SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
------------------------------------
FORM 10-K
Annual Report pursuant to Section 13 of the Securities Exchange Act of 1934
For the fiscal year ended December 31, 1998
File No. 1-6963
ORIOLE HOMES CORP.
1690 South Congress Avenue, Suite 200, Delray Beach, Florida 33445
(561) 274-2000
Florida 59-1228702
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(State of Incorporation) (I.R.S. Employer I.D.)
Securities registered pursuant of Section 12(b) of the act:
Name of Each Exchange on
Title of Each Class Which Registered
------------------- ----------------
Class A Common Stock, $.10 par Value American Stock Exchange
Class B Common Stock, $.10 par Value American Stock Exchange
The Registrant (1) HAS filed all reports required to be filed by Section 13
of the Securities Exchange Act of 1934 during the preceding twelve months; and
(2) HAS been subject to the filing requirements for at least the past 90 days.
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K [ X ].
As of March 22, 1999, the Company had outstanding 1,864,149 shares of its
Class A Common Stock and 2,761,375 shares of its Class B Common Stock.
The aggregate market value of voting stock held by non-affiliates of the
Registrant is $9,894,027 as of March 22, 1999.
Part III of this Report is incorporated by reference to the Registrant's
Proxy Statement which will be filed for the 1999 Annual Meeting, to be held on
May 12, 1999.
<PAGE>
ORIOLE HOMES CORP.
FORM 10-K
TABLE OF CONTENTS
Part I Page
Item 1. Business .............................................. 1
Item 2. Properties ............................................ 14
Item 3. Legal Proceedings ..................................... 14
Item 4. Submission of Matters to a Vote of Security-Holders ... 14
Part II
Item 5. Market for Registrant's Common Equity and
Related Stockholder Matters ................................. 15
Item 6. Selected Financial Data ................................ 16
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations ......................... 17
Item 8. Financial Statements and Supplementary Data ............ 24
Item 9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure ......................... 48
Part III
Item 10. Directors and Executive Officers of the Registrant .......... 48
Item 11. Executive Compensation ...................................... 48
Item 12. Security Ownership of Certain Beneficial Owners
and Management .............................................. 48
Item 13. Certain Relationships and Related Transactions .............. 48
Part IV
Item 14. Exhibits, Financial Statement Schedules and
Reports on Form 8-K ......................................... 49
Signatures ........................................................ 52
Exhibit Index ........................................................ 53
<PAGE>
PART I
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ITEM1 BUSINESS
General
Oriole Homes Corp. (together with its consolidated subsidiaries, the
"Company" or "Oriole") builds and sells single-family homes, patio homes,
townhomes, villas, duplexes and low and mid-rise condominiums, principally in
southeast Florida. Oriole was incorporated in the State of Florida in 1968 as
the successor to six corporations that had engaged in the construction and sale
of single-family homes in Florida since 1963.
The Company's executive office is located at 1690 South Congress Avenue,
Suite 200, Delray Beach, Florida 33445, and its telephone number is (561)
274-2000.
The Company is a leader in the "active adult" (age 55 and over) market in
south Florida. In 1998, approximately 75% of the Company's revenues were derived
from sales of homes in communities designed exclusively for active adults.
According to various market studies conducted on behalf of the Company, during
each of the last five years Oriole was the largest builder of condominiums for
active adults in Palm Beach County, measured by dollar volume and number of
units sold.
Oriole designs its product mix in response to the preferences of active
adults, a demographic group which, according to U.S. Census reports, enjoys a
high percentage of discretionary income in this marketplace and is the fastest
growing segment of the population in the United States. In 1998, homes in the
Company's active adult communities sold at prices that ranged from $100,000 to
$195,000. Approximately 54% of these sales were for cash.
During the year ended December 31, 1998, the average sales price for
housing units sold by the Company was $158,500.
<PAGE>
Home Building Data (in 000's)
The following table sets forth information concerning sales, new contracts
and backlog for each of the past five years for the Company's homes:
Years Ended December 31,
(Dollars in Thousands)
----------------------
1998 1997 1996 1995 1994
---- ---- ---- ---- ----
Total Sales
Sales value $ 82,737 $106,788 $100,661 $ 73,409 $110,116
Number of homes 522 676 597 433 755
Total New Contracts
Sales value $ 75,876 $102,392 $110,122 $ 79,410 $100,109
Number of homes 491 653 670 483 661
Total Backlog
Sales value $ 33,553 $ 40,414 $ 44,810 $ 35,349 $ 29,348
Number of homes 212 243 266 193 143
The Company anticipates delivering substantially all backlog, both in
number of homes and dollar amount, within a twelve month period. It generally
takes eight months after receipt of a contract to deliver a home. Typically, the
Company's backlog tends to increase between January and May as active adults,
who are planning retirement, generally plan occupancy of their homes in the
months of October through December.
Operating Strategies
The Company has attempted to maximize its financial return by (i) acquiring
tracts of developed and undeveloped land and marketing this land in phases, (ii)
developing planned communities, which permit the Company to take advantage of
certain economies of scale, (iii) generally beginning construction only after a
home is contracted for, and (iv) acting as general contractor and hiring
subcontractors on a fixed-price or other negotiated cost-effective basis. In
1998, Oriole implemented certain strategic initiatives to help enhance profit
margins, including a Process Redesign Program. This program is designed to allow
for the evaluation, modification and automation of certain business processes in
order to reduce home delivery time, enhance the quality of home construction and
standardize options.
Market-driven attributes which have contributed to Oriole's success
include, (i) construction of quality homes within communities that offer a
significant range of amenities, and therefore satisfy customers who have
provided a continual source of referrals, (ii) the offering of a wide selection
of competitively priced housing, which includes a substantial product mix, (iii)
extensive knowledge of the Florida market, and (iv) a land acquisition and
development strategy that both permits development and construction in phases
and ensures availability of strategically located land for future marketing.
The Company will continue to adhere to most of its current operating
strategies but will also adopt new strategies as it deems appropriate to meet
evolving and increasingly competitive market conditions. In this regard, the
Company continues to extend its geographic market into the southwest and central
Florida areas to take advantage of accelerated demand in those areas. It has
also reduced reliance on the purchase of larger tracts of land outright with the
use of "rolling" options and strategic alliances. The typical "rolling" option
allows the Company an exclusive right to the future purchase of a predetermined
quantity of land in a development at a price fixed at the original contract
date, thereby allowing the Company to reduce its market risk by adjusting its
level of investment. A typical strategic alliance allows for shared resources
and risk between homebuilders and/or suppliers in the purchase, development and
marketing of large parcels of land. These alliances may take various forms; i.e.
direct investment, joint ventures, etc. Finally, the combination of land
carrying costs and the reduction in the rate of land price appreciation has made
it attractive to purchase property already substantially developed.
Florida Market. The Company's residential developments are all located in
the State of Florida and primarily in southeast Florida (Broward, Palm Beach and
Martin Counties). The Company also has developments in the Naples and the Ocala
areas.
Quality Construction and Diverse Amenities. The Company creates a total
lifestyle experience for the active adult. The communities usually include
extensive product mix and recreational facilities, which range from intimate
social clubhouses and swimming pools to multi-million dollar clubhouse
environments which include tennis courts, indoor and outdoor swimming pools,
theaters for the performing arts, health clubs/spas and other amenities.
<PAGE>
Product Diversification and Merchandising. The Company spends considerable
effort in developing design, marketing and merchandising concepts for each of
its communities. The design concepts determine the size, style and price range
of homes, the layout of common areas and individual lots and the overall
community presentation. The product line offered depends upon many factors,
including the housing generally available in the area and the needs of a
particular target market. After establishing design concepts and a marketing
plan, the Company undertakes development activities which can include site
planning and engineering and the construction of roads, sewer, water and
drainage facilities and recreational facilities. Oriole seeks to appeal to a
wide variety of buyers in different geographic locations with different
individual risk profiles and lifestyle preferences and, accordingly, the Company
offers a diversity of home styles and price ranges including single family,
patio, townhomes, villas, duplexes and low and mid-rise condominiums. Sales
prices range from $100,000 to $600,000, with an average price of $158,500 for
homes delivered during 1998. See "Communities Currently Under Development or
Construction", at page 6. The Company offers a variety of options for each of
its homes. Options permit buyers some flexibility to customize their homes. They
also provide the Company with higher margins while allowing the Company to
maintain the efficiencies of a production builder. The Company believes the
availability of options increases the appeal of its homes and makes them
desirable to a wide variety of buyers. Designs are reviewed and refined to
reflect changing buyer preferences.
Land Acquisition and Development. The Company selects locations for its
developments on the basis of accessibility to infrastructure such as major
highways and thoroughfares, shopping areas, medical facilities and community
cultural and recreation centers. The land is then separated into development
phases and concepts, with actual construction typically beginning within one (1)
year from the land acquisition date. The Company generally develops tracts of
land that require site improvements prior to construction. This work sometimes
requires that the Company maintain Performance Bonds with the appropriate
regulatory authorities.
<PAGE>
Oriole's general policy is not to begin construction of single-family homes
prior to the execution of a sales contract, which minimizes the costs and risk
of completed but unsold inventory. The Company will, however, begin multi-family
construction (duplex, townhouse, villa and multi-story complexes) when (a) sales
contracts are executed for a predetermined percentage of the total units
available and (b) profit can be enhanced by matching production schedule to
deliveries. Land Sales. In the normal course of its business, the Company has
and may sell land which either it can be sold at an advantageous price due to
market conditions or because it no longer meets the Company's marketing needs.
Sales of this land may also be made because it is located in areas where the
Company considers its inventory to be excessive or because the land has been
zoned for commercial use.
<PAGE>
Communities Currently Under Development or Construction
The following table summarizes information as of December 31, 1998 with
respect to the Company's principal projects under development or
construction during 1998.
<TABLE>
<CAPTION>
Units Sold Units Sold
Name and Year Total and and
Location of Development Units Delivered Delivered Units Under Units Under Remaining
Development Started Type Planned Thru 1998 in 1998 Construction(1) Contract Units(2)
- ----------- ------------ ------- --------- ------- --------------- -------- --------
At December 31, 1998
--------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Country Glen 1993 Single 300 136 24 15 12 152
Cooper City Family
Sandpiper Landing 1995 Single 145 116 49 17 22 7
Coconut Creek Family
Coral Lakes 1992 Active 1,384 652 127 81 69 663
Delray Beach Adult
Palm Isles 1991 Active 992 974 25 3 3 15
Boynton Beach Adult
Palm Isles West 1995 Active 235 143 49 5 7 85
Boynton Beach Adult
Majestic Isles 1994 Active 450 296 98 28 24 130
Boynton Beach Adult
Addison Green 1998 Active 130 -- -- -- -- 130
Boynton Beach Adult
</TABLE>
<PAGE>
Communities Currently Under Development or Construction - Continued
<TABLE>
<CAPTION>
Units Sold Units Sold
Name and Year Total and and
Location of Development Units Delivered Delivered Units Under Units Under Remaining
Development Started Type Planned Thru 1998 in 1998 Construction(1) Contract Units(2)
- ----------- ------------ ------- --------- ------- --------------- -------- --------
At December 31, 1998
--------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Summer Chase 1989 Active 221 168 19 33 22 31
Lake Worth Adult
Whispering Sound 1991 Active 230 206 42 10 11 13
Palm City/Stuart Adult
Sandpiper Isles 1995 Mixed 100(3) 59 20 - 2 39
Bonita Springs
Sandpiper Greens 1995 Mixed 60 14 3 - 4 42
Bonita Springs
Stonecrest 1995 Active 544(4) 204 66 23 36 304
Ocala Adult
</TABLE>
(1) Includes model units.
(2) Includes model units and potential units to be constructed.
(3) Reduction in original number of units purchased.
(4) Includes purchase of additional land.
<PAGE>
Country Glen is a community of single-family homes located in Cooper City.
The community consists of 300 units with recreational facilities under
development and construction. Prices range from $295,000 to $500,000.
Sandpiper Landing is in a 240 acre master planned private-gated community
consisting of 145 three and four bedroom, two-car garage residences, located in
Coconut Creek. Prices range from $129,000 to $160,000.
Coral Lakes is an active adult community in Boynton Beach with a
multi-million dollar on-site clubhouse with substantial amenities. The community
of 1,384 units features condominiums in two- and four-story buildings, villas,
duplexes and sections of single-family residences with two- car garages. Prices
range from $120,000 to $180,000.
Palm Isles is an active adult community of 992 residences in Boynton Beach.
Prices in this community range from $129,000 to $140,000, and home styles
include villas, duplexes, lakefront two-story condominiums and single-family
residences. The community has a multi-million dollar on-site clubhouse and spa
with eight tennis courts and satellite swimming pools.
Palm Isles West, an active adult community in Boynton Beach, features 235
duplexes and single-family residences priced from $120,000 to $186,000.
Residents of this community share Palm Isles' amenities, plus enjoy the
convenience of a satellite swimming pool and sun deck within Palm Isles West.
Majestic Isles is an active adult community of 450 duplexes and
single-family residences located in Boynton Beach. Prices range from $127,000 to
$183,000. The community features an intimate, luxury clubhouse with swimming
pool and tennis courts. Addison Green is a gated community with a private
recreation area in a section of the Aberdeen Golf and Country Club located in
Boynton Beach. Aberdeen with its Tennis and Fitness Center overlooks an 18-hole
golf course. Oriole's 130 single-family residences, with two-car garages, are
priced from $150,000 to $174,000.
Summer Chase is a community for active adults located in Lake Worth. The
community features 221 single-family residences with two-car garages. The price
range is $139,000 to $163,000. A social clubhouse is available to all residents
along with tennis courts and pool.
Whispering Sound is an active adult community of 230 duplex residences
located in Martin County in Palm City/Stuart. The residences range in price from
$114,000 to $124,000. The community includes natural preserved areas offering
backyard privacy for nearly every residence. The social clubhouse is available
to all residents along with tennis courts and pool.
<PAGE>
Sandpiper Isles, located in Bonita Springs, is a 100 home neighborhood of
luxury 3 bedroom, 2 bath coach homes surrounded by lakes and preserves, priced
from $167,000 and luxury 3 bedroom, 3 1/2 bath mid-rise condominiums, priced
from $232,000. Included is a private social clubhouse, lakeside pool and gated
entry.
Sandpiper Greens is a neighborhood of sixty 3 bedroom, 2 bath garden
mid-rise residences adjoining a country club with a championship 18-hole golf
course, priced from $148,000 to the mid $200's, located in Bonita Springs.
Residents have the option of becoming members of the country club.
Stonecrest is an active adult community consisting of 544 single-family
homes and villas, priced from $70,000 to $130,000, offering championship golf
and a social recreational clubhouse with pool, located in Marion County.
Construction
Oriole is the general contractor for the construction of its developments.
Company employees monitor the construction of each project, participate in
design and building decisions, coordinate the activities of subcontractors and
suppliers, maintain quality and cost controls and monitor compliance with zoning
and building codes. Subcontractors typically are retained for a specified phase
of development pursuant to a contract that obligates construction at a fixed
price. Agreements with subcontractors are generally subject to competitive
bidding, with the Company continuously negotiating prices and other significant
terms with its subcontractors. The Company does not have any commitment beyond
one (1) year with any subcontractor.
At December 31, 1998, the Company employed approximately 47 people in the
construction operation. Most materials are obtained by subcontractors and are
readily available from numerous sources at commercially reasonable prices. The
Company has not experienced any material delays in construction due to shortages
of materials or labor, but has experienced cost increases due to shortages of
certain types of experienced labor. There has been a significant increase in
construction activity in Florida which has resulted in material shortages for
some competitors and could, but has not yet affected the Company's supply of
labor and materials.
<PAGE>
Marketing and Sales
The Company sells its homes primarily through commissioned employees who
typically work in model sales centers or from offices located in model homes in
the communities. The Company may also sell through independent brokers. Oriole's
sales and marketing organization consists of approximately 45 employees, many of
whom are licensed real estate agents in Florida.
The Company advertises in newspapers and magazines, by direct mail, on
billboards, by radio and infomercial. In fiscal 1998, the Company's aggregate
advertising cost was about $2.1 million. Oriole maintains model homes in most of
its communities and management believes that these units play a particularly
important role in the Company's marketing and merchandising efforts.
Competition and Market Influences
The business of developing and selling residential properties and planned
communities is highly competitive and fragmented. The Company competes with
numerous large and small builders on the basis of a number of interrelated
factors, including location, reputation, amenities, design, quality and price.
Some competing builders have nationwide operations and substantially greater
financial resources. The Company's products must also compete with resales of
existing homes and available rental housing. As discussed, management believes
that the Company's primary competitive strengths have been location, reputation,
price, design, value engineering, amenities and over 23,500 satisfied customers
who provide Oriole with a continuous source of referrals.
In general, the housing industry is cyclical and is affected by consumer
confidence levels, prevailing economic conditions and interest rates. A variety
of factors affect the demand for new homes, including the availability and cost
of labor and materials, changes in costs associated with home ownership, changes
in consumer preferences, demographic trends and the availability of mortgage
financing.
The Company has enjoyed doing business in a geographic area with relatively
positive market demand factors for a number of years including higher than U.S.
average population growth, employment growth and household and per capita
income. In addition, market demographics is strongly weighted in favor of the
Company's primary customer base, namely older segments of the population with an
average head of household age of 54 + years. There is no guarantee, however,
that these positive trends will continue.
<PAGE>
Regulation and Environmental Matters
In developing a community, the Company must obtain the approval of numerous
government authorities that regulate such matters as permitted land uses,
density levels, the installation of utilities such as water, drainage and waste
disposal, and the dedication of acreage for open space, parks, schools and other
community purposes. Several authorities in Florida have imposed impact fees as a
means of defraying the costs of providing certain governmental services to
developing areas. The amount of these fees has increased significantly during
recent years. Building codes generally require the use of specific construction
materials which increases the energy efficiency of homes. In addition, each
county in which the Company is building has imposed restrictive zoning and
density requirements in order to limit the number of persons who live and work
within certain boundaries. Counties and cities within Florida have also, at
times, declared moratoriums on the issuance of building permits and imposed
other restrictions in the areas where sewage treatment facilities and other
public facilities do not reach minimum standards. Certain permits and approvals
will be required to complete the communities under development and currently
being planned by Oriole. To date, restrictive zoning laws, impact fees, and
imposition of moratoriums have not had a material adverse effect on the
Company's development activities. However, there is no assurance that such
restrictions will not adversely affect the Company in the future.
The Company is also subject to a variety of federal, state and local
statutes, ordinances, rules and regulations concerning protection of the
environment. Environmental laws vary greatly depending on the community's
location, the site's environmental conditions and the present and former uses of
the site. These environmental laws may result in delays, causing the Company to
incur substantial compliance and other costs, and prohibit or severely restrict
development. Prior to consummating the purchase of land, the Company engages
independent environmental engineers to evaluate the land for the presence of
hazardous or toxic materials, wastes, or substances. Oriole has not been
adversely affected to date by the presence or potential presence of such
materials, but there is no assurance that environmental issues will not
adversely affect the Company in the future.
The Florida Local Government Comprehensive Planning and Land Development
Regulation Act (the "Act") provides that public facilities, including, but not
limited to: sewer, solid waste, drainage, potable water, parks, roads and
recreation facilities, shall be available concurrently with the impact of land
development projects that would use such facilities. This requirement is known
as the "concurrency" requirement and counties and cities are required to
implement concurrency by adopting local comprehensive plans and land development
regulations. These plans and regulations establish the guidelines for
concurrency review and the exemptions from the concurrency requirement. All of
the Company's projects have been found to satisfy concurrency requirements.
<PAGE>
The Company must also comply with regulations by federal and state
authorities relating to the sale and advertising of residential real estate,
including the preparation of registration statements or other disclosure type
documents to be filed with designated regulatory agencies.
Customer Financing and Services
The Company arranges title insurance for, and provides closing services to,
buyers of the Company's homes and other outside customers. Oriole also works
with mortgage lenders to provide buyers with conventional financing programs. By
making available a variety of attractive programs, the Company is able to more
efficiently expedite the entire sales transaction by assuring that necessary
mortgage commitments and other necessary conditions of sales are obtained. The
State of Florida requires that certain customer deposits be held in segregated
bank accounts. As of December 31, 1998, the Company has posted bonds of $1.0
million and had entered into an escrow agreement with a bank and the State of
Florida which allows the Company to use customer deposits under certain
circumstances.
Rental Arrangements
The Company currently owns 480 rental units in Miramar, Florida known as
The Pier Club and owns an additional 49 rental units in another development. The
Company leases these apartments through an independent management company,
typically for one year. In addition, in connection with certain housing
developments, the Company leases recreation facilities.
Joint Ventures
Oriole is a participant in a joint venture to construct and sell homes with
another builder of residential housing in southeastern Florida. The project is
for 1,000 units and is known as Regency Lakes. Oriole invested $5.1 million in
1994 and has received annual preferred guaranteed returns ranging from 10% to
15% on this investment. There were no advances to the joint venture in 1998.
Since the inception of the venture, Oriole has purchased from the venture 145
sites for an aggregate purchase price of approximately $3.3 million. The prices
paid by the Company for such sites were equivalent to the prices obtainable by
non-affiliated parties in arms' length transactions.
<PAGE>
Employees
The Company employs approximately 144 persons, 6 of whom are senior
executives and 28 of whom are management personnel. The Company has had no major
work stoppages as a result of labor disputes and believes that relations with
its employees and its subcontractors are good. These are no collective
bargaining agreements with employees.
<PAGE>
ITEM 2 PROPERTIES
The Company leases 19,700 square feet of space in a two-story office
building in Delray Beach as its principal business office. The lease expires
December 31, 2002 and can be renewed, at the Company's option, for an additional
five year period.
ITEM 3 LEGAL PROCEEDINGS
The Company is a party to various lawsuits, all of which are of a routine
nature and are incidental to the Company's present business activities. These
proceedings are not material, nor would the adverse resolution thereof
materially affect the business or properties of the Company.
ITEM 4 SUBMISSION OF MATTERS TO A VOTE BY SECURITY HOLDERS
No matters were submitted to security holders during the 4th quarter. The
Annual Meeting of Shareholders of the Registrant has been scheduled for May 12,
1999. The Company will file its definitive proxy materials pursuant to
Regulation 14A prior to April 21, 1999.
<PAGE>
PART II
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ITEM 5 MARKET FOR REGISTRANT'S COMMON EQUITY
The Company has two classes of common stock, Class A Common Stock and Class
B Common Stock, which, at December 31, 1998, were held by approximately 249 and
206 shareholders of record, respectively. Both the Class A Common Stock and the
Class B Common Stock are traded on the American Stock Exchange under the symbols
OHC.A and OHC.B. The following sets forth the range of high and low sale prices:
Class A Class B
------- -------
Quarter 1998 High Low High Low
- ------------ ---- --- ---- ---
First 5.25 4.38 5.00 4.00
Second 5.25 4.63 5.19 4.63
Third 5.00 3.94 4.88 3.63
Fourth 3.75 2.25 3.75 2.13
Class A Class B
------- -------
Quarter 1997 High Low High Low
- ------------ ---- --- ---- ---
First 9.00 7.25 8.75 7.13
Second 9.25 7.00 9.25 7.00
Third 8.25 6.25 8.25 6.25
Fourth 6.38 4.13 6.63 4.13
On March 22, 1999, the last reported sales prices of the Class A Common Stock
and Class B Common Stock were $2.44 and $1.94 per share, respectively. On the
same date, there were 247 shareholders of record of Class A Common Stock and 205
shareholders of record of Class B Common Stock.
<PAGE>
The Company currently intends to retain its future earnings to finance the
development of its business. In addition, the Company is currently restricted
from the payment of cash dividends on its Common Stock under the terms of the
Senior Notes. Accordingly, the Company does not anticipate paying any cash
dividends on its Common Stock in the foreseeable future. The payment of any
future dividends will be at the discretion of the Company's Board of Directors
and will depend upon, among other things, future earnings, the success of the
Company's development activities, capital requirements, restrictions in
financing arrangements, the general financial condition of the Company and
general business conditions.
ITEM 6 SELECTED FINANCIAL DATA
The following table sets forth selected financial data for the Company and
its consolidated subsidiaries and should be read in conjunction with the
financial statements included elsewhere in this Form 10-K. The data set forth
below as of and for the years ended December 31, 1998, 1997, 1996, 1995 and 1994
have been derived from the Company's audited consolidated financial statements.
<TABLE>
<CAPTION>
In Thousands (except per share data)
1998 1997 1996 1995 1994
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Revenues 91,065 116,190 111,619 82,236 119,977
Net Income (loss) 82 (20,850) 85 (11,762) 4,137
Shareholders' Equity 46,979 46,897 67,747 67,661 79,423
Average Shareholders' Return on Equity .17% (44.46%) .13% (14.80%) 5.21%
Total Assets 135,226 145,060 175,546 179,478 184,010
Net Income (loss) per Share (Class A and B) .02 (4.51) .02 (2,354) .89
Dividends- Class A -- -- -- -- .35
Dividends- Class B -- -- -- -- .40
Average Shares Outstanding 4,626 4,626 4,626 4,626 4,626
</TABLE>
<PAGE>
ITEM 7 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Overview
Revenues. The following table sets forth for the periods indicated certain
components of the revenues expressed as a percentage of total revenues.
Percentage of Total Revenues
Years Ended December 31,
1998 1997 1996
Sales of homes 90.9% 91.9% 90.2%
Sales of land -- .1 1.5
Other operating revenues 4.2 2.9 3.2
Interest, rentals and other income
3.5 2.8 3.0
Gain on sales of property and
land held for investment, net 1.4 2.3 2.1
Selling, general and
administrative expenses 16.6 15.4 15.2
Net income (loss) .1 (17.9) .1
Backlog. The following table sets forth the Company's backlog at December
31, 1998, 1997 and 1996.
Backlog generally represents units under a standard contract for which a
full deposit has been received and any statutory rescission right has expired.
The Company generally fills backlog within twelve months and estimates that the
period between receipt of a sales contract and delivery of the completed home to
be eight months. Backlog historically tends to increase between January and May.
Trends in the Company's backlog are subject to change from period to period
corresponding to changes in certain economic conditions including consumer
confidence levels and the availability of financing.
December 31, Number Aggregate
of Value
Units (Dollars in Thousands)
1998 212 33.6
1997 243 40.4
1996 266 44.8
<PAGE>
Results of Operations
Year Ended December 31, 1998 Compared to Year Ended December 31, 1997
Revenues from home sales decreased $24.1 million (22.5%) during the fiscal
year 1998 as compared to 1997 primarily as a result of a reduction in the number
of homes delivered. Oriole delivered 522 homes in 1998 compared to 676 in 1997,
with a slight increase in the average selling price of deliveries from $158,000
to $158,500. The number of new contracts signed and the aggregate dollar value
of those new contracts decreased to 491 and $75.9 million in 1998 from 653 and
$102.4 million, respectively, in 1997. The average selling price of homes under
new contracts in 1998 was approximately the same as in 1997.
The reduction in the level of activity was the result of a lag in
deliveries due to an operational strategies to introduce new redesigned product
and to balance sales deliveries with construction cycle time.
Other operating revenues and interest, rentals and other income increased
to $7.0 million in 1998 as compared to $6.7 million in 1997 due to sales of
recreation facility leases and a lower vacancy rate in the Company's rental
property.
Cost of home sales decreased by 24.8% to $71.4 million from $95.0 million
in 1997 as a result of a decrease in the number of homes delivered. As a
percentage of home sales, cost of sales decreased to 86.3% in 1998 from 88.0% in
1997 due to the positive impact of the prior year 1997 inventory valuation
adjustment and the execution of a strategy to better match construction delivery
schedules with sales pace.
Selling, general and administrative expenses, exclusive of the $0.2 million
amortization associated with the purchase of $11.0 million of the Company's
Senior Notes, decreased by $3.0 million, or 15.6% to $15.1 million in 1998
compared to 1997. This improvement was the result of the implementation of
strategic initiatives designed to enhance operating efficiencies, which included
a workforce reduction program, a centralized purchasing initiative, the redesign
of the sales incentive compensation program and functional outsourcing.
During the year ended December 31, 1997, the Company had a net loss of
$20.8 million ($4.51 per share) primarily because of the write-down in value of
certain land inventory and write-down of the cost of a rental apartment project
to estimated fair market value less cost to sell. These write-downs resulted in
non-cash, pre-tax charges of $17.1 million and $4.5 million, respectively. The
net loss for 1997 calculated without giving effect to these write-offs and
before related 1997 income tax benefits was $1.4 million ($0.31 per share)
compared to a net income of $0.1 million ($0.02 per share) in 1998.
<PAGE>
Results of Operations
Year Ended December 31, 1997 Compared to Year Ended December 31, 1996
Revenues from home sales increased $6.1 million (6.1%) during the fiscal
year 1997 as compared to 1996 primarily as a result of an increase in the number
of homes delivered. Oriole delivered 676 homes in 1997 compared to 597 in 1996,
with a decrease of 6.2% in the average selling price of homes delivered from
$168,600 to $158,000. The number of new contracts signed and the aggregate
dollar value of those new contracts decreased in 1997 to 653 and $102.4 million
from 670 and $110.1 million, respectively, in 1996. The average selling price of
homes under new contracts in 1997 was about $157,000 as compared to $164,000 in
1996.
