30,
1998 compared to September 30, 1997. The principal component of
this was an increase in inventories of approximately $8,607,000 due
to the seasonal accumulation of inventories. Also, deferred tax
assets increased approximately $484,000 as a result of increases in
net operating loss carrybacks. The Company's accounts receivable
balance increased approximately $4,611,000 during the nine months
ending June 30, 1998 due principally to increased sales.
Additionally, there was a decrease in cash and short-term cash
investments of approximately $577,000. Advances on fruit purchases
decreased approximately $440,000 as the Company processed the
purchased fruit and collected these advances. Other current assets
decreased approximately $490,000.
Current liabilities decreased approximately $610,000 during the
first nine months of fiscal 1998 compared to September 30, 1997.
There was an increase of approximately $941,000 in accrued expenses
associated with fruit purchases and increases in accounts payable
and other accrued expenses of approximately $2,312,000 principally
due to seasonal processing expenses. Offsetting these increases was
a decrease of $3,863,000 in the current portion of long-term debt.
At June 30, 1998 the Company's outstanding long-term debt was
approximately $63,305,000 including the working capital facility of
approximately $34,603,000. In addition current installments of long-
term debt were approximately $3,413,000 with the remaining amounts
due on various dates over the subsequent ten years. The Company
anticipates that amounts due over the next twelve months will be
paid out of working capital. At June 30, 1998 the Company was out
of compliance with loan covenants related to debt service coverage
and debt to equity ratios as a result of previous losses and high
seasonal working capital requirements. The lenders have waived
these requirements for the current periods without penalty.
Management believes its relationships with its lenders are good.
During the first nine months of the current fiscal year, capital
expenditures of approximately $770,000 were made for the
installation of new irrigation systems on 3,063 acres of Company-
owned groves. Also, costs of caring for newly planted citrus trees
in the amount of approximately $1,222,000 were capitalized, and
expenditures of approximately $113,000 were made for grove
operations equipment. Additionally, expenditures of approximately
$3,887,000 were made during the same period primarily for the
purpose of improving the efficiency of the Bartow processing
facility. The Company anticipates that these improvements will be
financed principally by working capital or by securing additional
funds under existing mortgages.
During the past three fiscal years, the Company has been making
capital expenditures to improve and update its computer systems to
enhance the efficiency of its production, processing, marketing,
sales and management systems. As a result, it has concurrently
addressed the "Year 2000" issue. Management believes that the
new systems will be completed in fiscal 1998 and that the Company's
systems will then be in compliance with "Year 2000" issues.
-15-
The Company has not determined what impact the "Year 2000"
problem may have on its customers, vendors, creditors or others with
whom the Company conducts business, and therefore, has not
ascertained what effect, if any, their level of compliance may have
on the Company.
OTHER SIGNIFICANT EVENTS
In October 1997 the United States Department of agriculture
("USDA") announced a Florida crop estimate of approximately
254,000,000 boxes of round oranges for the 1997-98 season. The
final crop of 244,000,000 boxes of round oranges has provided the
largest Florida crop in history. The expectation of this record
crop resulted in sharply decreased prices for bulk FCOJ. The
Florida citrus industry is highly cyclical subject to varying
weather conditions and other natural phenomena sometimes creating
wide swings in economic conditions and opportunities.
-16-
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8
Exhibit No. EXHIBIT
10.30 Loan Agreement by and among Farm Credit of South
Florida, ACA, Farm Credit of Southwest Florida,
ACA, and Orange-co, Inc. and Orange-co of Florida,
Inc. dated June 30, 1998.
10.31 Consolidated, Amended and Restated Florida
Mortgage and Security Agreement between Orange-co
of Florida, Inc. and John Hancock Mutual Life
Insurance Company dated June 2, 1998; and Renewal
Note between Orange-co, of Florida, Inc. and John
Hancock Mutual Life Insurance Company dated June
2, 1998.
27 Financial Data Schedule (Electronic Filing Only)
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934 the Registrant has duly caused this report to be signed on its
behalf by the undersigned thereunto duly authorized.
ORANGE-CO, INC.
(Registrant)
Date: August 14, 1998 By: /s/Gene Mooney
--------------
Gene Mooney
President and Chief Operating Officer
Date: August 14, 1998 By: /s/Dale A. Bruwelheide
----------------------
Dale A. Bruwelheide
Vice President, Chief Financial Officer,
and Principal Accounting Officer
-17-
EXHIBIT 10-30
LOAN AGREEMENT
THIS LOAN AGREEMENT (the "Loan Agreement") is made and
entered into by and among FARM CREDIT OF SOUTH FLORIDA, ACA, a
federally chartered agricultural credit association, ("South"),
FARM CREDIT OF SOUTHWEST FLORIDA, ACA, a federally chartered
agricultural credit association ("Southwest"), (with South and
Southwest collectively referred to herein as the "Associations")
and Orange-co, Inc. and Orange-co of Florida, Inc., (collectively
referred to herein as the "Borrowers"), with reference to the
following facts:
A. Borrowers have requested the Associations to extend to
Borrowers a syndicated term loan allocated among each of the
Associations in an aggregate amount of $3,500,000.00.
B. The Associations are willing to make the aforesaid
syndicated term loan upon the terms and conditions set forth in
this Agreement, with each of the Associations committing to
extend the following loans:
(i) A loan from South in the amount of $1,500,000.00
(ii) A loan from Southwest in the amount of
$2,000,000.00; and
IN CONSIDERATION OF the foregoing facts and other good and
valuable considerations, the receipt and sufficiency of which is
hereby acknowledged, and of the mutual covenants and agreements
contained in this Loan Agreement, Borrowers and the Associations
agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.1 Definitions. For the purpose of this Agreement,
the following terms shall have the respective meanings specified
in this Section 1.1 (such meanings to be equally applicable to
both the singular and plural forms of the terms defined):
"7.6 Loan" shall mean the $7,600,000.00 loan from Southwest to
Borrowers dated April 19, 1993, as modified and secured by the
First Mortgage.
"5.0 Loan" shall mean the $5,000,000.00 loan from Southwest to
Borrowers dated May 16, 1996, and secured by the First Mortgage.
"7.6 Note" shall mean that certain promissory note from Borrowers
to Southwest dated April 19, 1993, last renewed effective April
1, 1998.
"5.0 Note" shall mean that certain promissory note from Borrowers
to Southwest dated May 16, 1996.
"2.0 Note" shall mean the promissory note dated
June 30, 1998, executed by Borrowers in favor of Southwest,
pursuant to this Agreement.
"1.5 Note" shall mean the promissory note dated
June 30, 1998, executed by Borrowers in favor of South,
pursuant to this Agreement.
"ACA Stock" or "Borrower Stock" shall mean the common voting
stock issued to Orange-co, Inc., in the amount of $1,000.00 in
each Association pursuant to the Act in the total sum of
$2,000.00 par value.
"Act" shall mean the Farm Credit Act of 1971, as amended.
"Affiliate" shall mean any Person directly or indirectly
controlling, controlled by, or under direct or indirect common
control with any Person. A Person shall be deemed to control a
corporation if such Person possesses, directly or indirectly, the
power to direct or cause the direction of the management and
policies of such corporation, whether through the ownership of
voting securities, by contract or otherwise.
"Agent" shall mean Farm Credit of Southwest Florida, ACA, acting
in its capacity as agent for the Associations pursuant to the
Loan.
"Agreement" shall mean this Loan Agreement as originally executed
by the parties hereto and all permitted amendments and
modifications hereof, including all exhibits and schedules.
"Appraisal" shall mean an appraisal of the Real Property,
prepared by an appraiser approved by the Associations in
accordance with applicable regulations under The Act, and
otherwise in form and substance acceptable to the Associations.
The aforesaid appraisal must show the Real Property to have a
value of no less than $16,200,000.00.
"Associations" shall mean Farm Credit of South Florida, ACA and
Farm Credit of Southwest Florida, ACA.
"Borrowers" shall mean Orange-co, Inc., a Florida corporation and
Orange-co of Florida, Inc., a Florida corporation.
"Business Day" shall mean any day other than a Saturday, Sunday
or day on which the Associations are authorized to close under
applicable laws.
"Collateral" shall mean Borrower Stock, the Personal Property,
other property and money of Borrowers now or hereafter in the
custody, possession or control of Associations, and the Real
Property (including related improvements and fixtures).
"Collateral Sharing Agreement" shall mean that certain Agreement
between South and Southwest dated June 30, 1998, addressing
additional rights of South and Southwest concerning the Agency
relationship and rights in the Collateral.
"Costs" shall mean all costs, expenses, losses and damages
sustained or incurred by the Associations in connection with,
because of, or as a result of any default or any one or more
Events of Default of Borrowers under this Agreement, the Loan
Documents or any of them, or in realizing upon, protecting,
perfecting, defending or enforcing, or any combination thereof,
the rights and remedies of the Associations under this Agreement,
the Loan Documents, or any of them, including, without
limitation, all title premiums, title research costs, appraisal
fees, recording charges, documentary stamp taxes, intangible
taxes, all environmental consultants and engineer's fees and
costs and all appraiser's fees and costs, expert fees, and all
attorney's fees and costs, including paralegal fees in all legal
proceedings, including administrative, trial, appellate, probate,
bankruptcy or any other legal or administrative proceeding,
regardless of whether suit is brought.
"Current Ratio" shall mean current assets divided by current
liabilities, as determined in accordance with GAAP.
"Debt" shall mean as to any Person (i) all obligations of
borrowed money, (ii) obligations evidenced by bonds, debentures,
notes or similar instruments, or upon which interest payments are
customarily made, (iii) all obligations under conditional sale or
other title retention agreements relating to property purchased
by that Person (other than customary reservations or retentions
of title under agreements with suppliers entered into in the
ordinary course of business), (iv) all obligations, including,
without limitation, any items, issued or assumed as the deferred
purchase price of property or services purchased (including trade
debt incurred in the ordinary course of business and regardless
of the due date thereof) which would appear as liabilities on a
balance sheet, (v) all obligations under take-or-pay or similar
agreements or under commodities agreements, (vi) all Debt of
others secured by (or for which the holder of such debt has an
existing right, contingent or otherwise, to be secured by), any
lien on, or payable out of the proceeds of production from,
property owned or acquired by that Person, whether or not the
obligations secured thereby have been assumed, (vii) all guaranty
obligations, (viii) the principal portion of all obligations
under capital leases other than operating leases, (ix) all
obligations in respect of interest rate protection agreements,
foreign currency exchange agreements, commodity purchase or
option agreements or other interest or exchange rate or commodity
price hedging agreements, (x) the maximum amount of all standby
letters of credit issued or banker's acceptance facilities
created and, without duplication, all drafts drawn thereunder (to
the extent unreimbursed), (xi) all preferred stock or other
equity interests issued and required by the terms thereof to be
redeemed, for which mandatory sinking fund payments are due, by a
fixed date, and (xii) other off balance sheet financing
arrangements including, without limitation, synthetic leases,
which, for purposes of this Agreement, shall not include
operating leases.
"Debt to Equity Ratio" shall mean the total liabilities of a
Borrower divided by the net worth of such Borrower, excluding
deferred taxes.
"Default Rate" shall mean an interest rate equal to the Interest
Rate plus two percent.
"Due Date" shall mean the date any payment of principal or
interest is due and payable on the Loan or Syndication Notes.
"Environmental Laws" shall mean any federal, state or local law,
statute, ordinance or regulation pertaining to health, industrial
hygiene or the environmental conditions on, under or about the
Real Property, including, without limitation, the Comprehensive
Environmental Response Compensation and Liability Act of 1980
("CERCLA") as amended 42 U.S.C. Section 9601 et seq. and the
Resource Conservation and Recovery Act of 1976 ("RCRA"), 42U.S.C.
Section 6901 et seq.
"Event of Default" shall mean an event of default specified in
Article VII of this Agreement.
"Farm Products" shall mean crops or supplies owned by Borrowers
used or produced in fanning operations at the Real Property
including citrus fruits and other fruits or products of crops
prior to severance from the Real Property for any Borrower
engaged in raising or other farming operations; provided,
however, that Associations' lien shall not extend to the crops
upon their severance from the Real Property until the earlier of:
(i) acquisition of title to the Real Property by foreclosure,
deed in lieu of foreclosure, or other mechanism; (ii) the
appointment of a receiver for the Real Property; (iii) or the
filing of a petition in bankruptcy by or against a Borrower which
becomes an Event of Default.
"Financial Statements" shall mean those financial statements of
Borrowers described in Section 4.6 of this Agreement.
"Financing Statements" shall mean the financing statement or
statements executed and delivered by Borrowers for the purpose of
perfecting the Security Interest under the UCC or any other state
law.
"First Mortgage" shall mean the Real Estate mortgage dated April
19, 1993, recorded in Official Record Book 312, Page 1151, Public
Records of DeSoto County, Florida, as modified in Official Record
Book 364, Page 450, and further modified in Official Records Book
406, Page 409, all of the Public Records of DeSoto County,
Florida, which is a first lien on and security interest in the
Real Property and on the personal property encumbered thereby and
shall remain subject only to those exceptions and matters
satisfactory to the Associations.
"Fiscal Year" shall mean the fiscal year of each Borrower ending
on 9/30 in each calendar year. Subsequent changes of the fiscal
year of a Borrower shall not change the term "fiscal year,"
unless the Associations shall consent in writing to such changes.
"Future Advance" shall mean the advance under the First Mortgage
to secure the 2.0 Note by a mortgage lien against the Real
Property, which such future advance shall be represented by a
future advance receipt to the First Mortgage recorded in the
Public Records of DeSoto County, Florida.
"GAAP" shall mean generally accepted accounting principles
consistently applied.
"Hazardous Substance" shall include, without limitation, the
following: (i) those substances included within the definitions
of "Hazardous Substances," "Hazardous Materials," "Toxic
Substances," or "Solid Waste" in CERCLA, RCRA and the Hazardous
Materials Transportation Act, 49 U.S.C. Section 1801 et seq., and
in the regulations promulgated pursuant to said laws; (ii) those
substances defined as "Hazardous Waste" in any Florida Statute
and in the regulations promulgated pursuant to any Florida
Statute; (iii) those substances listed in the United States
Department of Transportation Table (49 CFR Part 172 and
Amendments thereto) or by the Environmental Protection Agency (or
any successor agency) as Hazardous Substances (40 CFR Part 302
and Amendments thereto); (iv) such other substances, materials
and waste which are or become regulated under applicable local,
state or federal law, or which are classified as hazardous or
toxic under federal, state or local laws or regulations; and (v)
any material waste or substance which is (1) petroleum; (2)
asbestos; (3) polychlorinated biphenyl; (4) designated as a
"Hazardous Substance" pursuant to Section 311 of the Clean Water
Act 33 U.S.C. Section 1251 et seq. or listed pursuant to Section
307 of the Clean Water Act (5) flammable explosive; or (6)
radioactive materials.
"Interest Rate" shall mean an annual interest rate equal to 2.25%
above the 5 year yield of U.S. Treasury debt obligations as of
the day of closing on the Loan.
"Loans" shall mean the 7.6 Loan, the 5.0 Loan and this Loan.
"Beneficial Majority Ownership" shall mean ownership, either
directly, or indirectly through any subsidiary, affiliate or
other intermediary, of more than 50% of each class of voting
stock of any corporation.
"Minimum Current Ratio" shall mean the current assets of a
Borrower divided by the current liabilities of a Borrower, as
determined under GAAP.
"Notes" shall mean collectively the 7.6 Note, the 5.0 Note and
the Syndication Notes.
"Obligations" with respect to Borrowers, shall mean, individually
and collectively, all payment and performance duties, obligations
and liabilities of Borrowers to any of the Associations, however
and whenever incurred, acquired or evidenced, whether primary or
secondary, direct or indirect, absolute or contingent, sole or
joint and several, or due to become due, including, without
limitation, all Costs and all such duties, obligations and
liabilities of Borrowers to any of the Associations, under and
pursuant to the Loan Documents and all renewals, modifications or
extensions of any thereof.
"Permitted Exceptions" shall mean only the Schedule B-2
exceptions contained in the final First Mortgage Title Policy and
the final title policy for the Supplemental Mortgage which will
be accepted by the Associations and are listed on Exhibit B
attached hereto and made a part.
"Personal Property" shall mean: all rents, equipment, machinery,
fixtures, pumps, irrigation pipes, wells, and improvements,
whether now on the Real Property or hereafter placed thereon, and
all accessions, parts or replacements now or hereafter affixed to
the Real Property or used in connection therewith; all surface
water management permits and all water use permits; all contract
rights, and leases associated with the Real Property and all Farm
Products.
"Person" shall mean any individual, joint venture, partnership,
firm, corporation, trust, unincorporated organization or other
organizational entity, or a governmental body or any department
or agency thereof, and shall include both the singular and the
plural.
"Place of Business" shall mean those places of business in which
any Borrower undertakes any of its business and shall include
each Borrower's Principal Place of Business.
"Potential Default" shall mean an event that but for the lapse
of time or the giving of notice, or both, would constitute an
Event of Default.
"Principal Place of Business" shall mean the principal place of
business and the headquarters of each Borrower at which place all
of its records are kept and which is located at the address set
forth in Section 11.3 of this Agreement.
"Proceeds" shall mean whatever is received upon the sale,
exchange, collection or other disposition of all or any portion
of the Collateral.
"Proportionate Share" shall mean each Association's proportionate
share of the Loan as set forth in Section 2.1, including each
Association's percentage rates of return on repayment of
principal and income, and percentage obligations of each
Association for expenses incurred in the administration of the
Loan or Costs, which have not been recaptured from Borrowers
which each Association is responsible to contribute pursuant to
this Agreement or any other Loan Document. In the event that the
Proportionate Share of the Loan shall change, Associations shall
execute a certificate evidencing the new Proportionate Share.
"Real Property" shall mean that certain real property consisting
of approximately 3,140 acres of citrus grove in the aggregate and
improvements thereon, situated in DeSoto County, Florida, all as
more particularly described in Exhibit A attached hereto and made
a part of.
"Security Agreement" shall mean that agreement dated June 30,
1998 pledging the Personal Property to all the Loans.
"Security Instruments" shall include the First Mortgage and the
Supplemental Mortgage on the Security Agreement and any other
agreements pledging collateral to secure the payment of the
Notes.
"Security Interest" shall mean the security interest granted in
the Collateral to the Associations pursuant to any Security
Instrument pledging the Personal Property.
"Subsidiary" shall mean any corporation more than fifty percent
(50%) of the stock of which is owned or controlled, directly or
indirectly, by any Borrower or its Affiliates.
"Supplemental Mortgage" shall mean that certain mortgage dated
June 30, 1998 given by Orange-co, Inc., to secure the $1.5 Note
with the Real Property.
"Loan Commitment Letter" shall mean the Associations' commitment
to make the Loan to Borrowers and Borrowers' acceptance thereof
on terms and conditions set forth in the letter dated March 11,
1998, from Southwest to Borrowers and all written amendments
thereto, if any.
"Loan Documents" shall mean this Agreement, the Syndication
Notes, the Security Instruments, the Financing Statements, the
Loan Commitment Letter, and all the other documents, agreements,
certificates, schedules, statements and opinions, however
described, referenced herein or executed or delivered pursuant
hereto or in connection with or arising with the Loan or the
transactions contemplated by this Agreement.
"Loan" shall mean the $3,500,000.00 loan evidenced by the
Syndication Notes.
"Loan Origination Fee" shall mean the fee paid to Associations
for establishment of this credit facility in the total sum of
$6,500.00.
"Syndication Notes" shall mean the $1.5 Note in favor of South,
and the $2.0 Note in favor of Southwest and executed by
Borrowers.
"Tangible Working Capital" shall mean the Current Assets of a
Borrower minus the Current Liabilities of such Borrower.
"Title Agent" shall mean the law firm of Peterson & Myers, P.A.,
as Agent for Chicago Title Insurance Company.
"First Mortgage Title Policy" shall mean the mortgagee title
insurance policy #10-0065-02-003795 written on Chicago Title
Insurance Company insuring the First Mortgage as a first lien on
the Real Property which shall be endorsed upon execution and
recordation of the Future Advance for an additional insured
amount of $2,000,000.00. The title policy shall otherwise only
be adjusted to provide for change in the effective date of the
title policy, and shall contain no additional exceptions to the
title except the Permitted Exceptions. Borrowers shall provide
Agent with a Commitment to Endorse the title policy at or prior
to closing. All "GAP" exceptions shall be eliminated at closing
from the title policy, as endorsed.
"UCC" shall mean the Florida Uniform Commercial Code, Chapters
671 to 680, inclusive.
SECTION 1.2 Accounting Terms. All accounting terms used
herein shall be construed in accordance with GAAP and all
financial data submitted pursuant to this Agreement shall be
prepared in accordance with GAAP. In the event of ambiguities
between this Agreement and GAAP, the more conservative principle
or interpretation shall be used.
SECTION 1.3 Other Definitional Provisions. All of the terms
defined in this Agreement shall have such defined meanings when
used in all the Loan Documents unless the context shall otherwise
require. All terms defined or used in this Agreement in the
singular shall have comparable meanings when used in the plural,
and vice versa. Terms defined in, or by reference to, the UCC,
including Chapter 679 of the Florida Statutes, to the extent not
otherwise defined herein shall have the respective meanings given
to them in the UCC, including Chapter 679 of the Florida
Statutes, with the exception of the word "document," unless the
context clearly requires such meaning. The words "hereby",
"hereto", "hereof", "herein", "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement
as a whole and not to any particular provision of the this
Agreement. The use of "to", "until", "on", and words of similar
import in this Agreement, in indicating expiration, shall be
interpreted to include the date mentioned. The neuter genders as
used herein and whenever used shall include the masculine,
feminine and neuter as well. Whenever in this Agreement any of
the parties hereto is referred to, such reference shall be deemed
to include the permitted successors and assigns of such party
unless the context shall expressly provide otherwise.
ARTICLE II
AMOUNTS AND TERMS OF THE LOAN
SECTION 2.1 Loan. The Associations agree, upon the terms
and conditions set forth in this Agreement, and in reliance upon
the representations and warranties made under this Agreement, to
make the Loan to Borrowers in an amount up to $3,500,000.00
solely for the purpose of allowing Borrowers to reduce their
existing Indebtedness under loans with third parties. The
Associations shall each make a portion of the Loan as follows:
Association Loan Amount Proportionate
Share
(a) South $1,500,000.00 42.86%
(b) Southwest $2,000,000.00 58.14%
Total Loan $3,500,000.00 100.00%
SECTION 2.2 Interest on the Syndication Notes. The Loan
shall be evidenced by the Syndication Notes and shall be due and
payable in accordance with and as required by Section 2.6,
Borrowers shall not be liable under the Syndication Notes except
with respect to funds actually advanced to Borrowers by the
Associations pursuant to the terms hereof. The Syndication Notes
shall bear interest from the date thereof on the unpaid principal
balance thereof from time to time outstanding at the Interest
Rate. From and after the due date, interest shall accrue on the
unpaid principal balance of the Syndication Notes or on such
defaulted payment, from the due date thereof at the Default Rate.
Such interest shall continue to accrue at the Default Rate until
the date of payment in full of all principal and accrued but
unpaid interest of such defaulted payment, if applicable.
SECTION 2.3 Advance of Loan Proceeds on the Loan. Each
Association shall disburse to Title Agent at the closing of the
transactions set forth herein their Proportionate Share of the
Loan as set forth in Section 2.1 above for disbursement to or for
Borrowers' benefit.
SECTION 2.4 Calculation of Interest. Agent shall be
responsible for calculation of interest due under this Agreement.
Further, Agent shall give prompt notice to Borrowers and the
other Association of the applicable Interest Rate determined by
Agent pursuant to the terms of this Agreement. Interest shall be
calculated on the basis of a year containing 365 or 366 actual
days, as applicable.