Other operating revenues and interest, rentals and other income decreased
to $6.7 million in 1997 from $7.0 million in 1996 primarily due to a decrease in
revenue derived by the Company from its joint venture investments.
Cost of home sales increased by 8.4% to $95.0 million from $87.6 million in
1996 as a result of an increase in the number of homes delivered. As a
percentage of home sales, cost of sales increased in 1997 to 88.9% from 87.1% in
1996 due to higher construction costs and the impact of higher previously
capitalized interest.
Selling, general and administrative expenses increased to $17.9 million in
1997 from $17.0 million in 1996, corresponding to the general increase in
revenues. Interest cost incurred in 1997 decreased to $9.9 million as compared
to $11.0 million in 1996 as a result of a reduction in average outstanding
borrowings under the line of credit.
During the year ended December 31, 1997, the Company had a net loss of
$20.8 million ($4.51 per share) primarily because of the write-down in value of
certain land inventory and a write-down of the cost of a rental apartment
project to estimated fair market value less cost to sell. These write-downs
resulted in non-cash, pre-tax charges of $17.1 million and $4.5 million,
respectively. The net loss for 1997 calculated without giving effect to these
write-offs and before related 1997 income tax benefits was $1.4 million ($0.31
per share) compared to net income of $0.1 million ($0.02) in 1996, without
giving effect to a write-down in value of certain land inventory. This
write-down resulted in a non-cash pre-tax charge of $1.7 million in 1996.
<PAGE>
Financial Position. The following table sets forth selected balance sheet
items of the
Company at December 31, 1998 and 1997.
Years Ended December 31,
(Dollars in Thousands)
1998 1997
Cash $ 10.6 $ 19.8
Inventories 97.1 93.4
Senior Notes, at face value 56.3 67.3
Other Liabilities 31.9 30.9
Liquidity and Capital Resources
The Company's cash requirements vary from period to period depending upon
changes in inventory, land acquisition and development requirements,
construction in progress and, to a lesser extent, the Company's current net
income. The Company obtains funds for its cash requirements from operations, the
sale of investment property and borrowings. In connection with land acquisitions
and development, the Company may borrow money secured by land and improvements.
In addition, the Company has a revolving line of credit in the amount of $10.0
million (the "Revolving Line of Credit") available for general cash
requirements. As of December 31, 1998, the Company had approximately $10.6
million in cash and cash equivalents and substantially the entire amount of the
Revolving Line of Credit was available. The Company believes that these
resources are sufficient to provide for its cash requirements during 1999.
In 1998, the Company purchased land for development purposes and developed
land for purchase prices totaling approximately $9.5 million, using
approximately $5.7 million in cash and approximately $3.8 million in bank
financing secured by a mortgage on certain real property. In addition, the
Company used available cash to repurchase $11.0 million of the Company's 12 1/2%
Senior Notes due January 15, 2003 (the "Senior Notes").
As of December 31, 1998, Senior Notes having a face value of $56.3 million
were outstanding. Under the terms of the Senior Notes indenture (the
"Indenture"), the Company may redeem the Senior Notes at 105% of their principal
amount on or after January 15, 1998 and thereafter at prices declining to 100%
of their principal amount on January 15, 2001. The Indenture requires the
Company to make sinking fund payments of $17.5 million on January 15, 2001 and
2002. In addition, the Indenture restricts the amount and type of additional
indebtedness that the Company may incur and restricts the purchase by the
Company of its common stock and the payment of cash dividends until the Company
has achieved cumulative net income in excess of $62.1 million. As of December
31, 1998, the Company was not permitted to purchase common stock or pay cash
dividends.
In October 1998, the Company's lender agreed to extend the term of the
Revolving Line of Credit to June 30, 2000. Borrowings under the Revolving Line
of Credit are secured by a mortgage on certain real property of the Company.
Under the terms of the Revolving Line of Credit, the Company is subject to
customary covenants and restrictions, including those relating to maintenance of
consolidated tangible net worth and the issuance of certain types of additional
debt. Oriole believes that it will be able to further extend the Revolving Line
of Credit beyond its scheduled expiration date or obtain a replacement credit
facility if necessary, but there can be no assurance that it will be able to
extend its existing facility or obtain a replacement credit facility.
<PAGE>
Oriole has an outstanding principal balance of $12.2 million on a purchase
money mortgage bearing interest at 7.15% per annum, collateralized by land and
buildings. Of this balance, $0.2 million is due in 1999 and $12.0 million is
payable by 2003.
In addition, Oriole has a mortgage with an outstanding principal balance of
$3.8 million. The interest rate on the loan is adjusted monthly to a Libor
market rate index plus .275% or the bank's prime rate, at the Company's option.
As of December 31, 1998, the Company had no firm commitments for capital
expenditures.
Forward Looking Statements
Certain statements made in this document, including certain statements made
in Management's Discussion and Analysis, contain "forward looking statements"
within the meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended, regarding the
expectations of management with respect to revenues, profitability, marketplace
conditions, adequacy of funds from operations and regulatory conditions
applicable to the Company, among other things.
Management cautions that these statements are qualified by their terms
and/or important factors, many of which are outside the control of the Company,
that could cause actual results and events to differ materially from the
statements made herein, including, but not limited to the following: changes in
consumer preferences, increases in interest rates, a reduction in labor
availability, increases in the cost of labor and materials, changes in the
regulatory environment particularly as relates to zoning and land use,
competitive pricing pressures, the general state of the economy, both nationally
and in the Company's market, unseasonable weather trends, and the effect on the
Company, its subcontractors and suppliers, disruptions caused by deficiencies in
the ability of computer hardware and software to process information with dates
or date ranges spanning the year 2000 and beyond.
<PAGE>
Inflation
The Company, as well as the home building industry in general, may be
adversely affected during periods of high inflation, primarily because of higher
land and construction costs. In addition, higher mortgage interest rates may
affect the affordability and availability of permanent mortgage financing to
prospective purchasers.
Inflation also increases the cost of labor and materials. The Company
attempts to pass through to its customers any increases in its costs through
increased selling prices. During the last three years, the Company has
experienced a reduction in gross margins on the sale of homes due in part to the
inability to pass on increased construction costs. There is no assurance that
inflation will not have an adverse impact on the future results of operations of
the Company.
Interest Rates
Overall housing demand is adversely affected by increases in interest
costs. If mortgage interest rates increase significantly, this may negatively
impact the ability of a homebuyer to secure adequate financing. Although about
54% of the Company's current sales are for cash, there is no guarantee that
future sales will be made on such terms in comparable amounts. As such, higher
interest rates may adversely affect the Company's revenues, gross margins and/or
net income.
New Pronouncements
The Financial Accounting Standards Board has recently issued Statement of
Financial Standards No. 130 ("SFAS 130"), "Reporting Comprehensive Income", and
131 ("SFAS 131"), "Disclosures about Segments of an Enterprise and Related
Information". SFAS 130 prescribes standards for reporting comprehensive income
and its components. SFAS 131 establishes guidance as to the required disclosure
for reporting segment information. The implementation of SFAS 130 and 131 did
not have a material effect on the Company's financial position or results of
operations.
Year 2000
The Company has assessed, and formulated a plan to resolve, its information
technology ("IT") and non-IT system year 2000 issues. The Company intends to
replace its software systems and applications in the second quarter of 1999 for
reasons unrelated to year 2000 compliance. The Company has been advised that the
new replacement systems and applications will cause its IT system to be fully
year 2000 compliant. The Company expects to test its systems and applications
for year 2000 compliance in conjunction with its testing of its new or upgraded
software systems and applications. The Company does not consider any other IT or
any non-IT system of the Company to be critical to Company operations and if
non-capable for year 2000, the only effect would be inconvenience. There will be
no incremental cost for acquiring a software and applications system that is
year 2000 compliant and the Company does not anticipate that testing or any
other measure relating to implementing its plan for year 2000 compliance will
result in costs that would have a material impact on future earnings. The
Company has and is consulting with its subcontractors and suppliers regarding
their year 2000 readiness. In any event, the Company believes that it would not
be difficult to find alternative subcontractors and suppliers in the event that
one or more of its existing subcontractors and suppliers were unable to
satisfactorily perform as the result of failure to be year 2000 compliant. The
Company does not anticipate the need to develop any contingency plans to cope
with a "worse case scenario".
<PAGE>
ITEM 8 FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
INDEX TO FINANCIAL STATEMENTS AND SCHEDULES
Page
Consolidated Balance Sheets as of
December 31, 1998 and 1997 ........................................... 25
Consolidated Statements of Operations for the Years Ended
December 31, 1998, 1997 and 1996 ..................................... 27
Consolidated Statements of Shareholders' Equity for the Years Ended
December 31, 1998, 1997 and 1996 ..................................... 28
Consolidated Statements of Cash Flows for the Years Ended
December 31, 1998, 1997 and 1996 ..................................... 29
Notes to Consolidated Financial Statements ........................... 30
Management's Responsibility for Financial Statements ................. 46
Report of Independent Accountants .................................... 47
<PAGE>
Oriole Homes Corp. and Subsidiaries
CONSOLIDATED BALANCE SHEETS
December 31,
ASSETS
1998 1997
---- ----
Cash and cash equivalents $ 10,557,772 $ 19,830,523
Receivables
Mortgage notes 953,284 267,323
Income Taxes -- 765,437
------------ ------------
Income Taxes
953,284 1,032,760
------------ ------------
Inventories
Land 59,059,535 58,120,681
Homes completed or under
construction 42,763,798 42,007,641
Model homes 4,360,514 4,871,304
------------ ------------
106,183,847 104,999,626
Less estimated costs of completion included
in inventories 9,080,857 11,597,567
------------ ------------
97,102,990 93,402,059
------------ ------------
Property and equipment, at cost
Land 517,554 654,937
Buildings 3,505,343 4,338,159
Furniture, fixtures and equipment 3,445,563 3,339,241
------------ ------------
7,468,460 8,332,337
Less accumulated depreciation 4,070,613 4,055,564
------------ ------------
3,397,847 4,276,773
------------ ------------
Property and equipment held for sale, at cost 11,956,165 12,264,126
------------ ------------
Investments in and advances to joint ventures 3,288,596 4,495,000
------------ ------------
Land held for investment, at cost 2,127,009 2,354,398
------------ ------------
Other
Prepaid expenses 1,719,517 2,275,569
Unamortized debt issuance costs 1,111,696 1,552,227
Other assets 3,011,589 3,576,695
------------ ------------
5,842,802 7,404,491
------------ ------------
Total assets $135,226,465 $145,060,130
============ ============
The accompanying notes are an integral part of these statements.
<PAGE>
Oriole Homes Corp. and Subsidiaries
CONSOLIDATED BALANCE SHEETS - CONTINUED
December 31,
LIABILITIES AND SHAREHOLDERS' EQUITY
1998 1997
---- ----
Liabilities
Line of credit $ 10,000 $ 10,000
Mortgage notes payable 15,970,385 12,438,445
Accounts payable and accrued liabilities 11,664,858 13,141,491
Customer deposits 5,095,182 6,389,145
Senior notes 55,507,312 66,184,074
------------ ------------
Total liabilities 88,247,737 98,163,155
------------ ------------
Shareholders' equity
Class A common stock, $.10 par value
Authorized - 10,000,000 shares
issued and outstanding - 1,864,149
in 1998 and in 1997 186,415 186,415
Class B common stock, $.10 par value
Authorized - 10,000,000 shares
issued and outstanding - 2,761,375
in 1998 and in 1997 276,138 276,138
Additional paid-in capital 19,267,327 19,267,327
Retained earnings 27,248,848 27,167,095
------------ ------------
Total shareholders' equity 46,978,728 46,896,975
------------ ------------
Total liabilities and shareholders'
equity $135,226,465 $145,060,130
============ ============
The accompanying notes are an integral part of these statements.
<PAGE>
Oriole Homes Corp. and Subsidiaries
CONSOLIDATED STATEMENTS OF OPERATIONS
Years Ended December 31,
<TABLE>
<CAPTION>
1998 1997 1996
<S> <C> <C> <C>
Revenues
Sales of
homes $ 82,736,768 $106,787,938 $ 100,661,096
Sales of land 8,500 56,500 1,649,356
Other operating revenues 3,873,699 3,426,228 3,580,708
Gain on sales of property and land held for
investment, net 1,225,190 2,633,761 2,355,119
Interest, rentals and other income 3,221,183 3,286,038 3,373,016
------------ ------------ -------------
91,065,340 116,190,495 111,619,295
------------ ------------ -------------
Costs and expenses
Cost of homes 71,420,904 94,981,000 87,645,345
Inventory valuation adjustment -- 17,050,000 1,723,130
Fixed asset valuation adjustment -- 4,525,000 --
Cost of land sold 2,097 14,638 1,714,696
Costs relating to other operating revenues 3,289,012 3,983,745 3,358,062
Selling, general and administrative expenses 15,095,165 17,878,373 16,971,142
Interest costs incurred 8,764,448 9,910,964 11,010,976
Interest capitalized (deduct) (7,588,039) (9,150,552) (10,336,279)
------------ ------------ -------------
90,983,587 139,193,168 112,087,072
------------ ------------ -------------
Income (loss) before benefit from income
taxes 81,753 (23,002,673) (467,777)
Benefit from income taxes -- (2,152,910) (553,066)
------------ ------------ -------------
Net income (loss) $ 81,753 $ (20,849,763) $ 85,289
============= ============= =============
Net income (loss) per Class A and Class B
common share available for common
stockholders - Basic $ .02 $ (4.51) $ .02
============= ============= =============
Weighted average number of common stock
outstanding - Basic 4,625,524 4,625,524 4,625,524
========= ========= =========
Net income (loss) per Class A and Class B
common share available for common
stockholders - Diluted $ .02 $ (4.51) $ .02
============= ============= =============
Weighted average number of common stock
outstanding - Diluted 4,625,549 4,625,524 4,714,224
========= ========= =========
</TABLE>
The accompanying notes are an integral part of these statements.
<PAGE>
Oriole Homes Corp. and Subsidiaries
CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
Years Ended December 31, 1998, 1997 and 1996
<TABLE>
<CAPTION>
Common Stock Additional
Class A Class B Paid-in Retained
Shares Amount Shares Amount Capital Earnings
------ ------ ------ ------ ------- --------
<S> <C> <C> <C> <C> <C> <C>
Balance at January 1, 1996 1,891,249 $ 189,125 2,734,275 $ 273,428 $ 19,267,327 $ 47,931,569
Net income for 1996 -- -- -- -- -- 85,289
Stock conversion (16,300) (1,630) 16,300 1,630 -- --
Balance at December 31, 1996 1,874,949 187,495 2,750,575 275,058 19,267,327 48,016,858
Net loss for 1997 -- -- -- -- -- (20,849,763)
Stock conversion (10,800) (1,080) 10,800 1,080 -- --
--------- ------------ --------- ------------ ------------ ------------
Balance at December 31, 1997 1,864,149 186,415 2,761,375 276,138 19,267,327 27,167,095
Net income for 1998 -- -- -- -- -- 81,753
Stock conversion -- -- -- -- -- --
Balance at December 31, 1998 1,864,149 $ 186,415 2,761,375 $ 276,138 $ 19,267,327 $ 27,248,848
========= ============ ========= ============ ============ ============
</TABLE>
The accompanying notes are an integral part of this statement.
<PAGE>
Oriole Homes Corp. and Subsidiaries
CONSOLIDATED STATEMENTS OF CASH FLOWS
Years Ended December 31,
<TABLE>
<CAPTION>
1998 1997 1996
<S> <C> <C> <C>
Cash flows from operating activities
Net income (loss) $ 81,753 $(20,849,763) $ 85,289
Adjustments to reconcile net income (loss) to net cash
(used in) provided by operating activities
Depreciation 1,320,976 1,377,780 1,356,947
Amortization 785,769 503,648 559,382
Deferred income taxes -- (1,387,473) 1,845,848
Gain on sales of property and land held
for investment, net (1,225,190) (2,633,761) (2,355,119)
Inventory valuation adjustment -- 17,050,000 1,723,130
Fixed asset valuation adjustment -- 4,525,000 --
(Increase) decrease in operating assets
Receivables (685,961) 9,882 118,057
Income taxes receivable 765,437 1,633,477 (738,068)
Inventories (3,651,987) 15,654,771 (4,408,864)
Other assets 1,121,158 (708,715) 2,369,615
Increase (decrease) in operating liabilities
Accounts payable and accrued liabilities (1,476,633) (4,189,180) 1,608,735
------------ ------------ ------------
Customer deposits (1,293,963) (1,194,426) 1,511,525
------------ ------------ ------------
Total adjustments (4,340,394) 30,641,003 3,591,188
------------ ------------ ------------
Net cash (used in) provided by operating activities (4,258,641) 9,791,240 3,676,477
------------ ------------ ------------
Cash flows from investing activities
Return of (investments in) joint ventures 1,206,404 2,036,000 (906,000)
Land held for investment -- (7,626) (13,530)
Capital expenditures (1,084,857) (398,051) (1,667,524)
Proceeds from sales of property and equipment 2,354,403 9,110,140 6,840,646
------------ ------------ ------------
Net cash provided by investing activities 2,475,950 10,740,463 4,253,592
------------ ------------ ------------
Cash flows from financing activities
Proceeds from mortgage notes 3,750,000 -- --
Payment of mortgage notes (218,060) (203,056) (2,400,072)
Borrowings under line of credit agreement -- 15,100,000 33,500,000
Repayments under line of credit agreement -- (17,790,000) (39,300,000)
Repurchase of senior notes (11,022,000) (150,000) (500,000)
Issuance costs -- (67,500) (96,236)
Net cash (used in) financing activities (7,490,060) (3,110,556) (8,796,308)
------------ ------------ ------------
Net (decrease) increase in cash and cash equivalents (9,272,751) 17,421,147 (866,239)
Cash and cash equivalents at beginning of year 19,830,523 2,409,376 3,275,615
------------ ------------ ------------
Cash and cash equivalents at end of year $ 10,557,772 $ 19,830,523 $ 2,409,376
============ ============ ============
Supplemental disclosures of cash flow information Cash paid during the year for:
Interest (net of amount capitalized) $ 1,620,812 $ 590,868 $ 528,720
Income taxes $ 2,627 $ -- $ 619
Supplemental disclosure of non-cash financing activities:
Refinancing of mortgage notes payable $ -- $ -- $ 12,800,000
</TABLE>
The accompanying notes are an integral part of these statements.
<PAGE>
Oriole Homes Corp. and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND OTHER INFORMATION
Basis of Presentation and Business
- ----------------------------------
The accompanying Consolidated Financial Statements include the accounts of
Oriole Homes Corp. and all wholly-owned subsidiaries (the "Company").
Significant intercompany accounts and transactions, if any, have been eliminated
in consolidation.
The Company, a Florida corporation, is engaged principally in the design,
construction, marketing and sale of single family homes, patio homes, townhomes,
villas, duplexes and low and mid-rise condominiums in Palm Beach, Broward,
Martin, Lee and Marion counties in Florida.
Revenue Recognition
- -------------------
The Company records sales of real estate in accordance with generally
accepted accounting principles governing profit recognition for real estate
transactions.
Inventories
- -----------
Inventories are carried at land cost, plus accumulated development and
construction costs (including capitalized interest and real estate taxes). Home
inventories which are completed and being held for sale aggregate approximately
$23,000,000 in 1998 and $14,861,000 in 1997. The accumulated costs of land and
homes is not in excess of estimated fair value less cost to sell. Estimated fair
value less cost to sell is based upon sales and backlog in the normal course of
business less estimated cost to complete and dispose of the property. The
Company's management, on a continuous basis, reviews individual projects in
inventory for potential adjustments in net realizable value.
The Company capitalizes certain interest costs incurred on land under
development and homes under construction. Such capitalized interest is included
in cost of home sales when the units are delivered.
Property and Equipment
- ----------------------
Property and equipment are stated at cost. The Company provides for
depreciation of property and equipment by the straight-line method over the
following estimated useful lives of the various classes of depreciable assets:
Buildings 25 to 27 years
Furniture, fixtures and equipment 5 to 7 years
<PAGE>
NOTE A -
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND OTHER INFORMATION - Continued
Senior Note Issuance Costs and Unamortized Discount
- ---------------------------------------------------
Costs incurred in connection with the Senior Notes have been deferred and
are being amortized by using the interest method over the term of the debt.
Cash Equivalents
- ----------------
Cash equivalents consist of highly liquid investments with maturities of
one month or less when purchased.
Net Income (Loss) Per Share
- ---------------------------
Net income (loss) per common share is computed by dividing net income
(loss) by the weighted average number of shares outstanding during each year:
4,625,524 in each year. The computation of diluted net income (loss) per share
includes all dilutive common stock equivalents in the weighted average shares
outstanding during each year: 4,625,549, 4,625,524 and 4,714,224 shares in 1998,
1997 and 1996, respectively.
Advertising
- -----------
The Company expenses advertising costs as incurred. Advertising expense for
the years ended December 31, 1998, 1997 and 1996 was $2,079,033, $1,868,236 and
$2,112,364, respectively.
Estimates
- ---------
In preparing financial statements in conformity with generally accepted
accounting principles, management makes estimates and assumptions that affect
the reported amounts and disclosures of assets and liabilities at the date of
the financial statements, as well as the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from these
estimates.
Income Taxes
- ------------
The Company accounts for income taxes under Statement of Financial
Accounting Standards No. 109, "Accounting for Income Taxes" ("SFAS 109"). This
statement requires an asset and liability approach to account for income taxes.
The Company provides deferred income taxes for temporary differences that will
result in taxable or deductible amounts in future years based on the reporting
of certain costs in different periods for financial statement and income tax
purposes.
New Accounting Pronouncements
- -----------------------------
The Financial Accounting Standards Board has recently issued Statement of
Financial Accounting Standards No. 130 ("SFAS 130"), "Reporting Comprehensive
Income," and 131 ("SFAS 131"), "Disclosures about Segments of an Enterprise and
Related Information." SFAS 130 prescribes standards for reporting comprehensive
income and its components. SFAS 131 establishes guidance as to the required
disclosure for reporting segment information. The implementation of SFAS 130 and
131 did not have a material effect on the Company's financial position or
results of operations.
<PAGE>
NOTE A -
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND OTHER INFORMATION - Continued
Reclassifications
- -----------------
Certain reclassifications have been made to conform to the 1998
presentation.
NOTE B - MORTGAGE NOTES
First and second mortgage notes receivable bear interest at rates ranging
from 7.75% to 10.0%. The Company's receivables are primarily mortgages
which are collateralized by real estate. Minimum payments required on the
first and second mortgage notes subsequent to December 31, 1998 are: 1999 -
$952,710 and 2000 - $574.
NOTE C - INVENTORIES
Information related to the interest component capitalized in the Company's
inventories is as follows:
Years Ended December 31,
<TABLE>
<CAPTION>
1998 1997 1996
---- ---- ----
Interest capitalized in inventories, beginning
<S> <C> <C> <C>
of period .................................... $ 12,626,682 $ 21,241,460 $ 18,862,962
Interest capitalized ......................... 7,588,039 9,150,552 10,336,279
Interest expensed to cost of sales ........... (5,993,230) (17,765,330) (7,956,781)
Interest capitalized in inventories, end of
period ....................................... $ 14,221,491 $ 12,626,682 $ 21,241,460
============ ============ ============
</TABLE>
Included in interest expensed to cost of sales during the year ended
December 31, 1997 is an impairment loss of $11,344,379 to reduce certain
projects under development to fair value.
NOTE D INVENTORY AND FIXED ASSET VALUATION ADJUSTMENTS
The Company follows Statement of Financial Accounting Standards ("SFAS") No.
121 which requires that long-lived assets held and used by an entity be
reviewed for impairment whenever events or changes indicate that the net book
value of the asset may not be recoverable. An impairment loss is recognized if
the sum of the undiscounted expected future cash flows from the use of the
assets is less than the net book value of the asset. The Company periodically
reviews the carrying value of its assets and, if such reviews indicate the
potential for lack of recovery of the net book value, adjusts the assets
accordingly.
In this regard, the Company recorded in the first and second quarters of 1997,
non-cash inventory and fixed asset valuation adjustments totaling $17,050,000
and $4,525,000, respectively ($11,253,000 and $2,986,500, net of tax benefit,
or $2.43 and $.65 per common share, respectively). These adjustments reduced
certain inventory to estimated fair value less cost to sell. The inventory
adjustment pertained to land inventory for approximately 2,200 unsold housing
units located in five developments. The fixed asset adjustment pertained to
rental property which management had decided to sell, and, as such, the
Company had reduced the rental property's carrying amount to its fair value
less cost to sell.
<PAGE>
NOTE D - INVENTORY AND FIXED ASSET VALUATION ADJUSTMENTS-Continued
The Company recorded, in the fourth quarter of 1996, a non-cash inventory
valuation adjustment of $1,723,130 ($1,137,266, net of tax benefit, or $.25
per common share) related to the write-down in the book value of a parcel of
land located in southern Broward County that was then under contract for sale
and closed in 1997.
NOTE E - LIFE INSURANCE
The Company has purchased life insurance on the lives of two of its
officers and their spouses who own significant shares of common stock of the
Company. An irrevocably designated trustee of the officers is the beneficiary.
Upon the death of the officers or termination of the policies, the Company
shall receive an amount equal to the aggregated premiums paid less any policy
loans and unpaid interest or cash withdrawals received by the Company. The
accumulated premiums paid by the Company on the above policies through the
years ended December 31, 1998 and 1997 were $893,786 and $893,786,
respectively, and are classified as other assets.
In connection with the policies, the Company has an option with the officers
to acquire all or any part of the Class A or Class B common stock of the
Company owned by such individuals at the market price of such securities at
the time of their death.
NOTE F - INVESTMENTS IN JOINT VENTURES
The Company had one and two investments in joint ventures in 1998 and 1997,
respectively. The joint ventures construct and sell homes. The Company is
guaranteed a preferred return ranging from 10% to 15% on these investments.
The joint ventures are accounted for using the cost method. During the years
ended December 31, 1998 and 1997, there were no advances from the Company to
the joint ventures.
<PAGE>
NOTE G - LINES OF CREDIT
The Company may borrow up to $10,000,000 at an interest rate of prime plus
1.5% under a revolving loan agreement (line of credit) with a bank, secured by
a mortgage on certain real property. At December 31, 1998, $9,990,000 was
available under this line of credit. The loan agreement expires June 30, 2000.
The line of credit can be used to finance ongoing development and construction
of residential real estate and short-term capital needs and only requires
monthly interest payments. The loan agreement contains typical restrictions
and covenants, the most restrictive of which are:
a. the Company shall maintain, at all times through the life of the
loan, a consolidated tangible net worth of not less than
$42,000,000, and;
b. the Company's ability to incur additional debt is restricted.
The average interest rate and balance outstanding for the revolving line of
credit payable to the bank, based on a weighted average, is as follows:
1998 1997 1996
---- ---- ----
Daily average outstanding
borrowings $ 10,000 $3,609,000 $ 13,703,000
Average interest rate during the
period 9.6% 10.9% 10.1%
Interest rate at the end
of the period 9.25% 10% 9.75%
Maximum outstanding during the
year $ 9,990,000 $9,800,000 $ 20,000,000
On December 22, 1998, the Company entered into a Construction Loan Agreement
with a bank providing for a loan totaling $6,750,000 (the "Loan") and a letter
of credit facility in the amount of $200,000 in connection with the Company's
acquisition of certain real property (the "Land") and the construction of
single family residential homes thereon (the "Homes"). The Loan is comprised
of a $3,750,000 acquisition loan (the "Acquisition Loan") (see Note H)
relating to the purchase of the Land and a revolving credit facility in an
amount of up to $3,000,000 outstanding at any time to be used to finance
construction of the Homes (the "Revolving Loan").
Outstanding amounts borrowed under the Loan bear interest at the specified
LIBOR Market Rate Index plus 0.275% or the prime rate of the bank as selected
each month by the Company. The Loan is secured by a mortgage on the Land and
the Homes to be constructed thereon. Interest accrued on the Loan must be paid
monthly and partial payments of principal shall be made from time to time upon
the closing of the sale of Homes. The principal must be paid in full at
maturity on December 22, 2000, unless extended for one year under certain
circumstances.
As of December 31, 1998, no amount was outstanding under the Revolving Loan.
The Company may draw up to $200,000 under the Letter of Credit. Amounts
advanced under the Letter of Credit bear interest at the bank's prime rate
plus 2.0%. Principal and interest are due and payable on demand. At December
31, 1998, the Company has not drawn on the Letter of Credit.
<PAGE>
NOTE H - MORTGAGE NOTES PAYABLE
Mortgage notes payable at December 31, 1998 and 1997, are as follows:
1998
----
1997
----
Mortgage note, interest at
7.15%, requires monthly
payments of $91,696
including interest; final
balloon payment due at
maturity on March 1, 2003;
secured by a mortgage on
certain land and buildings.
$12,220,385 $12,438,445
Acquisition loan/Mortgage
note, interest at the
specified Libor Market Rate
Index plus .275% or the
prime rate of the bank as
selected each month by the
Company. At December 31,
1998, interest was 7.75%;
secured by certain land and
improvements; accrued
interest paid monthly and
partial payments of
principal to be made upon
the closing of homes.
Principal must be paid in
full at maturity on December
22, 2000, unless extended
for one year under certain
circumstances.
3,750,000 -
----------- -----------
$15,970,385 $12,438,445
=========== ===========
Aggregate maturities of the mortgage notes payable as of December 31, 1998, is
as follows:
1999 $ 921,186
2000 3,311,586
2001 268,458
2002 288,294
2003 11,180,861
------------
$ 15,970,385
============
<PAGE>
NOTE I - INCOME TAXES
Deferred tax assets and liabilities reflect the future income tax effects of
temporary differences between the consolidated financial statement carrying
amounts of existing assets and liabilities and their respective tax bases.
As of December 31, 1998, and December 31, 1997, the significant components of
the Company's deferred tax assets and liabilities were:
1998 1997
---- ----
AMT credit carryover $ 113,877 $ 113,877
Federal net operating loss carryforward 3,749,382 2,081,137
State net operating loss carryforward 1,393,938 1,106,711
Inventory valuation adjustment 6,557,409 8,575,530
Reserve for warranties 593,450 778,562
Percentage of completion 80,768 138,931
Inventory capitalization 115,172 124,529
---------- ----------
Total deferred tax asset, before
valuation allowance 12,603,996 12,919,277
Less valuation allowance 8,962,909 8,907,252
---------- ----------
Total deferred tax assets, net of
valuation allowance 3,641,087 4,012,025
---------- ----------
Deferred expenses (3,571,379) (3,894,847)
Accelerated depreciation (69,708) (117,178)
---------- ----------
Total deferred tax liabilities (3,641,087) (4,012,025)
---------- ----------
Net deferred tax (liability) asset $ -- $ --
========== ==========
The valuation allowance for the deferred tax asset as of December 31, 1998 and
December 31, 1997 was $8,962,909 and $8,907,252, respectively. The net change
in the valuation allowance for the years ended December 31, 1998 and December
31, 1997 were increases of $55,657 and $6,600,240, respectively.
The Company files consolidated income tax returns. The components of the
provision for (benefit from) income taxes are as follows:
1998 1997 1996
Current provision:
Federal $ -- $ (765,437) $(2,398,914)
State -- -- --
----------- ----------- -----------
-- (765,437) (2,398,914)
Deferred provision:
Federal -- (1,387,473) 1,845,848
----------- ----------- -----------
State -- -- --
----------- ----------- -----------
-- (1,387,473) 1,845,848
$ -- $(2,152,910) $ (553,066)
=========== =========== ===========
<PAGE>
NOTE I - INCOME TAXES - Continued
The reasons for the difference between the total tax expense and the amount
computed by applying the statutory federal income tax rate to income (loss)
before income taxes are as follows:
<TABLE>
<CAPTION>
1998 1997 1996
---- ---- ----
<S> <C> <C> <C>
(Benefit from) provision for taxes
at statutory rates (34%) $ 27,796 $(7,820,909) $ (159,045)
Change in valuation allowance 55,657 6,600,240 (399,132)
(Benefit from) provision for state
income taxes, net of federal benefit 2,968 (1,265,569) (25,730)
Other (86,421) 333,328 30,841
----------- ----------- -----------
Net tax (benefit) $ -- $(2,152,910) $ (553,066)
=========== =========== ===========
</TABLE>
The Company has federal and state net operating loss carryforwards (NOLs) of
$11,027,595 and $25,344,329, respectively. Of this amount, $6,128,138 of the
federal NOLs expire in 2012 and $4,899,457 expire in 2018.
The Company's state NOLs expire principally in the years 2012 and 2013. The
complete realization of the value of the NOLs is dependent on various factors,
including future profitability.
NOTE J - CUSTOMER DEPOSITS
Certain customer deposits, pursuant to statutory regulations of the State of
Florida or by agreement between the customer and the Company, are held in
segregated bank accounts. At December 31, 1998 and 1997, cash in the amounts
of approximately $1,650,000 and $1,009,000, respectively, was so restricted.
The Company entered into an escrow agreement with a certain bank and the
Division of Florida Land Sales and Condominiums which allows the Company to
use customer deposits which were previously maintained in an escrow account.
Deposits of up to $557,000 in 1998 and $992,000 in 1997, which could be
released to the Company, are guaranteed by performance bonds aggregating
$1,000,000 and $2,000,000 for 1998 and 1997, respectively.
NOTE K - ACCOUNTS PAYABLE AND ACCRUED LIABILITIES
Accounts payable and accrued liabilities include the following:
1998 1997
---- ----
Accounts payable $ 6,080,030 $ 5,790,109
Accrued interest 3,225,063 3,856,531
Accrued warranties on homes 1,536,565 2,028,493
Other accrued liabilities 823,200 1,466,358
------------------- ---------------
$ 11,664,858 $ 13,141,491
=================== ===============
<PAGE>
NOTE L - SENIOR NOTES
Senior notes consist of the following:
1998 1997
---- ----
12 1/2% senior notes due January 15, 2003 at par
with an effective interest rate of 13.02% $ 70,000,000 $ 70,000,000
Repurchase of senior notes to be used as
part of sinking fund (13,708,000) (2,686,000)
Unamortized discount (784,688) (1,129,926)
------------ ------------
$ 55,507,312 $ 66,184,074
============ ============
On January 13, 1993, the Company issued 12 1/2% senior notes ("Senior Notes"),
due January 15, 2003. The Senior Notes have a face value of $70,000,000 and
were issued at a discount of $1,930,600. The Senior Notes are senior unsecured
obligations of the Company subject to redemption at the Company's option on or
after January 15, 1998 at 105% of the principal amount and thereafter at
prices declining annually to 100% of the principal amount on or after January
15, 2001.
Under the terms of the indenture ("Indenture"), the Company must make Senior
Notes sinking fund payments of $17,500,000 by January 15, 2001 and January 15,
2002. The Indenture also contains provisions restricting the amount and type
of indebtedness the Company may incur, the purchase by the Company of its
stock and the payment of cash dividends. At December 31, 1998, the payment of
cash dividends is prohibited and will be restricted until the Company posts
cumulative net income in excess of $62,100,000.
In February 1999, the Company repurchased $2,700,000 of Senior Notes to be
used to partially satisfy its sinking fund obligation (see Note V).
NOTE M - EARNINGS (LOSS) PER SHARE
Statement of Financial Accounting Standards No. 128, "Earnings Per Share"
(SFAS 128), requires dual presentation of basic and diluted earnings per share
on the face of the income statement. The reconciliation between the
computations is as follows:
Income Basic Diluted Diluted
(Loss) Shares Basic EPS Shares EPS
------ ------ --------- ------ ---
1998 81,573 4,625,524 .02 4,625,549 .02
1997 (20,849,763) 4,625,524 (4.51) 4,625,524 (4.51)
1996 85,289 4,625,524 .02 4,714,224 .02
Included in diluted shares are common stock equivalents relating to options of
61,000, 81,300 and 88,700 for 1998, 1997 and 1996, respectively. Options to
purchase 58,600 shares of common stock at prices ranging from $4.50 to $8.62
per share, which were outstanding during 1998, were not included in the
computation of diluted earnings per share because the exercise prices were
greater than the average market price of the common shares during such period.
<PAGE>
NOTE N - STOCK OPTIONS
The Company has two stock option plans accounted for under APB Opinion 25 and
related interpretations. The plans allow the Company to grant options to
employees for the purchase of up to 400,000 shares of Class B common stock and
non-employee Directors for the purchase of up to 20,000 shares of Class B
common stock. The options have terms of five years for employees and ten years
for non-employee Directors when issued. The stock options for employees vest
at the end of the second year, and stock options for non-employee Directors
50% of the grant vests after each of the first and second year of service on
the Board.
The exercise price of each option equals the market price of the Company's
Class B Common stock on the date of grant.
Accordingly, no compensation cost has been recognized for the plans. Had
compensation cost for the plans been determined based on the fair value of the
options at the grant dates consistent with the method of Statement of
Financial Accounting Standards No. 123, "Accounting for Stock-Based
Compensation" ("SFAS 123"), the Company's net income (loss) and earnings
(loss) per share would have been reduced to the proforma amounts indicated
below.
1998 1997 1996
---- ---- ----
Net income (loss) As reported $81,753 $(20,849,763) $ 85,289
Pro forma $70,936 $(20,935,861) $ (22,738)
Primary earnings (loss)
per share As reported $ .02 $ (4.51) $ .02
Pro forma $ .02 $ (4.51) $ (.01)
The fair value of each option grant is estimated on the date of grant using
the binomial options-pricing model with the following weighted-average
assumptions used for grants in 1998, 1997 and 1996, respectively: expected
volatility of 36.52, 36.68 and 36.77 percent; risk-free interest rate of 6.91,
6.92 and 6.93 percent; and expected life of 5.8, 5.5 and 5.3 years.
<PAGE>
NOTE N - STOCK OPTIONS - Continued
A summary of the status of the Company's fixed stock option plan as of
December 31, 1998 and 1997, and 1996, and changes during the years ending on
those dates is presented below:
1998 1997 1996
-------- -------- --------
Weighted Weighted Weighted
Average Average Average
Shares Exercise Shares Exercise Shares Exercise
(000) Price (000) Price (000) Price
----- ----- ----- ----- ----- -----
Outstanding at
beginning of
year 92.3 $ 7.34 88.7 $ 7.34 45.2 $ 7.06
Granted 2.4 4.50 3.6 7.38 43.5 7.63
Exercised -- -- -- -- -- --
Forfeited 33.7 5.37 - -- -- --
---- -------- ---- -------- ---- --------
Outstanding
at end of year 61.0 $ 7.17 92.3 $ 7.34 88.7 $ 7.34
Options
Exercisable
at year
end 57.4 $ 7.28 46.4 $ 7.08 3.6 $ 8.62
Weighted-
average fair
value of
options
granted
during
the year - $ 2.49 -- $ 4.41 -- $ 3.37
The following information applies to options outstanding at December 31,
1998:
Number outstanding 61,000
Range of exercise prices $4.50 to $8.62
Weighted-average exercise price $7.17
Weighted-average remaining contractual life 2.62
NOTE O - COMMON STOCK
Class A and Class B common stock have identical dividend rights with the
exception that the Class B common stock is entitled to a $.025 per share
additional dividend. Class A common stock is entitled to one vote per share
while Class B common stock is entitled to one-tenth vote per share. Holders of
Class B common stock are entitled to elect 25% of the Board of Directors as
long as the number of outstanding shares of Class B common stock is at least
10% of the number of outstanding shares of both classes of common stock. At
the option of the holder of record, each share of Class A common stock may be
converted at any time into one share of Class B common stock.
<PAGE>
NOTE P - LEASING ARRANGEMENTS
Rental Properties
-----------------
In connection with certain developments, the Company leases recreation
facilities. The Company also leases rental units on a one-year basis. These
leases are accounted for as operating leases.
The following schedule provides an analysis of the Company's property under
operating leases (included in property and equipment) by major classes as of
December 31, 1998 and 1997:
1998 1997
---- ----
Land $ 2,324,844 $ 2,462,227
Buildings 19,063,378 19,896,195
Furniture, fixtures and equipment 1,431,649 1,035,903
----------- -----------
22,819,871 23,394,325
Less accumulated depreciation 8,691,757 8,142,224
----------- -----------
$14,128,114 $15,252,101
=========== ===========
The following is a schedule of approximate future minimum rental income
(assuming non-renewal of one-year leases of the Company's units) expected
under these leases as of December 31, 1998:
1999 $ 2,101,453
2000 316,877
2001 314,742
2002 314,742
2003 314,742
Thereafter 23,484,477
-----------
$26,847,033
===========
Office and Warehouse
--------------------
The Company leases its headquarters office and a warehouse under lease
agreements extending through 2002, with options to renew for up to five years,
accounted for as operating leases. The approximate future minimum rental
payments as of December 31, 1998 are as follows:
1999 $196,059
2000 205,862
2001 216,155
2002 226,962
--------
$845,038
========
<PAGE>
NOTE P - LEASING ARRANGEMENTS - Continued
Total rent expense, including common area maintenance expenses, for each of
the years ended December 31, 1998, 1997 and 1996 amounted to approximately
$366,000, $308,000 and $300,000, respectively.
NOTE Q - DEFERRED COMPENSATION PLAN
The Company has a defined contribution plan (the "Plan") established pursuant
to Section 401(k) of the Internal Revenue Code. Participant employees may
elect to contribute up to 15% of pretax annual compensation as defined in the
Plan, subject to certain limitations. The Company will match 25% of the
participant's contributions, not to exceed 6% of the participant's annual
compensation. The Company's contributions to the Plan amounted to $44,688 in
1998, $75,450 in 1997 and $68,238 in 1996.
NOTE R - FINANCIAL INSTRUMENTS
The estimated fair value of the Company's financial instruments does not
purport to represent the aggregate net fair value of the Company.
The following methods and assumptions were used to estimate the fair value of
each class of financial instruments for which it is practicable to estimate
that value:
Cash and Cash Equivalents
-------------------------
The carrying amount approximates fair value because of the short maturity of
those instruments.
Mortgage Notes Receivables
--------------------------
The carrying amount approximates fair value due to interest rates currently
offered for loans with similar terms to borrowers of similar credit quality
not being significantly different.
Line of Credit
--------------
The carrying amount of the line of credit approximates fair value due to the
length of the maturity and interest rate being tied to market indices.
Mortgage Note Payable
---------------------
The carrying amount of the mortgage note payable approximates fair value due
to the interest rate not being significantly different from the current market
rates available to the Company.
Senior Notes
------------
The Senior Notes are not listed on any exchange. Prices offered to the Company
by individual holders and dealers in the Senior Notes are used to estimate
fair value of the Company's Senior Notes.
All of the Company's financial instruments are held for purposes other than
trading. The carrying amounts in the table below are the amounts at which the
financial instruments are reported in the financial statements.
<PAGE>
NOTE R - FINANCIAL INSTRUMENTS - Continued
The estimated fair values of the Company's financial instruments, at December
31 1998 and 1997, respectively, are as follows:
1998 1997
---- ----
Carrying Estimated Carrying Estimated
Amount Fair Value Amount Fair Value
of Assets of Assets of Assets of Assets
(Liabilities) (Liabilities) (Liabilities) (Liabilities)
------------- ------------- ------------- -------------
Cash and cash
equivalents $ 10,557,772 $ 10,557,772 $ 19,830,523 $ 19,830,523
Mortgage notes
receivable 953,284 953,284 267,323 267,323
Line of credit 10,000 10,000 10,000 10,000
Mortgage note
payable (15,970,385) (15,970,385) (12,438,445) (12,438,445)
Senior notes (55,507,312) (49,536,960) (66,184,074) (61,928,880)
NOTE S SEGMENT INFORMATION
The Company has the following two reportable segments: home building and
rental operations. The home building segment develops and sells residential
properties and planned communities. The rental operations segment consists of
529 units in two separate properties.
The accounting policies used to develop segment information correspond to
those described in the summary of significant accounting policies and other
information. Segment net income or loss is based on income or loss from
operations before income taxes, the cumulative effect of changes in accounting
principles, and the allocation of selling, general or administrative costs.
<PAGE>
NOTE S SEGMENT INFORMATION Continued
The following information about the two segments is for the years ended
December 31, 1998, 1997 and 1996, in thousands (000).
<TABLE>
<CAPTION>
Home Rental
Building Operations Other Total
-------- ---------- ----- -----
<S> <C> <C> <C> <C>
December 31, 1998:
- ------------------
Revenues $ 86,610 $ 3,874 $ 581 $ 91,065
Interest expense 7,170 -- -- 7,170
Depreciation and amortization 1,313 792 2 2,107
Segment net income (loss) (740) 585 237 82
Segment assets 119,669 14,779 778 135,226
Expenditures for segment assets 689 396 -- 1,085
December 31, 1997:
- ------------------
Revenues $ 112,074 $ 3,426 $ 690 $ 116,190
Interest expense 7,181 -- -- 7,181
Depreciation and amortization 1,136 743 2 1,881
Segment net income (loss) (18,182) (5,083) 262 (23,003)
Segment assets 129,088 15,076 896 145,060
Expenditures for segment assets 329 68 1 398
December 31, 1996:
- ------------------
Revenues $ 107,446 $ 3,550 $ 623 $ 111,619
Interest expense 7,402 -- -- 7,402
Depreciation and amortization 1,144 767 5 1,916
Segment net income (loss) (815) 205 142 468
Segment assets 154,470 20,509 567 175,546
Expenditures for segment assets 1,665 3 -- 1,688
</TABLE>
<PAGE>
NOTE T YEAR 2000
The Company has assessed and formulated a plan to resolve its information
technology ("IT") and non-IT system Year 2000 issues. The Year 2000 issue
relates to limitations in computer systems and applications that may
prevent proper recognition of the Year 2000. The potential effect of the
Year 2000 issue on the Company and its business partners will not be fully
determinable until the Year 2000 and thereafter. If Year 2000 modifications
are not properly completed either by the Company or entities with which the
Company conducts business, the Company's revenues and financial condition
could be adversely impacted.
NOTE U COMMITMENTS AND CONTINGENCIES
The Company is involved, from time to time, in litigation arising in the
ordinary course of business, none of which is expected to have a material
adverse effect on the Company's consolidated financial position or results
of operations.
The Company is also subject to the normal and customary obligations
associated with entering into contracts for the purchase, development and
sale of real estate in the routine conduct of its business.
NOTE V SUBSEQUENT EVENTS
In February, 1999, the Company sold certain property which had been held
for investment for an approximate book gain of $1.8 million. A portion of
the net cash proceeds of about $4.0 million from this transaction was used
to purchase $2.7 million of the Company's Senior Notes.
<PAGE>
MANAGEMENT'S RESPONSIBILITY FOR FINANCIAL STATEMENTS
----------------------------------------------------
Management is responsible for the preparation of the Company's consolidated
financial statements and related information appearing in this annual report.
Management believes that the consolidated financial statements reasonably
present the Company's financial position and results of operations in conformity
with generally accepted accounting principles. Management also has included in
the Company's financial statements amounts that are based on estimates and
judgments which it believes are reasonable under the circumstances.
The independent accountants audit the Company's financial statements in
accordance with generally accepted auditing standards and provide an objective,
independent review of the fairness of reported operating results and financial
position.
The Board of Directors of the Company has an Audit Committee composed of
two non-management independent Directors. The committee meets periodically with
financial management and the independent accountants to review accounting,
control, auditing and financial reporting matters.
<PAGE>
REPORT OF INDEPENDENT CERTIFIED
PUBLIC ACCOUNTANTS
Board of Directors
Oriole Homes Corp.
We have audited the accompanying consolidated balance sheets of Oriole Homes
Corp. and Subsidiaries as of December 31, 1998 and 1997, and the related
consolidated statements of operations, shareholders' equity, and cash flows for
each of the three years in the period ended December 31, 1998. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of Oriole
Homes Corp. and Subsidiaries at December 31, 1998 and 1997, and the results of
their operations and their cash flows for each of the three years in the period
ended December 31, 1998, in conformity with generally accepted accounting
principles.
Grant Thornton LLP
Miami, Florida
February 12, 1999
<PAGE>
ITEM 9 DISAGREEMENTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
This item is not applicable.
PART III
--------
ITEM 10 DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The information required by Item 10 is incorporated herein by reference to
Registrant's definitive proxy statement to be filed pursuant to Regulation 14A,
in conjunction with the Company's Annual Meeting of Shareholders.
ITEM 11 EXECUTIVE COMPENSATION
The information required by the Item 11 is incorporated herein by reference
to Registrant's definitive proxy statement to be filed pursuant to Regulation
14A, in conjunction with the Company's Annual Meeting of Shareholders scheduled
to be held on May 12, 1999.
ITEM 12 SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The information required by this Item 12 is incorporated herein by
reference to Registrant's definitive proxy statement to be filed pursuant to
Regulation 14A, in conjunction with the Company's Annual Meeting of Shareholders
scheduled to be held on May 12, 1999.
ITEM 13 CERTAIN RELATIONSHIP AND RELATED TRANSACTIONS
The information required by this item 13 is incorporated herein by
reference to Registrant's definitive proxy statement to be filed pursuant to
Regulation 14A, in conjunction with the Company's Annual Meeting of Shareholders
scheduled to be held on May 12, 1999.
<PAGE>
PART IV
-------
ITEM 14 EXHIBITS, FINANCIAL STATEMENTS, SCHEDULES AND REPORTS ON FORM 8-K
(a) Financial Statements
See Item 8
(b) Reports on Form 8-K
There were no reports on Form 8-K for the three months ended December
31, 1998
(c) Exhibits
Exhibit
Number
------
3.1 Articles of Incorporation, as amended, of Registrant.
2.2 Composite By-Laws of Registrant.
4.1 Form of 12-1/2% Senior Note.
4.2 Form of Indenture between the Registrant and Sun Bank National
Association, Trustee.
10.1 Lease Agreement, dated May 7, 1991 between the Registrant and
Arbors Associates, Ltd.
10.2 First Amendment to Lease Agreement dated as of April 30, 1998,
between Registrant and Arbors Associates, Ltd.
10.3 Revolving Loan Agreement dated July 13, 1993, between Ohio
Savings Bank, F.S.B. and the Registrant.
10.4 First Amendment to Revolving Loan Agreement.
10.5 Second Amendment to Revolving Loan Agreement.
10.6 Mortgage and Security Agreement dated as of July 13, 1993.
10.7 Mortgage, Assignment and Financing Statement Spreader Agreement
date May 31, 1995.
10.8 Future Advance, Mortgage, Assignment and Financing Statement
Extension, Modification and Spreader Agreement dated August 23,
1995.
10.9 Future Advance, Mortgage, Assignment and Financing Statement
Extension, Modification and Spreader Agreement dated January 12,
1996.
<PAGE>
10.10 Mortgage and Loan Modification and Extension Agreement dated July
1, 1997.
10.11 Mortgage and Loan Modification and Extension Agreement dated
October 15, 1998.
10.12 Second Amendment to Revolving Loan Agreement dated July 1, 1997.
10.13 Construction Loan Agreement dated December 22, 1998 between First
Union National Bank and the Registrant.
10.14 Mortgage and Security Agreement dated December 22, 1998 between
First Union Bank and the Registrant.
10.15 Stock Option Agreement with Richard D. Levy dated February 22,
1995
10.16 Stock Option Agreement with Richard D. Levy dated May 14, 1996
10.17 Stock Option Agreement with Harry A. Levy dated February 22, 1995
10.18 Stock Option Agreement with Harry A. Levy dated May 14, 1996
10.19 Stock Option Agreement with Mark A. Levy dated February 22, 1995
10.20 Stock Option Agreement with Mark A. Levy dated May 14, 1996
10.21 Stock Option Agreement with George Richards dated May 22, 1997
10.22 Stock Option Agreement with George Richards dated May 20, 1998
10.23 Stock Option Agreement with Paul Lehrer dated May 4, 1994
10.24 Stock Option Agreement with Paul Lehrer dated May 15, 1995
10.25 Stock Option Agreement with Paul Lehrer dated May 16, 1996
<PAGE>
9.26 Stock Option Agreement with Paul Lehrer dated May 22, 1997.
9.27 Stock Option Agreement with Paul Lehrer dated May 20, 1998.
10.28 Stock Option Agreement with Joseph Pivinski dated December 14,
1998.
10.29 Joint Venture Agreement between the Company and Regency Homes,
Inc. dated December 31, 1993.
10.30 Registrant's 401(k) Defined Contribution Benefit Plan.
10.31 Registrant's 1994 Stock Option Plan for Employees (filed as
Exhibit A to the proxy statement dated April 5, 1994 for the
Company's Annual Meeting of Shareholders held on May 9, 1994).
9.32 Registrant's 1994 Stock Option Plan for Non-Employee Directors
(filed as Exhibit B to the proxy statement dated April 5, 1994
for the Company's Annual Meeting of Shareholders held on May 9,
1994).
22.1 List of Registrant's Subsidiaries.
23.1 Consent of Grant Thornton LLP
27.0 Summary Financial Information.
<PAGE>
SIGNATURES
----------
Pursuant to the requirements of Section 13 of the Securities Exchange Act of
1934, the Registrant has duly caused this Annual Report to be Signed on its
behalf by the undersigned, thereunto duly authorized.
ORIOLE HOMES CORP.
DATE March 29, 1999 s/ R.D. Levy
-------------- ------------
R.D. Levy, Chairman of the Board,
Chief Executive Officer, Director
DATE March 29, 1999 s/ J. Pivinski
-------------- --------------
J. Pivinski, Vice President - Finance,
Treasurer, Chief Financial Officer
Pursuant to the requirements of the Securities Exchange Act of 1934 this
Annual Report has also been signed by the following persons on behalf of the
Registrant in the capacities indicated.
MEMBERS OF THE BOARD OF DIRECTORS
---------------------------------
DATE March 29, 1999 s/ R.D. Levy
-------------- ------------
R.D. Levy, Chairman of the Board,
Chief Executive Officer, Director
DATE March 29, 1999 s/ Harry A. Levy
-------------- ----------------
Harry A. Levy, Director
DATE March 29, 1999 s/Mark A. Levy
-------------- --------------
Mark A. Levy, Chief Operating Officer, Director
DATE March 29, 1999 s/ Paul R. Lehrer
-------------- -----------------
Paul R. Lehrer, Director
DATE March 29, 1999 s/ George R. Richards
-------------- ---------------------
George R. Richards, Director
<PAGE>
EXHIBIT INDEX
-------------
Exhibit Page
Number Number
------ ------
3.1 Articles of Incorporation, as amended, of Registrant.
3.2 Composite By-Laws of Registrant.
4.1 Form of 12-1/2% Senior Note. *
4.2 Form of Indenture between the Registrant and Sun Bank
National Association, Trustee. **
10.1 Lease Agreement, dated May 7, 1991 between the
Registrant and Arbors Associates, Ltd. ***
10.2 First Amendment to Lease Agreement dated as of April
30, 1998, between Registrant and Arbors Associates,
Ltd.
10.3 Revolving Loan Agreement dated July 13, 1993, between
Ohio Savings Bank, F.S.B. and the Registrant.
10.4 First Amendment to Revolving Loan Agreement.
10.5 Second Amendment to Revolving Loan Agreement.
10.6 Mortgage and Security Agreement dated as of July 13,
1993.
10.7 Mortgage, Assignment and Financing Statement Spreader
Agreement date May 31, 1995.
10.8 Future Advance, Mortgage, Assignment and Financing
Statement Extension, Modification and Spreader
Agreement dated August 23, 1995.
10.9 Future Advance, Mortgage, Assignment and Financing
Statement Extension, Modification and Spreader
Agreement dated January 12, 1996.
<PAGE>
10.10 Mortgage and Loan Modification and Extension Agreement
dated July 1, 1997.
10.11 Mortgage and Loan Modification and Extension Agreement
dated October 15, 1998.
10.12 Second Amendment to Revolving Loan Agreement dated July
1, 1997.
10.13 Construction Loan Agreement dated December 22, 1998
between First Union National Bank and the Registrant.
10.14 Mortgage and Security Agreement dated December 22, 1998
between First Union Bank and the Registrant.
10.15 Stock Option Agreement with Richard D. Levy dated
February 22, 1995
10.16 Stock Option Agreement with Richard D. Levy dated May
14, 1996
10.17 Stock Option Agreement with Harry A. Levy dated
February 22, 1995
10.18 Stock Option Agreement with Harry A. Levy dated May 14,
1996
10.19 Stock Option Agreement with Mark A. Levy dated February
22, 1995
10.20 Stock Option Agreement with Mark A. Levy dated May 14,
1996
10.21 Stock Option Agreement with George Richards dated May
22, 1997
10.22 Stock Option Agreement with George Richards dated May
20, 1998
10.23 Stock Option Agreement with Paul Lehrer dated May 4,
1994
10.24 Stock Option Agreement with Paul Lehrer dated May 15,
1995
10.25 Stock Option Agreement with Paul Lehrer dated May 16,
1996
<PAGE>
9.26 Stock Option Agreement with Paul Lehrer dated May 22,
1997
9.27 Stock Option Agreement with Paul Lehrer dated May 20,
1998
10.28 Stock Option Agreement with Joseph Pivinski dated
December 14, 1998
10.29 Joint Venture Agreement between the Company and Regency
Homes, Inc. December 31, 1993 . ****
10.30 Registrant's 401(k) Defined Contribution Benefit Plan. *****
10.31 Registrant's 1994 Stock Option Plan for Employees
(filed as Exhibit A to the proxy statement dated April
5, 1994 for the Company's Annual Meeting of
Shareholders held on May 9, 1994).
9.32 Registrant's 1994 Stock Option Plan for Non-Employee
Directors (filed as Exhibit B to the proxy statement
dated April 5, 1994 for the Company's Annual Meeting of
Shareholders held on May 9, 1994).
22.1 List of Registrant's Subsidiaries.
23.1 Consent of Grant Thornton LLP
27.1 Summary Financial Information.
* Filed as Exhibit 4.1 to the Company's registration
statement on Form S-2 (no. 33-51680).
** Filed as Exhibit 4.2 to the Company's registration
statement on Form S-2 (no. 33-51680).