SECTION 2.5 Place of Payment. Except for the final
balloon payments on the Syndication Notes, all payments by
Borrowers under the Loan Documents shall be made at the Agent in
Arcadia, Florida, or at such other place as the Agent may direct,
in lawful money of the United States of America and in
immediately available funds. Agent will promptly thereafter
cause to be distributed (i) such payments of principal and
interest in like funds to each Association at its address set
forth in this Agreement, and (ii) other fees payable to each
Association to be applied in accordance with the terms of this
Agreement. The balloon payments due in accordance with Section
2.6 below shall be paid directly to each of the Associations in
accordance with the terms of the respective Note at the offices
of each of the Associations at the addresses set forth in this
Agreement.
SECTION 2.6 Payment of Syndication Notes. Borrowers shall
pay the Syndication Notes together with interest at the Interest
Rate as follows:
(a) Commencing on July 1, 1998 and through June 1, 2003,
each of the Syndication Notes shall require monthly payments of
interest;
(b) The amortization of each Note shall begin on July 1,
1998 based on equal Quarterly payments of principal on a straight
10-year principal amortization and continue to April 1, 2003.
(c) The entire unpaid principal balance of each of the
Syndication Notes plus all accrued interest on each of the
Syndication Notes will be due and payable on July 1, 2003 in a
balloon payment.
SECTION 2.7 Application of Payments. All payments made in
connection with the Loan shall be applied first to Costs, then
accrued interest to the date of payment, and next to the unpaid
principal balance of the Syndication Notes. All payments shall
be made prior to 1:00 p.m. in available funds, and if not so made
shall be credited as of the next Business Day.
SECTION 2.8 Default Rate of Interest. If any installment of
interest or principal is not paid when due and remains unpaid at
the end of thirty (30) calendar days or if any other Event of
Default shall occur and be continuing for thirty (30) days
(without regard to cure periods) after written notice by Agent
thereof, interest on the entire principal balance outstanding
under the Loan shall accrue at the Default Rate, commencing as of
the date the installment was due or the date of occurrence of the
Event of Default, whichever is applicable, and continuing until
such overdue installment is paid or Event of Default is cured.
SECTION 2.9 Prepayment of Principal. No Borrower may prepay
all or part of the principal of the Syndication Notes except as
provided herein. All principal prepayments shall be subject to a
prepayment premium (the "Prepayment Premium") equivalent to the
Associations' loss of yield, if any, on the portion of principal
of the Loan prepaid, as calculated in accordance with the mark to
market conventions used by the Associations and hereinafter
described. For purposes of this Agreement, a prepayment shall be
deemed to have occurred if any Borrower pays the Obligations in
full following an acceleration after an Event of Default. All
principal prepayments shall be applied prorata to reduce the
principal installments due under the Syndication Notes in inverse
order of maturity. Prepayment Premium shall mean an amount
determined as follows:
1. There shall first be determined the Proportionate
Amount (the "Proportionate Amount"), which is the ratio of the
principal amount being prepaid to the then total principal amount
outstanding on the Loan.
2. The present discounted value (the "Present Value") of
the Proportionate Amount of all interest and principal payments
which would be paid over the remainder of the term of the Loan
shall then be determined. In determining the Present Value, the
following provisions shall apply:
(a) The amount of scheduled payments of interest
and principal over the remaining term of the Loan shall be
multiplied by the Proportionate Amount to arrive at the Interest
and principal payments to be used to arrive at the Present Value;
(b) The amount and schedule of payments under
clause (a) above shall then be discounted as if no prepayment had
occurred;
(c) The discount rate to be used will be a rate
equal to (x) the then-existing yield on US Treasury Obligations
having a maturity date most closely corresponding to the "Average
Life" of the remaining term of the Loan (regardless of when the
payments of Interest and principal are due), plus (y) 2.25% (i.e.
225 basis points). "Average Life" shall mean the point in time
when one half (1/2) of the then outstanding principal balance of
the Loan will have been repaid.
3. The Prepayment Premium shall be equal to (x) the Present
Value determined under Paragraph 2 above, less (y) the principal
amount being prepaid. Provided however, if the Present Value is
less than the principal amount being prepaid, Borrowers shall not
be entitled to receive a refund.
SECTION 2.10 Collateral and Security Interest. To secure
the payment, observance and performance of the Syndication Notes,
Borrowers shall grant to the Associations mortgage liens and
security interests in and upon the Real Property and Personal
Property in accordance with the terms of the Security
Instruments.
SECTION 2.11 Loan Origination Fee. As consideration for the
Associations making the Loan to Borrowers, Borrowers shall pay to
each Association its Proportionate Share of the Loan Origination
Fee.
SECTION 2.12 Other Fees and Costs. Borrowers shall pay all
expenses, taxes and fees incurred in connection with the
documentation, underwriting and closing of the Loan and this
Agreement, including, but not limited to, the Associations'
attorney's fees, recording fees, lien search fees, title
insurance premiums, appraisal fees, survey costs, and other
reasonable fees and expenses as may be required.
SECTION 2.13 ACA Stock and Right of Setoff. The ACA Stock
and all future allocated surplus or other equities owned in each
of the Associations are subject to the risk of capital impairment
and shall be retired at the sole discretion of each of the
Association's board of directors. The Associations have a
statutory first lien on the ACA Stock as Collateral for the
Syndication Notes as provided under the Act. Ownership of ACA
Stock, and all allocated surplus and other equities will be
evidenced by entries recorded in the books of the Associations.
Orange-co, Inc. shall be designated as the member of each
Association and owner of the ACA Stock. Borrowers hereby
acknowledge that Associations are authorized to exercise their
right of set-off against the ACA Stock, and any allocated surplus
stock, or other equities in the Associations, now or hereafter
owned by any Borrower, upon an Event of Default and as provided
in the Act.
SECTION 2.14 Monies of Borrowers/Associations Right of
Setoff. Borrowers hereby grant to the Associations a right of
setoff with respect to any other amounts held by any of the
Associations in any interest reserve or funds held accounts or
other monies of any Borrower in the possession of any of the
Associations, to secure and as Collateral for, the payment and
performance of the Obligations. The Associations may, at any
time upon the occurrence of an Event of Default, unless the Event
of Default is cured as provided in Article VIII hereof, without
demand or further notice, appropriate and setoff against and
apply the same to the Obligations when and as the Obligations
become due and payable. All such set offs shall be remitted by
Associations to Agent for distribution to the Associations for
each Association's Proportionate Share thereof.
SECTION 2.15 Maximum Legal Interest Rate. Notwithstanding
anything herein or in any Loan Document to the contrary, the sum
of all interest and all other amounts deemed interest under
Florida or other applicable law which may be collected by the
Associations hereunder shall not exceed the maximum lawful
interest rate permitted by such law from time to time. The
Associations and Borrowers intend and agree that under no
circumstance shall Borrowers be required to pay interest on the
Loan or on any other Obligations at a rate in excess of the
maximum interest rate permitted by applicable law from time to
time, and in the event any such interest is received or charged
by the Associations in excess of that rate, Borrowers shall be
entitled to an immediate refund of any such excess interest by a
credit to and payment toward the unpaid balance of the
Obligations (such credit to be considered to have been made at
the time of the payment of the excess interest) with any excess
interest not so credited to be immediately paid to Borrowers by
the Associations.
ARTICLE III
CONDITIONS TO CLOSING
Subject to the compliance with the terms of this Agreement,
the Associations shall make the Loan to Borrowers in accordance
with the terms hereof. The obligation of each of the
Associations hereunder is expressly conditioned upon Borrowers
executing and delivering, or causing to be executed and
delivered, to Agent the following Loan Documents and photocopies
or originals, as appropriate, of all documents, certifications
and information listed below, all in form and content
satisfactory to the Associations, along with such other
documents, items or instruments as the Associations or their
attorneys, may reasonably require:
SECTION 3.1 The Opinion Letter. An Opinion of counsel of
Borrowers, who must be an attorney-at-law licensed to practice in
the State of Florida, which shall meet the criteria of the
Reports on Standards for Opinion of Florida Legal Counsel for
Business and Real Estate Transactions dated June, 1997 and be
otherwise acceptable to Associations and their counsel and
contain at least the following opinions:
(a) That each Borrower is duly incorporated and validly
existing under Florida law and in good standing and that the
execution and delivery of the Loan Documents and the closing of
the Loan have been duly authorized by all necessary corporate
action on the part of each Borrower.
(b) That each Borrower has the unrestricted right and
capacity to execute and deliver each of the Loan Documents to be
executed and delivered by each Borrower and that no Borrower has
executed any documents of any kind, including any prior loan or
bonded indebtedness documents, which would prohibit the execution
and delivery of the Loan Documents incident to this Agreement.
(c) That each Borrower has all licenses, permits and
approvals from all applicable governmental authorities necessary
to use and to operate such Borrower's business for the specific
purpose contemplated by such Borrower and represented to the
Associations.
(d) The Syndication Notes and all other Loan Documents have
been duty authorized, executed and delivered by each Borrower and
are the legal, binding, valid and enforceable obligations of each
Borrower in accordance with their respective terms, except as the
enforcement of them may be limited by bankruptcy, insolvency,
moratorium and other applicable debtor relief laws.
(e) That to the best of such counsel's knowledge, there are
no undisclosed material legal actions or proceedings involving
pending or threatened against, or with reference to any Borrower
or the Collateral, before any court, quasi judicial or
administrative body or regulatory agency.
(f) That the Loan does not violate in any manner the usury
laws of the State of Florida, and the manner and payment of
interest under the Loan and all charges required to be paid under
the Loan (including any prepaid interest, service charges,
participation payments, reserved interest, additional interest,
loan commitment fees, loan processing fees, broker's fees, and
other charges contemplated, if any) are neither illegal nor
usurious under the laws of the State of Florida.
(g) The execution and delivery of the Loan Documents by
each Borrower does not violate, conflict with, result in a breach
of or default under any applicable statute, regulation, rule,
order or other legal requirement applicable to each such Borrower
(or any of them), or any agreement by which any of their
properties are bound, or result in the creation of any imposition
of any lien, charge or encumbrance upon the assets of any
Borrower other than as contemplated by this Agreement.
(h) All taxes and recording, registration or filing
fees required to be paid to any authority with respect to the
execution, recording, registration or filing of any of the
documents securing the Loan have been duly paid in fall,
including all documentary stamp taxes and intangible taxes,
payable incident to the Syndication Notes, the Future Advance,
and the Supplemental Mortgage.
(i) Such other matters and opinions as the Associations
and/or their counsel may reasonably require.
SECTION 3.2 Corporate Documents. As to each Borrower, a
certificate from the Florida Secretary of State stating that such
corporation is in good standing and that corporate taxes are
current, and a certificate from such corporation stating that (a)
the corporation is in good standing with all license, income, and
franchise taxes paid; (b) no proceeding for the dissolution or
liquidation of any Borrower is in effect; (c) a resolution (which
shall be stated verbatim in the certificate) has been duly
adopted by such corporation's Board of Directors and remains in
full force and effect specifically authorizing such corporation
to borrow under the Loan, and authorizing certain named officers
to execute and deliver documents on behalf of and bind each
corporation; and (d) copies of each corporation's Articles of
Incorporation filed with the Secretary of State and all
amendments thereto, the By-Laws of the corporation currently in
effect, and any shareholders agreements currently or in the
future affecting the control, voting rights, ownership or
transfer of the shares of the stock of the corporation which are
attached to the certificate as true and correct copies.
SECTION 3.3 Additional Documentation. Such other
documentation as the Associations may reasonably require.
SECTION 3.4 Survey. A copy of the most recent surveys and
legal descriptions of the Real Property that any Borrower has in
its possession accompanied by an affidavit of an officer of
Orange-co, Inc., attesting to the absence of change in
boundaries, encroachments and overlaps of the Real Property.
SECTION 3.5 Title Commitments.
(a) A title commitment to endorse the First Mortgage Title
Insurance Policy increasing the coverage by $2,000,000.00 issued
by Chicago Title Insurance Company (the "Title Company") and
including copies of all exceptions to coverage. The policy must
(1) guarantee that the Future Advance to the First Mortgage is
the first lien on the Real Property; (2) name Southwest and its
successors and/or assigns as the insured; (3) name Orange-co,
Inc. as the fee simple title holder to the Real Property; (4)
contain only the Permitted Exceptions; and (5) provide such
affirmative coverage's and endorsements as may be required by the
Associations or the Associations' counsel.
(b) A title commitment to issue a mortgagee title insurance
policy in the principal sum of not less than $1,500,000.00 issued
by the Title Company, agreeing to insure the Supplemental
Mortgage in favor of South, as a valid lien on the Real Property,
subject only to the recording of the First Mortgage and the
Permitted Exceptions and shall show Orange-co, Inc. as the fee
simple title holder to the Real Property. In addition,
commitment shall provide for such affirmative coverage's and
endorsements as may be required by the Associations or the
Associations' counsel. The final mortgagee policy shall be
issued to South within thirty (30) days from the date of closing.
SECTION 3.6 Environmental. Borrowers shall complete an
Environmental Hazards Assessment Form ("ENV-1"). In the event
the completed ENV-1 or the appraiser's report (required under
Section 3.10 hereof) reveals evidence of Hazardous Substances
contamination on the Real Property or threat of such
contamination from adjoining property, the Associations reserve
the right to withdraw their commitment to make the Loan.
SECTION 3.7 Regulatory Compliance. Evidence satisfactory to
the Associations that: (1) all governmental zoning ordinances,
restrictive covenants, comprehensive plan provisions, land
development regulations, concurrency management regulations, and
zoning issues affecting the Real Property have been complied
with; and (2) all water use permits and surface water management
permits are in full force and effect and have been pledged for
the Loan.
SECTION 3.8 Access. Evidence satisfactory to the
Associations which establishes legal ingress and egress from the
Real Property to a publicly dedicated roadway. This access in any
event must be reflected on the surveys provided to the
Associations and must be adequate for the Real Property and its
intended use as determined by the Associations in their
discretion. If the access is by private easement the easement
must be insured under the Title Policies
SECTION 3.9 The Following Policies of Insurance:
(a) Public liability insurance in the minimum amount of
$1,000,000.00.
(b) At all times, if any improvements on the Real Property
are located in a special flood hazard zone, Borrowers shall
obtain and maintain flood insurance in form and substance
acceptable to the Associations, designating the Associations as
an additional loss payee, in an amount equal to the lesser of the
outstanding balance of the Loan or the maximum amount available
and otherwise in form and substance approved by the Associations,
including a standard noncontributing mortgagee clause and a
standard subrogation clause.
(c) Business interruption insurance and insurance covering
such other risks as the Associations may require;
(d) Such other insurance policies with such coverages as
are normally maintained by persons engaged in business similar to
Borrowers.
As to all such policies, the Associations must be named as
mortgagee and loss payee, as applicable, and shall be entitled to
receive thirty (30) days advance written notice of cancellation
or material change. An original policy, a certified true copy of
the policy or a certificate evidencing the policy must be
obtained prior to closing of the Loan. All insurance policy
requirements shall be maintained in good standing during the
entire term of the Loan. All insurance companies furnishing the
coverage must be acceptable to the Associations.
SECTION 3.10 Appraisal. An appraisal of the Real Property
satisfactory to the Associations.
SECTION 3.11 Additional Documentation. The Associations
shall have received such other documentation as the Associations
may reasonably require.
In addition to the above requirements, the obligations of
the Associations to close the Loan and make any Advance under the
Syndication Notes are subject to compliance with the following
additional conditions precedent:
SECTION 3.12 No Default. On the date hereof, Borrowers
shall be in compliance with all the terms and provisions set
forth in the Loan Documents on their part to be observed or
performed, and no Event of Default or Potential Default shall
have occurred and be continuing at such time.
SECTION 3.13 Loan Documents. Borrowers shall have executed
and delivered or caused to be delivered to the Associations, in
fully executed form, all the Loan Documents, in form and
substance satisfactory to the Associations, as the Associations
may request and all of the Loan Documents shall be in full force
and effect.
SECTION 3.14 Payment of closing fees, the loan fees and all
costs of closing shall have been paid.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
Borrowers represent and warrant to each of the Associations
(which representations and warranties shall survive the execution
and delivery of the Loan Documents) that:
SECTION 4.1 Organization, Powers, etc. Each Borrower (i) is
a corporation duly organized, validly existing and in good
standing under the laws of the State of Florida, (ii) has all
requisite power and authority to own its properties and assets
and to carry on its business as now conducted and proposed to be
conducted, (iii) is duly qualified to do business and is in good
standing in every jurisdiction in which the character of its
properties or assets owned or the nature of its activities
conducted makes such qualification necessary, and (iv) has the
power and authority to execute and deliver, and to perform its
obligations under the Loan Documents.
SECTION 4.2 Authorization of Loan for Borrowers, etc. The
execution, delivery and performance of the Loan Documents by each
Borrower (a) has been duly authorized by all requisite action and
(b) will not (i) violate (A) any provision of law, any
governmental rule or regulation, any order, writ, judgment,
decree, determination or award of any court, arbitrator or other
agency of government, (B) the Articles of Incorporation or Bylaws
of any Borrower or (C) any provision of any indenture, agreement
or other instrument to which any Borrower is a party or by which
it or any of its properties or assets are bound, (ii) be in
conflict with, result in a breach of or constitute (with due
notice or lapse of time or both) a default under any such
indenture, agreement or other instrument, or (iii) result in the
creation or imposition of any lien, charge or encumbrance of any
nature whatsoever upon any of the properties or assets of any
Borrower other than as permitted by the terms hereof.
SECTION 4.3 Binding Effect. This Agreement is, and the
Syndication Notes and the other Loan Documents when delivered
hereunder will be legal, valid and binding obligations of each
Borrower, enforceable against each Borrower in accordance with
their respective terms, except (a) as enforceability may be
limited by any applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting the enforceability of
creditors rights; and (b) as enforceability may be limited or
qualified by general principles of equity, whether raised in a
proceeding at law or equity.
SECTION 4.4 Tax Payments. All federal, state and local tax
returns and reports of each Borrower required to be filed have
been filed, and all taxes, assessments, fees and other
governmental charges upon each Borrower, or upon any of such
Borrower's properties, assets, incomes or franchises, which are
due and payable in accordance with such returns and reports, have
been paid, other than those presently (a) payable without penalty
or interest, or (b) contested in good faith and by appropriate
and lawful proceedings prosecuted diligently. The aggregate
amount of the taxes, assessments, charges and levies so contested
is not material to the condition (financial or otherwise) and
operations of any such Borrower. The charges, accruals, and
reserves on the books of each Borrower in respect of federal,
state and local taxes for all fiscal periods to date are adequate
and no Borrower knows of any other unpaid assessment for
additional federal, state or local taxes for any such fiscal
period or of any basis therefore.
SECTION 4.5 Agreements.
(a) No Borrower is a party to any agreement, indenture,
lease or instrument or subject to any charter or other corporate
restriction or any judgment, order, writ, injunction, decree,
rule or regulation materially and adversely affecting its
business, properties, assets, operations or condition (financial
or otherwise). There are no unrealized losses with respect to
any such agreement, indenture, lease or instrument.
(b) No Borrower is a party to, or otherwise subject to any
provision contained in, any instrument evidencing indebtedness of
such Borrower, any agreement relating thereto or any other
contract or agreement which restricts or otherwise limits the
incurring of the Obligations to be evidenced by the Syndication
Notes.
(c) No Borrower is in default in the performance,
observance or fulfillment of any of the material obligations,
covenants or conditions contained in any material agreement or
instrument to which it is a party.
(d) Each Borrower enjoys lawful, peaceful and undisturbed
possession in all material respects to all permits, licenses,
trade names, trade marks, services marks and patents used or
whose use is contemplated in the operation of its business. Each
Borrower enjoys lawful, peaceful and undisturbed possession in
all material respects under all leases as to which such Borrower
is a lessee and all such leases are valid and subsisting and in
full force and effect.
SECTION 4.6 Financial Statements.
(a) Each Borrower has furnished the Associations with
financial statements year ending September 30, 1997. Such
financial statements including any related schedules and/or notes
are true and correct in all material respects and have been
prepared in accordance with GAAP and show all liabilities, direct
and contingent, of each such Borrower required to be shown in
accordance with such principles. The balance sheets fairly
present the condition of each Borrower as at the dates thereof,
and the profit and loss and surplus statements fairly present the
results of the operations of each Borrower for the periods
indicated.
(b) Since the date of the Financial Statements, there have
been no material undisclosed adverse changes in the actual or
anticipated assets, liabilities, financial condition, business,
operations, affairs or prospects (financial or otherwise) of any
Borrower from that set forth or reflected in the Financial
Statements, other than changes in the ordinary course of
business, none of which have been, either in any case or in the
aggregate, materially adverse.
SECTION 4.7 Litigation, etc. Except as disclosed in the
Financial Statements, there are no undisclosed actions,
proceedings or investigations pending or, to the knowledge of any
Borrower, threatened, against any Borrower or affecting any
Borrower (or any basis therefor known to any Borrower) which,
either in any case or in the aggregate, might result in any
material adverse change in the financial condition, business,
prospects, affairs or operations of any Borrower or in any
Borrower's properties or assets, or in any material impairment of
the right or ability of any Borrower to carry on its operations
as now conducted or proposed to be conducted, or in any material
liability on the part of any Borrower and none which questions
the validity of this Agreement, the Syndication Notes or any of
the other Loan Documents or of any action taken or to be taken in
connection with the transactions contemplated hereby or thereby.
SECTION 4.8 Violation of Judicial or Governmental Orders,
Laws, Ordinances or Regulations. No Borrower knows of any
violation nor has any notice of a violation of any court order or
of any law, regulation, ordinance, rule, order, code, or
requirement of any governmental authority having jurisdiction
over any Borrower that may detrimentally affect the business and
operation of any Borrower.
SECTION 4.9 Insurance. Borrowers maintain insurance coverage
on the Collateral naming the Associations as loss payee and
additional insured as its interests may appear.
SECTION 4.10 No Outstanding Debt. No Borrower has any
outstanding debt, except for: (i) the Loan; (ii) liabilities
shown on the Financial Statements; and (iii) other obligations in
the nature of trade payables incurred by Borrowers in their
ordinary course of business.
SECTION 4.11 Priority of Liens and Security Interest. The
Security Interest and liens granted to the Associations in the
Collateral shall be and are a perfected first and second liens in
the Real Property and Personal Property, there are no other liens
or security interests in the Collateral except for liens
expressly permitted or provided in this Agreement, and there will
be no other security interests or other liens upon the Collateral
during the term of the Loan without the prior written consent of
the Associations.
SECTION 4.12 Solvency. After giving effect to the funding of
the Loan, the application of the proceeds thereof as contemplated
by this Agreement and the Loan Documents, and the payment of all
estimated banking, legal, accounting and other fees related
thereto, each Borrower is solvent.
SECTION 4.13 Executive Offices And Location of Records.
Orange-co, Inc.'s Principal Place of Business is located at 2020
U.S. Highway 17, South, Bartow, FL 33830, and all of its books
and records are and shall be maintained there. Orange-co of
Florida, Inc.'s Principal Place of Business is located at 2020
U.S. Highway 17, South, Bartow, FL 33830, and all of its books
and records are and shall be maintained there.
SECTION 4.14 Investment Companies Act. No Borrower is an
"investment company" or a company "controlled" by, or an
"affiliated person" of, or "promoter" or "principal underwriter"
for, an "investment company" (as each of the quoted terms is
defined or used in the Investment Company Act of 1940, as
amended). The making of the Loan by the Associations, the
application of the proceeds and repayment thereof by Borrowers
and the consummation of the transactions contemplated by this
Agreement will not violate any provision of such act or any rule,
regulation or order issued by the Securities and Exchange
Commission thereunder.