*** Filed as Exhibit 10.1 to the Company's registration
statement on Form S-2 (no. 33-51680).
**** Filed as Exhibit 10.7 to the Company's Annual Report on
Form 10-K for the year ended December 13, 1993.
***** Filed as Exhibit 10.6 to the Company's registration
statement on Form S-2 (no. 33-46123).
EXHIBIT 3.1
CERTIFICATE OF INCORPORATION
OF
LEVY-MARGATE, INC.
The undersigned subscribers to these Articles of
Incorporation, each a natural person competent to contract, hereby associate
themselves together to form a corporation for profit, under the general laws of
the State of Florida.
ARTICLE I. NAME
The name of this corporation is as follows:
LEVY-MARGATE, INC.
ARTICLE II. NATURE OF BUSINESS
The general nature of the business and the objects and
purposes proposed to be transacted and carried on are to do any and all of the
things hereinafter mentioned, as fully and to the same extent that natural
persons might or could do, namely:
1. To carry on and conduct a general contracting business,
including the designing, constructing, enlarging, repairing, remodeling or
otherwise engaging in any work upon buildings, roads, sidewalks, highways,
bridges or manufacturing plants; and to engage in iron, steel, wood, brick,
concrete, stone, cement, masonry and earth construction, and to execute
contracts or to receive assignments of contracts therefor, or relating thereto;
also to manufacture and furnish the building materials and supplies connected
therewith.
2. To improve, develop, manage, sell, assign, transfer, lease,
mortgage, pledge or otherwise dispose of, or turn to account, or deal with, all
or any part of the property of the company, and from time to time to vary any
investment or employment of the capital of the company. 3. To the same extent as
natural persons might or could do, to purchase or otherwise acquire, and to
hold, own, maintain, work, develop, sell, lease, exchange, hire, convey,
mortgage or otherwise dispose of and deal in lands and leaseholds, and any
interest, estate and rights
1
<PAGE>
in real property, and any personal and mixed property, and any franchises,
rights, patents, licenses or privileges necessary, convenient or appropriate for
any of the purposes herein expressed.
4. To borrow money, and to make and issue notes, bonds,
debentures, obligations and evidence of indebtedness of all kinds, whether
secured by a mortgage, pledge, or otherwise, without limit as to amount, and to
secure the same by mortgage, pledge or otherwise, and generally to make and
perform agreements and contracts of every kind and description.
5. To do all and everything necessary, suitable and proper for
the accomplishment of any of the purposes, or the attainment of any of the
objects, or the furtherance of any of the powers hereinbefore set forth, either
alone or in association with other corporations, firms or individuals, and to do
every other act or acts, thing or things, incidental or appurtenant to or
growing out of or connected with the aforesaid business or powers, or any part
or parts thereof; provided, the same be not inconsistent with the laws under
which this corporation is organized.
ARTICLE III. CAPITAL STOCK
The maximum number of shares of stock that this corporation is
authorized to have outstanding at any one time is One Hundred and Fifty (150)
shares of Common Stock with voting power, and with a par value of One Hundred
Dollars ($100.00) per share.
ARTICLE IV. INITIAL CAPITAL
The amount of capital with which this corporation will begin
business is Five Hundred Dollars ($500.00) to be paid in cash, merchandise, real
estate, machinery or services, as may be determined by the Board of Directors.
ARTICLE V. TERM OF EXISTENCE
This corporation is to exist perpetually.
ARTICLE VI. ADDRESS
The initial post office address of the principal office of
this corporation in the State of Florida is as follows: 3910 Northwest 41st
Street, Lauderdale Lakes, Broward County, Florida.
2
<PAGE>
The Board of Directors may from time to time move the principal office to any
other address in Florida.
ARTICLE VII. DIRECTORS
This corporation shall have three (3) Directors, initially.
The number of Directors may be increased or decreased from time to time by
By-laws adopted by the Stockholders, but shall never be less than three (3).
ARTICLE VIII. INITIAL DIRECTORS AND OFFICERS
The names and post office addresses of the members of the
first Board of Directors, the President, the Secretary and the Treasurer are as
follows:
Office Name Address
- ------ ---- -------
President and Director Harry A. Levy 3910 N.W. 41st Street
Lauderdale Lakes, Fla.
Treasurer and Director Richard D. Levy 3910 N.W. 41st Street
Lauderdale Lakes, Fla.
Secretary and Director Louis Greenwald 3910 N.W. 41st Street
Lauderdale Lakes, Fla.
ARTICLE IX. SUBSCRIBERS
The name and post office address of each subscriber of these
Articles of Incorporation, the number of shares of stock each agrees to take and
the value of consideration therefor are as follows:
Name Address Shares Value
- ---- ------- ------ -----
Harry A. Levy 3910 N.W. 41st Street 2 $200.00
Lauderdale Lakes, Fla.
Richard D. Levy 3910 N.W. 41st Street 2 $200.00
Lauderdale Lakes, Fla.
Louis Greenwald 3910 N.W. 41st Street 1 $100.00
Lauderdale Lakes, Fla.
3
<PAGE>
ARTICLE X. AMENDMENT
These Articles of Incorporation may be amended in the manner
provided by law. Every amendment shall be approved by the Board of Directors,
proposed by them to the Stockholders and approved at a Stockholders' meeting by
a majority of the stock entitled to vote thereon.
/s/ Harry A. Levy
-----------------
HARRY A. LEVY
/s/ Richard D. Levy
-------------------
RICHARD D. LEVY
/s/ Louis Greenwald
-------------------
LOUIS GREENWALD
STATE OF FLORIDA
COUNTY OF BROWARD
I HEREBY CERTIFY that on this day, before me, a Notary Public,
duly authorized in the state and county named above to take acknowledgments,
personally appeared HARRY A. LEVY, RICHARD D. LEVY and LOUIS GREENWALD, to me
known to be the persons described as subscribers in and who executed the
foregoing Articles of Incorporation, and they acknowledged before me that they
subscribed to these Articles of Incorporation.
WITNESS my hand and official seal in the county and state
above named, this 29th day of December, 1967.
NOTARY PUBLIC: /s/________________
4
<PAGE>
AMENDMENT
TO
CERTIFICATE OF INCORPORATION
OF LEVY-MARGATE, INC.
The undersigned, HARRY A. LEVY and LOUIS L. GREENWALD, President and
Secretary, respectively, of LEVY-MARGATE, INC., a corporation organized and
existing under the laws of the State of Florida, hereby certify that at a
special meeting of the directors and stockholders of said corporation, called
for that expressly stated purpose, held at the office of GREGORY AND ELLISON,
Attorneys at Law, 21 Southwest 40th Avenue, Fort Lauderdale, Broward County,
Florida, on March 11, 1968, at which meeting all of the directors and
stockholders of the corporation were represented and voted, the following
resolution was, by unanimous vote of all of the directors and stockholders of
shares of stock of said corporation, adopted:
"RESOLVED, that the Certificate of Incorporation of the
corporation be and the same is hereby amended so as to
change the corporate name of this corporation from
LEVY-MARGATE, INC., to ORIOLE-MARGATE, INC., and Article I
of said Certificate of Incorporation is hereby amended so as
to substitute in place of the corporate name of
LEVY-MARGATE, INC., wherever the same appears therein, to
the corporate name of ORIOLE-MARGATE, INC."
IN WITNESS WHEREOF, the said President and Secretary of LEVY-MARGATE,
INC., have subscribed their hands and caused the corporate seal to be affixed
this 19th day of March, 1968.
/s/ Harry A. Levy
-----------------
HARRY A. LEVY, President
(corporate seal)
/s/ Louis L. Greenwald
----------------------
LOUIS L. GREENWALD, Secretary
1
<PAGE>
STATE OF FLORIDA
COUNTY OF BROWARD
I HEREBY CERTIFY that on this day, before me a Notary Public
duly authorized in the state and county above named to take acknowledgments,
personally appeared HARRY A. LEVY and LOUIS L. GREENWALD, to me known to be the
persons who executed the foregoing Amendment to Certificate of Incorporation,
and they acknowledged before me that they executed the same.
WITNESS my hand and official seal in the County and State
named above this ___ day of ____________, 1968.
_________________________
NOTARY PUBLIC
2
<PAGE>
CERTIFICATE OF SECOND AMENDMENT
TO THE CERTIFICATE OF INCORPORATION
OF ORIOLE-MARGATE, INC.,
a Florida corporation
---------------------
KNOW ALL MEN BY THESE PRESENTS:
The undersigned, who are all the Stockholders and Directors of
ORIOLE- MARGATE, INC., a Florida corporation, pursuant to Section 608.18(8),
Florida Statutes, do hereby declare their desire and intention that the
Certificate of Incorporation of said corporation be and the same is hereby
amended as follows:
1. Amending Article I of the Certificate of Incorporation to
read as follows:
"Article I. NAME
----------------
The name of this corporation is as follows: ORIOLE LAND &
DEVELOPMENT CORP."
2. Amending Article II of the Certificate of Incorporation
by adding thereto the following provision:
"Article II
-----------
6. To transact any and all business or enterprise not
prohibited by law."
3. Amending Article III of the Certificate of Incorporation
to read as follows:
"Article III. CAPITAL STOCK
---------------------------
The maximum number of shares of stock this corporation is
authorized to have outstanding at any time shall be one million five hundred
thousand (1,500,000) shares of common stock with ten cents ($.10) par value per
share."
4. Adding to the Certificate of Incorporation by adding an
Article XI which shall read as follows:
"Article XI"
------------
"GENERAL PROVISIONS:
- -------------------
"(a) The private property of the stockholders shall not be subject to the
payment of any corporate debts to any extent whatsoever.
"(b) The Corporation shall have a first lien upon the shares of its
stockholders and upon all dividends due them for any indebtedness by
such stockholders of the Corporation.
1
<PAGE>
"(c) Subject to the provisions and conditions of this Article, the
Corporation shall have full power and lawful authority to accept
property, labor and services in payment for shares of its capital
stock in lieu of cash, at a just valuation to be fixed by its Board of
Directors.
"(d) No holder of stock of any class of the Corporation, now or hereafter
authorized, shall be entitled as such as a matter of right, to
subscribe for or purchase any part (either pro rata share or
otherwise), of any new or additional issue of stock of any class
whatsoever or securities convertible into or evidencing the right to
purchase stock of any class whatsoever, whether now or hereafter
authorized, or whether issued for cash, property, or otherwise.
"(e) A director of the Corporation shall not, in the absence of actual
fraud, be disqualified by his office from dealing or contracting with
the Corporation, either as a vendor, purchaser or otherwise; and, in
the absence of actual fraud, no transaction or contract of the
Corporation shall be void or voidable by reason of the fact that any
director or any firm or corporation of which any director is a member
is in any way interested in such transaction or contract, provided
that the fact that such director, or firm is interested in the
transaction of the contract is disclosed to the Corporation, and that
such transaction or contract is authorized, ratified or approved
either by (i) vote of the majority of a quorum of the Board of
Directors or of the Executive Committee, if any, without counting in
such majority any director so interested or who is a member of a firm
or corporation so interested; or (ii) vote at a Stockholders' Meeting
of the holders of record of the majority of all the outstanding shares
of stock of the Corporation then entitled to vote, or by writing or
writings signed by a majority of such holders, which shall have the
same force and effect as though such authorization, ratification or
approval were made by all the stockholders; and no director, firm or
corporation of which a director is a member shall be liable to account
to the Corporation for any profits realized from or through any such
transaction or contract. Nothing in this paragraph contained shall
create any liability in the events above mentioned, or prevent the
authorization, ratification or approval of such contracts or
transactions in any other manner permitted by law, or invalidate or
make voidable any contract or transaction which would be valid without
reference to the provisions of this paragraph.
"(f) The Corporation shall indemnify each director and officer of the
Corporation against all or any portion of any expenses reasonably
incurred by him in connection with or arising out of any action, suit
or proceeding in which he may be involved, by reason of his being or
having been an officer or director of the Corporation (whether or not
he continues to be an officer or director at the time of incurring
such expenses), such expenses to include the cost of reasonable
settlements (other than amounts paid to the Corporation itself) made
with the view to curtailment of cost of litigation, except that no
sums shall be paid in connection with any such settlement unless the
Corporation is advised by independent counsel that the officer or
director so indemnified was not derelict in the performance of his
duty as such officer or director. The Corporation shall not, however,
indemnify such officer or director with respect to matters as to which
he shall be finally adjudged in any such action, suit or proceeding to
have been derelict in the performance of his duty as such officer or
director, nor in respect of any new matter on which any settlement or
2
<PAGE>
compromise is affected, if the total expense, including the cost of
such settlement, shall substantially exceed the expense which might
reasonably be incurred by such director or officer in conducting such
litigation to a final conclusion, and in no event shall anything here
contained be so construed as to protect or authorize the Corporation
to indemnify any such officer or director against any liability to the
Corporation or to its security holders to which he would otherwise be
subject by reason or willful misfeasance, bad faith, gross negligence
or reckless disregard of the duties involved in the conduct of his
office. The foregoing right of indemnification shall not be exclusive
of other rights to which any officer or director may be entitled as a
matter of law."
IN WITNESS WHEREOF, the undersigned have hereunto set their
hands and seals at Miami, Date County, Florida, this _____ day of _______, 19__.
/s/ E. E. Hubshman
------------------
E. E. HUBSHMAN
President, Stockholder and Director
/s/ Jacob L. Friedman
---------------------
JACOB L. FRIEDMAN, Chairman of the
Board, Executive Vice President, Director
and Stockholder
/s/ Richard D. Levy
-------------------
RICHARD D. LEVY
Vice President, Director and Stockholder
/s/ Harry A. Levy
-----------------
HARRY A. LEVY
Secretary/Treasurer, Director and Stockholder
/s/ Ann Friedman
----------------
ANN FRIEDMAN
Director and Stockholder
3
<PAGE>
STATE OF FLORIDA )
) ss.:
COUNTY OF DADE )
BEFORE ME, the undersigned authority, an officer duly qualified to
administer oaths and take acknowledgments, personally appeared E. E. HUBSHMAN,
JACOB L. FRIEDMAN, RICHARD D. LEVY, HARRY A. LEVY, and ANN FRIEDMAN,
constituting all of the Directors of ORIOLE-MARGATE, INC., a Florida
corporation, who acknowledge that they executed the foregoing Certificates of
Amendment for the purposes therein set forth.
- ----------------------------------------
Notary Public, State of Florida at Large
My Commission Expires: _________________
STATE OF FLORIDA )
) ss.:
COUNTY OF DADE )
BEFORE ME, personally appeared HARRY A. LEVY, RICHARD D. LEVY, E. E.
HUBSHMAN, JACOB L. FRIEDMAN, and ANN FRIEDMAN, constituting all the Stockholders
of ORIOLE-MARGATE, INC., a Florida corporation, who acknowledge that they
executed the foregoing Certificate of Amendment for the purposes therein set
forth.
- ----------------------------------------
Notary Public, State of Florida at Large
My Commission Expires: _________________
4
<PAGE>
CERTIFICATE OF AMENDMENT
to
CERTIFICATE OF INCORPORATION
of
ORIOLE LAND & DEVELOPMENT CORP.
Oriole Land & Development Corp., a Florida corporation, under its
corporate seal in the hands of its President, E. E. Hubshman, and its Secretary,
Harry A. Levy, hereby certify that:
I
Oriole Land & Development Corp. was organized under the laws of the
State of Florida by Articles of Incorporation filed January 3, 1968.
II
Pursuant to the unanimous written consent of the Board of Directors
dated May 16, 1972, the following amendments to the Certificate of Incorporation
was adopted:
"RESOLVED, that Article I of the Certificate of Incorporation be
amended so that it will read in its entirety as follows:
'The name of this corporation shall be:
Oriole Homes Corp.'"
III
"RESOLVED, that Article III of the
Certificate of Incorporation be amended
so that it will read in its entirety as
follows:
'The maximum number of shares of stock
this corporation is authorized to have
outstanding at any time shall be Five
Million (5,000,000) shares of common
stock with Ten Cents ($.10) par value
per share.'"
And it was further
"RESOLVED, by the said Board of
Directors that a Special Meeting of the
Stockholders of record entitled to vote
for the consideration of said Amendment
be called at the offices of the
Corporation at Oriole Golf & Tennis
Club, 8000 Margate
1
<PAGE>
Boulevard, Margate, Florida, on Tuesday,
May 30, 1972, at 10:00 a.m."
Pursuant to notice, the meeting of Stockholders of the Corporation
called by the Board of Directors was held and the holders of a majority of the
outstanding shares entitled to vote thereon approved the aforesaid Articles of
Amendment to the Certificate of Incorporation.
IN WITNESS WHEREOF, the said Corporation has caused these Articles of
Amendment to the Certificate of Incorporation filed January 3, 1968, to be
signed in its name by its President and its corporate seal to be hereunto
affixed and attested to by its Secretary, this 30th day of May, 1972.
ORIOLE LAND & DEVELOPMENT CORP.
By: /s/ E. E. HUBSHMAN
----------------------
E. E. Hubshman, President
ATTEST:
/s/ HARRY A. LEVY
-----------------
Harry A. Levy, Secretary
STATE OF FLORIDA )
) ss.:
COUNTY OF BROWARD )
I HEREBY CERTIFY that on this day before me, a Notary Public
of the State of Florida, duly qualified and acting, personally appeared E. E.
HUBSHMAN, as President, and HARRY A. LEVY, as Secretary of ORIOLE LAND &
DEVELOPMENT CORP., to me well known and being by me first duly sworn and
cautioned, upon their oath deposed and said that they acknowledged that they
signed the above and foregoing Certificate of Amendment to the Articles of
Incorporation of ORIOLE LAND & DEVELOPMENT CORP., for the purposes therein set
forth.
2
<PAGE>
WITNESS my hand and official seal at the County and State
aforesaid, this 30th day of May, 1972.
----------------------------------------
Notary Public, State of Florida at Large
My Commission Expires: _________________
3
<PAGE>
ARTICLES OF MERGER
OF
ALPHA TITLE COMPANY, INC.
INTO
ORIOLE HOMES CORP.
1.
The Plan of Merger attached hereto as Exhibit "A" and by reference
made a part hereof was duly approved by the Boards of Directors of ORIOLE HOMES
CORP. and ALPHA TITLE COMPANY, INC. on the 16th day of September, 1980.
2.
This is a merger of ALPHA TITLE COMPANY, INC., a Florida corporation, a
wholly-owned subsidiary corporation, into its parent, ORIOLE HOMES CORP., a
Florida corporation, under Section 607.227 of the Florida General Corporation
Act.
3.
The surviving corporation of the merger shall be ORIOLE HOMES CORP., a
Florida corporation.
4.
ALPHA TITLE COMPANY, INC. has 5,000 common shares authorized and 100
shares outstanding.
5.
ORIOLE HOMES CORP., the surviving corporation, owns 100 shares of ALPHA
TITLE COMPANY, INC., which constitutes 100% of the outstanding shares of ALPHA
TITLE COMPANY, INC.
6.
The mailing of the Plan of Merger to the shareholder of 100% of ALPHA
TITLE COMPANY, INC.'s shares has been waived by that shareholder. The waiver,
dated the 16th day of September, 1980, is attached hereto as Exhibit "B" and by
reference is made a part hereof.
ORIOLE HOMES CORP.
A Florida Corporation
1
<PAGE>
By: /s/ R. D. Levy
---------------
President
Attest:
/s/ Harry A. Levy
-----------------
Secretary
(Corporate Seal)
ALPHA TITLE COMPANY, INC.
A Florida Corporation
By: /s/ R. D. Levy
--------------
President
Attest:
/s/ Harry A. Levy
-------------
Secretary
(Corporate Seal)
2
<PAGE>
STATE OF FLORIDA )
) ss.:
COUNTY OF BROWARD )
I HEREBY CERTIFY that on this day before me, an officer duly authorized
in the State and County aforesaid to take acknowledgments, personally appeared
RICHARD D. LEVY and HARRY A. LEVY, well known to me to be the President and
Secretary, respectively, of the corporation named as ORIOLE HOMES CORP. in the
foregoing instrument, and that they severally acknowledged executing the same
freely and voluntarily under authority duly vested in them by said corporation,
and that the seal affixed thereto is the true corporate seal of said
corporation.
WITNESS my hand and official seal in the County and State aforesaid,
this 16th day of September, 1980.
/s/ Mary E. Chapman
-------------------
Notary Public
(SEAL) My Commission Expires:_________
STATE OF FLORIDA )
) ss.:
COUNTY OF BROWARD )
I HEREBY CERTIFY that on this day before me, an officer duly authorized
in the State and County aforesaid to take acknowledgments, personally appeared
RICHARD D. LEVY and HARRY A. LEVY, well known to me to be the President and
Secretary, respectively, of the corporation named as ALPHA TITLE COMPANY, INC.
in the foregoing instrument, and that they severally acknowledged executing the
same freely and voluntarily under authority duly vested in them by said
corporation, and that the seal affixed thereto is the true corporate seal of
said corporation.
WITNESS my hand and official seal in the County and State aforesaid,
this 16th day of September, 1980.
/s/ Mary E. Chapman
-------------------
Notary Public
(SEAL) My Commission Expires:_________
3
<PAGE>
PLAN OF MERGER
OF
ALPHA TITLE COMPANY, INC.
INTO
ORIOLE HOMES CORP.
1.
ALPHA TITLE COMPANY, INC., a Florida corporation (hereinafter called
"Alpha"), is to be merged into ORIOLE HOMES CORP., a Florida corporation
(hereinafter called the "Surviving Corporation"), which shall be the surviving
corporation, the name of which shall remain ORIOLE HOMES CORP., a Florida
corporation.
2.
The manner and basis of converting the shares of each merging
corporation into shares of the Surviving Corporation is as follows:
(a) All of the shares of the capital stock of the Surviving Corporation
issued and outstanding on the effective date of the merger shall continue
thereafter to be issued and outstanding shares of the capital stock of the
Surviving Corporation, without the surrender or exchange of any certificate or
certificates by the holder thereof.
(b) All of the shares of the capital stock of Alpha are owned by the
Surviving Corporation. Upon the effective date of the merger, all certificates
of the stock of Alpha shall thereafter be cancelled.
(c) Any and all shares of Alpha common stock held as treasury stock by
such corporation shall be cancelled and retired, and no consideration shall be
issued in exchange therefor.
3.
There shall be no amendment of the Articles of Incorporation of the
Surviving Corporation as a result of the merger.
4.
The other terms and conditions of the merger are as follows:
(a) The merger shall become effective upon the filing of the Articles
of Merger with the Secretary of State of the State of Florida.
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(b) The By-Laws of the Surviving Corporation shall not be amended as a
result of the merger.
(c) When the merger becomes effective:
(i) The separate existence of Alpha shall cease;
(ii) The Surviving Corporation shall have all the rights,
privileges, immunities and powers, and shall be
subject to all the duties and liabilities of a
corporation organized under the Florida General
Corporation Act; and
(iii) The merger shall have the effect provided by Section
607.231 of the Florida General Corporation Act.
ORIOLE HOMES CORP.
A Florida Corporation
By: /s/ Richard D. Levy
-------------------
RICHARD D. LEVY, President
Attest:
/s/ Harry A. Levy
-----------------
Secretary
(Corporate Seal)
ALPHA TITLE COMPANY, INC.
A Florida Corporation
By: /s/ Richard D. Levy
-------------------
RICHARD D. LEVY, President
Attest:
/s/ Harry A. Levy
-----------------
Secretary
(Corporate Seal)
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WAIVER
------
ORIOLE HOMES CORP., as sole shareholder of record for 100% of the
issued and outstanding shares of ALPHA TITLE COMPANY, INC., hereby waives the
mailing of a copy of the Plan of Merger to itself as a shareholder of the
subsidiary corporation, ALPHA TITLE COMPANY, INC. ORIOLE HOMES CORP. also waives
the requirement that it be given additional notice of the provisions of the
Florida General Corporation Act that govern dissenting shareholders.
DATED: September 16, 1980
ORIOLE HOMES CORP.
A Florida Corporation
By: /s/ Richard D. Levy
-------------------
President
Attest:
/s/ Harry A. Levy
-----------------
Secretary
3
<PAGE>
CERTIFICATE OF AMENDMENT
TO
CERTIFICATE OF INCORPORATION
OF
ORIOLE HOMES CORP.
Oriole Homes Corp., a Florida corporation, under its corporate seal in
the hands of its President, Richard D. Levy, and its Secretary, Harry A. Levy,
hereby certify that:
I
Oriole Homes Corp. was organized under the laws of the State of Florida
by Articles of Incorporation filed January 3, 1968.
II
Pursuant to the unanimous written consent of the Board of Directors
dated December 31, 1982, the following amendments to the Certificate of
Incorporation was adopted:
III
"RESOLVED, that Article III of the Certificate of
Incorporation be amended so that it will read in its entirety
as follows:
A. This Corporation is authorized to issue two classes of shares: Class
A Common Stock and Class B Common Stock. The number of Class A Common shares
which the Corporation is authorized to issue is 10,000,000, par value $.10 each;
the number of Class B Common shares which the Corporation is authorized to issue
is 10,000,000, par value $.10 each. Upon amendment of this article to read as
hereinabove set forth, each outstanding share is converted into or reconstituted
as one share of Class A Common Stock.
B. (a) No holder of shares of the Corporation of any class now or
hereafter authorized shall have any preferential or preemptive right to
subscribe for, purchase or receive any shares of the Corporation of any class
now or hereafter authorized, or any options or warrants for such shares, or any
securities convertible into or exchangeable for such shares, which may at any
time be issued, sold or offered for sale by the Corporation.
(b) Class A Common Stock and the Class B Common Stock shall be
identical in all respects and shall have equal rights and privileges, except as
otherwise provided in this Article.
(c) The relative rights, preferences, privileges and
restrictions of the shares of each class are as follows:
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(1) Dividends. Holders of Class A Common Stock and
holders of shares of Class B Common Stock shall have the same rights to
dividends and distributions of the Corporation whether paid in cash,
property or stock, except as follows:
(A) Whenever a cash dividend is paid,
holders of Class B Common Stock shall be paid $.025 per share
in addition to the amount payable for each share of Class A
Common Stock for each quarter in respect of which the cash
dividend is declared and paid. (Such extra amount, as from
time to time adjusted, is called the "Additional Dividend.")
The Additional Dividend shall be non-cumulative but shall be
appropriately adjusted if the Board of Directors declares a
cash dividend in respect of a period other than a quarterly
period, e.g. if the dividend is declared in respect of a
semi-annual or an annual period the Additional dividend shall
be $.05 or $.10 respectively. In the declaration of any
dividend the Board of Directors shall specify the period in
respect of which such dividend is declared. No Additional
Dividend shall be payable with respect to any extra dividend,
special dividend or dividend payable other than cash, which
term shall include without limitation a dividend paid in
partial or complete liquidation. The Company shall not pay any
extra dividend, special dividend or dividend payable other
than in cash on any share of either class of common shares
without at the same time paying the same dividend to all
shares of both classes.
(B) If at any time a dividend is to be paid
in shares of either Class A Common Stock or Class B Common
Stock, such dividend may be declared and paid as follows:
(i) Class A Common shares may be
paid to holders of both Class A Common shares and
Class B Common shares;
(ii) Class B Common shares may be
paid to holders of both Class Common shares and Class
B Common shares; or
(iii) Class A Common shares may be
paid to holders of Class A Common shares and Class B
Common shares may be paid to holders of Class B
Common shares in which case the Additional dividend
to be paid thereafter is subject to adjustment in
accordance with the provisions of subparagraph (C)
below.
(C) In case the Board of Directors shall
declare and pay a dividend pursuant to subparagraph (B) (iii)
above and such dividend equals or exceeds a 10% dividend (i.e.
one share for each ten shares) then the Additional dividend in
effect immediately prior to the record date for such payment
shall be proportionately decreased as of such record date. In
the case the shares of Class A Common Stock and Class B Common
Stock are subdivided into a greater number of shares or
combined into a smaller number of shares then the Additional
Dividend in effect
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<PAGE>
immediately prior to such subdivision or combination as the
case may be, shall be proportionately decreased or increased
as of the effective date of such division or combination. The
Company shall not pay any stock dividend on either class of
common stock and shall not combine or subdivide shares of
either class of common stock without at the same time paying
an equivalent stock dividend on or making an equivalent
combination or subdivision of shares of the other class of
common stock.
(2) Voting. The holders of shares of Class A Common
Stock shall have exclusive voting power prior to the issuance of shares
of Class B Common Stock and thereafter voting power shall be divided
between such classes as follows:
(A) With respect to the election of
directors, holders of Class B Common Stock voting as a
separate class shall be entitled to elect that number of
directors which constitutes 25% of the authorized number of
members of the Board of Directors and, if such 25% is not a
whole number, then the holders of Class B Common Stock shall
be entitled to elect the nearest higher whole number of
directors that is at least 25% of such membership. Holders of
Class A Common Stock voting as a separate class shall be
entitled to elect the remaining directors.
(B) The holders of the Class Common Stock
and the holders of the Class B Common Stock shall be entitled
to vote as separate classes on such other matters as may be
required by law or the Articles of Incorporation to be
submitted to such holders voting as separate classes.
(C) Any vacancy in the office of a director
elected by the holders of the Class A Common Stock may be
filled by a vote of such holders voting as a separate class
and a vacancy in the office of a director elected by the
holders of the Class B Common Stock may be filled by a vote of
such holders voting as a separate class or, in the absence of
a shareholder vote, in the case of a vacancy in the office of
a director elected by either class, such vacancy may be filled
by the remaining directors as provided in the Bylaws. Any
director elected by the Board of Directors to fill a vacancy
shall serve until the next Annual Meeting of Shareholders and
until his or her successor has been elected and has qualified.
If permitted by the Bylaws, the Board of Directors may
increase the number of directors and any vacancy so created
may be filled by the Board of Directors; provided that, so
long as the holders of shares of Class B Common Stock have the
rights provided in paragraphs (c)(2)(A) and (c)(2)(C) to vote
thereon shall be entitled to elect all of the Class A
directors of the corporation and in each such election of
directors of Class A directors each holder of Class A Common
Stock shall be entitled to one vote for each share of such
stock standing in the name of the holder on the books of the
corporation, and each holder of Class B Common Stock shall be
entitled to one-tenth vote for each share of such stock
standing in the name of the holder on the books of the
corporation.
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<PAGE>
(3) Conversion. Each holder of record of a share of
Class A Common Stock may at any time or from time to time, in such
holder's sole discretion and at such holder's option, convert any whole
number or all of such holder's shares of Class A Common Stock at the
rate of one share of Class B Common Stock for each share of Class A
Common Stock surrendered for conversion. Any such conversion may be
effected by any holder of Class A Common Stock by surrendering such
holder's certificate or certificates for the shares of Class A Common
Stock to be converted, duly endorsed, at the office of the Corporation
or any transfer agent for the Class B Common Stock, together with a
written notice to the Corporation at such office that such holder
elects to convert all or a specified number of such share of Class A
Common Stock. Promptly thereafter, the Corporation shall issue and
deliver to such holder a certificate or certificates for the number of
shares of Class B Common Stock to which such holder shall be entitled
as aforesaid. Such conversion shall be made at the close of business on
the date of such surrender and the person or persons entitled to
receive the shares of Class B Common Stock issuable on such conversion
shall be treated for all purposes as the record holder or holders of
such shares of Class B Common Stock on such date.
And it was further
"RESOLVED, that a Special Meeting
of Stockholders be held at the offices of
the Company located at 1151 N.W. 24th
Street, Pompano Beach, Florida, 33064 on
Tuesday, March 1, 1983 at 2:00 P.M. to
consider the adoption of said Amendment by
the Certificate of Incorporation."
Pursuant to notice, the meeting of Stockholders of the Corporation
called by the Board of Directors was held and the holders of a majority of the
outstanding shares entitled to vote thereon approved the aforesaid Articles of
Amendment to the Certificate of Incorporation.
IN WITNESS WHEREOF, the said Corporation has caused these Articles of
Amendment to the Certificate of Incorporation filed January 3, 1968 to be signed
in its name by its President and its corporate seal to be hereunto affixed and
attested to by its Secretary, this 1st day of March, 1983.
ORIOLE HOMES CORP.
By: /s/ Richard D. Levy
-----------------------
Richard D. Levy, President
ATTEST:
/s/ Antonio Nunez
-----------------
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<PAGE>
ANTONIO NUNEZ, Assistant Secretary
STATE OF FLORIDA )
) ss.:
COUNTY OF BROWARD )
I HEREBY CERTIFY that on this day before me, a Notary Public of the
State of Florida, duly qualified and acting, personally appeared RICHARD D.
LEVY, as President, and ANTONIO NUNEZ, as Secretary of ORIOLE HOMES CORP., to me
well known and being by me first duly sworn and cautioned, upon their oath
deposed and said that they acknowledged that they signed the above and foregoing
Articles of Amendment to the Certificate of Incorporation of ORIOLE HOMES CORP.
for the purpose therein set forth.
WITNESS my hand and official seal at the County and State aforesaid
this 1st day of March, 1983.
/s/ Dorothy E. Vaught
---------------------
Notary Public State of Florida at large
My Commission Expires: September 1, 1986
5
<PAGE>
ARTICLES OF MERGER OF
ORIOLE HOMES AT CAMBRIDGE, INC., A FLORIDA CORPORATION
INTO
ORIOLE HOMES CORP., A FLORIDA CORPORATION
The undersigned, Oriole Homes Corp., a Florida corporation (sometimes
hereinafter referred to as the "Surviving Corporation"), and Oriole Homes at
Cambridge, Inc., a Florida corporation ("Merging Corporation"), a wholly owned
subsidiary of the Surviving Corporation, hereby execute the following Articles
of Merger pursuant to Section 607.1105 Florida Statutes:
1. The Plan of Merger of Merging Corporation into the Surviving
Corporation that was approved by the Board of Directors of the Surviving
Corporation on August 21, 1995, in accordance with the provisions of Section
607.1104 Florida Statutes, is as follows:
Plan of Merger of
Oriole Homes at Cambridge, Inc.,
Into Oriole Homes Corp.,
a. The name of the corporation which will be the surviving corporation
in this merger is Oriole Homes Corp., a Florida corporation ("Surviving
Corporation"). The name of the corporation merging into the Surviving
Corporation is Oriole Homes at Cambridge, Inc., a Florida corporation
and wholly owned subsidiary of Oriole Homes Corp. ("Merging
Corporation").
b. The shares of the Merging Corporation shall be surrendered to the
Surviving Corporation for cancellation in consideration of the transfer
of the assets of the Merging Corporation to the Surviving Corporation,
and its assumption of the liabilities and obligations of the Merging
Corporation.
c. Shareholders of the Merging Corporation who, except for the
applicability of Section 607.1104, Florida Statutes, would be entitled
to vote and dissent from the merger pursuant to Section 607.1320,
Florida Statutes, may be entitled, if they comply with the provisions
of the Florida Business Corporation Act regarding the rights of
dissenting shareholders, to be paid the fair value of their shares.
2. The Articles of Incorporation and the Bylaws of the Surviving
Corporation shall not be changed by this merger.
3. The merger shall become effective upon the filing of these Articles
of Merger with the Florida Department of State.
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<PAGE>
4. Shareholder approval by the shareholders of the Surviving
Corporation an Merging Corporation was not required to approve the Plan of
Merger in accordance with the provisions of Section 607.1104, Florida Statutes.
5. The Board of Directors of the Surviving Corporation adopted the Plan
of Merger on August 21, 1995, in accordance with the provisions of Section
607.1104, Florida Statutes. The Board of Directors of the Merging Corporation
were not required to adopt the Plan of Merger.
Dated as of August 21, 1995.
ORIOLE HOMES CORP.
By: /s/ Mark A. Levy
--------------------
Mark A. Levy, President
ORIOLE HOMES AT CAMBRIDGE, INC.
By: /s/ Mark A. Levy
--------------------
Mark A. Levy, President
2
<PAGE>
CERTIFICATE OF EXECUTIVE COMMITTEE
OF
ORIOLE HOMES CORP.
The undersigned hereby certifies to the following:
1. He is the Secretary of the meeting of the Executive Committee
of the Board of Directors of Oriole Homes Corp., a Florida
corporation ("Corporation"), and as such, he is authorized,
among other things, to execute and deliver this Certificate on
behalf of the Executive Committee of the Board of Directors of
this Corporation.
2. The following Resolution of the Executive Committee of the
Board of Directors of the Corporation, adopted on August 21,
1995 by the Executive Committee of the Board of Directors of
the Corporation, is a true and correct copy of such
Resolution; such Resolution has not been amended, rescinded or
modified to any manner, are in full force and effect as of the
date hereof, and are not inconsistent with any provision in
the Corporation's Articles of Incorporation or Bylaws or any
other Resolution currently in effect.
IN WITNESS WHEREOF, the undersigned has hereunto act his hand and seal
for the purposes herein expressed.
Dated as of August 21, 1995.
/s/ Antonio Nunez
-----------------
Antonio Nunez, Secretary
<PAGE>
RESOLUTION OF
THE EXECUTIVE COMMITTEE OF
THE BOARD OF DIRECTORS OF
ORIOLE HOMES CORP.
A Special Meeting of the Executive Committee of the Board of Directors
of Oriole Homes Corp. (the "Corporation") was held telephonically on August 21,
1995, notice having been duly waived by all the members of the Executive
Committee of the Board of Directors pursuant to Florida Statutes 607.0823.
Present and voting throughout the meeting were the following Directors,
constituting the full membership of the Executive Committee:
Mark A. Levy
Richard D. Levy
Harry A. Levy
E. E. Hubshman
Antonio Nunez
The meeting was called to order by Mark A. Levy, who presided as
Chairman, and Antonio Nunez, acted as Secretary of the meeting.
The first order of business was to discuss and approve a Plan of Merger
of Oriole Homes at Cambridge into Oriole Homes Corp. as follows:
After discussion and upon motion duly made, seconded and carried, it
was unanimously:
RESOLVED, that the following Plan of Merger is hereby in all respects
approved and adopted:
Plan of Merger of
Oriole Homes at Cambridge, Inc.
Into Oriole Homes Corp.
1. The name of the corporation which will be the surviving corporation
in this merger is Oriole Homes Corp., a Florida corporation ("Surviving
Corporation"). The name of the corporation merging into the Surviving
Corporation is Oriole Homes at Cambridge, Inc., a Florida corporation and wholly
owned subsidiary of Oriole Homes Corp. ("Merging Corporation").
2. The shares of the Merging Corporation shall be surrendered to the
Surviving Corporation for cancellation in consideration of the transfer of the
assets of the Merging Corporation to the Surviving Corporation, and its
assumption of the liabilities and obligations of the Merging Corporation.
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<PAGE>
3. Shareholders of the Merging Corporation who, except for the
applicability of Section 607.1104, Florida Statutes, would be entitled to vote
and dissent from the merger pursuant to Section 607.1320, Florida Statutes, may
be entitled, if they comply with the provisions of the Florida Business
Corporation Act regarding the rights of dissenting shareholders, to be paid the
fair value of their shares.
FURTHER RESOLVED, that Mark A. Levy, the President of this Corporation,
or any other officer of this Corporation be, and each of them hereby is
authorized, empowered and directed to, execute and deliver, on behalf of this
Corporation, Articles of Merger ("Articles") to effectuate the aforesaid Plan of
Merger; and said President, or any other officer of this Corporation shall be
authorized, empowered and directed to enter into, execute and deliver any and
all documents and instruments and to take any and all actions necessary to close
or to conclude, on behalf of this Corporation, the transactions contemplated by
the Plan of Merger and Articles, and to expedite any and all of the covenants,
agreements, terms and conditions of the Plan of Merger and Articles; and the
approval of the Executive Committee of the Board of Directors and all corporate
power and authority for such actions shall be conclusively presumed by the
signature of any such officer.
There being no further business to discuss, the meeting was adjourned
on motion duly made, seconded and carried.
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<PAGE>
EXHIBIT 3.2
COMPOSITE BY-LAWS
OF
ORIOLE HOMES CORP.
Through February 29, 1992
ARTICLE XI.
1. Principal Office. The principal office shall be located in
the City of Delray Beach, County of Palm Beach and State of Florida.
2. Other Offices. The corporation may have other offices,
either within or outside the State of Florida, at such place or places as the
Board of Directors may from time to time determine.
ARTICLE XII.
1. Seal. The corporate seal shall be circular in form and
shall have inscribed thereon the name of the corporation, the year of its
incorporation and the words "Corporate Seal, Florida".
2. The Secretary of the corporation shall have the custody of
the corporate seal.
3. The seal may be used by causing it or a facsimile thereof
to be impressed or affixed or reproduced or otherwise.
ARTICLE XIII.
MEETING OF STOCKHOLDERS
-----------------------
1. Place of Meeting. All meetings of the stockholders shall be
held at the office of the corporation in the City of Delray Beach, State of
Florida, or at such other place as may be designated by the Board of Directors.
2. Annual Meetings. The Annual Meeting of Stockholders shall
be held no later than five (5) months after the close of each fiscal year on
such date as may be established by the Board of Directors. The Annual Meeting
shall be called by the Board of Directors for the purpose of electing Directors
for the ensuing year and for the transaction of such other general business of
the Corporation as may come before the meeting. At the Annual Meeting of
Shareholders, the
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<PAGE>
shareholders shall elect a Board of Directors by a plurality vote of the
stockholders present in person or by proxy at such meeting and entitled to vote.
3. Special Meetings. Special meetings of stockholders, for any
purpose other than those regulated by statute, may be called by the Board of
Directors or by the President of the corporation, or by the holders of not less
than one-tenth of all the shares entitled to vote at the meeting. Notice of and
all expenses relating to a Special Meeting of Shareholders, called by a
shareholder on his own initiative, shall be the sole responsibility and expense
of said shareholder. No business other than that specified in the Notice of
Special Meeting of Shareholders shall be transacted at any Special Meeting.
4. Notice. Notice of the annual meeting of stockholders shall
be mailed or otherwise given to each holder of record of the stock entitled to
vote thereat, at his address, as the same appears on the books of the
corporation, at least 10 days prior to such meeting. Such notice need not
specify the business to be transacted.
Written or printed notice of each special meeting of
stockholders, stating the place, day and hour of such meeting and business
proposed to be transacted thereat, shall be mailed, postage prepaid, or
otherwise given to each holder of record of the stock entitled to vote thereat,
at his address as the same appears on the books of the corporation, at least 10
days prior to such meeting.
Whenever any notice is required to be given under the
provisions of any law of this State or under the provisions of the Articles of
Incorporation of this corporation or by these By-Laws, waiver thereof in
writing, signed by the person or persons entitled to such notice, or by his or
their proxy or proxies, whether before or after the time fixed for the giving of
such notice, shall be deemed equivalent to such notice. If a person or persons
entitled to notice of a meeting shall attend such meeting, either in person or
by proxy, such attendance shall constitute a waiver of notice of the meeting,
except in case the attendance is for the express purpose of objecting to the
transaction of any business because the meeting shall not have been lawfully
called or convened.
5. Quorum. Except as otherwise required by law, by the
Certificate of Incorporation of this corporation, or by these By-Laws, the
presence, in person or by proxy, of stockholders entitled to cast a majority in
number of the aggregate number of votes to which Common Stock shall be entitled,
shall constitute a quorum of all meetings of the stockholders. In any case,
where the presence of the aforesaid number of the holders of Common Stock shall
be necessary to constitute a quorum, and if such number shall not be represented
at any meeting, the stockholders entitled to vote thereat, present in person or
by proxy, shall have the power to adjourn the meeting from time to time, without
notice other than announcement at the meeting, until the requisite amount of
voting stock shall be present. At any such adjourned meeting at which the
requisite amount of voting stock shall be present, any business may be
transacted which might have been transacted at the meeting as originally
scheduled.
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<PAGE>
6. Proxies. Any stockholders entitled to vote at any meeting
of stockholders may be represented and vote thereat by proxy appointed by an
instrument in writing subscribed by such stockholder and bearing a date not more
than three months prior to such meeting, unless such proxy shall, on its face,
provide a longer period in which it is to remain in force.
7. Vote by Ballot. The Secretary shall prepare at least 10
days prior to each election of directors, a complete list of the stockholders
entitled to vote, arranged in alphabetical order, with the residence of and the
number of voting shares held by each stockholder, which shall be open for the
examination of any stockholder, at the place where said election is to be held,
for 10 days prior to such election, and shall be kept available for the
inspection by any stockholder during the whole time of the election.
ARTICLE XIV.
DIRECTORS
---------
1. Powers. The Board of Directors shall exercise all of the
powers of the Corporation except such as are by law or by the Certificate of
Incorporation of this Corporation, or by these By-Laws conferred upon or
reserved to the stockholders.
2. Numbers. The Board of Directors shall be elected by the
stockholders and shall be not more than 9 nor less than 3 in number. The Board
of Directors, between the annual meetings of stockholders is authorized by the
vote of the majority thereof to increase the number of Directors to not more
than the above mentioned number and the Directors by a majority vote shall have
the power to fill the vacancies created by any such increases.
3. Term of Offices. Except as otherwise provided in the
Certificate of Incorporation of this Corporation, each Director shall be elected
to serve until the next annual meeting of stockholders and until his successor
is chosen and qualified. In case one or more vacancies shall occur in the Board
of Directors, the remaining Directors, although less than a quorum, may, by a
majority vote, elect a successor or successors for the unexpired term or terms.
4. Removal. At any special meeting of the stockholders duly
called, as provided in these By-Laws, any Directors may, by a vote of a majority
of all the shares of stock outstanding and entitled to vote, be removed from
office with or without cause, and his successor or their successors may be
elected at such meeting, or the remaining directors may, in the absence of such
election, fill any vacancies created by such removal.
5. Meetings. The newly elected Board of Directors may meet in
such place and time as shall be fixed by the vote of the holders of the Common
stock at the annual meeting, for the purpose of organization or otherwise, and
no notice of each meeting shall be necessary to the newly elected Directors in
order to legally constitute the meeting, provided a majority shall be present;
or it may meet at such place and time as shall be fixed by the consent in
writing of all the Directors. Regular meetings of the Board of Directors may be
held without notice at such time and place as
5
<PAGE>
shall be from time to time determined by the Board of Directors. Special
meetings of the Board of Directors may be called by the Chairman of the Board,
by the President of the Corporation, or by any two Directors of the Corporation.
Written notice of the time and place of Special Meetings of the Board of
Directors shall be given to each director either by personal delivery or by mail
at least two days in advance, or by telegram or cablegram to each director at
least one day in advance of the meeting. The time of such notice shall commence
when the telegram or cablegram reaches the sending office of the telegraph or
cable company. The Notice of Special Meeting of the Board of Directors shall
specify the time and place of such meeting. Neither the business to be
transacted, nor the purpose of, any Special Meeting of the Board of Directors
need be specified in the notice or waiver of notice of such meeting.
6. Place of Meeting. The Board of Directors may hold its
meetings and have one or more offices and keep the books of the Corporation
(except such as are required by law to be kept within the State of Florida)
either within or outside of the State of Florida, at such place or places as it
may from time to time determine.
7. Quorum and Powers of a Majority. At all meetings of the
Board of Directors, a majority of the Directors shall be necessary and
sufficient to constitute a quorum for the transaction of business, and the act
of majority of the Directors present at any such meeting at which a quorum is
present shall be the act of the Board of Directors, except as specifically
required by statute or by the Certificate of Incorporation of this Corporation
or by these By-Laws.
ARTICLE XV.
EXECUTIVE COMMITTEE
-------------------
1. Powers. The Board of Directors may designate 2 or more of
their number, including the President, to constitute an Executive Committee to
serve during the pleasure of the Board of Directors. The Board of Directors is
authorized to remove at any time, without notice, any member of the Executive
Committee, and elect another member in his place and stead.
The Board of Directors may delegate to such Committee any or
all of the powers of the Board of Directors in the management of the business
and affairs of the Corporation and may from time to time extend, modify, curtail
or restrict the powers so delegated. During the temporary absence of a member of
the Executive Committee, the remaining member or members may appoint a member of
the Board of Directors to act in his place, but vacancies in the membership of
the Executive Committee shall be filled by the Board of Directors at a regular
meeting or at a special meeting called for the purpose.
2. Meetings. The Executive Committee may meet at stated timed,
on not less than 1 day's notice given personally or mailed or telegraphed to all
by any one of their own number. During the intervals between meetings of the
Board of Directors, the Executive Committee shall
6
<PAGE>
advise with and aid the officers of the Corporation in all matters concerning
the interest and management of its business.
3. Minutes. The Executive Committee shall keep regular minutes
of its proceedings and report the same to the Board of Directors when requested.
4. Chairman of the Executive Committee. The Chairman of the
Executive Committee shall preside at all meetings of the Executive Committee.
The Chairman of the Executive Committee shall possess the same power as the
President to sign all certificates and contracts and other instruments of the
Corporation which may be authorized by the Board of Directors.
5. Vice Chairman of the Executive Committee. The Vice Chairman
shall preside at a meeting of the Executive Committee in the absence of the
Chairman of the Executive Committee. The Vice Chairman of the Executive
Committee shall possess the same power as the President to sign all certificates
and contracts and other instruments of the Corporation which may be authorized
by the Board of Directors.
ARTICLE XVI.
OFFICERS
--------
1. Election. The officers of the Corporation shall be a
Chairman of the Board, a President, one or more Vice-Presidents, a Treasurer, a
Secretary, and, if desired, one or more Assistant Secretaries and Assistant
Treasurers, all of whom shall be elected by the said Board of Directors. None of
the officers, except the Chairman of the Board, need be a Director. The officers
shall be elected at the first meeting of the Board of Directors after each
annual meeting.
2. Hold Two Offices. Any two or more of the above offices,
except those of President and Vice-President, and of Secretary and President,
may be held by the same person, but no officer shall execute, acknowledge or
verify any instrument in more than one capacity, if such instrument is required
by law or by these By-Laws to be executed, acknowledged or verified by any two
or more officers.
3. Term of Office. The officers hereinbefore mentioned shall
hold office for one year or until their successors are chosen and qualified. Any
vacancy occurring among the officers shall be filled by the Board of Directors,
but the person so elected to fill the vacancy shall hold office only until the
first meeting of the Board of Directors after the next annual meeting of
stockholders and until his successor is chosen and qualified.
4. Agents. The Board of Directors may appoint such agents as
it may deem necessary, who shall hold their offices for such terms and shall
exercise such powers and perform such duties as shall be determined from time to
time by the Board of Directors.
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5. Salaries. The salaries of all officers and agents of the
Corporation shall be fixed by the Board of Directors.
6. Removal. Any officer chosen by the Board of Directors may
be removed at any time by the affirmative vote of a majority of the Board of
Directors, with or without cause.
7. Voting Shares in Other Corporations. The Corporation may
vote any and all shares held by it in any other Corporation or Corporations by
such officer, agent or proxy as the Board of Directors may appoint, or, in
default of such appointment, by its President or by a Director or
Vice-President.
ARTICLE XVII.
CHAIRMAN OF THE BOARD
---------------------
1. Chairman of the Board. The Chairman of the Board shall
preside at all meetings of the stockholders and Board of Directors. The Chairman
shall possess the same power as the President to sign all certificates and
contracts and other instruments of the Corporation which may be authorized by
the Board of Directors.
The Chairman of the Board shall be the chief executive officer
and all other officers of the Corporation shall be subordinate to him and shall
from time to time report to him as he may direct. He shall have general
supervision and direction of the business of the Corporation and shall see that
all orders and resolutions of the board of Directors are carried into effect. He
shall have all the general powers and duties usually vested in the chief
executive officer of a Corporation.
2. Vice Chairman of the Board. The Vice Chairman of the Board
shall preside at meetings of the stockholders and of the Board of Directors in
the absence of the Chairman of the Board. The Vice Chairman shall possess the
same power as the President to sign all certificates and contracts and other
instruments of the Corporation which may be authorized by the Board of
Directors.
ARTICLE XVIII.
PRESIDENT
---------
1. The President, in the absence of the Chairman of the Board
and Vice Chairman of the Board, shall preside at meetings of the stockholders
and Board of Directors. He shall supervise the day-to-day operations of the
Corporation, shall sign and countersign all certificates, contracts or other
instruments of the Corporation, as authorized by the Board of
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Directors. He shall make reports to the Board of Directors and stockholders and
shall perform any other duties are incident to his office or prescribed by the
Board of Directors.
2. He, or any officer of the Corporation so authorized by the
Board of Directors, shall execute bonds, mortgages, and other contracts on
behalf of the Corporation and shall affix the seal to any instruments requiring
it and when so affixed, the seal shall be attested by the signature of the
secretary or treasurer or any other officer authorized to do so by the Board of
Directors.
ARTICLE XIX.
VICE PRESIDENT
--------------
1. The Vice-Presidents, in the order of their seniority, shall
have and exercise all the powers and duties of the President in case of his
absence or inability to act when requested to do so by the Board of Directors,
and shall possess such other powers as shall be assigned to them by the Board of
Directors or by the President with the approval of the Board of Directors. The
Board of Directors shall also determine the ordering which the Vice Presidents
shall assume the authority of the President in his absence.
ARTICLE XX.
TREASURER
---------
1. Custody of Funds. The Treasurer shall have the custody of
the corporate funds and securities, and shall keep full and accurate account of
receipts and disbursements in books belonging to the Corporation. He shall
deposit all moneys and other valuables in the name and to the credit of the
Corporation in such depositories as may be designated by the Board of Directors.
2. Disbursements. The Treasurer shall disburse the funds of
the Corporation as may be ordered by the Board of Directors, taking proper
vouchers for such disbursements. He shall render to the President and Directors
at the regular meetings an account of all his transactions as Treasurer and of
the financial condition of the Corporation.
3. Bond. He shall give the Corporation a bond if required by
the Board of Directors, in a sum and with one or more securities satisfactory to
the Board of Directors, for the faithful performance of the duties of his office
and for the restoration to the Corporation in case of his death, resignation,
retirement or removal from office of all books, papers, vouchers, moneys and
other property of whatever kind in his possession or under his control belonging
to the Corporation.
4. Assistant Treasurer. The Assistant Treasurer shall perform
all the duties and responsibilities of the Treasurer on such occasion on which
the Treasurer shall be unable to perform
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all the duties of the office and shall perform all other duties and exercise all
other powers as shall be assigned to im by the Board of Directors or by the
President or the Treasurer.
ARTICLE XXI.
SECRETARY
---------
1. The Secretary shall attend all meetings of the Board of
Directors and all meetings of the stockholders and shall record all votes and
the minutes of all proceedings in a book to be kept for that purpose and shall
perform like duties for the standing committees when required. He shall give or
cause to be given notice of all meetings of the stockholders and of the Board of
Directors, and he shall keep the seal of the Corporation in safe custody. He
shall perform such other duties as may be prescribed by the Board of Directors
or by the President under whose supervision he shall be.
2. Assistant Secretary. The Assistant Secretary shall perform
all the duties and responsibilities of the Secretary on such occasions on which
the Secretary shall be unavailable to perform the duties of the office and shall
perform all other duties and exercise all other powers as shall be assigned him
by the Board of Directors or by the President or the Secretary.
ARTICLE XXII.
DUTIES OF OFFICERS MAY BE DELEGATED
-----------------------------------
In case of the absence or disability of any officer of the Corporation,
or for any other reason that the Board of Directors may deem sufficient, the
Board of Directors, by majority vote, may delegate for that time being the
powers or duties or any of them of such officer to any other officer or to any
Director or to any other person.
ARTICLE XXIII.
CERTIFICATES OF STOCK
---------------------
1. The interest of each stockholder of the Corporation shall
be evidenced by certificates of shares of stock, certifying the number of shares
represented thereby and in such form as is consistent with the Articles of
Incorporation and as the Board of Directors may from time to time prescribe.
2. The certificates of stock shall be signed by the President
or a Vice-President and by the Secretary or an Assistant Secretary, and sealed
with the corporate seal of the Corporation. Such seal may be a facsimile,
engraved or printed. Where any certificate is manually signed by a
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transfer agent or a transfer clerk and registrar, the signature of the President
or a Vice-President and the Secretary or an Assistant Secretary, upon such
certificate may be facsimiles, engraved or printed. In case any officer who has
signed or whose facsimile signature has been placed upon any certificate, shall
have ceased to be such officer before the certificate is issued, it may be
issued by the Corporation with the same effect as if such officer had not ceased
to be such at the time of its issue.
3. The certificates of stock of the Corporation shall be
numbered and shall be entered in the books of the Corporation as they are
issued. They shall exhibit the holder's name and certify the number of shares
owned by him and shall be signed by the President or a Vice-President and by the
Secretary of the Corporation and sealed with the seal.
ARTICLE XXIV.
TRANSFER OF STOCK
-----------------
1. Transfers of shares of stock of the corporation shall be
made only on the books of the Corporation by the registered owner thereof, or by
his duly authorized attorney, or with a transfer agent appointed as provided in
Sec. (2) of this Article of the By-Laws, and on surrender of the certificate, or
certificates for such shares properly endorsed and with all taxes thereon paid.
2. The Board of Directors may appoint one or more transfer
agents and one or more registrars, and may require all certificates for shares
to bear the signature or signatures of any of them.
ARTICLE XXV.
INDEBTEDNESS OF STOCKHOLDERS
----------------------------
The Corporation shall have a first lien on all the shares of its
capital stock and upon all dividends declared upon the same for any sum due to
the Corporation, either on account of the subscription to its stock or for any
other indebtedness due from the stockholder.
ARTICLE XXVI.
CLOSING OF TRANSFER BOOKS
-------------------------
The Board of Directors shall have power to close the stock transfer
books of the Corporation for a period not exceeding sixty (60) days preceding
the date of any meeting of stockholders, or the date for payment of any
dividend, or the date for the allotment of rights, or the date when any change
or conversion or exchange of capital stock shall go into effect; provided,
however, that in lieu of closing the stock transfer books as aforesaid, the
Board of Directors are authorized to fix in advance
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a date, not exceeding the date for the payment of any dividend, or the date for
the allotment of rights, or the date when any change or conversion or exchange
of capital stock shall go into effect, as a record date for the determination of
the stockholders entitled to notice, and to vote at any such meeting, or
entitled to receive payment of any such dividend, or to any such allotment of
rights, or to exercise the rights in respect of any change, conversion or
exchange of capital stock, and in such case only such stockholders as shall be
stockholders or record on the date so fixed shall be entitled to notice of, and
to vote at, such meeting, or to receive payment of such dividend, or to receive
such allotment of rights, or to exercise such rights, as the case may be
notwithstanding any transfer of any stock on the books of the Corporation after
such record date fixed as aforesaid.