SECTION 4.15 Racketeer Influenced and Corrupt Organizations
Act. No Borrower has ever been and is not now engaged, and will
not engage, directly or indirectly, in any pattern of
"racketeering activity" or in any "collection of any unlawful
debt," as each of the quoted terms or phrases is defined or used
by the Racketeer Influenced and Corrupt Organization(s) Act of
either the United States or the State of Florida, Title 18,
United States Code, Section 1961 et,.seg. and Chapter 895,
Florida Statutes, respectively, as each act now exists or is
hereafter amended (the "RICO Lien Acts"). No Borrowers' real
property, interest or interests of any kind, including beneficial
interest or interests, mortgages and leases, in or on the Real
Property and Personal Property, including money, has ever been,
is now, or is any way reasonably anticipated by any Borrower to
become, subject to the any lien, notice, civil investigative
demand, action, suit or any proceeding pursuant to the RICO Lien
Acts.
SECTION 4.16 Regulatory Compliance. Each Borrower has in
the past complied with and is presently complying in all material
respects with all laws applicable to such Borrower's business.
SECTION 4.17 Real Property. Except for the Permitted
Exceptions, the Real Property is free and clear of all liens and
other adverse claims of any nature, and Orange-co, Inc. has good
and marketable fee simple title to the Real Property. Upon the
execution and delivery of the Loan Documents, including the
Future Advance and Supplemental Mortgage, except for the
Permitted Exceptions, Southwest will have a perfected first
mortgage in the Real Property and South will have a perfected
mortgage lien upon the Real Property. There are no matters
pending against any Borrower or the Real Property that could
result in a change of the status of the title to the Real
Property during the period of time between the effective date of
the title commitments for both the Future Advance to the First
Mortgage and the Supplemental Mortgage, and the recording of the
Future Advance and Supplemental Mortgage (herein the "Gap").
Borrowers covenant that Borrowers will not commit any act or
permit any act to be committed that might result in a change in
the status of the title to the Real Property during the Gap, and
Borrowers shall indemnify the Associations, as well as the Title
Agent and the title insurance underwriter issuing the title
commitments and policies, from all costs and expenses (including
reasonable attorney fees) suffered as a result of a change in the
status of the title to the Real Property during the Gap.
SECTION 4.18 Use of Loan. The proceeds of the Loan shall be
used exclusively for the purposes set forth in Article Two of
this Agreement.
SECTION 4.19 ERISA Compliance. Each Borrower has complied
with and will continue to comply with the Employee Retirement
Income Security Act of 1974, as amended, (ERISA).
SECTION 4.20 Fair Labor Standards Act. Each Borrower has
complied with, and will continue to comply with, the provisions
of the Fair Labor Standards Act of 1938, 29 U.S.C. Section 200,
et seq., as amended from time to time (the "FLSA"), including
specifically, but without limitation, 29 U.S.C. Section 215(a).
This representation and warranty, and each reconfirmation hereof,
shall constitute written assurance from each Borrower, given as
of the date hereof and as of the date of each reconfirmation,
that each Borrower has complied with the requirements of the
FLSA, in general, and 29 U.S.C. Section 215(a)(1) thereof, in
particular.
SECTION 4.21 Communication with Accountants. Each Borrower
authorizes Agent to communicate directly with each Borrower's
independent certified public accountants and authorizes those
accountants to disclose to Agent any and all financial statements
and other information of any kind, including copies of any
management letter or substance of any oral information or
conversation that such accountants may have with respect to any
Borrower's business, financial conditions and other affairs.
Agent shall treat information so obtained as confidential, except
that Borrowers consent to the disclosure of such information to
the Associations.
SECTION 4.22 Hazardous Substances. There are no Hazardous
Substances on or under the Real Property and Borrowers are not
now engaged in any litigation, proceedings or investigations, nor
does any Borrower have any knowledge of any pending or threatened
litigation, proceedings or investigations regarding the presence
of Hazardous Substances on the Real Property which will result in
any material adverse change to the value of the Real Property or
in the financial condition of any Borrower.
SECTION 4.23 Zoning. Ordinances. Similar Laws and
Standards. The Real Property is currently zoned for the uses
intended and complies with all applicable zoning ordinances,
concurrency requirements, regulations and restrictive covenants
affecting the Real Property. Further, the uses of the Real
Property presently comply and will continue to comply with all
governmental laws, regulations, ordinances, rules, orders,
standards and codes and with all hazard insurance underwriters'
standards, without reliance on any variance or other special
exemption or provision.
SECTION 4.24 Utilities. All utility services necessary for
the use and the operation of the Real Property for its intended
purpose, are available at the boundary lines of the Real
Property.
SECTION 4.25 Eminent Domain. No condemnation or eminent
domain proceedings have been commenced or, to the knowledge of
any Borrower, are threatened against the Real Property.
SECTION 4.26 Governmental Permits. All governmental
permits, approvals, consents, and other authorizations required
in connection with the use of the Real Property, including all
surface water management permits and water use permits have been
or will be obtained before the Associations are obligated to
advance proceeds of the Loan to Borrowers, and Borrowers shall at
Agent's request, deliver copies of all such permits to the
Associations on or before the date that the Associations are
obligated to advance proceeds of the Loan to Borrowers.
SECTION 4.27 Access. All of the Real Property has access to
a publicly dedicated road right-of-way.
SECTION 4.28 Usury. The amounts to be received by the
Associations which are or which may be deemed to be interest
under any of the Loan Documents or otherwise in connection with
the transactions described herein constitute lawful interest and
are not usurious or illegal under the laws of the State of
Florida, and no aspect of the transaction contemplated by this
Agreement is or will be usurious.
SECTION 4.29 Borrower Setoffs. No Borrower has, as of the
date hereof, any defenses, counterclaims, or setoffs with respect
to any sums to be advanced under this Agreement or under any
other loan between Borrowers and any of the Associations
SECTION 4.30 Disclosure and No Representation, Warranty or
Document Untrue. To the best of each Borrower's knowledge, no
representation or warranty made by any Borrower contained herein,
the Loan Documents, or in any certificate or other document
furnished or to be furnished by any Borrower pursuant hereto, or
which will be made by any Borrower from time to time in
connection with the Loan Documents (a) contains or will contain
any misrepresentation or untrue statement of fact, or (b) omits
or will omit to state any material fact necessary to make the
statements therein not misleading, unless otherwise disclosed in
writing to the Associations. There is no fact known to any
Borrower which adversely affects, or which might in the future
adversely affect, the business, assets, properties or condition,
financial or otherwise, of any Borrower, except as set forth or
reflected in the Loan Documents or otherwise disclosed in writing
to the Associations.
SECTION 4.31 Continuation and Investigation. Borrowers'
warranties and representations contained in this Agreement are
and shall remain correct and complete until the Loan is paid in
full. All representations, warranties, covenants and agreements
made to or with the Associations by or on behalf of, or at the
request of any Borrower in connection with this Agreement may be
relied upon by the Associations notwithstanding any independent
investigation made by or on behalf of the Associations.
SECTION 4.32 No Subsidiaries. No Borrower has Subsidiaries,
except as set forth on Exhibit "C".
SECTION 4.33 Survival. All of the representations and
warranties set forth in this Article shall survive until all
Obligations are satisfied in full.
ARTICLE V
FINANCIAL COVENANTS OF BORROWERS
Borrowers covenant, for so long as any of the principal
amount of or interest on the Syndication Notes is outstanding and
unpaid or any duty or obligation of Borrowers hereunder or under
any other Obligation remains unpaid or unperformed, as follows:
SECTION 5.1 Financial Records. Borrowers at all times will
keep proper and adequate records and books of account in
accordance with GAAP, in which the full, true and correct entries
will be made of its transactions and which will properly and
correctly reflect all items of income and expense in connection
with the operation of Borrowers' business regardless of whether
such income or expense is realized by any Borrower.
SECTION 5.2 Delivery of Financial Statements. Borrowers
shall deliver or secure the delivery to Agent (and each Borrower
authorizes delivery by Agent to each of the Associations) copies
of each of the following:
(a) As soon as practicable and in any event within fifty
(50) days after the end of each fiscal calendar quarter during
the term of this Agreement, the consolidated balance sheet for
Borrowers as of the end of such period and the related statement
of income for such quarter and cumulative year-to-date, all in
reasonable detail and satisfactory in scope certified by an
authorized financial officer of Orange-co, Inc., prepared in
accordance with GAAP. Copies of Orange-co, Inc.'s 10-Q Reports
filed with the Securities and Exchange Commission may be
delivered to Agent in lieu of the quarterly financial statements
provided for herein provided, however, that an authorized
financial officer of Orange-co, Inc. will provide Agent with a
certification thereof as to the accuracy of such reports;
(b) As soon as practicable and in any event within ninety-
five (95) days after each Fiscal Year end, combined audited
Financial Statements of Borrowers prepared in accordance with
GAAP (consisting of an income statement, balance sheet, changes
in capital position and a reconciliation of net worth, including
all normal and reasonable financial notes and further setting
forth such changes in financial position, in each case, in
comparative form figures for the corresponding period in the
preceding fiscal year) that are certified by and contain an
opinion from certified public accountants of recognized national
standing reasonably acceptable to the Associations, all in
reasonable detail and further certified by an authorized
financial officer of each Borrower as to accuracy of such
reports;
(c) Borrowers will provide Agent with copies of all 10-
K Reports filed with the Security and Exchange Commission within
fifteen (15) days of filing of such reports.
(d) Together with each delivery of those items required in
clauses (a) and (b) above, Borrowers shall deliver to Agent a
certificate executed by the an authorized financial officer of
each Borrower, containing computations indicting compliance with
the financial covenant ratios contained in this Agreement and,
stating that to the best such officer's knowledge, (i) Borrowers
have kept, observed, performed and fulfilled each and every
Agreement binding upon them contained in the Loan Documents, and
is not at the time in default of the keeping, observance,
performance or fulfillment of any of the terms, provisions and
conditions thereof; and (ii) that none of the Events of Default
or Potential Defaults, have occurred, or if they have occurred,
specifying all such defaults or potential defaults of which the
officer may have knowledge.
(e) With reasonable promptness, such other data and
information as from time to time may be reasonably required by
the Associations.
SECTION 5.3 Accounting, Financial Statements of Affiliates
and Subsidiaries. The Subsidiaries and Affiliates will deliver
to Agent (and Borrower authorizes delivery by Agent to each of
the Associations) copies of the following:
(a) With reasonable promptness, such data and information
as from time to time may be reasonably required by the
Associations.
SECTION 5.4 Financial Covenants. Borrowers shall observe the
following financial covenants:
(a) Borrowers agree to maintain, on a consolidated basis, a
minimum Tangible Working Capital of $10,000,000.00.
(b) Borrowers agree to maintain a Current Ratio of not less
than 1.5 to 1.0.
(c) Borrowers agree, on a consolidated basis, not to exceed
a Debt to Equity Ratio of 0.85 to 1.0.
(d) The financial covenants required under this Subsection
shall be measured as of the last day of each fiscal quarter of
Borrowers. The financial covenants of this Subsection shall be
computed without regard to deferred tax balances as set forth in
FASB Standard 109.
SECTION 5.5 Quarterly Certification. Quarterly, Borrowers
shall furnish Agent with a Certificate from an authorized
financial officer of each Borrower that no Borrower is in default
of any covenant or obligation under this Agreement or under any
other loan to which Borrowers, or either of them, are a party, or
in the event a default does exist, Borrowers shall furnish such
information as is required under Section 6.3 of this Agreement.
SECTION 5.6 Changes in Accounting Methods. Neither Borrower
will amend or change its accounting methods or practices, its
depreciation or amortization policy or rates, or its fiscal year
end from that in existence as of the date of the Financial
Statements, except as required to comply with GAAP.
ARTICLE VI
OTHER AFFIRMATIVE COVENANTS OF BORROWER
SECTION 6.1 Inspection. Borrowers will permit Agent or
Agent's designated representative to (i) visit any Place of
Business, (ii) inspect the Collateral, (iii) inspect and make
extracts from Borrowers books and records, and (iv) discuss the
affairs, finances and accounts of any Borrowers with the officers
of Borrowers, all at such reasonable times and as often as may
reasonably be requested.
SECTION 6.2 Maintenance of Legal Existence: Compliance with
Laws. Each Borrower shall at all times preserve and maintain in
full force and effect their respective legal existence, powers,
rights, licenses, permits and franchises in the jurisdiction of
its organization; continue to conduct and operate its business
substantially as conducted and operated during the present and
preceding fiscal year of such Borrower; operate in full
compliance with all applicable laws, statutes, regulations,
certificates of authority and orders in respect of the conduct of
its business; and qualify and remain qualified as a foreign
organization in each jurisdiction in which such qualification is
necessary or appropriate in view of its business and operations.
SECTION 6.3 Notice of Default. Borrowers shall immediately
notify Agent in writing upon the happening, occurrence or
existence of any Event of Default, or Potential Default and shall
provide Agent with such written notice containing a detailed
statement by an authorized financial officer of each Borrower of
all relevant facts and the action being taken or proposed to be
taken by each Borrower with respect thereto.
SECTION 6.4 Maintenance of Properties. Each Borrower shall
maintain or cause to be maintained in good repair, working order
and condition the Collateral and all other properties used or
useful in their respective businesses and from time to time will
make or cause to be made all appropriate repairs, renewals,
improvements and replacements thereof so that the businesses
carried on in connection therewith may be properly and
advantageously conducted at all times. No Borrower will do or
permit any act or thing which might impair the value or commit or
permit any waste of its properties or any part thereof, or permit
any unlawful occupation, business or trade to be conducted on or
from any of its properties. To the extent any Borrower leases
any of its Places of Business, it shall maintain and keep current
at all times all leases for said places of business and shall
provide Associations with appropriate Landlord waivers for such
leased Place of Business.
SECTION 6.5 Notice of Suit, Proceedings, Adverse Change.
Each Borrower shall promptly give Agent notice in writing (a) of
all threatened or actual actions or suits (at law or in equity)
and of all threatened or actual investigations or proceedings by
or before any court, arbitrator or any governmental department,
commission, board, bureau, agency or other instrumentality,
state, federal or foreign, affecting any Borrower or the rights
or other properties of any Borrower or (i) which involves
potential liability of any Borrower in an amount in excess of
$50,000.00, or (ii) which the officers or directors of any
Borrower believe in good faith is likely to materially and
adversely affect the financial condition of such Borrower or to
impair the right or ability of such Borrower to carry on its
businesses as now conducted or to pay the Obligations or perform
its duties under the Loan Documents; (b) of any material adverse
change in the condition (financial or otherwise) of any Borrower;
and (c) of any seizure or levy upon any part of the properties of
any Borrower under any process or by a receiver.
SECTION 6.6 Execution and Delivery of Loan Documents. Each
Borrower shall execute and deliver to the Associations all Loan
Documents to be executed by such Borrower as and when requested
by the Associations.
SECTION 6.7 Debts, Taxes and Liabilities. Each Borrower
shall pay and discharge (i) all of its indebtedness and
obligations in accordance with its terms and before it shall
become in default, (ii) all taxes, assessments and governmental
charges or levies imposed upon it or upon its income and profits
or against its properties prior to the date on which penalties
attach thereto, and (iii) all lawful claims which, if unpaid,
might become a lien or charge upon any of its properties;
provided, however, that no Borrower shall be required to pay any
such indebtedness, obligation, tax, assessment, charge, levy or
claim which is being contested in good faith by appropriate and
lawful proceedings diligently pursued and for which adequate
reserves have been set aside on its books. Each Borrower shall
also set aside and/or pay as and when due all monies required to
be set aside and/or paid by any federal, state or local statute
or agency in regard to F.I.C.A., withholding, sales or excise or
other similar taxes.
SECTION 6.8 Notification of Change of Name or Business
Location. Borrowers shall notify Agent of each change in the
name of any Borrower and of each change of the location of any
Place of Business and the office where the records of any
Borrower are kept, and, in such case, shall execute such
documents as the Associations may reasonably request to reflect
said change of name or change of location, as the case may be;
provided, however, the Principal Place of Business of a Borrower
and the office where the records of Borrower are kept may not be
kept out of or removed from Polk County, Florida, without the
prior written consent of the Associations.
SECTION 6.9 Compliance With Laws. Borrowers will comply
with all laws, regulations, rules, ordinances, statutes, orders
and decrees of any governmental authority or court applicable to
Borrowers.
SECTION 6.10 Copies of All Default Notices. Borrowers shall
promptly provide the Associations with copies of all notices of
defaults or matters which will or become defaults upon the
expiration of applicable grace periods under the SunTrust Loan
Agreement and under any other agreement, contract, or lease,
whether contained in the notice or not which any Borrower
receives from time to time.
SECTION 6.11 Further Assurances. Borrowers will, at the cost
of Borrowers, and without expense to the Associations, promptly
upon the request of the Associations: (a) correct any defect,
error or omission which may be discovered in the contents of any
Loan Documents or in the execution or acknowledgment thereof; (b)
execute, acknowledge, deliver and record or file such other and
further instruments (including, without limitation, mortgages,
deeds or trusts, security agreements, financing statements and
specific assignments of rents or leases) and do such further
acts, in either case as may be necessary, desirable or proper in
the Associations' opinion to carry out more effectively the
purposes of the Loan Documents; to protect and preserve the lien
of the First Mortgage, Supplemental Mortgage and the Security
Interest on the Collateral subject thereto and any property
intended by the terms thereof to be covered thereby, including,
without limitation, any renewals, additions, substitutions or
replacements thereto; or protect the Security Interest of the
Associations and the Collateral against the rights or interest of
third parties. Borrowers hereby appoint Agent as its attorney-in-
fact, coupled with an interest, to take the above actions and to
perform such obligations on behalf of Borrowers, at Borrowers'
sole expense, if any Borrower fails to comply with its
obligations under this paragraph.
SECTION 6.12 After Acquired Property. Without the necessity
of any further act of any Borrower or the Associations, subject
to the limitations set forth in any specific Security Instrument,
the lien of and the Security Interest created in the Collateral
automatically extends to and include:
(a) Any and all renewals, replacements, substitutions,
accessions, proceeds, products or additions of or to the
Collateral, subject to the limitations contained in the
definition of Farm Products.
(b) Any and all monies and other property that from time to
time may either by delivery to the Associations or by any
instrument, be subjected to such lien and Security Interest by
Borrowers or by anyone on behalf of Borrowers, or with the
consent of Borrowers, or which otherwise may come into possession
or otherwise be subject to the control of the Associations
pursuant to the Loan Documents.
SECTION 6.13 Indemnity. Borrowers shall indemnify, defend
and hold harmless the Associations from and against, and
reimburse the Associations for, all claims, demands, liabilities,
losses, damages, judgments, penalties, Costs and expenses,
including, without limitation, attorney's fees and disbursements,
which may be imposed upon, asserted against or incurred or paid
by either the Associations by reason of, on account of or in
connection with any claim or damage occurring in, upon or in the
vicinity of the Collateral through any cause whatsoever, or
asserted against the Associations on account of any act performed
or omitted to be performed under the Loan Documents or on account
of any transaction arising out of or in any way connected with
the Collateral or the Loan Documents, except as a result of the
willful misconduct or gross negligence of the Associations.
SECTION 6.14 Additional Documents. From time to time,
Borrowers shall provide Agent the following additional
assurances:
(a) Preservation of Security. Borrowers shall sign and
deliver to Agent such documents, instruments, assignments and
other writings and do such other acts necessary or desirable to
preserve and protect the Collateral at any time securing or
intended to secure the Syndication Notes, as the Associations may
reasonably require.
(b) Additional Documentation. Borrowers shall furnish
such additional and/or updated copies of the documents required
by Article III above.
SECTION 6.15 Insurance. During the term of this Agreement,
Borrowers shall maintain the insurance coverage required by
Article III hereof.
SECTION 6.16 Application. Each Borrower shall use its best
efforts to collect the maximum amount of insurance proceeds (the
"Insurance Proceeds") payable on account of any act or occurrence
of any kind or nature which results in damage, loss or
destruction to the Real Property ("Casualty") and the maximum
award or payment or compensation payable ("Taking Proceeds") on
account of any action or proceeding which results in a
condemnation or other taking for public or private use of all or
any portion of the Real Property or which relates to injury,
damage, benefit or betterment thereto (a "Taking"). In the case
of a Casualty, the Associations may, at their sole option make
proof of loss to the insurer, if not made promptly by Borrowers.
No Borrower shall settle or otherwise compromise any claim of any
Borrower for Insurance Proceeds or Taking Proceeds without the
Associations' prior written consent in any amount of more than
$20,000.00. Each Borrower hereby assigns, sets over and transfers
to Associations, all Insurance Proceeds and all Taking Proceeds
and authorizes payment of such proceeds to be made directly to
the Agent for distribution to the Associations. The Associations
may, in their sole discretion, apply such proceeds to either of
the following, or any combination thereof: (i) payment of the
Syndication Notes, either in whole or in part, in any order
determined by the Associations in their sole discretion; or (ii)
repair or replacement, in part or entirely, of any part of the
Real Property or the improvements thereon so destroyed, damaged
or taken, in which event the Associations may impose such terms,
conditions and requirements for the disbursements of proceeds for
such purpose as they, in their sole discretion, deem advisable;
provided, however that the Associations shall allow the repair or
replacement of the Real Property so long as the Associations
determine, in their sole discretion, that no Event of Default or
Potential Default exists under the Loan Documents. The
Associations shall not be a trustee with respect to any Insurance
Proceeds or Taking Proceeds and may co-mingle Insurance Proceeds
or Taking Proceeds with its funds without obligation to pay
interest thereon. If the Associations elect to allow any
Borrower to use all or any portion of the proceeds for the
restoration of the Real Property, the Associations will make such
proceeds available to Borrowers upon such terms and conditions as
the Associations deem advisable in the Associations' sole and
exclusive discretion.
SECTION 6.17 Financial Records. Borrowers at all times will
keep proper and adequate records and books of account in
accordance with GAAP in which the full, true and correct entries
will be made of its transactions and which will properly and
correctly reflect all items of income and expense in connection
with the operation of Borrowers' businesses regardless of whether
such income or expense is realized by Borrowers.
SECTION 6.18 Environmental Compliance.
(a) No Borrower has undisclosed knowledge after due
investigation of (i) the presence of any unlawful "Hazardous
Substances" on the Real Property, or (ii) any spills, releases,
discharges or disposal of Hazard Substances that have occurred or
are presently occurring on or onto the Real Property or any
adjacent properties, or (iii) any spills or disposal of Hazardous
Substances that have occurred or are presently occurring off the
Real Property as a result of any construction or operation and
use of the Real Property.
(b) In connection with the operation and use of the Real
Property, each Borrower represents that, as of the date of the
First Mortgage and continuing through the date of the Future
Advance and Supplemental Mortgage, it has no undisclosed
knowledge of any failure to comply with all applicable local,
state and federal environmental laws, regulations, ordinances and
administrative and judicial orders relating to the generation,
recycling, re-use, sale, storage, handling, transport and
disposal of any Hazardous Substances.
(c) Each Borrower represents and warrants to the
Associations that it has duly investigated the present and past
uses of the Real Property and has made due inquiry of the
appropriate governmental agencies and offices having jurisdiction
over the Real Property and the laws regulating the environment,
as to whether the Real Property or any lands in the immediate
vicinity of the Real Property is or has been the site of, storage
of or contamination by any Hazardous Substances.
(d) No Borrower will use, generate, manufacture, produce,
store, release, discharge or dispose of on, under or about the
Real Property or transport to or from the Real Property any
Hazardous Substance or allow any other person or entity to do so,
except those which are used in accordance with applicable
Environmental Laws and with all required permits and approvals
and consistent with legal agricultural activities on the Real
Property. Each Borrower agrees to keep and maintain the Real
Property in compliance with and shall not cause or permit the
Real Property to be in violation of any Environmental Laws; and
(e) Each Borrower will give prompt written notice to the
Associations of the following: (i) any proceeding or inquiry by
any governmental authority (including, without limitation, the
Florida Department of Environmental Protection or any local
health department) with respect to the presence of any Hazardous
Substance on the Real Property or the migration thereof from or
to other lands; (ii) all claims made or threatened by any third
party against any Borrower or the Real Property relating to any
loss or injury resulting from any Hazardous Substance; and (iii)
any Borrower's discovery of any occurrence or condition on any
lands adjoining or in the vicinity of the Real Property that
could cause the Real Property or any part thereof to be subject
to any restrictions on the ownership, occupancy, transferability
or use of the Real Property under any Environmental Laws or any
regulation adopted in accordance therewith, or to be otherwise
subject to any restrictions on the ownership, occupancy,
transferability or use of the Real Property under any
Environmental Laws.
(f) The Associations shall have the right to join and
participate in, as a party if they so elect, any legal
proceedings or actions initiated in connection with any
Environmental Laws and have all their attorney's fees, Costs, and
other expenses in connection therewith paid by Borrowers.
(g) In the event that any investigation, site monitoring,
containment, clean up, removal, restoration or other remedial
work of any kind or nature (the "Remedial Work") is reasonably
necessary or desirable under any applicable local, state or
federal law or regulation, any judicial order, or by any
governmental or non-governmental entity or person because of, or
in connection with, the current or future presence, suspected
presence, release or suspected release of a Hazardous Substance
in or into the air, soil, ground water, surface water or soil
vapor at, on, about, under or within the Real Property (or any
portion thereof) Borrowers shall, within thirty (30) days after
written demand for performance thereof by the Associations (or
such shorter period of time as may be required under any
applicable law, regulation or agreement), commence to perform or
cause to be commenced, and thereafter diligently prosecute to
completion, all such Remedial Work. All Remedial Work shall be
performed by one or more contractors, approved in advance in
writing by the Associations and under the supervision of a
consulting engineer approved in advance in writing by the
Associations. All costs and expenses of such Remedial Work shall
be paid by Borrowers including, without limitation, the charges
of such contractor and/or the consulting engineer and each
Association's reasonable attorney's fees and any other Costs
incurred in connection with monitoring or reviewing such Remedial
Work. In the event that Borrowers shall fail to timely commence
or cause to be commenced or fail to diligently prosecute the
completion of such Remedial Work, the Associations may, but shall
not be required to, cause such Remedial Work to be performed and
all costs and expenses thereof, or incurred in connection
therewith, shall be deemed a Cost and become part of the debt
evidenced by the Syndication Notes and shall be secured by the
First Mortgage and Supplemental Mortgage.
(h) Each Borrower hereby agrees unconditionally, absolutely
and irrevocably to indemnify, defend and hold harmless the
Associations, their affiliates, successors, assigns and the
officers, directors, employees and agents of the Associations,
against and in respect of: (i) any loss, liability, cost, injury,
expense or damage of any and every kind whatsoever (including
without limitation, all Costs), which at any time and from time
to time may be suffered or incurred in connection with any
inquiry, charge, claim, cause of action, demand or lien made or
arising directly or indirectly or in connection with, with
respect to or as a direct or indirect result of the presence on
or under or the escape, seepage, leakage, spillage, discharge,
emission or release from the Real Property into or upon any land,
the atmosphere or any water course, body of water or wetlands of
any Hazardous Substances including, without limitation, any
losses, liabilities, damages, injuries, Costs and expenses
incurred in connection with removal, encapsulation or other
treatment of Hazardous Substances from or on the Real Property or
claims asserted or arising under the Environmental Laws whether
now known or unknown including, without limitation, all; (ii) any
loss or damage resulting from a loss of priority of the Future
Advance or the record First Mortgage due to the imposition of a
lien against the Real Property; (iii) any attorney's fees,
engineering fees and/or charges of any contractor or expert
retained or consulted in connection, with any inquiry, claim or
demand including, without limitation, any costs incurred in
connection with the compliance with such inquire, claim or
demand; (iv) any loss, liability, cost, expense or damage
(including, without limitation, attorney's fees) suffered or
incurred as a result of, arising out of or in connection with any
failure of the Real Property to comply with all applicable
Environmental Laws and any litigation, proceeding or
environmental investigation relating to such compliance or
noncompliance; (v) any loss, liability, cost, damage or expense
(including, without limitation, court costs and attorney's fees)
directly or indirectly arising from any claim, action, demand,
cause of action or damage relating to or in connection with any
personal injury concerning or relating to the presence of any
Hazardous Substance on the Real Property.
(i) The provisions of and the undertakings and
indemnification set out in this paragraph shall survive the
satisfaction and release of the Security Instruments and shall
continue to be the joint and several liability, obligation and
indemnification of Borrowers, binding upon Borrowers, forever.
(j) If at any time or times hereafter the Associations
employ counsel for advice or other representation with respect to
this indemnity, to represent the Associations in any litigation
contest, dispute, suit or proceeding in any way relating to this
indemnity or to enforce Borrowers' obligations under this
indemnity, then in all of the foregoing events, all of the
reasonable attorney's fees and expenses arising from such
services and all expenses, Costs and charges in any way arising
in connection therewith or relating thereto shall be paid by
Borrowers to the Associations, on demand.
(k) The representations, warranties and covenants of
Borrowers set forth in this paragraph shall continue in effect
and, to the extent permitted by law, shall survive the transfer
of title to the Real Property pursuant to foreclosure
proceedings, by deed in lieu of foreclosure or otherwise.
Borrowers acknowledge and agree that their covenants and
obligations under this paragraph are separate and distinct from
their obligations under the Security Instruments and any other
Loan Documents.
SECTION 6.19 Reappraisal. If at any time and for any reason
the Associations, in their sole opinion, reasonably determine
that the value of the Real Property may have declined or be less
than the Associations previously anticipated, or the Associations
are required to reappraise the Real Property pursuant to
regulation or direction from Farm Credit Administration, then,
within sixty (60) days from the Associations' written request,
Borrowers shall, at Borrowers' sole expense, provide to the
Associations a current appraisal of the Real Property, from an
appraiser reasonably acceptable to the Associations and in form
and content as required by the Associations. Borrowers shall
cooperate fully with such appraiser and provide all documents and
information as the appraiser may reasonably request in connection
therewith.
SECTION 6.20 Water Use Permits. Borrowers shall at all
times maintain all water use permits and shall provide copies of
all such permits to Associations upon request. Borrowers agree
to comply with all the terms and conditions of any each water use
permit associated with the Real Property and shall not
voluntarily amend or otherwise curtail the quantities of water
permitted for the Real Property without the prior written consent
of Associations. Further, Borrowers agree not to transfer any
quantities of water associated with the Real Property, as
currently permitted under water use permit, to any other location
without the prior written consent of Associations.
SECTION 6.21 Surface Water Management Permits. Borrowers
agree to comply with all of the terms and conditions of any
surface water management permit affecting the Real Property and
to furnish Associations with copies of all such surface water
management permits upon request by Associations. Further,
Borrowers agree to provide written notice to Associations of any
proposed amendments to any surface water management permits and
agree not to voluntarily amend such surface water management
permits without the prior written consent of Associations.
Borrowers agree to comply with all of the terms and conditions of
any surface water management permit affecting the Real Property
so long as any Obligations are outstanding.
SECTION 6.22 Year 2000 Compliance. Prior to June 30, 1999,
Borrowers shall furnish Associations with such reports, audits,
and other information as is necessary to demonstrate Borrowers'
compliance with all "Year 2000" mandates. All such reports shall
include analysis of Borrowers' information systems and computer
systems software and Borrowers shall make all such software and
hardware upgrades, as may be necessary, to preserve the integrity
of Borrowers' information systems for the transition to the
calendar year 2000. In the event Borrowers fail to furnish the
reports, audits, or other information as required by this
paragraph, Associations reserve the right, at Borrowers' sole
cost and expense to conduct such audits, tests, and reviews as
Associations reasonably deem necessary to ensure Borrowers'
ability to comply with all "Year 2000" mandates.
ARTICLE VII
NEGATIVE COVENANTS
Borrowers covenant, for so long as any of the principal
amount of, or interest on, the Syndication Notes is outstanding
and unpaid or any Obligations remain unpaid or unperformed, that
no Borrower will undertake any of the following actions, without
the prior written consent of the Associations:
SECTION 7.1 Merger, Consolidation, Dissolution, etc.
Consolidate with or merge into any other corporation or
partnership, including a merger of Borrowers; permit another
corporation or partnership to merge into either of them; dissolve
or take or omit to take any action which would result in their
dissolution; acquire all or substantially all the properties or
assets of any other Person; enter into any arrangement, directly
or indirectly, with any Person whereby a Borrower shall sell or
transfer any property, real or personal, whether now owned or
hereafter acquired, and thereafter rent or lease such property or
other property which such Borrower intends to use for
substantially the same purpose or purposes as the property being
sold or transferred.
SECTION 7.2 Changes in Business. Engage in any business
other than the business presently conducted by such Borrower on
the date of this Agreement and business of substantially the same
type or directly related thereto.
SECTION 7.3 Other Agreements. Enter into any arrangements,
contractual or otherwise, which would materially and adversely
affect any Borrower's duties to or the rights of, the
Associations under the Loan Documents, or which is inconsistent
with, limit, or abrogate any of the Loan Documents.
SECTION 7.4 Loans by Borrowers. Extend any credit or loan
any monies to any Person other than:
(a) advances made in the normal course of a Borrower's
business for harvesting costs;
(b) credit extended in connection with the sale of juice
dispensing equipment under purchase money security arrangements
represented by promissory notes and security agreements or
capital leases therefore ;
(c) loans and advances on an inter-company basis.
SECTION 7.5 Sale or Encumbrance.
(a) Convey, assign, sell, mortgage, encumber, pledge,
dispose of, hypothecate, grant a security interest in, grant
options with respect to, or otherwise dispose of (directly or
indirectly or by operation of law or otherwise, of record or not)
all or any, part of the legal or beneficial interest in any part
or all of the Collateral.
(b) Sell, assign or otherwise dispose of (whether or not of
record or for consideration or not), or permit the sale,
assignment or other disposition of, all or substantially all of
the assets of any Borrower.
SECTION 7.6 Loans to Borrowers/Liens on Collateral. Other
than loans with one or more of the Associations, Borrowers will
not borrow from anyone on the security of, or create, incur, or
suffer to exist any lien on any of the Collateral.
SECTION 7.7 Other Liens. Create, assume, or suffer to exist
any lien upon the Collateral, whether now owned or hereafter
acquired, except liens for taxes not yet due or which are being
actively contested in good faith by appropriate proceedings;
SECTION 7.8 Compliance with Regulation U and Regulation G.
Permit any part of the proceeds of the Loan made pursuant to this
Agreement to be used to purchase or carry or reduce or retire any
loan incurred to purchase or carry any margin stock (within the
meaning of Regulation U or Regulation G of the Board of Governors
of the Federal Reserve System) or to extend credit to others for
the purpose of purchasing or carrying any such margin stock, or
to be used for any other purpose which violates or which would be
inconsistent with the provisions of Regulation U, or Regulation
G, or other applicable regulation. Each Borrower covenants that
it is not engaged in and will not become engaged in as one of its
principal business activities, the extending of credit for the
purpose of purchasing or carrying such margin stock. If
requested by Associations, each Borrower will furnish to
Associations in connection with Loan hereunder, a statement in
conformity with the requirements of Federal Reserve Form U-1 or
comparable form pursuant to Regulation G, referred to in said
regulations. In addition, each Borrower covenants that no part
of the proceeds of the Loan hereunder will be used for the
purchase of commodity future contracts (or margins therefore for
short sales) for any commodity not required for the normal raw
material inventory of such Borrower.
ARTICLE VIII
EVENTS OF DEFAULT
The following each and all are Events of Default hereunder:
SECTION 8.1 Monetary Default. If Borrowers shall default in
any payment of the principal of or interest on the Notes, or any
of them, when and as the same shall become due and payable,
whether at maturity, by acceleration at the discretion of the
Associations or otherwise;
SECTION 8.2 Non-Monetary Default under the Agreement. If
Borrowers shall default in the performance or compliance with any
of the terms, conditions, covenants or agreements contained in
this Agreement (other than that set forth in Section 8.1 above);
SECTION 8.3 Third Party Default. If any Borrower shall
suffer a default in the performance under the SunTrust Loan
Agreement or under any agreement with any other Person other than
the Associations where such default involves a contractual
liability of such Borrower in excess of $1,000,000.00;
SECTION 8.4 Misrepresentation. If any representation or
warranty made in writing by or on behalf of any Borrower, in this
Agreement or in any other Loan Document, shall prove to have been
false or incorrect in any material respect on the date as of
which made or reaffirmed;
SECTION 8.5 Dissolution. If any order, judgment, or decree
is entered in any proceedings against any Borrower decreeing the
dissolution of such Borrower and such order, judgment, or decree
remains unstayed and in effect for more than thirty (30) days;
SECTION 8.6 Bankruptcy, Failure to Pay Debts, etc. If any
Borrower shall admit in writing its inability, or be generally
unable, to pay its debts as they become due or shall make an
assignment for the benefit of creditors, file a petition in
bankruptcy, petition or apply to any tribunal for the appointment
of a custodian, receiver or trustee for any Borrower or a
substantial part of any Borrower's assets, or shall commence any
proceeding under any bankruptcy, reorganization, arrangement,
readjustment of debt, dissolution or liquidation law or statute
of any jurisdiction, whether now or hereafter in effect, or if
there shall have been filed any such petition or application, or
any such proceeding shall have been commenced against any
Borrower, in which an order for relief is entered or which
remains undismissed for a period of thirty (30) days or more, or
any Borrower by any act or omission shall indicate its consent
to, approval of or acquiescence in any such petition,
application, or proceeding or order for relief for the
appointment of a custodian, receiver or any trustee for any
Borrower or any substantial part of any of its properties, or
shall suffer any such custodianship, receivership or trusteeship
to continue undischarged for a period of thirty (30) days or
more;
SECTION 8.7 Fraudulent Conveyance. If any Borrower shall
conceal, remove, or permit to be concealed or removed, any part
of its properties, with intent to hinder, delay or defraud its
creditors or any of them, or make or suffer a transfer of any of
its properties which may be fraudulent under any bankruptcy,
fraudulent conveyance or similar law, or shall have made any
transfer of its properties to or for the benefit of a creditor at
a time when other creditors similarly situated have not been
paid, or shall have suffered or permitted, while insolvent, any
creditor to obtain a lien upon any of its properties through
legal proceedings or distraint which is not vacated within thirty
(30) days from the date thereof;
SECTION 8.8 Final Judgment. If a final judgment for the
payment of money in excess of $500,000.00 shall be rendered
against any Borrower, and the same shall remain undischarged or
shall not be bonded off to the satisfaction of the Associations
for a period of thirty (30) consecutive days during which the
execution shall not be effectively stayed;
SECTION 8.9 Impairment of Security. If any Security
Instrument, agreement, or other instrument given to the
Associations to evidence or secure the payment and performance of
the Obligations hereunder shall be revoked by any Borrower or
shall cease to be in full force and effect, or the protection or
security afforded the Associations in any portion of the
Collateral secured thereby is impaired for any reason; or any
Borrower shall default in any material respect in the performance
or observance of any term, covenant, condition or agreement on
its part to be performed or observed under any Security
Instrument and such default shall not have been cured or waived
in any applicable grace period contained therein; or any
representation or warranty of any Borrower made in any Security
Instrument shall be false in any material respect on the date as
of which made; or for any reason (except for acts or omissions of
the Associations) the Associations shall fail to have a valid,
perfected and enforceable security interest, lien or mortgage
encumbering the Collateral (or any of them) as required under
this Agreement or if any Borrower shall contest in any manner
that any Security Instrument constitutes its valid and
enforceable agreement or any Borrower shall assert in any manner
that it has no further obligation or liability under such
agreement;
SECTION 8.10 Cross-Default. The default under any other Loan
between Borrowers and any Associations shall be deemed an Event
of Default hereunder.
SECTION 8.11 Condemnation. If the Real Property, or any
material part thereof, is condemned or taken by right of eminent
domain or other public authority and Borrowers' ability to carry
on its business is materially affected as a result of such
taking.
SECTION 8.12 Maintenance Of Majority Ownership.
(a) The failure of Ben Hill Griffin, Inc. to maintain a
Beneficial Majority Ownership of each Borrower.
(b) The failure of Ben Hill Griffin, III to maintain a
Beneficial Majority Ownership of Ben Hill Griffin, Inc.
ARTICLE IX
RIGHTS UPON DEFAULT
Upon the occurrence or continuing of any Event of Default,
the Associations shall have and may exercise any or all of the
rights set forth herein (provided, however, the Associations
shall be under no duty or obligation to do so):
SECTION 9.1 Acceleration. To declare the indebtedness
evidenced by the Syndication Notes and all other Obligations to
be forthwith due and payable, whereupon the Syndication Notes and
all other Obligations shall become forthwith due and payable,
both as to principal and interest, without presentment, demand,
protest or any other notice or grace period of any kind, all of
which are hereby expressly waived, anything contained herein or
in the Syndication Notes or in such other Obligations to the
contrary notwithstanding, and, upon such acceleration, the unpaid
principal balance and accrued interest upon the Syndication Notes
shall from and after such date of acceleration bear interest at
the Default Rate.
SECTION 9.2 Right of Setoff. To exercise any rights of
setoff granted by law or under this Agreement or the Loan
Documents.
SECTION 9.3 Other Rights. To exercise such other rights as
may be permitted under any of the Loan Documents or applicable
law.
SECTION 9.4 Uniform Commercial Code. To exercise from time
to time any and all rights and remedies of a secured creditor
under the UCC and any and all rights and remedies available to it
under any other applicable law.
SECTION 9.5 Foreclosure. Subject to the requirements of the
Act, foreclose the First Mortgage and the Supplemental Mortgage
on the Real Property and/or the Security Interest in the Personal
Property by instituting a foreclosure suit in any court having
jurisdiction thereof.
SECTION 9.6 Cure of Defaults. Cure any default or Event of
Default without releasing any Borrower from any obligation
hereunder or under the Loan Documents. In connection with
exercising its right to cure an Event of Default, the
Associations may enter upon the Real Property and do such acts
and things as the Associations deem necessary or desirable to
protect the Real Property, including, without limitation: (i)
paying, purchasing, contesting or compromising any encumbrance,
charge, lien, claim of lien, tax, assessment, fine, or other
imposition; (ii) paying any insurance premiums and (iii)
employing counsel, accountants, contractors and other appropriate
persons to assist the Associations in the foregoing.
SECTION 9.7 Receiver. Secure the appointment of a receiver
or receivers, as a matter of right for the Real Property, whether
such receivership is incident to a proposed sale of the Real
Property or otherwise, and without regard to the value of the
Real Property or the solvency of any Borrower. Each Borrower
hereby consents to the appointment of such receiver or receivers,
waives any and all defenses to such appointment and agrees not to
oppose any application therefor by the Associations. The
appointment of such receiver, trustee or other appointee by
virtue of any court, order or laws shall not impair or in any
manner prejudice the rights of the Associations to receive
payment of the rents and income pursuant to any lease assignment;
the receiver shall be appointed to take charge of, manage,
preserve, protect, and operate the Real Property and any business
or businesses situated thereon, or any combination thereof;
collect all income, including rents; harvest and sell crops not
severed as of the date of appointment of the receiver and collect
the proceeds therefrom; make all necessary and needed repairs;
pay all taxes, assessments and insurance premiums and all other
costs incurred in connection with the Real Property; and after
payment of the expenses of the receivership, including reasonable
attorney's fees and court costs, if any, to apply all net
proceeds derived therefrom in the reduction of the indebtedness
under the Notes and any other Obligations or in such other manner
as the court shall direct. All expenses, fees and compensation
incurred pursuant to any such receivership shall also be secured
by the lien of the First Mortgage and the Supplemental Mortgage
until paid. The receiver, personally or through agents, may
exclude any Borrower wholly from the Real Property and have,
hold, use, operate, manage and control the Real Property and may,
in the name of each Borrower, exercise all of each Borrower's
rights and powers to maintain, construct, operate, restore,
insure, and keep insured the Real Property in such manner as such
receiver shall deem appropriate.
SECTION 9.8 Other Security. The Associations may proceed to
realize upon any and all other security for the Syndication Notes
in such order as the Associations may elect; and no such action,
suit, proceeding, judgment, levy, execution or other process will
constitute an election of remedies by the Associations or will in
any manner alter, diminish or impair the lien and security
interest created by the Future Advance and the First Mortgage and
Supplemental Mortgage, unless and until the Syndication Notes are
paid in full.
SECTION 9.9 Collect Income. Following the occurrence of an
Event of Default, if the Associations shall be entitled to
collect and receive all income from the Collateral which shall
for all purposes constitute property of the Associations and
after deducting the expenses of conducting the business thereof
and of all maintenance, repairs, renewals, replacements,
alterations, additions, betterment's and improvements and amounts
necessary to pay for taxes, assessments, insurance and prior or
other profit charges upon the Collateral or any part thereof, as
well as just and reasonable compensation for the services of the
Associations and all attorneys, agents, clerks, servants and
other employees properly engaged by the Associations, the
Associations shall apply the money received, first to the payment
of the indebtedness secured by the First Mortgage, the Future
Advance, and the Supplemental Mortgage, when and as the same
shall become payable and then to the payment of any other sums
required to be paid by Borrowers to the Associations under the
Loan Documents.
SECTION 9.10 Use of Fund Balance. To use any funds of
Borrowers, including any balance which may be available in any
cash collateral, reserve or contingency account under the Loan.
SECTION 9.11 Status of the Collateral Upon an Event of
Default. Upon the occurrence of any Event of Default, and
pursuant to the procedures agreed to among the Associations under
Article IX, Agent, after giving written notice to Borrowers and
the Associations of the actions to be taken, may at any time or
times thereafter (i) deliver any correspondence or notices
required by this Agreement; (ii) receive directly, for the
benefit of all of the Associations and for the reduction of each
of the Syndication Notes as provided hereafter in this Agreement,
all payments and process related to the Collateral; and (iii)
oversee the exercise of the remedies permitted by this Article
IX, which remedies must be unanimously approved by each of the
Associations.
In the case of any sale of the Collateral, the proceeds
which then may be held or recovered by Agent for the benefit of
all of the Associations, shall be applied in the following order:
(a) First, to the payment of all of the reasonable costs
and expenses of such sale and of the collection or enforcement of
such collateral, and reasonable compensation to Agent, its agents
and attorneys, and all of the reasonable expenses and liabilities
incurred and advances made by Agent in connection therewith;
(b) Second, to the liquidation of the indebtedness under
the 7.6 Loan as required by the Collateral Sharing Agreement.
(c) Third, to the payment ratably of the amounts due for
principal and of interest on each of the Syndication Notes and
the liabilities on the 5.0 Loan then outstanding, without
preference or priority of such indebtedness owing to one
Association over a another, or of principal over interest, or of
interest over principal; and
(d) Fourth, to the payment of the surplus, if any, to
Orange-co., Inc. or its successors or assigns, or to whomsoever
may be lawfully entitled to receive the same, or as a court of
competent jurisdiction may direct.
SECTION 9.12 Rights of the Associations. Subsequent to the
existence of an Event of Default, or of a Potential Default, the
Associations shall meet to establish written procedures to be
taken by Agent for the protection, collection and enforcement of
the Collateral. Agent shall not act with respect to the
Collateral except in accordance with the written procedures as
established by the unanimous consent of the Associations and
under Agent's loan participation agreement with AgFirst Farm
Credit Bank; provided, however, if an emergency situation exists,
Agent, in its sole discretion and in good faith, may (but is not
required to) take whatever action it deems necessary to protect
the Collateral or enforce the rights of the Associations under
the Loan Documents until the Associations agree on a written
procedure in accordance with this Section.
SECTION 9.13 Enforcement of the Syndication Notes. Nothing
herein contained shall affect or impair any Association's right,
which is absolute and unconditional, to enforce the payment of
its Note, provided; however, that none of the Associations may
enforce or demand enforcement of, any rights or liens with
respect to the Collateral except upon the terms and conditions
stated in this Agreement.