ARTICLE XXVII.
REGISTERED STOCKHOLDERS
-----------------------
The Corporation shall be entitled to treat the holder of record of any
share or shares of stock as the holder in fact thereof and shall not be bound to
recognize any equitable or other claims to or interest in such share or shares
on the part of any other person, whether or not it shall have express or other
notice thereof, save expressly provided by the laws of the State of Florida.
ARTICLE XXVIII.
LOST CERTIFICATES
-----------------
No certificate for shares of stock in the Corporation shall be issued
in place of any certificate alleged to have been lost, destroyed or stolen,
except on production of evidence satisfactory to the Board of Directors of such
loss, destruction of theft and, if the Board of Directors so requires, upon the
furnishing of bond satisfactory to the corporation and to the transfer agent, if
any, in such sum as the Board of Directors may direct as indemnity against any
claim that may be made against the Corporation or the transfer agent, if any,
with respect to the certificate alleged to have been lost, destroyed or stolen
before a new certificate may be issued with the same tenor for the same number
of shares as the one alleged to have been lost, destroyed or stolen.
ARTICLE XXIX.
INSPECTION OF BOOKS
-------------------
The Board of Directors shall determine from time to time whether, and
if allowed, when and under what conditions and regulations the accounts and
books of the Corporation (except such as may be statute be specifically open to
inspection), or any of them, shall be open to the inspection of the stockholders
and the stockholders' rights in this respect are and shall be restricted and
limited accordingly.
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ARTICLE XXX.
CHECKS, ETC.
------------
All checks, drafts, acceptances, notes and other orders, demands, or
instruments in respect to the payment of money, shall be signed or endorsed in
behalf of the Corporation by the President and Secretary or by any other
officers whom the Board of Directors may from time to time designate.
ARTICLE XXXI.
FISCAL YEAR
-----------
The fiscal year of the Corporation shall begin January 1, and end on
December 31 next following.
ARTICLE XXXII.
DIVIDENDS
---------
Dividends upon the capital stock of the Corporation may be declared at
the discretion of the Board of Directors, subject to the provisions of the
Certificate of Incorporation, at any regular or special meeting.
ARTICLE XXXIII.
NOTICES
-------
Whenever notice is required to be given by the Certificate of
Incorporation or by these ByLaws it shall not be construed to mean personal
notice, but such notice, except as otherwise provided by law or by these
By-Laws, may be given by depositing the same in a post office, letter box or
mail chute, in a postpaid sealed wrapper addressed to the stockholder, officer
or director, as the case may be, at such address as appears on the books of the
Corporation.
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ARTICLE XXXIV.
AMENDMENTS
----------
These By-Laws may be altered, amended or repealed by the affirmative
vote of the holders of a majority of the outstanding voting shares of the
Corporation at any regular or special meeting of the stockholders, if notice of
the proposed alteration, amendment or repeal be contained in the notice of the
meeting, or by the affirmative vote of a majority of the Board of Directors, at
any regular or special meeting; provided however, that no change of the time or
place for the election of Directors shall be made within ten days before the day
on which such election is to be held that, in case of any change of such time or
place, notice thereof shall be given to each stockholders entitled to vote for
any director or directors in person or by letter mailed to his last known post
office address at least ten days before such election is held.
ARTICLE XXXV.
INDEMNIFICATION
---------------
For purposes of this Article XXV, the following terms shall have the
meanings hereafter ascribed to them:
"Agent" includes a volunteer.
"Corporation" includes, as the context may require, Oriole Homes Corp.,
any resulting Corporation and any constituent Corporation absorbed in a
consolidation or merger, so that any person who is or was a director, officer,
employee, or Agent of a constituent Corporation, or is or was serving at the
request of a constituent Corporation as a director, officer, employee or Agent
of another Corporation, partnership, joint venture, trust or other enterprise,
is in the same position with respect to the resulting or surviving Corporation
as he would have been with respect to such constituent Corporation of its
separate existence had continued.
"Expenses" include, without limitations, all costs, expenses,
attorneys' fees and paralegal expenses incurred by the director or officer in,
for or related to the Proceeding or in connection with investigating, preparing
to defend, defending, being a witness in or participating in the proceeding,
including such costs, expenses, attorneys' fees and paralegal expenses incurred
on appeal. Such attorneys' fees shall include, without limitation (a) attorneys'
fees incurred by the director or officer, in any and all judicial or
administrative proceedings, including appellate proceedings, arising out of or
related to the proceedings; (b) attorneys' fees incurred in order to interpret,
analyze or evaluate that person's rights and remedies in the proceedings or
under any contracts or obligations which are the subject of such Proceeding; and
(c) attorneys' fees to negotiate with counsel for any claimants, regardless of
whether formal legal action is taken against him.
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"Liability" includes obligations to pay a judgment, settlement,
penalty, fine (including an excise tax assessed to any employee benefit plan),
and Expenses actually and reasonably incurred with respect to a proceeding.
"Not Opposed to the Best Interest of the Corporation" describes the
actions of a person who acts in good faith and in a manner he reasonably
believes to be in the best interest of the Corporation or the participants and
beneficiaries of an employee benefit plan, as the case may be.
"Other Enterprise" includes employee benefit plans.
"Proceeding" includes any threatened, pending, or completed action,
suit, or other type of proceeding, whether civil, criminal, administrative, or
investigative and whether formal or informal to which the person is a party by
reason of the fact that he is or was a director or officer of the Corporation or
is not or was Serving at the Request of the Corporation as a director, officer,
employee, or Agent of another Corporation, partnership, joint venture, trust or
Other Enterprise.
"Serving at the Request of the Corporation" includes any service as a
director, officer, employee or Agent of the Corporation that imposes duties on
such persons, including duties relating to an employee benefit plan and its
participants or beneficiaries.
1. The Corporation shall indemnify to the fullest extent
permitted by law, and shall advance Expenses therefor, to any director officer
who was or is a party to any proceeding, against Liability incurred in
connection with such proceeding, including any appeal thereof; provided,
however, that no indemnification under this Section 1 shall be made
(1) if a judgment or other final adjudication
establishes that the person's actions or omissions to act were
material to the cause of action adjudicated and such actions
or omissions constitute:
(a) A violation of the criminal law, unless
the director or officer had reasonable cause to
believe his conduct was lawful or had no reasonable
cause to believe his conduct was unlawful;
(b) A transaction from which the director or
officer derived an improper personal benefit;
(c) In the case of a director, a
circumstance under which the Liability provisions of
Fla. Stat. ss.607.0850 are applicable; or
(d) Willful misconduct or a conscious
disregard for the best interests of the Corporation
in a Proceeding by or in the right of the Corporation
to procure a judgment in its favor in a proceeding by
or in the right of a shareholder.
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(2) Unless authorized in the specific case:
(a) By the board of directors by a majority
vote of a quorum consisting of directors who were not
parties to such Proceedings;
(b) If such a quorum is not obtainable or,
even if obtainable, by majority vote of a committee
duly designated by the board of directors (in which
directors who are parties may participate) consisting
solely of two or more directors not at the time
parties to the Proceeding;
(c) by independent legal counsel;
(i) Selected by the board of
directors prescribed in paragraph B.(1) or
the committee prescribed in paragraph B.(2);
or
(ii) If a quorum of the directors
cannot be obtained for paragraph B.(1) and
the committee cannot be designated under
paragraph B.(2) selected by majority vote of
the full board of directors (in which
directors who are parties may participate);
or
(d) By the shareholders by a majority vote
of a quorum consisting of shareholders who were not
parties to such Proceeding or, if no such quorum is
obtainable, by a majority vote of shareholders who
were not parties to such proceeding.
(3) Upon a determination that:
(a) in a Proceeding other than an action by,
or in the right of, the Corporation, the person acted
in good faith and in a manner he reasonably believed
to be in, or Not Opposed to, the Best Interests of
the Corporation and, with respect to any criminal
action or Proceeding, had no reasonable cause to
believe his conduct was unlawful.
(b) in a Proceeding by, or in the right of,
the Corporation to procure a judgment in its favor,
the person acted in good faith and in a manner he
reasonably believed to be in, or Not Opposed to, the
Best Interests of the Corporation; provided, further,
that the parties described in Sections 1.B(1)-(4)
shall not authorize any indemnification is such a
Proceeding if the person has been adjudged to be
liable therein. The foregoing proviso shall not
preclude or limit indemnification under the mandatory
indemnification provision of Section 1. or as
directed by the court pursuant to Section.
(c) For purposes of making the
determinations set forth in C.(1) and C.(2) above,
the fact that a Proceeding was terminated by a
judgment,
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order, settlement or conviction or upon a plea of no
contendere or its equivalent shall not, of itself,
create a presumption that the person did not act in
good faith and in a manner which he reasonably
believed to be in, or Not Opposed to, the Best
Interests of the Corporation or, with respect to any
criminal action or Proceeding, that the person had
reasonable cause to believe that his conduct was
unlawful.
2. In all events, and notwithstanding the conditions and
qualifications set forth in Section 1. above, the Corporation shall indemnify a
director or officer who has been successful on the merits or otherwise in
defense of any Proceeding or in defense of any claim, issue, or matter therein,
against Expenses actually and reasonably incurred by him in connection
therewith.
3. Notwithstanding the failure of the Corporation to provide
indemnification due to a failure to satisfy the conditions of Section
1.A.(1)-(4), and despite any contrary determination of the board or of the
shareholders in the specific case, a director or officer of the shareholders in
the specific case, a director or officer of the Corporation who is or was a
party to a Proceeding may apply for indemnification or advancement of Expenses,
or both, to the court conducting the proceeding, to the circuit court, or to
another court of competent jurisdiction, and such court may order
indemnification and advancement of Expenses, including Expenses incurred in
seeking court-ordered indemnification or advancement of Expenses, if it
determines that:
(1) The director or officer is entitled to mandatory
indemnification under Section 2.1, in which case the court
shall also order the Corporation to pay such person reasonable
Expenses incurred in obtaining court-ordered indemnification
or advancement of Expenses.
(2) The director or officer is entitled to
indemnification or advancement of Expenses, or both, under 1.;
or
(3) The director or officer is fairly and reasonably
entitled to indemnification or advancement of Expenses, or
both, in view of all the relevant circumstances, regardless of
whether such person met the standards of conduct set forth in
Section 1.A.(1)-(4) or Section 1.B.(1)-(4).
4. If a judgment or other final adjudication establishes that
the person's actions or omissions to act were material to the cause of action
adjudicated and such actions or omissions constitute a violation of the
standards set forth in Section 1.A.(1)-(4), then the Corporation shall cause one
or more of the meetings described in Section 1.B.(1)-(4) to be held for the
purpose of determining and authorizing indemnification.
5. Expenses incurred by an officer or director in defending a
civil or criminal Proceeding may be paid by the Corporation in advance of the
final disposition of such Proceeding upon receipt of an undertaking by or on
behalf of such director or officer to repay such amount if he is ultimately
found not to be entitled to indemnification by the Corporation pursuant to this
Article.
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6. Indemnification and advancement of Expenses as provided in
this Article shall continue as, unless otherwise provided when such
indemnification and advancement of Expenses was authorized or ratified, to a
person who has ceased to be a director or officer and shall inure to the benefit
of their heirs, executors and administrators of such person.
7. The Corporation shall have the power to purchase and
maintain insurance on behalf of any person who is or was a director, officer,
employee, or Agent of the Corporation or is or was serving at the request of the
Corporation as a director, officer, employee, or Agent of another Corporation,
partnership, joint venture, trust, or other enterprise against any liability
asserted against him and incurred by him in any such capacity or arising out of
his status as such, whether or not the Corporation would have the power to
indemnify him against such liability under the provisions of this Article XXV.
8. If any Expenses or other amounts are paid by way of
indemnification other than by court order or action by the shareholders or by an
insurance carrier pursuant to insurance maintained by the Corporation, the
Corporation shall, not later than the time of delivery to the shareholders of
written notice of the next annual meeting of shareholders, unless such meeting
is held within 3 months from the date of such payment, and, in any event, within
15 months from the date of such payment, deliver either personally or by mail to
each shareholder of record at the time entitled to vote for the election of
directors a statement specifying the persons paid, the amounts paid, and the
nature and status at the time of such payment of the litigation or threatened
litigation.
9. The board of directors may authorize indemnification or
advancement of expenses in favor of other employees and Agents upon such terms
and conditions as the board of directors may seem appropriate under the
circumstances, and may enter into agreements therefor with such employees and
Agents.
10. The rights of an officer or director, employee or Agent
hereunder shall be in addition to any other rights such person may have under
the Corporation's Articles of Incorporation or the Florida General Corporation
Act or otherwise, and nothing herein shall be deemed to diminish or otherwise
restrict such person's right to indemnification under any such other provision.
It is the intent of this By-Law to provide the maximum indemnification possible
under the applicable law. To the extent applicable law or the Articles of
Incorporation of the Corporation, as in effect on the date hereof or at any time
in the future, permit greater indemnification than is provided in this ByLaw,
the parties hereto agree that Indemnitee shall enjoy by this Agreement the
greater benefits so afforded by such law or provision of the Articles of
Incorporation, and this By-Law and the exceptions to indemnification set forth
in Section 1A., to the extent applicable, shall be deemed amended without any
further action by the Corporation to grant such greater benefits.
11. This Article XXV shall be interpreted to permit
indemnification to the fullest extent permitted by law. If any part of this
Article shall be found to the invalid or ineffective in any action, suit or
proceeding, the validity and effect of the remaining part thereof shall not be
affected.
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The provisions of this Article XXV shall be applicable to all Proceedings
commenced after the adoption hereof, whether arising from acts or omissions
occurring before or after its adoption.
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EXHIBIT 10.2
FIRST AMENDMENT TO LEASE AGREEMENT
----------------------------------
This First Amendment to Office Lease (the "Amendment") is made as of
the 30th day of April, 1997, by and between ARBORS ASSOCIATES, LTD., a Florida
limited partnership (the "Landlord") and ORIOLE HOMES CORP., a Florida
corporation (the "Tenant").
RECITALS
--------
I. Landlord and Tenant entered into that certain Office Lease dated May
10, 1991 (the "Lease") with respect to office space at 1690 South Congress
Avenue, Delray Beach, Florida.
II. Landlord and Tenant are desirous of amending and modifying the
Lease on the terms and conditions set forth in this Amendment.
NOW, THEREFORE, in consideration of the foregoing, the mutual covenants
and conditions contained in this Amendment and other good and valuable
considerations, the receipt and sufficiency of which are acknowledged, the
parties to this Amendment, intending to be legally bound, agree to amend the
Lease as follows:
I . Incorporation of Recitals. The parties warrant and represent that
the foregoing recitals are accurate and correct and incorporate them in this
Amendment. Capitalized terms used but not otherwise defined in this Amendment
shall have the same meanings given to such terms in the Lease, unless otherwise
specifically indicated or unless the context clearly indicates to the contrary.
2. The Term is extended for an additional sixty (60) calendar months,
commencing January 1, 1998, and expiring December 31, 2002. "Extension Term", as
used in this Amendment, shall mean the sixty (60) month Lease Term commencing
January 1, 1998.
3. Deletion Space Commencement Date. The "Deletion Space Commencement
Date" is August 31, 1997.
4. Deletion of Space. (a) Effective upon the Deletion Space
Commencement Date, the space delineated on EXHIBIT "A" attached to this
Amendment and made a part of this Amendment (the "Deletion Space") shall be
deleted from the Premises. The Rentable Area of the Deletion Space is 2,832
rentable square feet and the Rentable Area of the Premises after deletion of the
Deletion Space is 19,655 rentable square feet (the "Remaining Space"). These
square footage amounts constitute a material part of the economic basis of this
Amendment and the Lease and the consideration to Landlord in entering into this
Amendment and shall not be adjusted without the mutual agreement of Landlord and
Tenant. From and after the Deletion Space Commencement Date,
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whenever the term Premises is used in the Lease, or this Amendment, such term
shall refer to the remaining 19,655 rentable square feet of space.
(b) On or prior to the Deletion Space Commencement Date, Tenant shall
vacate the Deletion Space and surrender possession of the Deletion Space to
Landlord in accordance with the provisions of the Lease, as if the Deletion
Space Commencement Date was the original expiration date of the Lease Term as to
the Deletion Space, and Tenant shall execute any documents reasonably required
by Landlord in connection with the deletion. Tenant shall deliver exclusive
possession of the Deletion Space to Landlord: (i) broom clean and vacant of any
and all of the Tenant Property; (ii) with the construction of the demising walls
substantially completed; and (iii), with all building systems (such as HVAC,
electrical, and plumbing) and utilities fully installed so that they service
both the Deletion Space and the Remaining Space.
(c) Tenant shall separate the Deletion Space from the Remaining Space,
by, including, but not limited to, installing demising walls and separating all
building systems and utilities servicing the Premises so that both the Remaining
Space and the Deletion Space are separately usable as independent premises. All
other provisions of the Lease shall be deemed to be appropriately modified to
reflect the deletion of the Deletion Space from the Premises. Otherwise, the
Remaining Space shall continue to be leased pursuant to all the applicable
terms, covenants, and conditions of the Lease.
5. Tenant Improvements. (a) Tenant is currently in possession of the
Premises, is fully familiar with the physical condition of the Premises, and
shall accept the Premises for the Extension Term in its existing "as is," "where
is," and "with all faults" condition, subject to Landlord's maintenance and
repair obligations as set forth in the Lease.
(b) Tenant shall, at its sole cost and expense, perform all work
necessary or desirable in connection with the deletion of the Deletion Space
from the Premises and Tenants continuing occupancy of the Remaining Space (the
"Tenant Improvements"). Within twenty-one (21) days after the date of this
Amendment, Tenant shall furnish to Landlord, for Landlord's written approval, a
permit set (final construction drawings) of plans and specifications for the
Tenant Improvements (the "Plans"). The Plans shall include the following: fully
dimensioned architectural plan; electric/telephone outlet diagram; reflective
ceiling plan with light switches; mechanical plan; furniture plan; electric
power circuitry diagram; plumbing plans; all color and finish selections; all
special equipment and fixture specifications; and fire sprinkler design
drawings.
(c) The Plans will be prepared by a licensed architect and the
electrical and mechanical plans will be prepared by a licensed professional
engineer. The architect and engineer will be subject to Landlord's approval,
which shall not be unreasonably withheld. The Plans shall comply with all
applicable laws, ordinances, directives, rules, regulations, and other
requirements imposed by any and all governmental authorities having or asserting
jurisdiction over the Premises. Landlord shall review the Plans and either
approve or disapprove them, in Landlord's sole discretion, within five (5)
business days of receipt. Should Landlord disapprove them, Tenant shall make any
necessary modifications and resubmit the Plans to Landlord in final form within
ten (10) days following receipt
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of Landlord's disapproval of them. The approval by Landlord of the Plans or the
supervision by Landlord of any work performed an behalf of Tenant shall not: (i)
imply Landlord's approval of the Plans as to quality of design or fitness of any
material or device used; (ii) imply that the Plans and specifications are in
compliance with any codes or other requirements of governmental authority (it
being agreed that such compliance is solely Tenants responsibility); or (iii)
impose any liability on Landlord to Tenant or any third party. The Tenant
Improvements shall be constructed by a general contractor selected and paid by
Tenant. Tenant shall cooperate as reasonably necessary so that its general
contractor will cause the Tenant Improvements to be completed promptly and with
due diligence. The Tenant Improvements shall be performed in accordance with the
Plans and shall be done in a good and workmanlike manner using new materials.
All such work shall be done in compliance with all other applicable provisions
of the Lease and with all applicable laws, ordinances, directives, rules,
regulations, and other requirements of any governmental authorities having or
asserting jurisdiction over the Premises. Prior to the commencement of any work
by Tenant, Tenant shall furnish to Landlord certificates evidencing the
existence of builder's risk, comprehensive general liability, and workers
compensation insurance complying with the requirements set forth in the
Insurance section of the Lease. Any damage to any part of the Building which
occurs as a result of the Tenant Improvements shall be promptly repaired by
Tenant.
d) Tenant shall also insure compliance with the following requirements
concerning construction:
i. Tenant and all construction personnel shall abide by
Landlord's reasonable job site rules and regulations and fully cooperate with
Landlord's construction representatives in coordinating all construction
activities in the Building, including, but not limited to, reasonable rules and
regulations concerning working hours, parking, and use of the construction
elevator.
ii. All transportation of construction materials shall be on
the padded construction elevator only.
iii. Tenant shall be responsible for cleaning up any refuse or
other materials left behind by construction personnel at the end of each work
day.
iv. Tenant shall deliver to Landlord all forms of approval
provided by the appropriate local governmental authorities to certify that the
Tenant Improvements have been completed and the Premises are ready for
occupancy, including, but not limited to, a final, unconditional certificate of
occupancy.
v. Upon completion of the Tenant Improvements, Tenant's
general contractor shall review the Premises with Landlord and Tenant.
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6. Fixed Annual Rent. The Fixed Annual Rent (stated monthly and
excluding sales tax) during the Extension Term shall be:
PERIOD RATE PER SQUARE FOOT MONTHLY RENT
------ -------------------- ------------
01/01/98 - 12/31/98 $ 9.50 $15,560.21
01/01/99 - 12/31/99 $ 9.98 $16,346.41
01/01/00 - 12/31/00 $10.48 $17,165.37
01/01/01 - 12/31/01 $11.00 $18,017.08
01/01/02 - 12/31/02 $11.55 $18,917.94
7. Tenant's Proportionate Share. Throughout die Extension Term,
Tenant's Proportionate Share of Operating Costs shall be Twenty-Nine and Twelve
One Hundredths percent (29.120%).
8. Operating Expenses. Tenant's cap on "controllable" Operating Costs
provided in Section 9.D. of the Lease is deleted from the Lease.
9. Option to Renew. Exhibit "G" shall be deleted in its entirety and
replaced with the following:
A. Tenant shall have the option to extend the Term for an
additional period of sixty (60) months, with respect to the Premises then being
demised under the Lease upon the same terms and conditions as provided in the
Lease (unless hereafter changed or modified by a mutual agreement in writing),
except that, for the extended term:
(1) upon exercise of this option to extend the Term,
the Lease, as extended, shall not contain any further option to extend as
provided in this paragraph;
(2) the Fixed Annual Rent shall be determined in
accordance with Subparagraphs C and D, but in no event shall it be less the
Fixed Annual Rent payable with respect to the twelve (12) month period
immediately preceding the expiration of the original term of the Lease; and
(3) Landlord shall have no obligation to perform any
alteration or preparatory or other work in and to the then demised Premises and
Tenant shall take or continue possession thereof in its "as is" condition.
B. The exercise of the option set forth in this paragraph
shall only be effective upon, and in strict compliance with, the following terms
and conditions:
(1) Written notice of such election (the "Extension
Notice") shall be given by Tenant to Landlord not later than nine (9) months
prior to the expiration date of the initial term
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of the Lease. Time shall be of the essence in connection with the exercise of
any election by Tenant under this paragraph.
(2) At the time of Tenant giving Landlord written
notice of its election to extend the Term and upon the expiration of the initial
term, the Lease shall be in full force and effect and Tenant shall not be in
default under any of the terms, covenants, and conditions of the Lease beyond
any applicable grace period.
(3) No portion of the Premises is sublet to anyone at
the expiration date of the initial Term of the Lease.
(4) The Lease has not been assigned by Tenant at the
expiration date of the initial Term of the Lease.
C. The Fixed Annual Rent, exclusive of any sales and use
taxes, shall be a sum equal to the fair and reasonable market rental value of
the Premises for such extended term, taking into account the rentals at which
leases are being concluded for comparable space in the Building Project and in
comparable buildings in the Delray Beach/Boca Raton, Florida area at such time
and for such a term and taking into account the terms and conditions of the
Lease (the "Fair Market Rental Value" or the "Value").
(1) Within thirty (30) days after receipt of the
Extension Notice, Landlord shall advise Tenant of the applicable Fixed Annual
Rent for the extended term. Tenant, within thirty (30) days after the date on
which Landlord advises Tenant of the applicable Fixed Annual Rent for the
extended term, shall either (i) give Landlord final binding written notice
("Binding Notice") of Tenant's exercise of its option, or (ii) if Tenant
disagrees with Landlord's determination of the Fair Market Rental Value, provide
Landlord with written notice of rejection (the "Rejection Notice"). If Tenant
fails to provide Landlord with either a Binding Notice or Rejection Notice
within such thirty (30) day period, Tenants election of the option to extend the
Lease shall, at Landlord's option, be null and void and of no further force and
effect. If Tenant provides Landlord with a Binding Notice, Landlord and Tenant
shall enter into an Amendment to the Lease extending the Term in accordance with
the terms and conditions of this paragraph.
(2) If Tenant provides Landlord with a Rejection
Notice, Landlord and Tenant shall work together in good faith to agree upon the
Fair Market Rental Value for the Premises during the extended term. Upon
agreement, Landlord and Tenant shall enter into an Amendment to the Lease
extending the Term in accordance with the terms and conditions of this
paragraph.
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(3) If Landlord and Tenant cannot agree on the Value
within thirty (30) days after receipt of the Rejection Notice, Tenant shall have
the option to withdraw its election to extend the Term by giving Landlord
written notice of such withdrawal within ten (10) days after the expiration of
such thirty (30) day period. If Tenant elects to withdraw its election to
extend, Tenants right to extend the Term shall be null and void and of no
further force and effect.
(4) If Landlord and Tenant cannot agree on the Value
within thirty (30) days after receipt of the Rejection Notice and, in addition,
Tenant does not elect to withdraw its election to extend the Term, Landlord and
Tenant, within twenty (20) days after the expiration of the thirty (30) day
period, shall each simultaneously submit to the other, in a sealed envelope, its
good faith estimate of the Value (collectively referred to as the "Estimates").
If the higher of such Estimates is not more than one hundred five (105%) percent
of the lower of such Estimates, then the Fair Market Rental Value shall be the
average cf the two Estimates. If the higher of such Estimates is more than one
hundred five (105%) percent of the lower of such Estimates, Landlord and Tenant,
within seven (7) days after the exchange of Estimates, shall each select an MAN
appraiser with experience in commercial real estate activities, including at
least ten (10) years experience in appraising office space in the local area in
which the Building Project is located. Upon selection, Landlord's ind Tenant's
appraisers shall work together in good faith to agree upon which of the two
Estimates most closely reflects the Fair Market Rental Value. The estimate that
is selected by such appraisers shall be binding upon both Landlord and Tenant.
If either Landlord or Tenant fails to appoint an appraiser within the seven (7)
day period referred to above, the appraiser appointed by the other party shall
be the sole appraiser for the purposes of this section. If the two (2)
appraisers cannot agree upon which of the two (2) Estimates most closely
reflects the Value within twenty (20) days after their appointment, then, within
ten (10) days after the expiration of the twenty (20) period, the two (2)
appraisers shall select a third appraiser meeting the criteria stated above.
Once the third appraiser has been selected, then, as soon thereafter as
practical but in any case within fourteen (14) days, the third appraiser shall
make his determination as to which of the Estimates most closely reflects the
Fair Market Rental Value. The determination by the third appraiser shall be
rendered in writing to both the Landlord and Tenant and shall be final and
binding upon them. If the third appraiser believes that expert advice would
materially assist him, he may retain one or more qualified persons to provide
such expert advice. The parties shall share equally in the cost of the third
appraiser and of any experts retained by the third appraiser. Any fees of any
counsel or experts engaged directly by Landlord or Tenant, including the
appraisers selected by Landlord and Tenant, however, shall be borne by the party
retaining such counsel or expert.
(5) Upon a determination of the Value pursuant to the
preceding procedure, Landlord and Tenant shall enter into an Amendment to the
Lease extending the Lease Term in accordance with the terms and conditions of
this paragraph.
(6) If at the date of commencement of the extended
term, the Fixed Annual Rent shall not have been determined, then, pending such
determination, Tenant shall pay to Landlord Fixed Annual Rent at a sum equal to
(i) the Fixed Annual Rent payable for the immediately preceding twelve (12)
month period plus (ii) thirty-three (33%) percent thereof (the "Temporary
Rate"). After a determination of Fixed Annual Rent is made (x) if such rate is
greater
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than the Temporary Rate, Tenant shall promptly pay to Landlord the difference
between the rent theretofore paid at the Temporary Rate and the greater rate, as
determined or (y) if such rate is less than the Temporary Rate, Landlord shall
promptly pay to Tenant the difference between the rent theretofore paid at the
Temporary Rate and the lesser rate, as determined.
D. The Fixed Annual Rent payable for the second year and all
subsequent years of the extension period shall be calculated by multiplying the
Fixed Annual Rent payable for the immediately preceding year by one hundred and
five (105%) percent, with each such adjustment in Fixed Annual Rent being
effective as of the anniversary date of the Commencement Date occurring in the
applicable year.
10. First Opportunity - Expansion of Premises. Section 54 of the Lease
is deleted.
11. Ratification. Except as modified by this Amendment, the Lease shall
remain otherwise unmodified and in full force and effect and the parties ratify
and confirm the terms of the Lease as modified by this Amendment. Landlord and
Tenant each certify that each has no offsets, defenses, or-claims with respect
to its obligations under the Lease. All future references to the Lease shall
mean the Lease as modified by this Amendment.
12. Tenant's Representations. Tenant represents and warrants as
follows:
(a) Tenant is duly organized, validly existing, and in good
standing under the laws of the state of Florida.
(b) Tenant has full power to execute, deliver, and perform its
obligations under this Amendment.
(c) The execution and delivery of this Amendment, and the
performance by Tenant of its obligations under this Amendment, have been duly
authorized by all necessary action of Tenant, and do not contravene or conflict
with any provisions of Tenant's Articles of Incorporation or By-laws or any
other agreement binding on Tenant.
(d) The individual executing this Amendment on behalf of
Tenant has authority to do so.
(e) The scroll seal set forth immediately below the signature
of the individual executing this Amendment on Tenants behalf has been adopted by
the corporation as its seal for the purpose of execution of this Amendment and
such seal has been affixed to this Amendment as the seal of the corporation and
not as the personal or private seal of the officer executing this Amendment on
behalf of the corporation.
12. Landlord's Representation. The scroll seal set forth immediately
below the signature of the individual signing this Amendment on Landlord's
behalf has been adopted by the corporation as its seal for the purpose of
execution of this Amendment and such seal has been affixed to this
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Amendment as the seal of the corporation and not as the personal or private seal
of the officer executing this Amendment on behalf of the corporation.
13. Binding on Landlord. Submission of this Amendment by Landlord is
not an offer to enter into this Amendment but rather a solicitation for such an
offer by Tenant. Landlord shall not be bound by this Amendment until Landlord
has executed it and delivered it to Tenant.
14. Broker. Landlord and Tenant represent and warrant that they have
neither consulted nor negotiated with any broker or finder with respect to this
Amendment. Landlord and Tenant agree to indemnify, defend, and save the other
harmless from and against any claims for fees or commissions from anyone with
whom they have dealt in connection with this Amendment including attorneys' fees
incurred in connection with the defense of any such claim.
15. Benefit and Binding Effect. This Amendment shall be binding upon
and inure to the benefit of the parties to this Amendment, their legal
representatives, successors, and permitted assigns.
16. Amendment. This Amendment may not be changed, modified, or
discharged in whole or in part except by an agreement in writing signed by both
parties to this Amendment.
17. Construction of Language. This Amendment has been negotiated at "at
arm's length" by and between Landlord and Tenant, each having the opportunity to
be represented by legal counsel of its choice and to negotiate the form and
substance of this Amendment. Therefore, this Amendment shall not be more
strictly construed against either party by reason of the fact that one Party may
have drafted any or all of the provisions of this Amendment.
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<PAGE>
IN WITNESS WHEREOF, Landlord and Tenant have duly executed this First
Amendment to Lease Agreement as of the date first above stated.
WITNESSES: LANDLORD:
/s/ Laura M. Vickers ARBORS ASSOCIATES, LTD.,
a Florida limited partnership
LAURA M. VICKERS
Print or type name By: BFC/ARBOR ASSOCIATES, LTD.,
Florida limited partnership, general partner
By: BFC/ARBOR ASSOCIATES, INC.,
a Florida corporation, general partner
/s/ Beverly Lamb By: /s/ Drew P. Cunningham
Drew P. Cunningham,
BEVERLY LAMB Vice President
Print or type name
(CORPORATE SEAL)
TENANT:
/s/ Jeannette Calderone ORIOLE HOMES CORP.,
a Florida corporation
JEANNETTE CALDERONE
Print or type name
/s/ Lynne Jentis By: /s/ Richard D. Levy
Print or type name
Its: CEO
(CORPORATE SEAL)
28
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EXHIBIT 10.3
REVOLVING LOAN AGREEMENT
On this day of July, 1993, Borrower and Bank (each as hereinafter
defined), each in consideration of the covenants and agreements contained herein
and for other valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, and intending to be legally bound, hereby mutually agree as
follows:
1. DEFINITIONS, ACCOUNTING TERMS AND CODE
(a) Definitions. As used in this Agreement the terms listed below shall
have the following meanings unless otherwise required by context (terms defined
in the singular to have the same meaning when used in the plural and vice
versa):
"Advance" or "Line Advance" means an advance made by Bank to Borrower, subject
to the provisions, terms, and conditions of this Agreement, and payable in
accordance with this Agreement and the Revolving Note.
"Affiliate" of any Person means (1) the spouse, parent, child, grandchild or
sibling of any individual Person, or any other relative who lives in the same
house with, or is a dependent of (under the Internal Revenue Code), such Person;
(2) any general or limited partnership in which such Person or any individual
identified in clause (1) or entity identified in clause (3), (4) or (5) is a
general partner or in which any such Person, individual or entity owns,
beneficially or of record, more than 50% of the limited partnership interest;
(3) any corporation in which such Person or any individual identified in clause
(1) is a director or officer, or which any such Person, or any individual or
entity identified in clause (2), (4) or (5) is the owner, beneficially or of
record, of 10% or more of its outstanding voting stock; (4) any trust of which
any such Person, or any individual or entity identified in clauses (1), (2), (3)
or (5) is a trustee or co-trustee or is the holder, beneficially or of record,
of a beneficial interest of 10% or more; or (5) any corporation, partnership,
trust or other entity controlled by, controlling or under common control with,
either directly or indirectly, such Person or any of the individuals or entities
identified in clauses (1) through (4) above.
"Agreement" means this Revolving Loan Agreement between Borrower and Bank, and
includes any partial or total amendment, renewal, restatement, extension,
modification or substitution of or for such agreement.
"Bank" means OHIO SAVINGS BANK, a corporation incorporated under the laws of the
State of Ohio.
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"Borrower" means Oriole Homes Corp., a corporation incorporated under the laws
of the State of Florida.
"Borrower's Certificate" means a certificate substantially in the form of
attached Exhibit A.
"Borrower's Location" means:Suite 200, 1690 South Congress Avenue, Delray Beach,
Florida 33445-6327.
"Borrowing Base" at any time means an amount not in excess of the lesser of the
following:
(1) eighty percent (80%) of the aggregate amount payable to Borrower
within the next succeeding twelve (12) months from the date of
computation pursuant to bona fide contracts between Borrower and
one or more Persons not an Affiliate of Borrower for the sale of
single family residences located upon the Mortgaged Property or
elsewhere within any portion of the entire Palm Isles Development,
North of Boynton Beach Boulevard and East of the Florida Turnpike
in Boynton Beach, Palm Beach County, Florida as Palm Isles
Development is described in Exhibit B attached hereto and made a
part hereof;
(2) twenty five percent (25%) of the aggregate amounts payable within
the next succeeding twelve (12) months from the date of
computation pursuant to bona fide contracts between Borrower and
Persons not an Affiliate of Borrower for the sale of single family
residences in all residential developments owned and operated by
Borrower in Broward, Palm Beach and Martin Counties, Florida.
"Business Day" means any day other than a Saturday or Sunday or any day on which
Bank is required or authorized by law (including executive orders) to close.
"Capital Lease" means any lease which has been capitalized on the books of the
lessee in accordance with GAAP.
"Cash Security" means all cash, Instruments, Deposit Accounts, and other cash
equivalents, whether matured or unmatured, whether collected or in the process
of collection, upon which Borrower presently has or may hereafter have any
claim, that are presently or may hereafter be existing or maintained with,
issued by, drawn upon, or in the possession of Bank.
"Code" means the Florida Uniform Commercial Code as amended from time to time.
"Collateral" means:
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(1) the Mortgaged Property, as defined in the Mortgage;
(2) all Cash Security,
(3) all Proceeds, products, revenues, issues, profits, and rents (cash
and non-cash) of any of the foregoing; and
(4) all substitutions for, renewals of, improvements to, replacements
for and additions to any of the foregoing.
"Consolidated Tangible Net Worth" means the excess of the net book value (after
deducting all applicable reserves and deducting any value attributable to the
re-appraisal or write-up of any asset) of assets of Borrower and its
consolidated subsidiaries (other than patents, copyrights, trademarks,
franchises, licenses, goodwill, treasury stock, customer lists, employees, and
similar intangibles and amounts due from officers, employees, directors,
stockholders or Affiliates) over all of their liabilities (other than any
liabilities or indebtedness subordinated by written agreement in form and
substance satisfactory to Bank in favor of the prior payment in full of the
Loan), as determined on an accrual basis and in accordance with generally
accepted accounting principles consistently applied.
"Collateral Value" means at any time the most recent appraised value of the
Mortgaged Property as determined by an appraiser (not an Affiliate of Borrower)
and one or more appraisals made or effective not less than one year prior to
such time in form and substance satisfactory to Bank.
"Contract Year" means each twelve (12) month period commencing upon the
execution hereof and each anniversary thereof.
"Debt" means (1) indebtedness or liability for borrowed money; (2) obligations
evidenced by bonds, debentures, notes, or other similar instruments; (3)
obligations for the deferred purchase price of property or services (including
trade obligations); (4) obligations as lessee under Capital Leases; (5) current
liabilities in respect of unfunded vested benefits under plans covered by ERISA;
(6) obligations under letters of credit; (7) obligations under acceptance
facilities; (8) all guaranties, endorsements (other than for collection or
deposit in the ordinary course of business), and other contingent obligations to
purchase, to provide funds for payment, to supply funds to invest in any Person,
or otherwise to assure a creditor against loss; and (9) obligations secured by
any Liens, whether or not the obligations have been assumed.
"Default" means any condition or event which constitutes an Event of Default or
which with the giving of notice or lapse of time or both would, unless cured
within the applicable period or waived, become an Event of Default.
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"Default Rate" means a rate of interest that is five percent (5%) per annum in
excess of the rate of interest otherwise applicable to Line Advances.
"Deposit Account" means (1) any deposit account, and (2) any demand, time,
savings, passbook, or a similar account maintained with a bank, savings and loan
association, credit union, or similar financial institution.
"ERISA" means the Employee Retirement Income Security Act of 1974, as amended
from time to time, and the regulations promulgated pursuant thereto and
published interpretations thereof.
"Event of Default" means the occurrence of any of the events set forth in
Section 8 of this Agreement (including the giving of any required notice and the
expiration of any applicable grace period).
"Financial Impairment" means the distressed economic condition of a Person
manifested by any one or more of the following events:
(1) adjudicated bankruptcy or insolvency of the Person;
(2) the Person is unable, or admits in writing its inability, to make
timely payment of the Person's debts, obligations, or liabilities
as they mature or come due;
(3) assignment by the Person for the benefit of creditors;
(4) voluntary institution by the Person or consent granted by the
Person to the involuntary institution (whether by petition,
complaint, application, default, answer (including, without
limitation, an answer or any other permissible or required
responsive pleading admitting (a) the jurisdiction of the forum
and (b) any material allegations of the petition, complaint,
application, or other writing to which such answer serves as a
responsive pleading thereto), or otherwise) of any bankruptcy,
insolvency, reorganization, arrangement, readjustment of debt,
dissolution, liquidation, receivership, trusteeship, or similar
proceeding pursuant to or purporting to be pursuant to any
bankruptcy, insolvency, reorganization, arrangement, readjustment
of debt, dissolution, liquidation, receivership, trusteeship, or
similar law of any jurisdiction;
(5) voluntary application by the Person for or consent granted by the
Person to the involuntary appointment of any receiver, trustee, or
similar officer (a) for the Person or (b) of or for all or
substantially all of the Person's property, or (c) any part of the
Mortgaged Property;
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(6) entry, without the Person's application, approval, or consent, of
any order that is not dismissed, stayed, or discharged within
sixty (60) days from its entry, which is pursuant to or purporting
to be pursuant to any bankruptcy, insolvency, reorganization,
arrangement, readjustment of debt, dissolution, liquidation,
receivership, trusteeship or similar law of any jurisdiction (a)
approving an involuntary petition seeking an arrangement of the
Person's creditors, (b) approving an involuntary petition seeking
reorganization of the Person, or (c) appointing any receiver,
trustee, or similar officer (i) for the Person, or (ii) of or for
all or substantially all of the Person's property, or (iii) any
part of the Mortgaged Property; or
(7) any judgment, writ, warrant of attachment, execution, or similar
process is issued or levied against all or any substantial part of
the Person's property or any of the Mortgaged Property for a sum
not covered by insurance in excess of $250,000.00 in any one
instance or $500,000 in the aggregate, and such judgment, writ,
warrant of attachment, execution, or similar process is not
released, vacated, or fully bonded within thirty (30) days after
its issue or levy, or paid over time in accordance with the terms
of the judgment.
"GAAP" means generally accepted accounting principles in the United States.
"Lien" means any mortgage, deed of trust, pledge, security interest,
hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or
other), or preference, priority, or other security agreement, or preferential
arrangement, charge, or encumbrance of any kind or nature whatsoever (including,
without limitation, any conditional sale or other title retention agreement, any
financing lease having substantially the same economic effect as any of the
foregoing, and the filing of any financing statement under the Code or
comparable law of any jurisdiction to evidence any of the foregoing).
"Loan(s)" means the loan(s) made in connection with the Revolving Note.
"Loan Account" means an account maintained by Bank on its books, which will
evidence all Line Advances, accrued interest thereon, other amounts due Bank
with respect to such Line Advances, and all payments thereof by Borrower.
"Loan Documents" means this Agreement, the Revolving Note, the Mortgage, any
other security agreement or financing statements creating or further evidencing
or securing the right, title, and interest of the Bank in and to the Collateral
and all documents or instruments collateral thereto and all other documents or
instruments now or subsequently evidencing or securing or further securing the
Loan, and any partial or total extensions, renewals, modifications, amendments,
restatements or substitutions thereof or therefor.
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"Loan to Collateral Value Ratio" means ratio of the Collateral Value at any time
to the then unpaid principal balance of the Loan at that time.
"Maximum Loan Amount" means Ten Million and no/100 Dollars ($10,000,000.00)
"Mortgage" means the Mortgage and Security Agreement of even date from Borrower
to Bank intended to secure the Loan, including any partial or total amendment,
renewal, restatement, extension, modification or substitution of or for such
instrument.
"Organization" means a corporation, government or government subdivision or
agency, business trust, estate, trust, partnership, association, two or more
Persons having a joint or common interest, and any other legal or commercial
entity.
"Person" means an individual or an Organization.
"Prime Rate" means that interest rate established and used from time to time by
Bank as Bank's Prime Rate, whether or not such rate is publicly announced; the
Prime Rate might or might not be the lowest interest rate charged by Bank for
commercial or other extensions of credit.
"Principal Office" means the principal office of the Bank located at Ohio
Savings Plaza, 1801 East Ninth Street, Cleveland, Ohio 44114, as modified by any
change therein which Bank has supplied in writing to Borrower.
"Proceeds" means (1) any proceeds, and (2) whatever is received upon the sale,
exchange, collection, or other disposition of Collateral or Proceeds, whether
cash or non-cash. Cash Proceeds includes, without limitation, money, checks, and
Deposit Accounts. Proceeds includes, without limitation, any account arising
when the right to payment is earned under a Contract Right, any insurance
payable by reason of loss or damage to the Collateral, and any return or
unearned premium upon any cancellation of insurance. Except as expressly
authorized in this Agreement, Bank's right to Proceeds specifically set forth in
this Agreement or indicated in any financing statement shall never constitute an
express or implied authorization on the part of Bank to Borrower's sale,
exchange, collection, or other disposition of any or all of the Collateral.
"Related Expenses" means any and all costs, liabilities, and expenses (including
without limitation, losses, damages, penalties, claims, actions, reasonable
attorney's fees, legal expenses, judgments, suits, and disbursements) incurred
by, imposed upon, or asserted against, Bank in any attempt by Bank:
(1) to obtain, preserve, perfect, confirm or enforce any security
interest evidenced by (a) this Agreement, (b) the Mortgage, or (c)
any of the other Loan Documents,
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(2) to obtain payment, performance, and observance of any or all of
the Loan or the Loan Documents,
(3) to maintain, insure, audit, collect, preserve, repossess, and
dispose of any of the Collateral or any security described in any
of the Loan Documents, including, without limitation, any
attorney's fees and legal expenses incurred in connection with any
forfeiture proceedings, or
(4) incidental or related to (1) through (3) above, inclusive,
including, without limitation, interest thereupon from the date
which is ten (10) days following the date invoices therefor are
forwarded to Borrower until paid at the Default Rate, but in no
event greater than the highest rate permitted by law.
"Revolving Note" means the Revolving Mortgage Note of even date herewith
executed and delivered to Bank by Borrower, in the maximum principal amount of
Ten Million and no/100 Dollars ($10,000,000.00), including any partial or total
extension, restatement, renewal, amendment, modification or substitution thereof
or therefor.
"Senior Indenture" means that certain Indenture dated as of January 20, 1993,
between the Borrower, as Issuer, and SunBank, National Association, a national
banking association, as Trustee, related to the issuance of twelve and one-half
percent (12-1/2%) Senior Notes, dues 2003 in the aggregate principal sum of
Seventy Million Dollars ($70,000,000.00).
"Single Family Residence" means a detached single family dwelling, condominium
unit or similar space (whether or not in a multi-family building) intended for
permanent (not leased, rented, temporary or transient) residential use by not
more than one family.
"Termination Date" means June 30, 1996.
(b) Accounting Terms. All accounting terms not specifically defined herein
shall be construed in accordance with GAAP consistent with those applied in the
preparation of the financial statements referred to in Section 5 of this
Agreement.
(c) Code. All terms defined in the Code shall have the meanings given
therein unless otherwise defined herein.
(d) Mortgage. Capitalized terms used herein and not otherwise defined
herein or in the Code shall have the meanings prescribed therefor in the
Mortgage to the extent defined therein.
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2. LOANS TO BORROWER
-----------------
(a) Revolving Credit.
-----------------
(1) Line Advances. Subject to the terms and conditions hereof, and
in reliance on the representations and warranties herein contained, Bank shall
make Line Advances from time to time during the period commencing on the date
hereof and ending on the Termination Date to or for the account of Borrower up
to but not exceeding an aggregate unpaid principal amount outstanding at any one
time on Line Advances equal to the least of (a) the Maximum Loan Amount then in
effect, (b) the Borrowing Base, or (c) one-half (1/2) of the Collateral Value
within twenty four (24) hours after delivery of Borrower's most recent Quarterly
Collateral Value Certificate, or, at all other times, two-thirds (2/3) of the
Collateral Value, as evidenced by Borrower's most recent Quarterly Collateral
Value Certificate, or (d) such lesser amount as provided by this Agreement. Each
of (a), (b), (c) and (d) is a "Loan Amount Limitation". Borrower's obligation to
repay the Line Advances shall be evidenced by the Revolving Note.
(2) Loan Account. The Bank shall debit to the Loan Account the
amount of each Line Advance made under this Agreement and all interest, the
Unused Line Fee, and other compensation or fees payable on or with respect to
any Line Advances and the Revolving Note, and shall credit to the Loan Account
by the appropriate entries each payment of (a) principal and interest on account
of each Line Advance and (b) other amounts paid under this Agreement. The Loan
Account shall constitute rebuttable presumptive evidence of all Line Advances
made by Bank pursuant to this Agreement and of all other entries contained
therein and the accuracy thereof.
(3) Interest. As compensation for the Line Advances made by Bank,
Borrower undertakes and agrees to pay to Bank on the first day of each calendar
month all accrued and unpaid interest, at a rate equal to one and one-half
percent (1.50%) per annum in excess of the Prime Rate, upon the average daily
balances in Borrower's Loan Account during the preceding month (using a day rate
based upon a year of 360 days and charged for actual number of days elapsed).
The rate will increase or decrease on the day of, and by an amount equal to,
each increase or decrease in the Prime Rate. The rate charged to Borrower under
this Agreement shall change when and as the Prime Rate is changed. Prior to an
Event of Default, Bank will mail an invoice or notice for each monthly
installment of interest not less than two (2) Business Days prior to the date
when due, provided that failure to mail, deliver or receive any such notice or
invoice shall not excuse, waive or delay any obligation of Borrower to pay any
amount pursuant to the Note, the Agreement or any other Loan Document as and
when due and payable. Whenever the unpaid principal and accrued interest thereon
evidenced by the Loan Account become due and payable and remain unpaid, whether
upon demand at maturity, by acceleration or otherwise, the unpaid amount thereof
shall thereafter bear interest at the Default Rate.
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(4) Unused Line Fee. Within five (5) days after the end of each
calendar quarter during the term of the Revolving Note, commencing with the
quarter ending September 30, 1993, Borrower shall pay to Bank an "Unused Line
Fee" equal to the rate of three-eighths of one percent (0.375%) per annum of the
average daily amount for such quarter of the difference between (a) the Maximum
Loan Amount; and (b) the unpaid principal balance of the Loan.
(5) Reduction of Commitment. The Borrower shall have the right,
upon at least sixty (60) days' prior written notice to the Bank, to terminate in
whole or reduce in part the Maximum Loan Amount, provided that each partial
reduction shall be in the amount of at least Five Hundred Thousand Dollars
($500,000.00), and provided further that no reduction shall be permitted if,
after giving effect thereto, and to any prepayment made therewith, the
outstanding and unpaid principal amount of the Revolving Note shall exceed the
reduced Maximum Loan Amount. Once reduced or terminated by Borrower, the Maximum
Loan Amount may not be increased or reinstated.
(6) Termination. Bank's obligation to advance funds hereunder and
under the Revolving Note shall automatically expire without any further notice
or action on the part of the Bank, and all Line Advances and the outstanding
balance of the Revolving Note shall be due and payable in full, on the
Termination Date. The Bank shall have the right to terminate immediately, at any
time, any of its obligations hereunder pursuant to Section 8 of this Agreement.
The security interest, lien and rights granted to the Bank hereunder shall
continue in full force and effect until expressly released by the Bank in
accordance with the release provisions of this Agreement, notwithstanding the
termination of this Agreement or the fact that the Loan Account may from time to
time be temporarily in a credit position. Borrower may terminate the Agreement
by giving Bank not less than sixty (60) days prior written notice of termination
and by paying, performing, and observing in full all obligations under this
Agreement and the Loan Documents on or before such Termination Date, and Bank
shall thereupon release all security interests and liens.
(7) Notice and Manner of Borrowing. Borrower shall give Bank at
least one (1) Business Day's written notice requesting, and specifying the date,
the amount and the manner of, each borrowing or reborrowing pursuant hereto.
Provided that all conditions to such borrowing have then been satisfied in the
reasonable judgment of the Bank, not later than noon of the date specified by
Borrower in such notice, Bank shall credit one or more accounts maintained by
Borrower at Bank in the amount borrowed or reborrowed.
(b) Payments.
-------------
(1) Method of Payment. The Borrower shall make each payment under
this Agreement and under the Revolving Note not later than 2:00 P.M. EDT on the
date when due in lawful money of the United States to the Bank at its Principal
Office in immediately available funds. The Borrower hereby authorizes the Bank,
if and to the extent payment is not made when due under
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this Agreement or under the Revolving Note, to charge from time to time against
any account of the Borrower with the Bank any amount so due. Whenever any
payment to be made under this Agreement or under the Revolving Note shall be due
on a day other than a Business Day, such payment shall be made on the next
succeeding Business Day, and such extension of time shall be included in the
computation of the payment of interest and any applicable fees, as the case may
be.
(2) Prepayments. The Borrower may at any time prepay the Revolving
Note in whole or in part with accrued interest to the date of such prepayment on
the amount prepaid, provided that each partial prepayment shall be in a
principal amount of not less than Twenty Five Thousand Dollars ($25,000.00).
(c) Use of Proceeds. The proceeds of the Loan hereunder shall be used by
the Borrower solely to provide working capital to finance development and
construction of residential real estate and short term capital requirements
related to Palm Isles development at 7865 Whispering Palms Drive, Boynton Beach,
Florida, located North of Boynton Beach Boulevard and East of the Florida
Turnpike in Boynton Beach, Palm Beach County, Florida, and also other
residential development and construction by Borrower in Palm Beach, Broward or
Martin Counties, Florida. The Borrower will not, directly or indirectly, use any
part of such proceeds for personal, consumer, family, household, educational,
agricultural or similar uses or for the purpose of purchasing or carrying any
margin stock within the meaning of Regulation G of the Board of Governors of the
Federal Reserve System or to extend credit to any Person for the purpose of
purchasing or carrying any such margin stock, or for any purpose which violates,
or is inconsistent with, Regulation X of such Board of Governors.
3. BORROWING REQUIREMENTS
----------------------
(a) General Conditions. The conditions listed below are precedent to the
making of the Loan and any Line Advance by the Bank and shall be satisfied in
form and substance reasonably satisfactory to Bank in its sole and absolute
discretion:
(1) Loan Documents. The Revolving Note, Mortgage, this
Agreement and all other Loan Documents shall have been executed and delivered to
Bank, and the Collateral Value of the Mortgaged Property at the date hereof
shall be approximately Twenty Million Dollars ($20,000,000), but in any event
not less than Nineteen Million Five Hundred Thousand Dollars ($19,500,000), and
Bank shall have received a certificate from Borrower in form and substance
satisfactory to Bank to such effect;
(2) Evidence of Corporate Action. The Bank shall have received
satisfactory evidence authorizing the borrowing herein provided for, the
execution and delivery of the Revolving Note,
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Mortgage, this Agreement, and all other Loan Documents, and the granting to Bank
of a security interest in the Collateral;
(3) Incumbency and Signature Certificate. The Bank shall have
received a certificate signed by the secretary or assistant secretary of the
Borrower certifying the names of the officers of the Borrower authorized to sign
the Revolving Note, Mortgage, this Agreement and all other Loan Documents and/or
certificates to be delivered hereunder or in connection herewith, together with
true signatures of such representative officers;
(4) Good Standing Certificate. The Bank shall have received a
Certificate of Good Standing issued by the Secretary of State of the State of
Florida relating to the Borrower;
(5) Opinion of Counsel for the Borrower. The Bank shall have
received a written opinion of legal counsel, selected by the Borrower and
satisfactory to the Bank, in form and substance reasonably satisfactory to Bank
and its counsel;
(6) Perfection of Security Interests. The Bank shall have
received evidence satisfactory to the Bank that there has been filed or recorded
in the appropriate offices such documents and instruments necessary to establish
and perfect the Bank's interest in and to the Collateral;
(7) Title Insurance. Bank shall have received an original ALTA
Commitment to issue a Loan Policy of Title Insurance, with such endorsements as
may be reasonably required by Bank and available in the State of Florida, issued
by Commonwealth Land Title Association (the "Title Insurer") to Bank, in an
amount equal to the maximum amount permitted to be borrowed hereunder, which
title insurance Commitment shall be "marked up" to the date of closing and
committing the Title Insurer to insure Bank that the Mortgage is a valid, first
mortgage on the Mortgaged Property described therein, subject only to liens,
encumbrances, easements, reservations, restrictions and exceptions expressly
permitted by the Mortgage or expressly approved in writing by Bank;
(8) Survey. Bank shall have received from Borrower a current
survey of all portions of the Mortgaged Property not subject to a subdivision
plat duly approved by all required governmental authorities and recorded in the
appropriate public land records, which surveys shall be prepared and certified
to Bank and the title insurance company by a licensed surveyor acceptable to
Bank, dated not more than sixty (60) days prior to the date hereof, showing the
following:
(i) the location of the perimeter boundaries of the Land by
courses and distances and perimeter footings in place, and by reference
to Township, Range and Section;
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(ii) the location of and the identification by reference to
recording data of all easements, rights-of-way, conditions and
restrictions on or appurtenant to the Premises;
(iii) the location of all building setback lines as shown on
the site plan;
(iv) the lines of the streets and public rights-of-way abutting
the Premises and the width thereof;
(v) all encroachments, and the extent thereof in feet and
inches upon the Premises;
(vi) the buildings and Improvements, to the extent installed,
and the relation of the buildings and Improvements by distances to the
perimeter of the Premises, the building setback lines and the street
lines;
(vii) if the Premises are described as being on a map filed in
the public records, a legend relating the plat of survey to such map;
(viii) the legal description of the Land by metes and bounds,
including the acreage; and
(ix) identifying any portion of the Premises located within a
hazardous flood area as identified by the U.S. Secretary of Housing and
Urban Development, or, if no part of the Premises is within such a
hazardous flood area, stating that fact.
(9) Governmental Requirements. Borrowers shall provide
evidence satisfactory to Bank that development of the Mortgaged Property as
residential subdivisions consisting of fully developed single or multi-family
residential building sites and the construction of single or multi-family
residences thereon has been fully authorized by all governmental authorities
having jurisdiction over the Mortgaged Property, and that development in
compliance with such authorizations: (a) is consistent with all land development
regulations and adopted comprehensive plans and land use plans of Palm Beach
County, Florida and any other governmental authority having jurisdiction over
the Mortgaged Property including without limitation regulations dealing with
Developments of Regional Impact pursuant to Section 380.06, Florida Statutes;
(b) meets all levels of service standards for public facilities needed to
accommodate the impact of such development including roads, water, sewer,
drainage, recreation, mass transportation and solid waste; (c) is not subject to
any limiting conditions or restrictions under any zoning resolution, ordinance,
covenant, agreement or the like that could prohibit, impair, frustrate or
adversely affect such development; (d) complies with all Federal, state and
local laws, rules, regulations and ordinances, including without limitation, all
zoning, building, fire, safety, health and environmental laws, rules,
regulations and ordinances; (e) will meet all conditions precedent to obtaining
any permits required in
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connection with the development, including without limitation, all environmental
and building permits; and (f) complies with and conforms to applicable land use,
density, structural and architectural design requirements of any governmental
authority having jurisdiction over the Mortgaged Property (collectively referred
to as the "Governmental Requirements").