SECTION 9.14 Obligation to the Associations. Borrowers
shall be deemed to be directly obligated to each of the
Associations to the extent of the full amount of the Note in
favor of such Association, and each Association shall be entitled
to exercise the rights of offset applicable to it pursuant to
this Agreement.
SECTION 9.15 Default Other Obligations. Each Association
may, at its option, treat an Event of Default under this
Agreement as an Event of Default or default under any other loan
between Borrowers or either of them and such Association.
The Associations agree among themselves that, if an
Association shall obtain payment through the exercise of a right
of offset or other collection efforts, such Association shall
remit such amount to Agent for redistribution to Associations
pursuant to their Proportionate Share as set out in this
Agreement.
ARTICLE X
AGENCY PROVISIONS
SECTION 10.1 Authorization and Action. Each Association
hereby irrevocably appoints and authorizes Agent to take such
actions as agent on behalf of such Association and to exercise
such powers under this Agreement as are delegated to Agent by the
terms of this Agreement, together with such additional powers as
are reasonably incidental thereto. Agent shall not, by reason of
this Agreement, be a trustee or fiduciary for any of the other
Associations. Agent shall have only those duties and
responsibility expressly set forth in this Agreement. As to any
matters not expressly provided for in this Agreement and the
Collateral Sharing Agreement (including, without limitation,
enforcement or collection of the Syndication Notes), Agent shall
not be required to exercise any discretion or take any action,
but shall be required to act or to refrain from acting (and shall
be fully protected in so acting or so refraining from acting)
upon the instructions given by the Associations (with such
instructions to require the unanimous consent of all of the
Associations), and such instructions shall be binding upon all
holders of the Syndication Notes; provided, however, Agent shall
not be required to take any action which exposes Agent to
personal liability or which is contrary to this Agreement, the
Collateral Sharing Agreement, or applicable law.
In general, and except as otherwise provided in this
Agreement, The Collateral Sharing Agreement or any of the other
Loan Documents and except as otherwise mutually agreed by Agent
and each of the Associations, Agent will act on behalf of each of
the Associations in connection with the receipt and collection of
payments with respect to accounts payable, accrued interest,
penalties or prepayment charges and principal under the Loan and
Agent will service, manage, collect and enforce the Loan on
behalf of itself and each other Association.
SECTION 10.2 Termination of Agency Status.
10.2.1 Notwithstanding any contrary provision contained
in this Agreement, any Association may terminate the agency of
the Agent with respect to the Loan, by providing written notice
thereof to Agent, upon the occurrence of any of the following
events:
(a) The appointment of a conservator or receiver for,
or the liquidation of, Agent by the Farm Credit Administration or
the filing of any petition of bankruptcy by or against Agent
unless discharged within thirty (30) days; or
(b) The Association shall make a good faith
determination that Agent has failed or refused to comply with
its duties and obligations as Agent in accordance with, and
pursuant to, the terms of this Agreement; or
(c) Agent is in continuous material default under its
General Financing Agreement with AgFirst Farm Credit Bank which
has not been cured or, default thereunder waived, within sixty
(60) days from the date of default.
10.2.2 Upon the termination of Agent's agency status on
behalf of any Association, such Association thereafter shall have
the right to represent its own interest with respect to its
interest in the Loan including, without limitation, its Note.
Without limiting the generality of the immediately preceding
sentence, such Association shall have the right to immediately
direct Borrowers to pay all principal and interest payments with
respect to such Association's Note directly to such Association
(referred to herein as a "Direct Payment Notice"), and, if
requested by the particular Association, Agent shall join in any
such Direct Payment Notice.
10.2.3 Furthermore, upon the termination of Agent's
agency status on behalf of any Association, then, notwithstanding
any contrary provision contained in this Agreement, all further
decisions with respect to the Loan shall require the unanimous
consent of Agent and each Association.
SECTION 10.3 Rights of Agent as an Association. With
respect to this Agreement, the Loan made by it and the
Syndication Note issued to it, Agent shall have the same rights
and powers under this Agreement as any of the other Associations
and may exercise the same as though it were not Agent; and the
term "Associations" shall, unless otherwise expressly indicated,
include Agent in its individual capacity. Agent may lend money
to, and generally engage in any kind of business with Borrowers,
any of Borrowers' Affiliates and any Person who may do business
with or own securities of any Borrower or any Affiliate, all as
if Agent were not Agent and without any duty to account therefor
to the other Associations.
SECTION 10.4 Successor Agent. In the event of termination
of Southwest as Agent, South shall automatically shall be the
successor Agent. The successor Agent shall succeed to and become
vested with all of the rights, powers, privileges and duties of
the removed Agent, and the removed Agent shall be discharged from
any further duties and obligations under this Agreement.
SECTION 10.5 Provisions With Respect to Information as to
Borrowers and the Loan. Until such time as this Loan, and all of
the Syndication Notes, have been paid in full, each of the
Associations, including, in particular, Agent, shall be obligated
to furnish to each of the other Associations any and all
information, including Confidential Information (as defined
below), with respect to Borrowers and with respect to the Loan
which may, at any time, come into the possession of Agent or any
of the other Associations, as the case may be; provided, however,
each of the Associations receiving any Confidential Information
of Borrowers will exercise the same degree of care to protect
such Confidential Information from any unauthorized disclosure
and from any unauthorized use as such Association exercises to
protect such Association's own confidential and proprietary
information.
Agent hereby acknowledges and confirms to each Association
that Agent has advised Borrowers, and Borrowers hereby consent,
that each Association will be entitled to receive any and all
information, including any Confidential Information, with respect
to Borrowers and with respect to the Loan which may, at any time,
be furnished by, or at the direction of, Borrowers to any
Association, including Agent, or otherwise obtained by any
Association, including Agent.
The term "Confidential Information" as used in this Section,
shall mean any information which is in writing, which is clearly
marked "Confidential" and which is provided by, or at the
direction of, Borrowers to any of the Associations, including, in
particular, Agent, with respect to the business or businesses,
financial condition, operations, assets and properties,
management, suppliers, customers, production or sales of
Borrowers; provided, however, the term "Confidential Information"
shall not include any of the foregoing information (a) which, at
the time of disclosure to any of the Associations, is otherwise a
part of the public domain, or (b) which, at any time after
disclosure to any of the Associations, becomes a part of the
public domain through no fault of any of the Associations, (c)
which is received by any of the Associations from a third party
who is legally in possession of it and who is not under any
obligation of confidentiality with respect thereto, or (d) which,
at the time of disclosure to any of the Associations, is already
in the possession of any of the Associations.
SECTION 10.6 Provisions With Respect to Payments by
Borrowers. Except as otherwise expressly provided in this
Agreement, or in any of the other Loan Documents, the following
provisions shall be applicable with respect to all payments made
by or on behalf of Borrowers with respect to the Loan:
10.6.1 Payments with respect to the Loan shall be
allocated first to costs, next to accrued interest, next to
penalties or any Prepayment Premiums, and last to principal. Any
payments received by Agent and not designated by Borrowers as
applying to a specific loan shall be applied first to the Note on
which interest or principal is currently due (to the extent of
the amount due) and next to loans in accordance with Agent's
customary practices.
10.6.2 If Agent has one or more loans to Borrowers
other than the Loan under this Agreement, then, notwithstanding
any contrary provision contained herein, Agent shall have an
obligation of fairness with respect to its collection practices,
its application of payments that are not designated as payments
on a specific loan, and its application of the proceeds of any
security which is not the primary security for this Loan. Agent
shall conduct its collection practices in a manner consistent
with what its conduct would be if it were the sole owner of all
outstanding loans to Borrowers. Agent further agrees that it
will attempt to apply default remedies in a manner that permits
the proceeds of Collateral for all outstanding loans, including
this Loan, to be divided equitably among the outstanding balances
of all loans that are secured to the same extent by such
Collateral; provided, however, this provision shall never be
interpreted or construed to require that the collateral which is
first lien Collateral for this Loan to be applied against the
balance of any other loans to Borrowers while there is a balance
outstanding on this Loan except to the extent required by this
Agreement, the Act, the Collateral Sharing Agreement, or other
loan participation agreement among the Associations and AgFirst
Farm Credit Bank.
10.6.3 Notwithstanding the foregoing provisions, if the
Loan is declared to be in distress or is declared to be in
default, then, except as otherwise provided in this Agreement,
the Collateral Sharing Agreement, or as otherwise mutually agreed
by Agent and all of the Associations, Agent and all of the
Associations will thereafter each share in subsequent principal
and interest payments and/or collections and losses in proportion
to their Proportionate Share.
10.6.4 Any payment or portion thereof made by or on
behalf of Borrowers and designated by Agent, in accordance with
this Agreement or any of the other Loan Documents, as payment of
interest shall be applied prorata according to the Proportionate
Share of the accrued interest for each Association's Note
evidencing the Loan at the time of receipt of any such payment.
10.6.5 All fees received by Agent from Borrowers for
default and late charges and prepayment charges shall be shared
by Agent and all of the Associations at such time as they are
received by Agent according to each Association's Proportionate
Share.
10.6.6 All origination, closing and servicing fees paid
by or on behalf of Borrowers under this Agreement or any of the
other Loan Documents shall, unless otherwise mutually agreed by
the Associations, belong to Agent; provided, however, commitment
fees, regardless of when paid, shall be divided among the
Associations as provided in the offer of syndication for the
Loan.
10.6.7 All principal and interest payments and other
amounts collected by Agent under the Loan will be held in trust
by Agent for the benefit of all of the Associations until such
funds are actually paid to and received by each particular
Association. Each Association, as the beneficiary of such trust,
will at all times be immediately entitled to payment of all funds
held in trust by Agent for such Association.
SECTION 10.7 Benefits of this Article X. Although binding
upon and creating certain obligations for Borrowers, none of the
provisions of this Article X shall inure to the benefit of
Borrowers or any Person other than the Associations and AgFirst
Farm Credit Bank as a loan participant; consequently, neither
Borrowers or any other Person shall be entitled to rely upon or
to raise as a defense, in any manner whatsoever, the failure of
any of the Associations to comply with the provisions of this
Article X.
ARTICLE XI
MISCELLANEOUS
SECTION 11.1 Cumulative Remedies. The remedies provided in
this Agreement and in the Loan Documents are cumulative and not
exclusive of any remedies provided by law or in equity. Upon an
Event of Default, the Associations may elect to exercise any one
or more of such remedies and such election shall not waive or
cause the Associations to have elected not to subsequently
exercise any other such remedies available to it under the
Agreement or any Loan Document.
SECTION 11.2 Amendments, etc. No amendment, modification,
termination or waiver of any provision of this Agreement, the
Syndication Notes or the other Loan Documents, nor consent to any
departure by Borrowers, shall in any event be effective unless
the same shall be in writing and signed by the Associations, and
then such waiver or consent shall be effective only in specific
instance and for the specific purpose for which given.
SECTION 11.3 Addresses for Notices, etc. All notices,
requests, demands and other communications provided for hereunder
shall be in writing and shall be deemed to have been given (i) in
the case of delivery, when addressed to the other party and
delivered to the address set forth below, (ii) in the case of
mailing, three (3) days after said notice has been deposited in
the United States Mails, postage prepaid, by certified or return
mail, and addressed to the other party as set forth below, and
(iii) in all of the cases, when received by the other party. The
address at which notices may be sent under this Section are the
following:
If to Borrowers:
Orange-co, Inc. and Orange-co, Inc. of Florida, Inc.
P.O. Box 2158
Bartow, FL 33830
If to South:
Farm Credit of South Florida, ACA
10084 - 70th Road South
P.O. Box 5559
Lake Worth, FL 33466
If to Agent in its capacity as Agent and as an Association:
Farm Credit of Southwest Florida, ACA
P. O. Box 1070
Arcadia, Florida 34265
Any party may at any time change the address to which notices may
be sent under this Section by the giving of notice of such to the
other party in the manner set forth herein.
SECTION 11.4 Applicable Law. This Agreement, and each of
the Loan Documents and transactions contemplated herein (unless
specifically stipulated to the contrary in such document) shall
be governed by and interpreted in accordance with the laws of the
State of Florida, except to the extent that applicable federal
law supersedes such state law.
SECTION 11.5 Actions and Process. Any legal action or
proceeding against Borrowers with respect to this Agreement may
be brought in such of the courts of competent jurisdiction of the
state or federal courts located in DeSoto County, Florida as the
Associations or their successors and assigns, as the case may be,
may elect, and, by execution and delivery of this Agreement,
Borrowers irrevocably submit to the nonexclusive jurisdiction of
such courts for purposes of legal actions and proceedings
hereunder and, in case of any such legal action or proceeding
brought in the above-named Florida courts, hereby irrevocably
consent, during such time, to the service of process out of any
of the aforementioned courts in any such action or proceeding by
the mailing of copies thereof by registered mail, postage
prepaid, to Borrowers at its address as provided in Section 11.3
hereof; or by any other means permitted by applicable law. If it
becomes necessary for the purpose of service of process out of
any such courts, Borrowers shall take all such action as may be
required to authorize a special agent to receive, for and on
behalf of it, service of process in any such legal action or
proceeding, and shall take all such action as may be necessary to
continue said appointment in full force and effect so that
Borrowers will at all times have an agent for service of process
for the above purposes available in DeSoto County, Florida. To
the extent permitted by law, a final judgment (a copy certified
by the court that has rendered the judgment shall be conclusive
evidence of the fact and of the amount of any indebtedness of
Borrowers to the Associations) against Borrowers in any such
legal action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on an unsatisfied
judgment. To the extent that any Borrower has or hereafter may
acquire any immunity from jurisdiction of any of the above-named
courts or from any legal process therein, each such Borrower
hereby irrevocably waives such immunity, and each such Borrower
hereby irrevocably waives and agrees not to assert by way of
motion, as a defense, or otherwise, in any legal action or
proceeding brought hereunder in any of the above-named courts,
(i) the defense of immunity, (ii) any claim that it is not
personally subject to the jurisdiction of the above-named courts
by reason of immunity or otherwise, (iii) that it or any of its
property is immune from the above described legal process
(whether through service of notice, attachment prior to judgment,
attachment in aid of execution, or otherwise), (iv) that such
action or proceeding is brought in an inconvenient forum, that
venue for the action or proceeding is improper or that this
Agreement may not be enforced in or by such courts, or (v) any
defense that would hinder or delay the levy, execution or
collection of any amount to which any party hereto is entitled
pursuant to a final judgment of any court having jurisdiction.
Nothing in these provisions shall limit any right of an
Association to bring actions, suits or proceedings in the courts
of any other jurisdiction. Borrowers expressly acknowledge that
the foregoing waiver is intended to be irrevocable under the laws
of the State of Florida and of the United States of America.
SECTION 11.6 Survival of Representations and Warranties.
All representations, warranties, covenants and agreements
contained herein or made in writing by Borrowers in connection
herewith shall survive the execution and delivery of this
Agreement, the Syndication Notes and the other Loan Documents and
be true and correct during the term of the Loan.
SECTION 11.7 Time of the Essence. Time is of the essence of
this Agreement, the Syndication Notes and the other Loan
Documents,
SECTION 11.8 Headings. The headings in this Agreement are
intended to be for convenience of reference only, and shall not
define or limit the scope extent or intent or otherwise affect
the meaning of any portion hereof.
SECTION 11.9 Severability. In case any one or more of the
provisions contained in this Agreement, the Syndication Notes or
the other Loan Documents shall for any reason be held to be
invalid, illegal or unenforceable in any respect, the same shall
not affect any other provision of this Agreement, the Syndication
Notes or the other Loan Documents, but this Agreement, the
Syndication Notes and the other Loan Documents shall be construed
as if such invalid or illegal or unenforceable provision had
never been contained therein; provided, however, in the event
said matter would be in the reasonable opinion of the
Associations adversely affect the rights of the Associations
under any or all of the Loan Documents, the same shall be an
Event of Default.
SECTION 11.10 Counterparts. This Agreement may be executed
in any number of counterparts, all of which taken together shall
constitute one and the same instrument and any of the parties
hereto may execute this Agreement by signing any such
counterpart.
SECTION 11.11 Conflict. In the event any conflict arises
between the terms of this Agreement and the terms of any other
Loan Document, the Association shall have the option of selecting
which conditions shall govern the loan relationship evidenced by
this Agreement and, if the Associations do not so indicate, the
terms of this Agreement shall govern in all instances of such
conflict.
SECTION 11.12 Term. The term of this Agreement shall be for
such period of time until the Loan and Syndication Notes have
been repaid in full, and all Obligations have been paid to the
Associations in full. At such time, the Associations shall mark
all the Loan Documents "Cancelled" and return them to Borrowers.
SECTION 11.13 Expenses. Borrowers agree, whether or not the
transactions hereby contemplated shall be consummated, to pay and
save Associations harmless against liability for the payment of
documentary stamp taxes, intangible tax, all out-of-pocket
expenses arising in connection with this transaction and all
taxes, together in each case with interest and penalties, if any,
which may be payable in respect of the execution, delivery and
performance of this Agreement or the execution, delivery,
acquisition and performance of the Syndication Notes (including
any renewal, extension, substitution or replacement thereof)
issued under or pursuant to this Agreements (excepting only any
tax on or measured by net income of Association determined
substantially in the same manner, other than the rate of tax, as
net income is presently determined under the Federal Internal
Revenue Code), all printing costs and the reasonable fees and
expenses of any special counsel to Association in connection with
this Agreement and any subsequent modification thereof or consent
thereunder. The obligations of Borrowers under this Section
11.13 shall survive payment of the Syndication Notes.
SECTION 11.14 Successors and Assigns. All covenants and
agreements in this Agreement contained by or on behalf of either
of the parties hereto shall bind and inure to the benefit of the
respective successors and assigns of the parties hereto whether
so expressed or not; provided, however, this clause shall not by
itself authorize any delegation of duties by Borrowers or any
other assignment which may be prohibited by the terms and
conditions of this Agreement.
SECTION 11.15 Further Assurances. Borrowers shall, from
time to time, execute such additional documents as may reasonably
be requested by the Associations or the counsel, to carry out and
fulfill the intent and purpose of this Agreement and the Loan
Documents.
SECTION 11.16 No Third Party Beneficiaries. The parties
intend that this Agreement is solely for their benefit and no
Person not a party hereto shall have any rights or privileges
under this Agreement whatsoever either as the third party
beneficiary or otherwise.
SECTION 11.17 WAIVER OF JURY TRIAL. EACH BORROWER HEREBY
AGREES TO WAIVE ITS RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE
OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT, THE
SYNDICATION LOAN DOCUMENTS, AND/OR THE TRANSACTIONS CONTEMPLATED
BY THIS AGREEMENT, OR ANY DEALINGS BETWEEN BORROWERS AND THE
ASSOCIATIONS. The scope of this waiver is intended to be all-
encompassing of any and all disputes that may be filed in any
court and that relate to the subject matter of this transaction,
including without limitation, contract claims, tort claims,
breach of duty claims, and all other common law and statutory
claims. Borrowers acknowledge that this waiver is a material
inducement to the Associations to enter into a business
relationship with Borrowers. Borrowers represent and warrant
that each has reviewed this waiver with their legal counsel, and
that such waiver is knowingly and voluntarily given following
consultation with legal counsel. THIS WAIVER IS IRREVOCABLE,
MEANING THAT IT MAY NOT BE MODIFIED, EITHER ORALLY OR IN WRITING,
AND THE WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
RENEWALS, REPLACEMENTS, REAFFIRMATIONS, SUPPLEMENTS OR
MODIFICATIONS TO THIS AGREEMENT, THE LOAN DOCUMENTS, OR ANY OTHER
DOCUMENTS OR AGREEMENTS RELATING TO THE TRANSACTIONS CONTEMPLATED
BY THIS AGREEMENT. In the event of litigation this Agreement may
be filed as a written consent to a trial by the court.
No claim may be made by any Borrower against the
Associations, any of their affiliates and their respective
directors, officers, employees, attorneys or agents for any
special, indirect or consequential damages ("Special Damages") in
respect of any breach or wrongful conduct (whether the claim
therefor is based on contract, tort or duty imposed by law) in
connection with, arising out of, or in any way related to the
transactions contemplated or relationship established by this
Agreement, or an act, omission or event occurring in connection
herewith or therewith; and each Borrower hereby waives, releases
and agrees not to sue upon any such claim for Special Damages
whether or not accrued and whether or not known or suspected to
exist in its favor.
SECTION 11.18 No Waiver. No failure or delay on the part of
the Associations in exercising any right, power or remedy
hereunder, or under the Syndication Notes or the other Loan
Documents shall operate as a waiver thereof, nor shall any single
or partial exercise of any such right, power or remedy preclude
any other or further exercise thereof or the exercise of any
other right, power or remedy hereunder or thereunder.
SECTION 11.19 Entire Agreement. Except as otherwise
expressly provided, this Agreement and the other Loan Documents
embody the entire agreement and understanding between the parties
hereto and supersede all prior agreements and understandings
relating to the subject matter hereof.
Signed and sealed in
the presence of: Orange-co, Inc., a Florida corporation
/s/ John V. Quinlan By: /s/ Gene Mooney
- --------------------------- ------------------------
(Print Name)John V. Quinlan Gene Mooney, as its President
/s/ C. B. Myers, III By: /s/ Dale A. Bruwelheide
- --------------------------- ---------------------------------------
(Print Name)C.B. Myers, III Dale Bruwelheide, as its Vice President
and Chief Financial Officer
Orange-co of Florida, Inc.,
a Florida corporation
/s/ John V. Quinlan By: /s/ Gene Mooney
- ---------------------------- -----------------------------
(Print Name)John V. Quinlan Gene Mooney, as its President
/s/ C. B. Myers, III By: /s/ Dale A. Bruwelheide
- ---------------------------- -----------------------------
(Print Name)C. B. Myers, III Dale Bruwelheide, as its Vice President
and Chief Financial Officer
Farm Credit of South Florida, ACA
By: /s/ Andrew W. Hintzman
- ---------------------------- -----------------------------
Print Name------------------ Andrew W. Hintzman,
its Senior Vice President
- ----------------------------
Print Name------------------
Farm Credit of Southwest Florida, ACA
/s/ John V. Quinlan By: /s/ Eric L. Dunham
- ---------------------------- ---------------------------------
Print Name John V. Quinlan Eric L. Dunham,
its Senior Vice President
/s/ C. B. Myers, III
- ----------------------------
Print Name C. B. Myers, III
EXHIBIT 10.31
CONSOLIDATED, AMENDED AND RESTATED
FLORIDA MORTGAGE AND SECURITY AGREEMENT
THIS CONSOLIDATED, AMENDED AND RESTATED FLORIDA MORTGAGE AND SECURITY
AGREEMENT (the "Mortgage"), made and entered into as of this 2nd day of June,
1998, by and between Orange-co of Florida, Inc., a Florida corporation having
a mailing address at 2020 U.S. Highway 17 South, Bartow, Florida 33830,
hereinafter referred to as the "Mortgagor," which term shall be construed to
include the successors and assigns of the Mortgagor, all of whom shall be
bound hereby, and John Hancock Mutual Life Insurance Company, a Massachusetts
corporation, having an address of P.O. Box 111, John Hancock Place, Boston,
Massachusetts 02117, hereinafter referred to as the "Mortgagee," and the
successors and assigns of the Mortgagee.
W I T N E S S E T H:
WHEREAS, the Mortgagee is presently the owner and holder of the following
described instruments, as well as other loan documents executed in connection
with a mortgage loan (the "Loan Documents") which encumbers certain personal
property and real property situate in Polk County, Florida, to wit:
1. That certain Renewal Promissory Note dated November 8, 1979 (the
"1979 Renewal Note"), representing an indebtedness in the original principal
amount of Sixteen Million Three Hundred Thousand and No/100 Dollars
($16,300,000.00), collateralized by that certain Loan Modification Agreement,
Notice of Advance and Restated Florida Mortgage and Security Agreement entered
into by and between Mortgagor and Mortgagee as of the 8th day of
NOTA BENE: State of Florida Documentary Stamp Tax in the amount required by
law has been paid and the documentary stamps obtained upon such
payment have been affixed to that certain Loan Modification
Agreement, Notice of Advance and Restated Florida Mortgage and
Security Agreement dated the 8th day of November, 1979 and
recorded in Official Records Book 1911, Page 1040, that certain
Future Advance Agreement dated as of April 21, 1993 and recorded
in Official Records Book 3226, Page 971, and that certain
Florida Second Mortgage and Security Agreement dated August 13,
1996 and recorded in Official Records Book 3718, Page 176, all
as recorded in the Public Records of Polk County, Florida, as well
as that certain Florida Mortgage and Security Agreement of even
date herewith given by the Mortgagor to Mortgagee, recorded or to
be recorded in the Public Records of Polk County, Florida.
November, 1979 and recorded in Official Records Book 1911, Page 1040,
Public Records of Polk County, Florida, and amended and restated pursuant
to that certain Amended and Restated Florida Mortgage & Security Agreement
and Spreader Agreement entered into by and between Mortgagor and Mortgagee
as of the 21st day of April, 1993 and recorded in Official Records Book 3226,
Page 937, Public Records of Polk County, Florida (collectively, the
"Amended and Restated Mortgage").
2. That certain Future Advance Promissory Note
dated April 21, 1993 (the "1993 Future Advance Note"), executed by
Mortgagor in favor of Mortgagee in the original principal amount of
Eight Million Seven Hundred Forty-three Thousand One Hundred
Ninety-one and No/100 Dollars ($8,743,191.00), collateralized
by that certain Future Advance Agreement entered into by and
between Mortgagor and Mortgagee as of the 21st day of April, 1993
and recorded in Official Records Book 3226, Page 971 of the Public
Records of Polk County, Florida (the "Future Advance Agreement").
3. That certain Renewal Note (the "1993 Renewal Note") dated as
of April 21, 1993 and executed by Mortgagor in favor of Mortgagee in the
original amount of $12,000,000.00 which combines and renews that certain
1979 Renewal Note and the 1993 Future Advance Note, and the 1993 Renewal
Note is collateralized by the Amended and Restated Mortgage and the Future
Advance Agreement.
4. That certain Promissory Note (the "1996 Promissory Note")
dated August 13, 1996, executed by Mortgagor in favor of Mortgagee in the
original principal amount of Ten Million and No/100 Dollars ($10,000,000.00),
collateralized by that certain Florida Second Mortgage and Security Agreement
(the "Second Mortgage") executed by Mortgagor in favor of Mortgagee on August
13, 1996 and recorded in Official Records Book 3718, Page 176, Public
Records of Polk County, Florida.
5. That certain Consolidated, Amended and Restated Florida Mortgage
and Security Agreement (the "First Consolidated Mortgage") executed by
Mortgagor in favor of Mortgagee on August 13, 1996 and recorded in Official
Records Book 3718, Page 198, of the Public Records of Polk County, Florida,
which consolidates the Amended and Restated Mortgage, the Future Advance
Agreement and the Second Mortgage, as well as to modify and restate the
terms and conditions of said documents, as set forth in the First Consolidated
Mortgage, and the 1993 Renewal Note and the 1996 Promissory Note are
collateralized by the First Consolidated Mortgage.
6. That certain Demand Promissory Note (the "Demand Note") dated
June 2, 1998, executed by Mortgagor in favor of Mortgagee in the original
principal amount of Nine Million and No/100 Dollars ($9,000,00.00), which is
collateralized by that certain Florida Mortgage and Security Agreement
(the "Demand Note Mortgage") executed by Mortgagor in favor of Mortgagee
on June 2, 1998 and recorded under Clerk's File No. 082681, Public Records
of Polk County, Florida.
7. That certain Renewal Note (the "1998 Renewal Note") dated
June 2, 1998 executed by the Mortgagor in favor of Mortgagee in the original
principal amount of Fifteen Million and No/100 Dollars ($15,000,000.00)
which combines and renews the 1993 Renewal Note and the Demand Note.
WHEREAS, the principal balance remaining under the 1998 Renewal Note is
Fifteen Million and No/100 Dollars ($15,000,000.00) and the principal balance
remaining unpaid on the 1996 Promissory Note is Eight Million Two Hundred
Fifty Thousand and No/100 Dollars ($8,250,000,000.00).
WHEREAS, Mortgagor has agreed to consolidate the First Consolidated
Mortgage and the Demand Note Mortgage as well as to modify and restate the
terms and conditions of said documents, as set forth in this Mortgage, and
has agreed that the 1998 Renewal Note and the 1996 Promissory Note are
collateralized by this Mortgage.
NOW, THEREFORE, in consideration of the aforesaid premises, the mutual
benefits and the mutual promises of the parties hereto and other good and
valuable consideration, it is hereby agreed by the Mortgagor and Mortgagee
as follows:
KNOW ALL MEN BY THESE PRESENTS, that Mortgagor does hereby grant, bargain,
sell, assign and convey to Mortgagee and Mortgagee's successors and assigns
forever, the real estate more particularly described in Exhibit A attached
hereto and made a part hereto, together with all the buildings, structures,
offices, barns, tanks, and all other improvements of whatsoever kind and nature,
now or hereafter erected thereon and located in the County of Polk, State of
Florida, together with all and singular the easements, tenements, hereditaments,
appurtenances and other rights and privileges thereunto belonging or in any
wise now or hereafter appertaining, and the rents, issues and profits thereof,
as well as all proceeds under any policy or policies of insurance; together
with all tangible personal property and fixtures of Mortgagor whether now
owned or in existence of hereafter acquired or created, including goods (but
excluding inventory), accessions, machinery, equipment, farm products and
fixtures, such terms having the meaning ascribed by the Uniform Commercial
Code, including, but not limited to, all citrus crops now and hereafter
growing on the real estate described on Exhibit A attached hereto and made a
part hereof (provided that the Mortgagee's interest as a first lienor on
such citrus crops shall remain in effect until such time as such citrus crops
are harvested, processed or packed, and thereafter the lien evidenced hereby
shall be deemed to be released and provided further that all of Mortgagor's
existing and future inventories of citrus products are specifically excluded
from the lien of this Mortgage), all minerals or the like (including oil
and gas) now and hereafter situate in, under or on the real estate described
on Exhibit A attached hereto and made a part hereof or extracted
therefrom, and all apparatus, chattels, fixtures, machinery, furniture,
furnishings, installations, equipment and other property (provided that all
grove caretaking and harvesting equipment including, but not limited to,
nonpermanent irrigation equipment not necessary for proper irrigation and
care of the real estate described on Exhibit A attached hereto and made a
part hereof, sprayers, tractors, trucks, trailers, hedging and topping
equipment and movable grove caretaking and harvesting equipment of like
nature are specifically excluded from the lien of this Mortgage) now or
hereafter attached to or used or procured for use in connection with the
operation and maintenance of a citrus concentrate plant situate on the real
estate described on Exhibit A attached hereto and made a part hereof or in
connection with the operation, maintenance or protection of any buildings,
structures, offices, barns, tanks and all other improvements of whatsoever
kind and nature, whether real or personal, whether now owned or hereafter
acquired, and whether or not attached to any building, structure, office,
barn, tank, or any other improvements of whatsoever kind and nature, and
all elevators, escalators, vaults, safes, screens, awnings, storm windows
and doors, window blinds and shades, inlaid floor coverings, shrubbery,
plants, fences, gates, stoves, ranges, sinks, drinking fountains, ventilating,
refrigerating, air conditioning, incinerating, dishwashing and cleaning
equipment, pipes, wires, irrigation and sprinkler systems (including overhead
or underground systems and all wells, pumps, motors and power units which
are installed as part of same) and all apparatus associated with the foregoing
located on the real estate described on Exhibit A attached hereto and made a
part hereof, all of which shall be subject to the lien of this Mortgage. To
the extent permitted by law, the foregoing items shall be considered part
of the hereinabove described real estate.
TO HAVE AND TO HOLD said mortgaged premises, with all said tenements,
hereditaments, easements, appurtenances and other rights and privileges
thereunto belonging, or in any wise now or hereafter appertaining unto and
to the use of the Mortgagee, its successors and assigns, forever.
THE MORTGAGOR HEREBY COVENANTS AND AGREES:
1. The recitals set forth in the foregoing "WHEREAS" clauses are true and
correct and are hereby incorporated by reference and made a part hereof
as if fully set forth herein. This Mortgage is given as security for
the performance and observation of the covenants and agreements herein
contained and to secure to the Mortgagee the payment of the principal
sum of Fifteen Million and no/100 Dollars ($15,000,000.00) and interest
thereon evidenced by the 1998 Renewal Note according to its terms, the
final payment of the entire indebtedness, including accrued and unpaid
interest, if any, being due and payable on June 1, 2008, as well as to
secure to Mortgagee the payment of the principal sum of Ten Million and
No/100 Dollars ($10,000,000.00) and interest thereon evidenced by the 1996
Promissory Note, payable according to its terms, to the order of the
Mortgagee, the final payment of the entire indebtedness, including accrued
and unpaid interest, if any, being due and payable on August 1, 2003.
Immediately upon recording this Mortgage among the Public Records of Polk
County, Florida, the lien of the First Consolidated Mortgage and the
Demand Note Mortgage as consolidated, modified and restated herein, is
and shall be construed to constitute in law one first mortgage lien on the
real property described on Exhibit A attached hereto and made a part
hereof, as well as the improvements and personal property situate thereon
(as described above) securing the obligations set forth in the 1998
Renewal Note and the 1996 Promissory Note, and although the First
Consolidated Mortgage and the Demand Note Mortgage, as consolidated,
modified and restated herein, shall remain in full force and effect as a
lien and encumbrance in favor of the Mortgagee, henceforth the recitations,
terms, conditions, covenants, promises and provisions of this Mortgage
shall constitute the one first mortgage lien from Mortgagor to Mortgagee
encumbering the real property described on Exhibit A attached hereto and
made a part hereof, as well as the improvements and personal property
situate thereon (as described above), and the recitations, terms,
conditions, covenants, promises and provisions of this Mortgage shall
govern in the event of a conflict between the terms and conditions set
forth in this Mortgage and those set forth in the First Consolidated
Mortgage and the Demand Note Mortgage. Any default by the Mortgagor in
the payment or performance of the 1998 Renewal Note and the 1996
Promissory Note shall, at the option of Mortgagee, constitute a default
not only with respect to the 1998 Renewal Note and this Mortgage, but
also with respect to the 1996 Promissory Note, and any default by the
Mortgagor in the payment or performance of the 1996 Promissory Note shall,
at the option of Mortgagee, constitute a default not only with respect to
the 1996 Promissory Note and this Mortgage, but also with respect to the
1998 Renewal Note, and, in any of such events, Mortgagee shall be
entitled to exercise all of the rights granted to Mortgagee in the event
of a default as set forth in the 1998 Renewal Note, the 1996 Promissory
Note and this Mortgage, as well as in law and/or in equity.
2. The Mortgagor is well and lawfully seized of the mortgaged premises as
a good and indefeasible estate in fee simple and has good right and full
power to sell and convey the same; that the mortgaged premises are free
and clear of all encumbrances, except this Mortgage (and other loan
documents consolidated, modified and restated herein), building and use
restrictions and easement of record, if any, zoning ordinances, if any,
and taxes and assessments not yet overdue; and that the Mortgagor will
make any further assurances of title that the Mortgagee may require and
will warrant and defend said mortgaged premises against all lawful
claims and demands whatsoever.
3. Mortgagor will pay the 1998 Renewal Note and the 1996 Promissory Note
(hereinafter sometimes collectively referred to as the "Notes") in
accordance with their terms and will perform and comply with all of the
terms and provisions thereof.
4. Mortgagor will keep protected and in good order, repair and condition at
all times the buildings and improvements (including fixtures) now standing
or hereafter erected or placed upon the mortgaged premises and any and all
appurtenances, apparatus and articles of personal property, including,
but not limited to, furniture, furnishings and equipment, now or hereafter
in or attached to or used in connection with said buildings or
improvements, promptly replacing any of the aforesaid which may become
lost, destroyed or unsuitable for use, and will keep insured the
aforesaid real and personal property and the interests and liabilities
incident to the ownership thereof, in manner, forms, companies, sums
and length of terms satisfactory to the Mortgagee, provided, however,
that Federal Crop Insurance shall not be required of the Mortgagor; that
all insurance policies are to be held by and, to the extent of its
interests, are to be for the benefit of and first payable in case of
loss to the Mortgagee except as hereinafter provided, and the Mortgagor
shall deliver to the Mortgagee evidence of continuing insurance
coverage at least fifteen (15) days before the date any existing policy
expires. In the event of a casualty or loss as contemplated herein for
which insurance proceeds are recoverable under the policy or policies of
insurance to be kept by the Mortgagor, the amounts recoverable shall be
applied as follows:
(a) in events of casualty or loss for which the proceeds
recoverable are $50,000.00 or less, such proceeds may be collected solely
by the Mortgagor and used by the Mortgagor in any manner it deems fit and
proper, whether for restoration of the loss or casualty or otherwise;
(b) in events of casualty or loss for which the proceeds
recoverable are in excess of $50,000.00, but less than $500,000.00, and the
further event that the Mortgagor shall have, on or before the time of
collection of said proceeds, furnished to the Mortgagee evidence satisfactory
to the Mortgagee that such proceeds will and can be used to replace or
restore the lost or damaged property to a condition satisfactory to the
Mortgagee within nine (9) months from the date of the casualty or loss,
then, in such events, it shall be conclusively presumed that the Mortgagee
has agreed to the application and use of such proceeds for such replacement
and restoration and the other options of the Mortgagee regarding the
application of insurance proceeds (as set forth in subparagraph (c) below)
shall be unavailable to the Mortgagee, provided however, that in such
foregoing events the Mortgagor will remain obligated to actually apply such
proceeds to said replacement or restoration, and provided further that should
Mortgagor fail to provide Mortgagee with the aforementioned satisfactory
evidence of use of proceeds for replacement and restoration purposes,
then the Mortgagee's options regarding the application of insurance
proceeds recited in subparagraph (c) below shall remain fully available
to the Mortgagee;
(c) in events of casualty or loss for which the proceeds
recoverable are $500,000.00 or more, the proceeds collected may, at the option
of the Mortgagee, be used in any one or more of the following ways:
(1) applied against the indebtedness secured hereby, whether such indebtedness
then be matured or unmatured, (2) used to fulfill any of the covenants
contained herein as the Mortgagee may determine, (3) used to replace or
restore the property to a condition satisfactory to the Mortgagee, or
(4) released to the Mortgagor.
The Mortgagor expressly agrees that all proceeds under any policy or
policies of insurance are hereby assigned to the Mortgagee and both Mortgagor
and Mortgagee expressly agree to the method and manner of application of
proceeds as set forth herein. Additionally, the Mortgagee is hereby
irrevocably appointed by the Mortgagor as attorney of the Mortgagor to assign
any policy in the event of the foreclosure of this Mortgage or other
extinguishment of the indebtedness secured hereby.
5. Mortgagor will pay before same become delinquent or any penalty
attaches thereto for non-payment, all taxes, assessments and charges of
every nature and to whomever assessed that may now or hereafter be levied
or assessed, or by reason of non-payment become a lien prior to this
Mortgage, upon the mortgaged premises or any part thereof, upon the rents,
issues, income or profits thereof, whether any or all of said taxes,
assessments or charges be levied directly or indirectly or as excise
taxes or as income taxes, and will thereupon submit to the Mortgagee
such evidence of the due and punctual payment of such taxes, etc., as
the Mortgagee may require. It is agreed by the Mortgagee and Mortgagor
that there shall be excepted from the foregoing requirement such taxes,
assessments and public charges the assessment or collection of which is
being contested by the Mortgagor, by appropriate legal proceedings, in
good faith and with due diligence, provided always however that the
Mortgagee shall retain the right, notwithstanding any contest which may
be conducted by the Mortgagor, to redeem the mortgaged premises or any
part thereof from tax sale without any obligation on the part of the
Mortgagee to inquire into the validity of such taxes, assessments and/or
tax sales (the receipts of the proper taxing officials being conclusive
evidence of the validity and amount thereof). The Mortgagor agrees that
it shall give Mortgagee fifteen (15) days' prior written notice of its
intention to engage in such good faith contests and shall bear all cost,
expense and attorney fees involved in such contest, including any costs
incurred for same by the Mortgagee.
6. If Mortgagor shall neglect or refuse to keep in good repair and condition
the property referred to in paragraphs 4 and 7, to replace the same as
therein agreed, to maintain and pay the premiums for insurance which
may be required under paragraph 4 or to pay and discharge all taxes,
assessments and charges of every nature and to whomever assessed, as
provided for in paragraph 5, subject to the Mortgagor's right to
bring good faith contests as provided in said paragraph 5, the Mortgagee
may, at its election, cause such repairs or replacements to be made,
obtain such insurance or pay said taxes, assessments and charges and any
amounts paid as a result thereof, together with interest thereon at the
rate of nine and eighteen hundredths percent (9.18%) per annum from the
date of payment, shall be immediately due and payable by the Mortgagor
to the Mortgagee, and until paid shall be added to and become a part of
the principal debt secured hereby, and the same may be collected as a
part of said principal debt in any suit hereon or upon the Notes; or the
Mortgagee, by the payment of any tax assessment or charge, may, if it
sees fit, be thereby subrogated to the rights of the state, county,
village and all political or governmental subdivisions. No such advances
shall be deemed to relieve the Mortgagor from any default hereunder or
impair any right to remedy consequent thereon, and the exercise of the
rights to make advances granted in this paragraph shall be optional with
the Mortgagee and not obligatory and the Mortgagee shall not in any case
be liable to the Mortgagor for a failure to exercise any such right.
7. Mortgagor will keep the mortgaged premises in good order and repair and
will not commit or suffer any waste or stripping of the mortgaged premises
or any violation of any law, regulation, ordinance or contract affecting
the mortgaged premises and will not commit or suffer any demolition,
removal or material alteration of any of the buildings or improvements
(including fixtures) on the mortgaged premises without the prior written
consent of the Mortgagee. The Mortgagor shall have the right, after prior
notice to the Mortgagee, to contest by appropriate legal proceedings
diligently conducted in good faith, in the name of the Mortgagor, without
cost or expense to the Mortgagee, the validity or application of any law
regulation, or ordinance of the nature herein referred to, subject to
the following:
(a) if by the terms of any such law, regulation or ordinance,
compliance therewith pending the prosecution of any such proceeding may
legally be delayed without the incurrence of any lien, charge or liability of
any kind against the mortgaged premises or the Mortgagor's ownership
interest therein, and without subjecting the Mortgagor or the Mortgagee to
any liability, civil or criminal, for failure so to comply, the Mortgagor,
provided it prosecutes any such proceeding with due diligence, may delay
compliance therewith until the final determination of such proceeding;
(b) if any lien, charge or civil liability would be incurred by
reason of any such delay, as provided above in subparagraph (a), the
Mortgagor may nevertheless, with the prior written consent of the Mortgagee,
contest and delay compliance with such law, regulation and ordinance as
provided in subparagraph (a), provided that such contest or delay would not
subject the Mortgagee to criminal liability and the Mortgagor furnishes to the
Mortgagee security, satisfactory to the Mortgagee, against any loss, injury
or liability by reason of such contest or delay, and prosecutes the contest
with due diligence. Upon giving the approvals required above, the Mortgagee
will execute and deliver any appropriate documents which may be necessary
or proper to permit the Mortgagor to contest the validity or application
of any such law, regulation or ordinance, provided however that the Mortgagee
shall not be required to execute and deliver any documents which in the
reasonable judgment of the Mortgagee may prejudice the Mortgagee's interest
in the mortgaged premises.
8. Mortgagor agrees that all awards heretofore or hereafter made by any
public or quasi-public authority to present and all subsequent owners of the
premises covered by this Mortgage by virtue of any exercise of the right of
eminent domain by such authority, including any award for a taking of title,
possession or right of access to a public way, or for any change of grade of
streets affecting said premises, are hereby assigned to the Mortgagee; and the
Mortgagee, at its option, is hereby authorized, directed and empowered to
collect and receive the proceeds of any such award and awards from the
authorities making the same and to give proper receipts and acquittances
therefor, and may, at the Mortgagee's election, use such proceeds in any one
or more of the following ways; (1) apply the same or any part thereof against
the indebtedness secured hereby, whether such indebtedness then be matured
or unmatured, (2) use the same or any part thereof to fulfill any of the
covenants contained herein as the Mortgagee may determine, (3) use the same
or any part thereof to replace or restore the property to a condition
satisfactory to the Mortgagee, or (4) release the same to the Mortgagor;
and the Mortgagor hereby covenants and agrees to and with the Mortgagee, upon
request by the Mortgagee, to make, execute and delivery any and all assignments
and other instruments sufficient for the purpose of assigning all such awards
to the Mortgagee free, clear and discharged of any and all encumbrances of
any kind or nature whatsoever.
9. Of even date herewith, Orange-co, Inc., a Florida corporation
("OCI"), the parent company of the Mortgagor, has issued its certificate to
the Mortgagee, in connection with this loan (the "Certificate") setting forth
its agreements and the business requirements to be maintained by OCI at all
times prior to the payment in full of the indebtedness secured hereby
(the "Business Requirements"). It is agreed that it shall be a default
under the terms and conditions of this Mortgage in the event that OCI fails to
maintain or otherwise violates the Business Requirements set forth in the
Certificate. Mortgagor will deliver to the Mortgagee, in detail satisfactory
to the Mortgagee: (i) unaudited quarterly financial statements regarding OCI
as soon as practicable, but in any event within forty-five (45) days subsequent
to the end of each fiscal quarter, and (ii) within ninety (90) days after the
expiration of each fiscal year, audited financial statements regarding OCI and
related certificates and financial data, all in accordance with paragraph 16
hereof. At the same time that the above described quarterly and annual
financial statements are delivered to the Mortgagee, the appropriate corporate
officers of OCI shall issue and deliver a certificate to the Mortgagee as to
whether the covenants set forth in the Certificate have been complied with,
and stating whether or not there exists any default or any event of default
under the Notes, this Mortgage or under the Certificate, and the appropriate
corporate officers of the Mortgagor shall issue and deliver a certificate to
the Mortgagee as to whether the covenant set forth in this Mortgage has been
complied with, and stating whether or not there exists any default or any
event of defaults under the Note, this Mortgage or any document executed in
connection with same.
10. That if any action or proceeding be commenced, excepting an action to
foreclose this Mortgage or to collect the debt hereby secured, to which action
or proceeding the Mortgagee is made a party by reason of the execution of this
Mortgage or the Notes which it secures, or in which it becomes necessary to
defend or uphold the lien of this Mortgage, all sums paid by the Mortgagee
for the expense of any litigation to prosecute or defend the rights and lien
created hereby including all court costs, abstracting charges and reasonable
attorneys' fees (including such fees for trial, pretrial and appellate matters),
shall be paid by the Mortgagor together with interest thereon from date of
payment at the rate of nine and eighteen hundredths percent (9.18%) per annum
and any such sum and the interest thereon shall be immediately due and payable
and be secured hereby, having the benefit of the lien hereby created, as a part
thereof, and of its priority.
11. Subject to the Mortgagor's right to bring good faith contests as
provided above in paragraph 5, Mortgagor shall pay all sums, the failure to pay
which may result in the acquisition of a lien prior to the lien of this Mortgage
before such a prior lien may attach, or which may result in conferring upon a
tenant of any part of the mortgaged premises a right to recover such sums as
prepaid rent, or as a credit or offset against any future rental obligation.
12. Mortgagor shall assign to the Mortgagee, upon request, as further
security for the indebtedness secured hereby, the lessor's interests in any
or all leases, and the Mortgagor's interests in all agreements, contracts,
licenses and permits affecting the property subject to this Mortgage, such
assignments to be made by instruments in from satisfactory to the Mortgagee;
but no such assignment shall be construed as a consent by the Mortgagee to any
lease, agreement, contract, license or permit so assigned, or to impose upon
the Mortgagee any obligations with respect thereto. Nothing contained in this
paragraph 12 or in paragraphs 13 or 14 below shall be construed as a waiver or
consent by the Mortgagee to any violation of the prohibitions and restrictions
set forth in subparagraph 23 (g) hereof.
13. Mortgagor shall not cancel any of the leases now or hereafter
assigned to Mortgagee pursuant to paragraph 12 above, nor terminate or accept
a surrender thereof or reduce the payment of the rent thereunder or modify
any of said leases or accept any prepayment of rent therein (except any
amount which may be required to be prepaid by the terms of any such lease)
without first obtaining, on each occasion, the written approval of the
Mortgagee.
14. Mortgagor will faithfully keep and perform all of the obligations
of the landlord under all of the leases now or hereafter assigned to the
Mortgagee pursuant to paragraph 12 above and will not permit to accrue to any
tenant under any such lease any right to prepaid rent pursuant to the terms of
any lease other than the usual prepayment of rent as would result from the
acceptance on the first day of each month of the rent for the ensuing month,
according to the terms of the various leases.
15. Except as otherwise provided herein, the Mortgagor agrees that,
during the term hereof, the Mortgagor will not acquire any equipment,
machinery, furniture, furnishings, fixtures or apparatus covered by this
Mortgage subject to any security interest, conditional sale, title retention
arrangement or other charge or lien taking precedence over this Mortgage.
The Mortgagor shall have the right to add, substitute or replace such machinery
and equipment during the term hereof, provided, however, that the Mortgagor
shall not so add, substitute or replace in such a manner as to substantially
diminish or impair the value of the security of this Mortgage and provided
further that all of the right, title and interest of the Mortgagor in all such
replacement or additional machinery and equipment shall, when acquired by the
Mortgagor, be encumbered by the lien of this Mortgage and become an integral
part of the security under this Mortgage. Anything to the contrary contained
in this Mortgage, including the specific provisions ofthis paragraph 15,
notwithstanding, the Mortgagor shall have the right without being deemed to
be in default of its covenants contained herein, during the term hereof and
without the prior written consent of the Mortgagee, to remove as items included
in the mortgaged premises, such equipment, machinery, furniture, furnishings,
fixtures or apparatus which have depreciated to such extent so as to render
the same a non-material asset or assets. For the purposes of this paragraph 15,
non-material assets are those items of personal property having a salvage value
of $50,000 or less. In events of removal of non-material assets by the
Mortgagor, the Mortgagor shall not be required to replace such assets as
contemplated herein unless such removal without replacement will serve to
substantially diminish or impair the value of the security of this Mortgage or
materially affect the business operations of the Mortgagor or its ability
to fulfill its obligations hereunder. The Mortgagor expressly agrees that
it shall not, without replacing same, remove as part of the mortgaged premises
any tangible personal property having a salvage value in excess of $50,000
without having first obtained the prior written consent of the Mortgagee.
16. Mortgagor shall furnish to Mortgagee, at Mortgagor's expense,
within ninety (90) days after the end of each fiscal year, a consolidated
balance sheet and consolidated statement of income and retained earnings
of OCI and said company's consolidated subsidiaries, certified by independent
public accountants selected by OCI and satisfactory to the Mortgagee, together
with a certificate of said accountants to the effect that their audit of the
financial affairs of OCI and its consolidated subsidiaries for such fiscal year
has not disclosed any default under the terms and provisions of this Mortgage,
or if such accountants have obtained knowledge of such default, they shall
specify in the certificate the nature and status thereof. The foregoing audited
financial statement shall be accompanied by unaudited consolidating financial
information reporting financial data for the Mortgagor. Such supplementary
financial information relating to the condition of the Mortgagor is to be of
sufficient detail in order to permit determination of the status of the various
financial and business requirements provided for herein. The Mortgagee and
its representatives shall have the right to inspect all books of accounts
relating to the property encumbered by this Mortgage and the financial and
business requirements contained herein (and to make copies or extracts
therefrom) and to cause such books to be audited by such independent public
accountants selected by the Mortgagee as often as may be reasonably requested,
provided however, that such inspection and audit shall be at the Mortgagee's
expense.
17. This Mortgage is personal to the Mortgagor herein, and no sale,
lease, encumbrance or other transfer or conveyance shall be made by Mortgagor
of the property encumbered by this Mortgage, except for the sale of non-material
personal property pursuant to paragraph 15 of this Mortgage, or premises
described herein or any part thereof without first obtaining the prior written
consent of the Mortgagee. In the event Mortgagee gives this written consent
in a sale transaction, the grantee named in the conveyance shall assume and
agree to pay the obligation evidenced by the Notes secured hereby. Any
conveyance of the property herein described or any part thereof in violation
of the terms of this paragraph shall entitle Mortgagee to accelerate the
payment of the obligation secured hereby and all sums of money secured hereby
shall, at the option of Mortgagee, and upon the giving of notice thereof,
become immediately due and payable and in default whether or not the same are
so due and payable and in default by the specific terms hereof. In the event
of sale with the approval of Mortgagee having first been obtained, nothing
herein contained shall be construed to constitute a novation or release
Mortgagor or any subsequent owner of liability or obligation under the Notes
secured hereby or this Mortgage by reason of the aforesaid assumption of the
obligation under the Notes secured hereunder, whether real or personal,
excepting that the Mortgagor shall have the right to add, substitute or replace
personal property without the prior consent of the Mortgagee in accordance with
the provisions of paragraph 15 hereof, and excepting that the Mortgagor shall
be permitted to bring good faith contests as provided in paragraph 5 herein.
18. Mortgagor shall not at any time during the term hereof, without
having first obtained the prior written consent of the Mortgagee, mortgage,
pledge or otherwise encumber or place any lien, or permit the same, to
be filed against the real and personal property encumbered hereby, or
any portion thereof.
19. Mortgagor shall at all times during the term hereof comply with and
conform to the requirements of all federal, state and local laws, ordinances,
regulations, conditions and restrictions applicable or pertaining to, or
affecting, the property and improvements described herein or the business and
operations of the Mortgagor, and Mortgagor shall not knowingly commit, suffer
or permit any act to be done in violation thereof, including, without
limitation, all federal, state and local pollution control laws and regulations
affecting the property encumbered hereby and the operation hereof. Mortgagor
warrants and represents that:
(a) to the best of Mortgagor's knowledge, there has been no release
or discharge of hazardous materials, hazardous wastes, hazardous substances,
solid wastes or pollution upon, in, over or under the mortgaged premises and
that no such materials or pollution has migrated thereto from neighboring land;
(b) Mortgagor has not received any notice from any governmental
agency or authority or from any tenant or other occupant or from any other
person or entity with respect to any release or discharge of hazardous
materials, hazardous wastes, hazardous substances, solid waste or pollution
upon, in, over or under the mortgaged premises;
(c) to the best of Mortgagor's knowledge, there is no asbestos or
asbestos-containing materials, PCB's, radon gas or urea formaldehyde foam
insulation at or within the mortgaged premises; and
(d) Mortgagor has fully disclosed to Mortgagee all material facts
regarding the mortgaged premises, the Mortgagor and the Mortgagor's business
operations.
If Mortgagor's warranties and representations set forth in this Mortgage
are not true and correct, then Mortgagee, at its option, shall have the right
to declare the loan immediately due and payable and to accelerate the entire
indebtedness.
Mortgagor covenants and agrees that:
(a) Mortgagor is not and will not become involved in operations at
the mortgaged premises or at other locations which would lead to the imposition
on Mortgagor of liability under Chapter 403, Florida Statutes, the Resource
Conservation and Recovery Act ("RCRA"), 42 U.S.C. 6903, Comprehensive
Environmental Response, Compensation and Liability Act of 1980 ("CERCLA"),
42 U.S. 9601 or any other federal, state or local ordinances, laws
or regulations regarding environmental matters or hazardous substances;
(b) Mortgagor will promptly comply with the requirements of Chapter
403, Florida Statutes, RCRA, CERCLA and all federal, state and local laws
and regulations regarding environmental matters or hazardous substances as the
same may each be amended from time to time (including all federal, state and
local laws and regulations regarding underground storage tanks), and all such
laws and regulations relating to asbestos and asbestos-containing materials,
PCB's, radon gas, and urea formaldehyde foam insulation, and will notify
Mortgagee promptly in the event of any release or discharge or a threatened
release or discharge of hazardous materials, hazardous wastes, hazardous
substances, solid waste or pollution upon, in, over or under the mortgaged
premises as those terms are defined in Chapter 403, Florida Statutes and any
federal, state or local ordinances, laws or regulations regarding environmental
matters or hazardous substances, or the presence of asbestos or
asbestos-containing materials, PCB's, radon gas or urea formaldehyde foam
insulation at the mortgaged premises, or of the receipt by Mortgagor of any
notice from any governmental agency or authority or from any tenant or other
occupant or from any other person or entity with respect to any alleged such
release or presence promptly upon discovery of such release, or promptly
upon receipt of such notice, and will promptly send Mortgagee copies of all
results of any tests regarding same on the mortgaged premises, including, but
not limited to test on underground storage tanks; and
(c) Mortgagor indemnifies and holds Mortgagee harmless from and
against all loss, liability, damage and expense, including attorneys fees on
the trial court and appellate levels, suffered or incurred by Mortgagee, as
holder of the Mortgage, Mortgagee in possession or as successor in interest
to Mortgagor as owner ofthe mortgaged premises by virtue of foreclosure or
acceptance of a deed in lieu of foreclosure, under or on account of said
Chapter 403 and any federal, state or local ordinances, laws or regulations
regarding environmental matters or hazardous substances, including the
assertion of any liens taking priority over the lien of this Mortgage
relating to any such release or discharge of hazardous materials which may
occur prior to the discharge of this Mortgage.
In the event that Mortgagor fails to abide by the above-described
covenants, Mortgagee, at its option, shall have the right to declare the loan
immediately due and payable, and to accelerate the entire indebtedness.
During the term of this Mortgage, Mortgagee may, but is not obligated to,
enter upon the mortgaged premises to make reasonable inspection of its
condition, including, but not limited to soil and groundwater sampling and
monitoring, inspection for hazardous waste, asbestos or asbestos-containing
materials, PBC's, radon gas and/or urea formaldehyde foam insulation;
provided, however, that any such inspections shall be at reasonable times
and without unreasonably disturbing the occupancy of any of the tenants on
the mortgaged premises.
In the event Mortgagor fails to comply with the requirements of said
Chapters 403 and any federal, state or local ordinances, laws or regulations
regarding environmental matters or hazardous substances, and should such
condition remain uncorrected for a period of thirty (30) days, Mortgagee
may, at its election, but without the obligation so to do, cause curative or
remedial work to be performed at the mortgaged premises, or take any and
all other actions as Mortgagee deems necessary, as shall cure said failure
of compliance, and any amounts paid as a result thereof, together with
interest thereon from the date of payment at the rate equal to the highest
rate permitted by law, but in no event to exceed twelve and one-half percent
(12.5%) per annum, shall be immediately due and payable by Mortgagor to
Mortgagee, and until paid shall be added to and become a part of the
principal debt secured hereby, having the benefit of the lien hereby created,
as a part thereof, and of its priority, and the same may be collected
as a part of said principal debt in any suit hereon or upon the Notes secured
hereby, or Mortgagee, by the payment of any assessment, claim or charge, may,
if it sees fit, be thereby subrogated to the rights of the State of Florida,
but no such advance shall be deemed to relieve Mortgagor from any default
hereunder or impair any rights or remedy consequent thereon.
20. Mortgagor agrees that during the term hereof, the Mortgagee shall
have the right, upon reasonable notice, during normal business hours and by
appointment, to enter upon the mortgaged premises for the purpose of
inspecting same and for the purpose of ascertaining that the various
requirements and restrictions contained herein are being complied with by
the Mortgagor.
21. In the event that Mortgagor shall (1) consent to the appointment
of a receiver or trustee of all or a substantial part of Mortgagor's assets,
or (2) be adjudicated a bankrupt or insolvent, or file voluntary petition
in bankruptcy or admit in writing its inability to pay its debts as they
become due, or (3) make a general assignment for the benefit of creditors, or
(4) file a petition or answer seeking reorganization or arrangement with
creditors, or to take advantage of any insolvency law, or (5) file an answer
admitting the material allegations of a petition filed against the Mortgagor
in any bankruptcy, reorganization or insolvency proceeding, or (6) action
shall be taken by the Mortgagor for the purpose of effecting any of the
foregoing, or (7) any order, judgment or decree shall be entered upon an
application of a creditor or Mortgagor by a court of competent jurisdiction
approving a petition seeking appointment of a receiver or trustee of all or
a substantial part of the Mortgagor's assets and such order, judgment or
decree shall continue unstayed and in effect for any period of thirty (30)
consecutive days, the Mortgagee may declare the Notes hereby secured
immediately due and payable, without notice or demand, whereupon the principal
of and the interest accrued on the Notes and all other sums hereby secured
shall become immediately due and payable as if all of the said sums of money
were originally stipulated to be paid on such day; and thereupon the Mortgagee
without notice or demand may prosecute a suit at law and/or in equity as
if all monies secured hereby had matured prior to its institution.
22. It is agreed that nothing herein contained nor any transaction
related thereto shall be construed or so operate as to require the Mortgagor
to pay interest at a rate greater than it is now lawful in such case to
contract for, or to make any payment or to do any act contrary to law; that
if any clauses or provisions herein contained operate or would
prospectively operate to invalidate this Mortgage or the Notes in whole or in
part, then, such clauses and provisions only shall be held for naught, as
though not herein contained, and the remainder of this Mortgage shall remain
operative and in full force and effect.
23. The Mortgagor understands and agrees that the successful
operation of the mortgaged premises by the Mortgagor as a citrus concentrate
plant forms an integral part of the security given hereby and the Mortgagor
expressly agrees that it shall, during the term hereof, conduct its corporate
business in compliance with the below-listed requirements and the failure by
Mortgagor to comply with or abide by such requirements, or Mortgagor's
misrepresentation regarding any or all of the facts hereafter recited, shall
constitute a default under this Mortgage and the Notes secured hereby.
By its execution hereof, the Mortgagor does hereby represent and warrant
all of the facts hereafter recited and covenants and agrees with the
Mortgagee that it shall comply with or abide by the below-listed requirements
at all times during the term hereof, to-wit:
(a) The Mortgagor represents, that on the date hereof, it is a
corporation duly incorporated and validly existing in good standing under the
laws of the State of Florida and that it is a wholly-owned subsidiary of OCI.
Additionally, Mortgagor covenants and agrees that it shall, at all times during
the term hereof, remain validly existing and in good standing under the laws
of the State of Florida, and that it shall not enter into a merger or
consolidation agreement with any other corporation, foreign or domestic,
including, without limitation, Mortgagor's parent company, OCI, or its
successor, without the prior written consent of the Mortgagee.
(b) The Mortgagor represents that the execution and delivery by it
of this Mortgage, the Notes secured hereby, and related loan documents, and the
performance by the Mortgagor thereunder, have been duly authorized by all
necessary corporate action and will not violate any provision of law or the
charter or by-laws of Mortgagor or result in the breach or constitute a default
under any indenture or other agreement or instrument to which the Mortgagor is
a party or by which the Mortgagor or the real and personal property
encumbered hereby may be bound or affected.
(c) The Mortgagor covenants and agrees that, during the term hereof,
its lines of business shall be restricted to activities directly or
substantially related to the citrus industry.
(d) The Mortgagor covenants and agrees that, except for transactions
in the ordinary course of or pursuant to the reasonable requirements of the
Mortgagor's business, all transactions between the Mortgagor and affiliates
(including its parent company, OCI or its successor) shall be on terms which
are not substantially different from those which the Mortgagor could have
obtained from unrelated parties as a result of "arms-length" bargaining.
(e) The Mortgagor covenants and agrees that, during the term hereof,
it shall annually reinvest not less than 25% of its annual depreciation
(as indicated on the required financial statements and reports to be furnished
by Mortgagor to Mortgagee) in capital improvements or repairs and maintenance
of the concentrate plant which is included as part of the security hereof and
are encumbered hereby. By its execution hereof, the Mortgagor expressly
understands and agrees that for the purposes of this subparagraph (e) relating
to reinvestment requirements, sums expended in employing practices of good
husbandry (with the exception of such items as adding or replacing irrigation
and drainage pumps and equipment and the replacement of unproductive trees)
shall not qualify for inclusion within the annual reinvestment
requirement of not less than 25% of its annual depreciation.
The Mortgagor further expressly agrees that if such amount of its annual
depreciation is not so reinvested, the Mortgagor will establish an escrow
account, satisfactory in all respects to the Mortgagee and will pay annually
into such account an amount equal to the difference between 25% of its annual
depreciation and the amounts actually reinvested, as contemplated herein, by
the Mortgagor in any one given fiscal year, and the Mortgagor shall set a
reserve aside therefor. The amounts so deposited by Mortgagor into the escrow
account may be used for reinvestment purposes within a five-year period,
and to the extent not so reinvested, such funds, at the sole option of the
Mortgagee, may be applied to the then unpaid principal balance due under
the Notes secured hereby. It is agreed between the Mortgagor and the
Mortgagee that if, in any one fiscal year, the Mortgagor shall invest an
amount in excess of 25% of its annual depreciation in capital improvements or
repairs and maintenance, then, such amount in excess of 25% of its annual
depreciation may be credited toward the Mortgagor's obligations under this
subparagraph (e) in any of the Mortgagor's next five ensuing fiscal years.
(f) Intentionally Deleted.
(g) The Mortgagor represents that, on the date hereof, all
certificates, licenses and permits applicable to the property encumbered
hereby, including, but not limited to, all necessary water usage or
consumption permits, fruit dealers and citrus packing, producing and marketing
licenses and permits, all required pollution control permits, and State
and local agricultural permits, have been obtained, and Mortgagor agrees to
keep all such certificates, licenses and permits current during the term
hereof. Additionally, the Mortgagor covenants and agrees to use its best
efforts to comply with the requirements of all Federal, State and local
pollution control laws and regulations applicable to the property encumbered
hereby and to the business and operations of the Mortgagor.
(h) The Mortgagor acknowledges that, in accordance with paragraph 15
hereof and subject to its provisions, the Mortgagor's right to substitute and
replace machinery and equipment shall exist only in those events in which the
value of the Mortgagee's security will not be reduced or impaired by such
substitution or replacement and in which the Mortgagee will obtain the first
and best lien on the machinery and/or equipment so substituted or replaced.
(i) It is agreed that all references to Mortgagor's parent company,
OCI, contained in this Mortgage shall be deemed and construed to include any
successor, by any means whatsoever, to OCI, and any successor to such
successor, etc.
(j) The Mortgagor covenants and agrees that it shall, upon learning
of or recognizing any non-compliance with any of the special requirements and
restrictions contained in this paragraph 23, or of non-compliance with any of
the other provisions of this Mortgage, including without limitation, the
provisions contained in paragraphs 15, 17, 18 and 19 hereof, give written
notice to the Mortgagee of such non-compliance within ten (10) days from such
recognition. In the event of any default under the terms and conditions of
this paragraph 23, or under the terms and conditions of paragraphs 15, 17, 18,
and 19 hereof, aforesaid, and such default shall have continued for a period
of thirty (30) days or more after written notice thereof has been given by the
Mortgagor to the Mortgagee as provided above, or, in any event, shall have
continued for a period of thirty (30) days or more after written notice thereof
has been given by the Mortgagee to the Mortgagor (it being expressly understood
by the Mortgagor that the Mortgagee may give such notice of default regarding
the obligations to be performed by the Mortgagor hereunder at any time the
Mortgagee learns of such default by any means whatsoever and the Mortgagee's
right to give such notice is not conditioned upon having received a notice
from the Mortgagor as provided above) and such default shall have not
been cured or the Mortgagor shall not have commenced upon the curing thereof
to the satisfaction of the Mortgagee within said thirty (30) days' period
then, at its option, the Mortgagee shall be entitled to accelerate the payment
of the obligation secured hereby and all sums of money secured hereby shall
become immediately due and payable and in default whether or not the same are
so due and payable and in default by the specific terms hereof. It is
expressly understood between the Mortgagor and the Mortgagee that the aforesaid
thirty (30) day grace period shall apply only in the event of a default
under this paragraph 23 and under paragraphs 15, 17, 18 and 19 hereof and
such grace period shall not apply to any default under any other provision,
requirement, condition or covenant contained herein, in the Notes secured
hereby, or in any other related or associated loan document given by the
Mortgagor to the Mortgagee.
24. It is agreed that any sum or sums which may be loaned or advanced
by the Mortgagee to the Mortgagor at any time within twenty (20) years from the
date of this indenture, together with interest thereon at the rate agreed upon
at the time of such loan or advance shall be equally secured with and have
the same priority as the original indebtedness and be subject to all the terms
and provisions of this Mortgage; provided that the aggregate amount of
principal outstanding at any time shall not exceed the sum of $25,000,000.00,
plus interest thereon, and any disbursements made for the payment of taxes,
levies, or insurance on the property covered by the lien of this
Mortgage, with interest on such disbursements.
25. By its execution and delivery hereof, the Mortgagor does hereby
represent and warrant unto the Mortgagee that there are no actions, suits or
proceedings pending or, to the best of the knowledge and belief of the
Mortgagor, threatened against or affecting the Mortgagor or its subsidiaries,
at law or in equity or before or by any Federal, state, municipal or other
governmental department, commission, board, bureau, agency or instrumentality,
domestic or foreign, which may result in any material adverse change in the
business, properties or assets or in the condition, financial or otherwise,
of the Mortgagor or any of its subsidiaries. The Mortgagor expressly agrees
that if the aforementioned representation and warranty prove to be false or
if the Mortgagor has misrepresented the facts set forth above, either of such
events shall constitute a default under this Mortgage and the Notes secured
hereby entitling the Mortgagee to exercise all of the rights and remedies
contained herein and in the Notes.
26. No delay by Mortgagee in exercising any right or remedy hereunder,
or otherwise afforded by law, shall operate as a waiver thereof or preclude
the exercise thereof during the continuance of any default thereunder. No
waiver by Mortgagee of any default shall constitute a waiver of or consent to
subsequent defaults. No failure of Mortgagee to exercise any option herein
given to accelerate the maturity of the debt hereby secured, no forbearance by
Mortgagee before or after the exercise of such option and no withdrawal or
abandonment of foreclosure proceedings by Mortgagee shall be taken or construed
as a waiver of its right to exercise such option or to accelerate the maturity
of the debt hereby secured by reason of any past, present or future defult
on the part of Mortgagor; and, in like manner, the procurement of insurance
or the payment of taxes or other liens or charges by Mortgagee shall not be
taken or construed as a waiver of its right to accelerate the maturity of
the debt hereby secured.
27. All written notices required to be given in connection with this
Mortgage shall be deemed to have been properly given if mailed by registered
or certified mail or personally delivered, if to Mortgagee, at John Hancock
Mutual Life Insurance Company, P.O. Box 111, John Hancock Place, Boston,
Massachusetts 02117, Attention: Bond and Corporate Finance Department
(Agri Business Group); and if to the Mortgagor, at 2020 U.S. Highway 17 South,
Bartow, Florida 33830. Said addresses may be changed from time to time by any
of the foregoing parties by notice to the others, mailed or delivered as
aforesaid, of the location and mailing address of the place at which notice is
thereafter to be mailed or delivered.
28. This instrument also creates a security interest in favor of
Mortgagee under the Florida Uniform Commercial Code and shall be construed as
a security agreement under said Code, and Mortgagee shall also have all rights
and remedies of a secured party under the Florida Uniform Commercial Code, and
without limitation upon or in derogation of the rights and remedies created
under and accorded Mortgagee by this Mortgage pursuant to the common law or any
other laws of the State of Florida or of any other jurisdiction, it being
understood that the rights and remedies of Mortgagee under the Florida Uniform
Commercial Code shall be cumulative and in addition to all other rights
and remedies of Mortgagee arising under the common law, or any other laws of
the State of Florida or of any other jurisdiction. This Mortgage creates a
continuing lien to secure the full and final payment of the Notes and the
performance of all other obligations imposed hereby and hereafter arising.
29. MORTGAGEE AND MORTGAGOR HEREBY KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVE THE RIGHT EITHER MAY HAVE TO TRIAL BY JURY IN RESPECT
OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER OR IN CONNECTION
WITH THIS MORTGAGE AND ANY AGREEMENT EXECUTED IN CONNECTION WITH THIS MORTGAGE,
OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR
WRITTEN) OR ACTIONS OF EITHER PARTY. THIS PROVISION IS A MATERIAL INDUCEMENT
FOR MORTGAGEE ACCEPTING THIS MORTGAGE AND MAKING THE LOAN TO MORTGAGOR.
NOW, if the payments are made as provided and all the foregoing
covenants and agreements are performed and observed, this Mortgage shall be
null and void and shall be released at the cost of the Mortgagor, which cost
the Mortgagor agrees to pay; but upon any default in the payment of the
indebtedness hereby secured or of any installment thereof or of interest
thereon, as they severally become due, or upon any default in the performance
or observance of any of the terms, covenants or agreements of this
Mortgage or of any of the assignments of leases beyond any applicable grace
period from time to time given by Mortgagor to Mortgagee as further security
for said loan, then, in any or either of said events, the whole of the
indebtedness hereby secured, at the option of the Mortgagee or the legal holder
of said indebtedness, shall become immediately due and payable without notice
or in the event of the passage after the date of this Mortgage of any law of
the State of Florida deducting from the value of land for the purpose of
taxation any lien thereon, or changing in any way the laws now in force for the
taxation of mortgages or debts secured by mortgages for state or local
purposes, or the manner of the collection of any such taxation so as to affect
this Mortgage adversely, the holder of this Mortgage, and of the debt
which it secures, shall have the right to give thirty (30) days' written
notice to the owner of the mortgaged premises requiring the payment of the
mortgage debt, and it is hereby agreed that, if such notice be given, the
said debt shall become due, payable and collectible at the expiration of said
thirty (30) days provided, however, that such requirement of payment of said
debt shall be ineffective if the Mortgagor is permitted by law to pay
or reimburse the Mortgagee for payment of the whole of such tax in addition
to all other payment required hereunder, without any penalty thereby accruing
to the holder of this Mortgage and the debt secured hereby, and if, in fact,
the Mortgagor does pay or reimburse the Mortgagee for payment of such tax
prior to the date on which payment is required by such notice. Upon the
Mortgage indebtedness becoming due and payable as heretofore provided, the
Mortgagor shall refrain from collecting and receiving all rents accruing as
aforesaid and upon notice from the Mortgagee all tenants shall thereafter
pay such rents to the Mortgagee, and any payment made otherwise shall not
discharge the obligations of such tenant, and the Mortgagee may immediately
cause this Mortgage to be foreclosed in the manner prescribed by law, and upon
commencement of foreclosure proceedings shall be entitled to have a receiver
appointed, whether the mortgaged premises are homestead or not and without
proof of any other ground for his appointment than the said default, to take
possession and charge of the mortgaged premises, to rent the same and receive
and collect the rents, issues and profits thereof, under direction of the
court, and any amount so collected by such receiver shall be applied under
direction of the court to the payment of any judgment rendered, or amounts
found due upon foreclosure of this Mortgage including the cost of collection
and attorneys' fees on any trial court and appellate levels; and, in the event
of any default or defaults in the payment of the indebtedness hereby
secured, or of any installment thereof, or of interest thereon, or in the
performance or observance of any of the terms, covenants or agreements herein
contained beyond any applicable grace period, the Mortgagee shall have the right
forthwith after any such default to enter upon and take possession of the said
mortgaged premises and to let said premises and receive the rents, issues and
profits thereof, and apply the same, after payment of all necessary charges and
expenses, on account of the indebtedness hereby secured.
The proceeds of said foreclosure shall be applied, first, to the expenses
incurred hereunder, including attorneys' fees on any trial court and appellate
levels for such services as may be rendered for the collection of said
indebtedness and the foreclosure of this Mortgage; second, to the payment of
whatever sum or sums the Mortgagee may have paid or become liable to pay in
carrying out the options, terms and stipulations of this Mortgage, together
with interest thereon; third, to the payment and satisfaction of the Notes;
and fourth, the surplus,if any, shall be paid to the Mortgagor or otherwise
as the court may decree.
The Mortgagor hereby agrees that in the event the Notes secured hereby
is placed in the hands of an attorney for collection, or in case the holder
shall become a party either as plaintiff or as defendant in any suit or legal
proceeding in relation to the property described or the lien created in this
Mortgage, or for the recovery or protection of said indebtedness, the Mortgagor
will pay on demand all costs and expenses arising thereof incurred by the
Mortgagee, including the Mortgagee's attorneys' fees (including such fees for
prosecuting or defending any appeal in any matter involving collection of this
obligation or foreclosure of the Mortgage securing same), all of Mortgagee's
court costs, and the cost of extending the abstract of title in the event of
foreclosure (or any other litigation which, in the judgment of the Mortgagee
requires the extending of the abstract of title), with interest thereon until
paid at the rate of nine and eighteen hundredths percent (9.18%) per annum.
The Mortgagor hereby assigns, transfers and conveys unto the Mortgagee,
its successors and assigns, the rents accrued and to accrue from all tenants in
occupancy of the mortgaged premises, or any part thereof, including rentals
and royalties under oil, gas and mineral leases, if any, during the lifetime
of this Mortgage, it being understood that as long as there is no default in
the performance or observance of any of the covenants or agreements herein
contained, the Mortgagor shall have the privilege of collecting and receiving
all rents accruing under the leases or contracts of tenancy for the mortgaged
premises or any part thereof. All leases, royalty agreements, etc., must be
executed pursuant to the provisions of paragraph 17 hereof.
It is expressly agreed by and between Mortgagor and Mortgagee that
if any provision, or any part thereof, of this Mortgage, the Notes secured
hereby, or any related loan document is prohibited, unenforceable or invalid
under the laws of any jurisdiction which has jurisdiction over same, including
those of the State of Florida, the provision or part thereof shall be
ineffective to the extent of such prohibition, unenforceability or invalidity
under the applicable law without affecting the enforceability or validity of
such provision in any such jurisdiction, and without invalidating the remainder
of such provision or other provisions of said documents.
IN WITNESS WHEREOF, the Mortgagor has caused the execution of this
Mortgage, by its authorized officers and caused its corporate seal to be
affixed this 2nd day of June, 1998.
Signed, sealed and delivered ORANGE-CO OF FLORIDA, INC.,
in the presence of: a Florida corporation
/s/John R. Alexander By: /s/Gene Mooney
- ------------------------ ---------------
Name: John R. Alexander Name: Gene Mooney
Title: President & COO
/s/C.B. Myers III ATTEST: /s/Dale A. Bruwelheide
- ----------------- ----------------------
Name: C. B. Myers III Name: Dale A.Bruwelheide
Title: Vice President & Chief Financial Officer
(Corporate Seal)
STATE OF FLORIDA )
)
COUNTY OF POLK )
I hereby certify that on this 2nd day of June, 1998, before me an officer
duly authorized in the State and County aforesaid to take acknowledgments,
personally appeared Gene Mooney and Dale A. Bruwelheide, respectively, the
President and Vice President/Chief Financial Officer of ORANGE-CO OF FLORIDA,
INC., a Florida corporation, on behalf of the corporation, who is personally
known to me/or who produced the following __________________________________
as identification, and they acknowledged before me that they executed the same
as their free act and deed on behalf of said corporation.
In witness whereof, I have hereunto set my hand and seal in the State
and County aforesaid as of this 2nd day of June, 1998.
/s/Colleen B. Peoples
----------------------
Notary Public, State of Florida
Name: Colleen B. Peoples
Commission No. CC670157
My commission expires: August 7, 2001
(Notary Seal)
JOINDER AND CONSENT
The undersigned does hereby join in and consent to the foregoing
Consolidated, Amended and Restated Florida Mortgage and Security Agreement
as of the 2nd day of June, 1998.
JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY,
a Massachusetts corporation
/s/ William A. Kinsley By: /s/ Scott A. McFetridge
- ------------------------- ---------------------------
Name: William A. Kinsley Name: Scott A. McFedtridge
Title: Investment Officer
/s/ David E. Johnson
- -----------------------
Name: David E. Johnson
COMMONWEALTH OF MASSACHUSETTS )
)
COUNTY OF SUFFOLK )
I hereby certify that on this 1st day of June, 1998, before me an officer
duly authorized in the State and County aforesaid to take acknowledgments,
personally appeared Scott A. McFetridge, as the Investment Officer for
JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY, a Massachusetts corporation, on
behalf of the corporation, who produced the following a driver's license
of Massachusettes as identification, and he did acknowledge before me
that he executed the same as his free act and deed and the free act and
deed of said corporation.
IN WITNESS WHEREOF, I have hereunto set my hand and seal in the State
and County aforesaid as of this 1st day of June, 1998.
/s/ John T. Wallace
--------------------
Name: John T. Wallace
Notary Public, Commonwealth of Massachusetts
Commission No.:
My Commission expires: April 14, 2000
RENEWAL NOTE
$15,000,000.00 June 2nd, 1998
FOR VALUE RECEIVED, ORANGE-CO OF FLORIDA, INC. (the "Maker")
promises to pay to JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY, a
Massachusetts corporation ("John Hancock"), having an office at
John Hancock Place, Boston, Massachusetts 02117, or order, the
principal amount of FIFTEEN MILLION AND NO/100 DOLLARS
($15,000,000.00), or so much thereof as may actually be
disbursed, together with interest thereon from date at the rate
of seven and eighteen hundredths percent (7.18%) per annum until
maturity, payable as follows:
The principal sum and interest at the rate stated above on
the outstanding principal balance from time to time shall be
payable in quarterly installments due on September 1, 1998
and each successive December 1, March 1, June 1 and
September 1, during the term hereof. Each quarterly
installment of principal shall be in the amount of Two
Hundred Fifty Thousand and No/100 Dollars ($250,000.00)
commencing on September 1, 1998, and on the first day of
each December, March, June and September thereafter, during
the term of this Note, provided, however, that on the 1st
day of June, 2008, all of the principal hereof then
remaining unpaid, all accrued and unpaid interest thereon,
and any and all other interest or charge then due under the
provisions hereof or under the provisions of the
Consolidated, Amended and Restated Florida Mortgage &
Security Agreement of even date herewith (the "Mortgage")
securing this note (the "Note") shall be due and payable.
Nota Bene: State of Florida Documentary Stamp Tax in the
amount required by law has been paid and the
documentary stamps obtained upon such payment have been
affixed to that certain Loan Modification Agreement,
Notice of Advance and Restated Florida Mortgage and
Security Agreement dated the 8th day of November, 1979
and recorded in Official Records Book 1911, Page 1040
and amended and restated pursuant to that certain
Amended and Restated Florida Mortgage and Security
Agreement and Spreader Agreement, dated as of the 21st
day of April, 1993 and recorded in Official Records
Book 3226, Page 937, that certain Future Advance
Agreement dated as of April 21, 1993 and recorded in
Official Records Book 3226, Page 971, and that certain
Florida Second Mortgage and Security Agreement dated
August 13, 1996 and recorded in Official Records Book
3718, Page 176, all as recorded in the Public Records
of Polk County, Florida, as well as that certain
Florida Mortgage and Security Agreement of even date
herewith given by the Maker to John Hancock, recorded
or to be recorded in the Public Records of Polk County,
Florida.
When received by the holder hereof, the quarterly
installments of principal and interest due from time to time
during the term of this Note shall be applied by such holder
first to accrued and unpaid interest and next to principal. Any
other payments or prepayments of the indebtedness evidenced
hereby which are required or permitted hereunder and which are
received by the holder hereof while no default exists under the
provisions of this Note or under the provisions of the Mortgage
shall likewise be applied; provided, however, that such prepayments
of principal shall be applied to the installments thereof in the
inverse order of maturity.
Payment of principal, premium, if any, and interest on this
Note shall be made in lawful money (or, subject to collection, by
good check payable in such money) of the United States of America
at the principal office of the holder of this Note or at such
other place as the holder may direct.
After not less than seven (7) days prior written notice to
the holder of this Note, the Maker shall have the privilege of
prepaying in full the unpaid principal balance of this Note by
payment of such principal balance together with a premium
calculated pursuant to the prepayment calculation set forth in
subparagraph (a) below, or in part, in multiples of One Million
and No/100 Dollars ($1,000,000.00) together with a premium
calculated pursuant to the prepayment calculation set forth in
subparagraph (b) below, unless the holder has, by virtue of the
existence of a default under the provisions of this Note, the
provisions of the Mortgage securing this Note, or the provisions
of any instruments now or hereafter evidencing or securing this
indebtedness, accelerated the maturity date of this Note, in
which case the holder shall be entitled to collect the full
unpaid balance of this Note together with the premium set forth
in (c) below:
(a) a sum equal to the net present value (if positive) of
the remaining payments of principal and interest,
discounted at a rate equal to the sum of: (i) the
highest rate for United States Treasury Securities (as
published in the Wall Street Journal or other business
publications of general circulation five (5) business
days prior to the date of said prepayment) with a
maturity date most closely matching the remaining years
of the term of this Note, plus (ii) one half of one
percent (0.50%);
(b) consistent with the concepts and provisions of
subparagraph (a) above, a sum equal to the present
values of a proportionate amount of each remaining
future contractual quarterly installment of principal
and interest due for the remaining term of this Note,
said proportionate amount to be determined by
multiplying said remaining installments by a fraction,
the numerator of which shall be the amount of the
partial prepayment and the denominator of which shall
be the principal balance of this Note remaining unpaid
immediately prior to such partial prepayment, and the
sum of said present values of said proportionate amount
as so determined to be discounted in the manner
provided in subparagraph (a) above;
(c) a sum equal to five percent (5%) of the outstanding
unpaid principal balance of this Note upon the occasion
of the acceleration of the maturity date hereof.
In the event that the yield rate on publicly traded United
States Treasury Securities is not obtainable, then the nearest
equivalent issue or index shall be selected, at the sole
discretion and determination of the holder hereof, and used to
calculate the prepayment premium.
The Maker expressly understands and agrees that the
prepayment premium set forth in (c) above shall be due to and
collectible and enforceable by the holder hereof upon the
occasion of the holder's exercise of its acceleration option
hereafter set forth; that said holder will suffer damages as a
result of any such acceleration; that the prepayment premium set
forth in (c) above is directly related to such damages which the
holder will suffer as a result of the acceleration and is fair
and reasonable under the circumstances; and that the
enforceability of such prepayment premium upon any such
acceleration was negotiated by and between the Maker and said
holder and forms an integral part of the benefits which have been
bargained by said holder in its making of the loan evidenced
hereby. The Maker further understands and agrees that (i)
accrued and unpaid interest at the applicable rate or rates set
forth herein shall be due to the holder in connection with any
exercise by the Maker of its prepayment privilege; (ii) the
making of any partial prepayments of principal pursuant to such
prepayment privilege shall not excuse the Maker from paying, when
due, the next consecutive quarterly installment of principal and
interest; and (iii) that the amount of said next consecutive
quarterly installment as well as those for the years remaining in
the balance of the term hereof may, of necessity, change.
It is agreed that upon any default in the payment of
principal, interest or money owing for advancements made by the
holder hereof, or default in the performance or observance of any
of the covenants or agreements herein contained, contained in the
Mortgage securing this Note, or contained in any instrument now
or hereafter evidencing or securing this indebtedness, the
principal of this Note then remaining unpaid shall, automatically
and immediately, without regard to the exercise or nonexercise of
the acceleration option of the holder hereof as hereinafter set
forth, and without notice or demand, bear interest at the rate of
nine and eighteen hundredths percent (9.18%) per annum while such
default exists, and the holder hereof may apply payments received
on any amounts due hereunder or under the terms of any instrument
now or hereafter evidencing or securing this indebtedness as said
holder may determine.
It is further agreed that upon the occasion of any default
set forth in the preceding paragraph, the principal then
remaining unpaid, all interest then accrued thereon, and any and
all other sums or charges then due to the holder pursuant to the
terms hereof or of the Mortgage or any other instrument now or
hereafter evidencing or securing this indebtedness, shall, at the
option of the holder hereof, become immediately due and payable
without notice or demand, anything herein or in said Mortgage or
other instrument to the contrary notwithstanding, and no omission
on the part of the holder to exercise said option when entitled
so to do shall be construed as a waiver of such right or as a
waiver of the holder's right to the automatic additional interest
during default as hereinabove provided.
In the event this Note is placed in the hands of an attorney
for collection, or in case the holder shall become a party either
as plaintiff or as defendant in any suit or legal proceeding in
relation to the property described in the Mortgage, or arising
out of holder accepting the Mortgage, or for the recovery or
protection of said indebtedness, the Maker hereof will repay on
demand all costs and expenses arising therefrom, including
attorneys' fees (including such fees for prosecuting or defending
any appeal in any matter involving the Mortgage, the collection
of this obligation or the foreclosure of the Mortgage securing
same), all court costs, and the cost of extending the abstract of
title in the event of foreclosure, with interest thereon until
paid at the rate of nine and eighteen hundredths percent (9.18%)
per annum.
Nothing herein contained, nor any transaction related
hereto, shall be construed or so operate as to require the Maker
or any person liable for repayment of the indebtedness evidenced
hereby, to pay interest, or charges in the nature of interest, at
a greater rate than is now lawful in such case to contract for,
or to make any payment, or to do any act contrary to law. The
holder shall not be entitled to collect any interest, or charges
in the nature of interest, which is in excess of the legal rate
and the Maker shall be entitled to a refund of any amount
collected hereunder which may be determined to be excessive or
not permitted by law.
The Maker and guarantor hereof and all others who may become
liable for all or any part of this obligation severally waive
presentment for payment, protect and notice of protest and of
nonpayment and consent to any number of renewals or extensions of
time of payment hereof. Any such renewals or extensions may be
made without notice to any of said parties and without affecting
their liability.
BY THEIR EXECUTION AND DELIVERY HEREOF, THE MAKER AND THE
HOLDER, INTENDING TO BIND THEMSELVES AND THEIR RESPECTIVE HEIRS,
PERSONAL REPRESENTATIVES, SUCCESSORS AND ASSIGNS, DO HEREBY
KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT WHICH
EACH HAS OR MAY HAVE TO A TRIAL BY JURY IN RESPECT TO ANY LEGAL
ACTION, PROCEEDING, SUIT, LITIGATION, CLAIM, OR COUNTERCLAIM
WHICH (A) IS BASED UPON THIS NOTE, THE MORTGAGE SECURING THIS
NOTE, AND ANY OTHER DOCUMENT NOW OR HEREAFTER EVIDENCING OR
SECURING THE INDEBTEDNESS OWED TO THE HOLDER OF THIS NOTE (SAID
NOTE, MORTGAGE, AND OTHER DOCUMENTS BEING HEREAFTER COLLECTIVELY
REFERRED TO AS THE "LENDER'S LOAN DOCUMENTS"); (B) IS BASED UPON
ANY PARTICULAR PROVISION OR PROVISIONS OF SAID LENDER'S LOAN
DOCUMENTS; (C) ARISES OUT OF, UNDER, OR IN CONNECTION WITH SAID
LENDER'S LOAN DOCUMENTS OR ANY PROVISION THEREOF; OR (D) ARISES
OUT OF, IN CONNECTION WITH, OR IS BASED UPON ANY CONDUCT, COURSE
OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR
WRITTEN) OR ACTIONS OF THE MAKER OR OF THE HOLDER RESPECTING ANY
MATTER ADDRESSED OR CONTEMPLATED IN SAID LENDER'S LOAN DOCUMENTS.
THIS WAIVER IS INTENDED TO BE APPLICABLE THROUGHOUT THE PERIOD OF
TIME IN THE RECENT PAST WHEN THE LOAN EVIDENCED BY THE LENDER'S
LOAN DOCUMENTS WAS NEGOTIATED, TO THE PRESENT TIME, AND AT ALL
TIMES IN THE FUTURE UNTIL ALL APPLICABLE STATUTES OF LIMITATION
RESPECTING THE BRINGING OF LEGAL ACTIONS AND CLAIMS COVERED
HEREBY SHALL HAVE RUN, NOTWITHSTANDING THE PAYMENT IN FULL OF THE
INDEBTEDNESS EVIDENCED OR SECURED BY THE LENDER'S LOAN DOCUMENTS
AND THE DISCHARGE OR SATISFACTION THEREOF. THE MAKER AND THE
HOLDER DO HEREBY FURTHER EXPRESSLY ACKNOWLEDGE AND AGREE THAT
THIS WAIVER OF RIGHT TO TRIAL BY JURY (I) FORMS AN INTEGRAL PART
OF THE CONSIDERATION FOR THEIR MAKING, ENTERING INTO, OR
ACCEPTING THE LENDER'S LOAN DOCUMENTS, (II) CONSTITUTES A
MATERIAL INDUCEMENT TO SAID MAKER AND THE HOLDER FOR THE
CONSUMMATION OF THE MORTGAGE LOAN TRANSACTION DESCRIBED IN THIS
NOTE, AND (III) WAS KNOWINGLY BARGAINED FOR AND VOLUNTARILY
ENTERED INTO BY SAID MAKER AND HOLDER. THE MAKER BY EXECUTING
AND DELIVERING THIS NOTE AND THE HOLDER BY ACCEPTING THIS NOTE
HAVE EXPRESSED THEIR UNDERSTANDING AND AGREEMENT REGARDING THE
FOREGOING WAIVER OF TRIAL BY JURY.
This Note is secured by that certain Consolidated, Amended
and Restated Florida Mortgage and Security Agreement of even date
herewith recorded/to be recorded in the Public Records of Polk
County, Florida, made by the Maker to John Hancock encumbering
personal property and fee simple interest in real property
situated in Polk County, in the State of Florida, and this Note
is to be governed by and construed in accordance with the laws of
the State of Florida.
This Note combines and renews a certain Renewal Promissory
Note given by the Maker to John Hancock dated as of April 21,
1993, in the original principal amount of $12,000,000.00, of
which the unpaid principal balance is $6,000,000.00, and a Demand
Promissory Note given by the Maker to John Hancock of even date
herewith in the principal amount of $9,000,000.00, and restates
the terms of the Renewal Promissory Note and the Demand
Promissory Note in their entirety. Documentary stamps due on the
Renewal Promissory Note have been paid and affixed to the Loan
Modification Agreement, Notice of Advance and Restated Florida
Mortgage and Security Agreement given by the Maker to John
Hancock, dated November 8, 1979, and recorded in Official Records
Book 1911, Page 1040 of the Public Records of Polk County,
Florida, and amended and restated pursuant to that certain
Amended and Restated Florida Mortgage and Security Agreement and
Spreader Agreement, dated as of the 21st day of April, 1993, and
recorded in Official Records Book 3226, Page 937, and that
certain Future Advance Agreement given by Maker to John Hancock,
dated as of April 21, 1993 and recorded in Official Records Book
3226, Page 971, Public Records of Polk County, Florida, while the
documentary stamps due on the Demand Promissory Note have been
paid and affixed to the Florida Mortgage and Security Agreement
of even date hereof, recorded/to be recorded in the Public Records
of Polk County, Florida.
ORANGE-CO OF FLORIDA, INC.
By: /s/Gene Mooney
--------------
Name: Gene Mooney
Title: President & COO
ATTEST:
/s/Dale A Bruwelheide
---------------------
Name: Dale A. Bruwelheide
Title: Vice President &
Chief Financial Officer
(CORPORATE SEAL)
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<NAME> ORANGE-CO, INC.
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0
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