(10) Permits and Authorizations. Bank shall have received
evidence satisfactory to Bank that all permits necessary to the commencement of
construction of single family or multi-family residences on the platted portions
of the Mortgaged Property (except for building permits for residences to be
constructed more than 30 days thereafter) have been issued, and not revoked, and
can be utilized.
(11) Assignment of Rights. Borrower shall deliver to Bank
true and correct copies of all contracts (other than contracts for the sale and
purchase of residences and construction contracts), agreements, declarations,
licenses, permits, easements, and other instruments and documents affecting or
benefitting all or any part of the Mortgaged Property (collectively the
"Collateral Agreements"), together with a collateral assignment of Borrower's
rights thereunder, all satisfactory in form and substance to Bank, provided
that, so long as no Event of Default has occurred hereunder, the Borrower shall
have the right to receive, retain and use any and all amounts paid pursuant to
any such agreements. Borrower shall deliver such consents, estoppel certificates
and/or non-disturbance agreements relating to any one or more of the foregoing
as Bank may reasonably require.
(12) Zoning Change. Bank shall receive evidence
satisfactory to the Bank that there are no existing, pending or threatened
zoning, building or other moratoria, downzoning petitions, proceedings or
restrictive allocations or similar matters that could materially, adversely
affect Borrower's use of or development of any part of the Mortgaged Property.
(13) Financial Statements. Bank shall have received all
financial statements for Borrower for its most recent fiscal year, in form and
substance in accordance with Section 6A(1)(d) of this Agreement, together with a
certificate stating there has been no material adverse change in such financial
statements or in the business or operations of Borrower since the date of such
financial statements.
(14) Environmental Site Assessment. Bank shall have
received a Phase One Environmental Site Assessment satisfactory in form and
substance to Bank prepared by an independent environmental engineer or other
qualified consultant or expert satisfactory to the Bank and in conformance with
the scope and limitations of the ASTM (American Society for Testing and
Materials) Standard Practice E.50.02.2 indicating no evidence of Recognized
Environmental Conditions (as defined in said standard) in connection with the
Mortgaged Property. The Bank will
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accept the Environmental Site Assessment of Langan Environmental Services, Inc.,
dated June 12, 1991 as full compliance and fulfillment of this condition.
(15) UCC Search. Borrower will provide the Bank with a
UCC-11 or similar search of the appropriate State and County records for
Borrower.
(16) Notice of Commencement. No Notice of Commencement
shall have been recorded or posted on or at any portion of the Mortgaged
Property in accordance with Section 713.13, Florida Statutes, until at least one
(1) day subsequent to the date of recording of the Mortgage. Any and all such
Notices of Commencement relating to any part of the Mortgaged Property shall
designate Bank and the Title Company as additional persons upon whom notices
shall be served.
(17) Evidence of Compliance with Insurance Requirements.
The Bank shall have received satisfactory evidence of compliance by the Borrower
with the insurance requirements set forth herein and in the Mortgage;
(18) Fees. Bank shall have received payment of a facility
fee in the amount of $100,000.00, and payment of all fees, costs and expenses
incurred by Bank in connection with the origination of the loan contemplated
hereby, including legal fees and expenses (including cost of counsel employed by
Bank); and
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(19) Miscellaneous.
(a) The Bank shall have received such other documents
and information as Bank may reasonably request; and
(b) All legal matters incident to the transactions
contemplated by this Agreement have been resolved in a manner reasonably
satisfactory to Bank's counsel.
(b) Conditions for each Advance. Bank shall not make any Line Advance to
Borrower pursuant hereto until all of the following conditions precedent have
been performed or established to the reasonable satisfaction of Bank as to each
separate Line Advance:
(1) No Defaults. The warranties and representations contained
in this Agreement and the Mortgage remain true, correct and complete in all
material respects, all covenants, terms and conditions of this Agreement and the
Mortgage remain satisfied or have been performed, and no Event of Default shall
have occurred as of the date of the Line Advance; and
(2) Title Insurance. Bank shall have received an endorsement to
the policy of title insurance updating the policy to the date of the current
Advance and specifically including any and all property then included in the
definition of Mortgaged Property, including any additional property to which the
lien of the Mortgage has been "spread" since the last Line Advance without
additional exceptions or objections other than the "Permitted Encumbrances" set
forth in the Mortgage;
(3) Loan Amount Limitation. After giving effect to the
requested Advance, the aggregate unpaid principal amount of Line Advances
outstanding will not exceed any Loan Amount Limitation (as defined in Section
2(a)(1); and
(4) Borrower's Certificate. The delivery to the Bank of a
Borrower's Certificate fully completed as to all figures and information called
for therein and certified as correct and complete by a duly authorized officer
of Borrower and such other documents and instruments, and evidence of the
performance by Borrower of its obligations herein, as Bank may request.
4. SECURITY INTEREST IN COLLATERAL - RELEASES
------------------------------------------
A. Security Interest.
------------------
In consideration of and as security for the full and complete payment,
performance, and observance of the Loan, Borrower has executed and delivered to
Bank the Mortgage and does hereby grant to Bank a continuing security interest
in the Collateral. Any and all Collateral, howsoever and whensoever acquired,
received or arising, shall secure any and all of the Loans,
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without apportionment. Accordingly, all the Collateral is assigned and pledged,
and a security interest in favor of Bank is granted therein, to secure the
entire indebtedness which may be owed to the Bank from time to time pursuant to
the Revolving Note or this Agreement, and Bank shall have the right, in its sole
and absolute discretion, to determine the order in which its rights in or
remedies against any Collateral are to be exercised, which type(s) or portion(s)
of Collateral are to be proceeded against, and the order of application of
proceeds of Collateral with respect to the Loan.
B. Releases of Collateral.
-----------------------
Provided that no Event of Default then exists, the Bank shall release
portions of the Collateral from the lien of the Mortgage and other Loan
Documents upon the terms and conditions set forth in the Mortgage.
5. WARRANTIES
----------
Borrower represents and warrants to Bank that:
(a) Incorporation, Good Standing and Due Qualification. Borrower is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Florida, and is duly qualified to do business, and is in good
standing as a foreign corporation, in all jurisdictions wherein its ownership of
property or the nature of its business requires such qualification, and has the
right, power and authority to own its property and to carry on its business as
now being conducted and as contemplated hereby.
(b) Stock Ownership. The statements contained in the Proxy Statement
regarding ownership of the outstanding stock of Borrower dated April 26, 1993
are true and correct on and as of the date hereof. Attached hereto as Exhibit C
is a list of all of Borrower's subsidiaries, and all of the issued and
outstanding stock of each such subsidiary is owned of record, legally and
beneficially, by Borrower.
(c) Corporate Power and Authority. The execution, delivery, and
performance hereof and of the Mortgage are within Borrower's corporate powers,
have been duly authorized, and are not in contravention of law or the terms of
Borrower's charter, by-laws, or regulations or of any indenture, agreement, or
undertaking to which Borrower is a party or by which it is bound.
(d) Ownership and Liens. Borrower is, and as to Collateral to be
acquired after the date hereof will be, the lawful owner of and has and shall
have full and unqualified right to transfer, mortgage and grant a security
interest in all of the Collateral to Bank; such Collateral is not and will not
during the term of this Agreement be subject to any prior or adverse financing
statement,
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encumbrance, claim, lien, mortgage or security interest of any type except any
granted to or in favor of Bank.
(e) Litigation. Except as disclosed in Exhibit D attached hereto and
made a part hereof, there are no material actions, suits or proceedings pending,
or to the best knowledge of Borrower threatened, at law or in equity, or by or
before any judicial or administrative court, tribunal, agency, authority or any
arbitrator, and it is not in violation of any order, judgment or decree of any
court, governmental authority or arbitration board or tribunal: (a) which might
result in any material adverse change in its businesses, prospects, profits or
condition (financial or otherwise); (b) which might hinder, restrain, or in any
way materially adversely affect its full and timely performance hereunder; or
(c) which might adversely affect the validity or enforceability of any Loan
Document delivered by it pursuant hereto or any of the transactions contemplated
hereby.
(f) Taxes. All tax returns required to be filed by it in any
jurisdiction have been filed, and all taxes, assessments, fees and other
governmental charges imposed upon it, or upon any of its properties, income or
franchises, which are due and payable, have been paid, and the provisions for
reserves for taxes on the books of Borrower are adequate, in its reasonable
opinion, for all unaudited fiscal years, and for its current fiscal period.
(g) Approvals. No approval, authorization, order, license, franchise or
consent of, or registration or filing with, or notice to, any governmental
authority or any other Person is required in connection with the execution,
delivery or performance by Borrower of this Agreement and the other Loan
Documents.
(h) No Brokerage Commission. Borrower has not in connection with the
Loan entered into any agreement, incurred any obligation, made any commitment or
taken any action which might result in a claim for or an obligation to pay a
brokerage commission, finder's fee or similar fee in respect to the transactions
described in the Agreement, and Borrower shall indemnify Bank against all loss,
expense, demand and liability (including attorneys fees) arising in connection
with any such claim or obligation.
(i) No Defenses or Set-Offs. Any indebtedness secured hereby was
incurred in good faith for full value received, and the Borrower has no
defenses, set-offs or counterclaims thereto.
(j) Bulk Transfers. The mortgaging of the Collateral is not subject to
any bulk transfer or similar statutory provision applicable to the Borrower.
(k) Compliance with Laws. Borrower has complied with, and is in
compliance with, all applicable local, state and federal laws, rules and
regulations relating to any of its activities to the
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extent that any failure to comply would adversely affect its ability to repay
the Loan as and when due or perform its obligations pursuant hereto or to any
Loan Document.
(l) Purpose of Loan. The Loan secured hereby and evidenced by the
Revolving Note is for business, commercial, investment or other similar purposes
and are not for personal, consumer, family, household, educational, agricultural
or other similar use, and the Borrower will not, directly or indirectly, use any
part of such proceeds for personal, consumer, family, educational, household,
agricultural or similar use or for the purpose of purchasing or carrying any
margin stock within the meaning of Regulation G of the Board of Governors of the
Federal Reserve System or to extend credit to any Person for the purpose of
purchasing or carrying any such margin stock, or for any purpose which violates,
or is inconsistent with, Regulation X of such Board of Governors.
(m) Place of Business. Borrower's Location is Suite 200, 1690 South
Congress Avenue, Delray Beach, Florida 33445-6327.
(o) Other Agreements. The execution, delivery and performance by
Borrower of this Agreement and the Loan Documents does not contravene or
conflict with, result in any breach of or constitute a default under, any
indenture, loan, credit agreement or lease or other agreement, instrument or
document to which Borrower is a party or binding upon Borrower and, to the best
knowledge of Borrower, Borrower is not in default in any respect in the
performance, observance or fulfillment of any of the obligations, covenants, or
conditions contained in any agreement or instrument material to its business.
(p) Financial Statements and Information. The balance sheet of the
Borrower as of December 31, 1992, and the related statements of income and
retained earnings of the Borrower for the fiscal year then ended, and the
accompanying footnotes, together with the audit report, dated December 31, 1992,
prepared by Grant Thornton, independent certified public accountants, and the
interim balance sheet of the Borrower as of March 31, 1993, and the related
statement of income and retained earnings for the three (3) month period then
ended, copies of which have been furnished to the Bank, are complete and correct
and fairly present the financial condition of the Borrower as at such dates and
the results of the operations of the Borrower for the periods covered by such
statements, all in accordance with GAAP consistently applied (subject to
year-end adjustments in the case of the interim financial statements), and since
March 31, 1993, there has been no material adverse change in the condition
(financial or otherwise), business, or operations of the Borrower. There are no
liabilities of the Borrower, fixed or contingent, which are material but are not
reflected in the foregoing financial statements or in the notes thereto, other
than liabilities arising in the ordinary course of business since March 31,
1993. No certificate, document, exhibit, report or other information furnished
by the Borrower to the Bank in connection with the negotiation of this Agreement
contains, as of the date of delivery to Bank, any material misstatement of fact
or omits
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to state a material fact or any fact necessary to make any statement contained
therein not materially misleading.
(q) Labor Disputes and Acts of God. Neither the business nor the
properties of the Borrower are, to the best knowledge of Borrower, affected by
any fire, explosion, accident, strike, lockout or other labor dispute, drought,
storm, hail, earthquake, embargo, act of God or of any public enemy, or other
casualty (whether or not covered by insurance), materially and adversely
affecting such business or properties or the operation of the Borrower.
(s) Environment. To the best knowledge of Borrower, Borrower has duly
complied with, and its businesses, operations, assets, equipment, property,
leaseholds, or other facilities are in compliance with, the provisions of all
federal, state and local environmental, health, and safety laws, codes and
ordinances, and all rules and regulations promulgated thereunder. To the best
knowledge of Borrower, Borrower has been issued and will maintain all required
federal, state and local permits, licenses, certificates, and approvals relating
to (1) air emissions; (2) discharges to surface water or groundwater; (3) noise
emissions; (4) solid or liquid waste disposal; (5) the use, generation, storage,
transportation, or disposal of toxic or hazardous substances or wastes (intended
hereby and hereafter to include any and all such materials listed in any
federal, state or local law, code or ordinance, and all rules and regulations
promulgated thereunder as hazardous or potentially hazardous); and (6) other
environmental, health or safety matters. To the best knowledge of Borrower, a
true, accurate and complete list of all such permits, licenses, certificates and
approvals has been delivered to the Bank and are listed upon Exhibit E attached
hereto and made a part hereof. To the best knowledge of Borrower, Borrower has
not received notice of, nor knows of, or suspects, facts which might constitute
any violations of any federal, state or local environmental, health or safety
laws, codes or ordinances, or any rules or regulations promulgated thereunder
with respect to its businesses, operations, assets, equipment, property,
leaseholds or other facilities. To the best knowledge of Borrower, except in
accordance with a valid governmental permit, license, certificate or approval,
there has been no emission, spill, release or discharge into or upon (1) the
air; (2) soils, or any improvements located thereon; (3) surface water or
groundwater; or (4) the sewer, septic system or waste treatment, storage or
disposal system servicing any Borrower facility, of any toxic or hazardous
substances or wastes at or from any Borrower facility; and accordingly, to the
best knowledge of Borrower, the premises of the Borrower are free of all such
toxic or hazardous substances or wastes. Borrower has received no complaint,
order, directive, claim, citation or notice by any governmental authority or any
person or entity with respect to (1) air emissions; (2) spills, releases or
discharges to soils or improvements located thereon, surface water, groundwater
or the sewer, septic system or waste treatment, storage or disposal systems
servicing any Borrower facility; (3) noise emissions; (4) solid or liquid waste
disposal; (5) the use, generation, storage, transportation or disposal of toxic
or hazardous substances or waste; or (6) other environmental, health or safety
matters affecting the Borrower or its business, operations, assets, equipment,
property, leaseholds or other facilities. Borrower
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does not have any indebtedness, obligation or liability, absolute or contingent,
matured or not matured in excess of $500,000, with respect to the storage,
treatment, cleanup or disposal of any solid wastes, hazardous wastes, or other
toxic or hazardous substances (including without limitation any such
indebtedness, obligation or liability with respect to any current regulation,
law or statute regarding such storage, treatment, cleanup or disposal).
(r) ERISA. The Borrower is in compliance in all material respects with
all applicable provisions of ERISA, and all regulations promulgated pursuant
thereto.
(s) Trademarks, Patents, Etc. Borrower possesses all trademarks, trade
names, copyrights, patents, licenses or rights in any thereof, adequate for the
conduct of its businesses as now conducted and presently proposed to be
conducted, without conflict with the material rights or claimed rights of any
Person.
(t) Governmental Requirements. Borrower knows of no reason why it will
not be able to obtain all permits necessary to the commencement of construction
of single family or multi-family residences on any of the Mortgaged Property as
and when the same are necessary in order to enable Borrower to commence,
continue and complete construction thereof in the ordinary course of its
business.
(u) Utility Services. All utility services including, but not limited
to, drinking water supplies, service water drainage facilities, sanitary sewage
collection and disposal facilities or water treatment plant, electric and
telephone facilities that may be necessary to obtain a certificate of occupancy
for each Single Family Residence included in any platted subdivision, or
intended to be constructed on any unplatted land, included in the Mortgaged
Property are available at the boundary thereof and, upon completion of the
contemplated improvements, will be available to each Single Family Residence
constructed thereon, and all fees and other charges, if any, required to be paid
in connection with the reservation and/or connection of such utility services
have been paid in full or will be paid when due.
All statements contained in any certificate or other document or instrument of
any kind whatsoever delivered by or on behalf of Borrower pursuant hereto or any
other Loan Document, or in connection with the transactions contemplated hereby
or thereby, shall be deemed representations and warranties made by the Borrower
in this Agreement, and together with all representations and warranties herein
or in any other Loan Document, shall survive the execution and delivery thereof
and of the Agreement and any other Loan Document, the making of any Line
Advances, and the making of any investigation made by any Person at any time by
or on behalf of Bank.
6. COVENANTS
---------
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A. Affirmative Covenants. Borrower undertakes, covenants, and agrees
that, until the full and complete payment, performance, and observance of the
Loan, Borrower shall:
(1) Reporting Requirements. Furnish to the Bank:
(a) Borrower's Borrowing Base Certificate. Within three (3)
Business Days after the end of each calendar month during the term hereof, and
prior to each Line Advance under this Agreement, and at any other times
reasonably required by Bank, deliver to Bank a Borrower's Borrowing Base
Certificate fully completed as to all figures and information called for therein
and certified as complete and correct by a duly authorized officer of Borrower;
(b) Borrower's Collateral Value Certificate. Within fifteen
(15) days after the end of each calendar quarter during the term hereof, deliver
to Bank a certificate signed by the chief executive or chief financial officer
of Borrower certifying the Collateral Value of the Mortgaged Property as of the
end of the preceding quarter.
(c) Quarterly Financial Statements. Within thirty (30) days
after the close of each calendar quarter, a statement of condition and statement
of income of Borrower for such period, certified as complete and correct by a
duly authorized officer of Borrower;
(d) Annual Financial Statements and Accountant's Report.
Not later than ninety (90) days after the close of each fiscal year of Borrower,
a statement of condition of Borrower as of the end of such year, and statements
of income, changes in financial position, and common shareholders' equity of
Borrower for such year, setting forth in each case in comparative form the
figures for the previous fiscal year, all in accordance with GAAP consistently
applied and consistent with those applied in the preparation of the financial
statements referred to in Section 5(p) of this Agreement and accompanied by an
audit report of independent certified public accountants of recognized standing,
selected by the Borrower and satisfactory to the Bank, which audit report shall
be prepared in accordance with the standards established by the American
Institute of Certified Public Accountants, together with a certificate by such
accountants (1) briefly setting forth the scope of their review (which shall
include a review of the relevant provisions of this Agreement) and stating that
in their judgment such review is sufficient to enable them to give the
certificate, and (2) stating whether or not their review has disclosed the
existence of any condition or event which constitutes an Event of Default under
this Agreement or which, with the passage of time or service of notice or both,
would constitute an Event of Default, and, if their review has disclosed such a
condition or event, specifying the nature and period of existence thereof;
(e) Changes of Name and Location. Not less than thirty (30)
days prior written notification of:
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(i) any change in Borrower's name, and/or
(ii) any change in Borrower's Location;
(f) Matters Affecting Collateral. Within ten (10) days
after learning thereof, report to the Bank: any loss or destruction of, or
substantial damage to, any of the Collateral, any substantial change relating to
the type, quantity or quality of Collateral, and any other matters affecting the
value, enforceability or collectibility of any of the Collateral; the Borrower
shall at all times maintain internal procedures reasonably designed to call any
such matter to the attention of the chief financial or chief accounting officer
of Borrower and the Bank;
(g) Management Letters. Promptly upon receipt thereof,
copies of any reports submitted to the Borrower by independent certified public
accountants in connection with examination of the financial statements of the
Borrower made by such accountants;
(h) Certificate of No Default. Within thirty (30) days
after the end of each fiscal year of the Borrower, a certificate of the chief
financial officer of the Borrower (a) certifying that to the best of his
knowledge no Default or Event of Default has occurred and is continuing, or if a
Default or Event of Default has occurred and is continuing, a statement as to
the nature thereof and the action which is proposed to be taken with respect
thereto, and (b) with computations demonstrating compliance with the Financial
Covenants contained in Section 6(c) of this Agreement;
(i) Notice of Defaults and Events of Default. As soon as
possible and in any event within ten (10) days after the occurrence of each
Default or Event of Default, a written notice setting forth the details of such
Default or Event of Default and the action which is proposed to be taken by the
Borrower with respect thereto;
(j) Notice of Litigation. Within ten (10) days after
service of process thereof on Borrower, notice of all actions, suits, and
proceedings before any court or arbitrator or governmental department,
commission, board, bureau, agency or instrumentality, domestic or foreign,
affecting the Borrower where the amount claimed exceeds $250,000.00 or which, if
determined adversely to the Borrower, could have a material adverse effect on
the financial condition, properties or operations of the Borrower;
(k) Notice of Other Material Matters. Within five (5) days
after becoming aware of any development or other information which may
materially and adversely affect the properties, business, prospects, profits or
condition (financial or otherwise) of Borrower, or the ability of the Borrower
to perform or comply with this Agreement, telephonic or telegraphic notice
specifying the nature of such development or information and the anticipated
effect;
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(2) Compliance with Laws. Comply with, or cause to be complied
with, all applicable local, state and federal laws, rules and regulations
relating to all or any of its assets, properties, operations and activities.
(3) Maintenance of Existence. Do, or cause to be done, all
things necessary to preserve and keep in full force and effect its existence as
a corporation, its good standing under the laws of the State of Florida and its
qualification to do business, and its good standing, in all jurisdictions
wherein its ownership of its property or the nature of its business requires
such qualification.
(4) Maintenance of Records. Keep, or cause to be kept, full and
complete accounts, books and records in which correct and accurate entries will
be made of all its business transactions and its property including the
Collateral, and by means of appropriate quarterly entries, reflect in its
accounts and in all financial statements furnished pursuant to this Agreement
proper liabilities and reserves for all taxes and proper provision for
depreciation and amortization of its properties and bad debts, all in accordance
with GAAP consistently applied and consistent with those applied in the
preparation of the financial statements referred to above.
(5) Payment of Taxes. Promptly pay and discharge when due, all
taxes, assessments, and governmental charges of every kind and nature that have
been lawfully levied, assessed, or imposed upon Borrower, its properties
(including the use thereof), the Revolving Note, which, if unpaid, would become
a lien against all or any part of its assets, including, without limitation, all
sums due and owing any taxing authority for income and other taxes withheld from
the wages and salaries of its employees, except to the extent Borrower is
reasonably contesting in good faith any such tax, assessment, or charge with an
adequate reserve provided therefor.
(6) Inspections; Audits. At all reasonable times after
reasonable notice allow Bank by or through any of its officers, agents,
employees, attorneys, or accountants to reasonably examine, inspect, audit and
make extracts from Borrower's books and other records; and to enter upon,
examine, inspect and audit all or any part of the Collateral and any other
property owned by Borrower, all reasonable expenses of which shall be Related
Expenses hereunder.
(7) Maintenance of Assets. Maintain, keep and preserve, all of
its assets (tangible and intangible) necessary or useful in the proper conduct
of its business in good working order and condition, ordinary wear and tear
excepted.
(8) Further Assurances. Upon request of Bank promptly take such
action and promptly make, execute, and deliver all such additional and further
items, assurances, and instruments as Bank may reasonably require, including,
without limitation, financing statements, so as to completely vest in and assure
to Bank its rights hereunder and in or to the Collateral; provided that
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no such further assurance shall create liability or security beyond that
contemplated in this Agreement or the other Loan Documents.
(9) Related Expenses. Promptly repay, reimburse, and indemnify
Bank for any and all Related Expenses, with interest thereon at the Default Rate
if not paid within ten (10) days following receipt of notice thereof. Bank may,
at its option, debit Related Expenses and such interest directly to the Loan
Account.
(10) Environment. Be and remain in compliance with the
provisions of all federal, state and local environmental, health and safety
laws, codes and ordinances, and all rules and regulations issued thereunder;
notify the Bank within five (5) days of any notice of a hazardous discharge or
environmental complaint received from any governmental agency or any other
Person; notify the Bank within five (5) days of any hazardous discharge from or
affecting any of Borrower's property; immediately contain and remove the same,
in compliance with all applicable laws; promptly pay any fine or penalty
assessed in connection therewith unless same is contested in compliance with
Section 9 of the Mortgage; permit the Bank to inspect the Mortgaged Property, to
conduct tests thereon, and to inspect all books, correspondence and records
pertaining thereto; and at the Bank's request, and at the Borrower's expense,
provide a report of a qualified environmental engineer, satisfactory in scope,
form and content to the Bank, and such other and further assurances reasonably
satisfactory to the Bank that the condition has been corrected and provided that
in the absence of any hazardous discharge or environmental complaint with
respect to any property, Bank shall not require an environmental audit or report
with respect to any such property more often than annually.
(11) Additional Collateral. If Borrower seeks at any time to
increase the Collateral Value, Borrower shall provide additional Collateral in
accordance with the following procedures:
(a) Borrower shall deliver to Bank: (i) a legal description
of the proposed additional Collateral; (ii) a title commitment or title policy
endorsement covering the proposed additional Collateral and containing or
showing only such exceptions from title insurance coverage as are similar in
substance and character to the title exceptions for the Collateral originally
described in the Mortgage ("Original Collateral") or otherwise reasonably
acceptable to Bank; (iii) such environmental audits and documents as Bank
required for purposes of approval of the Original Collateral hereunder; (iv) a
mortgage amendment or spreader agreement which, when executed, delivered and
recorded by Borrower and Bank, shall "spread" the lien of the Mortgage over and
upon the additional Collateral so that the lien of the Mortgage shall constitute
a first mortgage lien upon the additional Collateral, subject only to the
exceptions permitted as provided herein; (v) sketches of survey or plats which
will permit Bank to locate the proposed additional Collateral and to verify the
legal description thereof; and (vi) an appraisal of the proposed additional
Collateral sufficient to establish the Collateral Value therefor in accordance
with the provisions of this Agreement.
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(b) Bank shall approve or disapprove in writing Borrower's
submission of any proposed additional Collateral within ten (10) Business Days
after the date of its receipt thereof. The Collateral Value shall be increased
by the value of the Collateral subject to the Mortgage amendment or spreader
agreement upon filing thereof in the proper public records and receipt by Bank
of a title commitment or endorsement insuring such Collateral in the amount
thereof as provided herein, and provided all other conditions to inclusion of
such property in the Mortgaged Property and Collateral Value are satisfied, and
all representations and warranties herein related thereto are true and correct.
If Bank shall disapprove of Borrower's submission, it shall specify in writing
its reasons for doing so. In the event that Bank shall neither approve or
disapprove the additional Collateral within such ten (10) day period, then Bank
shall be deemed to have approved such proposed additional Collateral in all
respects and Borrower shall thereafter, upon execution and delivery to Bank by
Borrower of the "spreader agreement", be deemed to have added acceptable
additional Collateral to the Collateral hereunder for purposes of determining
Collateral Value.
B. Negative Covenants. Borrower undertakes, covenants and agrees that,
until the full and complete payment, performance and observance of the Loan,
Borrower shall not:
(1) Liens. Without the prior written consent of the Bank,
create, incur, assume or suffer any Lien upon or with respect to any of its
properties, now owned or hereafter acquired, including without limitation any of
the Mortgaged Property, except (to the extent expressly permitted by, and
subject to all requirements of, the Mortgage):
(a) Liens in favor of the Bank, including the Mortgage;
(b) Liens for taxes or assessments or other government
charges or levies if not yet due and payable or, if due and payable, if they are
being contested in good faith by appropriate proceedings and for which
appropriate reserves are maintained;
(c) Liens imposed by law, such as mechanics',
materialmen's, landlords', warehousemen's and carriers' Liens, and other similar
Liens on property other than the Mortgaged Property not exceeding One Hundred
Thousand Dollars ($100,000.00) individually or Two Hundred Fifty Thousand
Dollars ($250,000.00) per annum in the aggregate and securing obligations
incurred in the ordinary course of business which are not past due for more than
sixty (60) days or which are being contested in good faith by appropriate
proceedings and for which appropriate reserves have been established;
(d) Liens under workers' compensation, unemployment
insurance, Social Security or similar legislation for which appropriate reserves
have been established;
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(e) Liens, deposits or pledges to secure the
performance of bids, tenders, contracts (other than contracts for the payment of
money), leases (permitted under the terms of this Agreement), public or
statutory obligations, surety, stay, appeal, indemnity, performance or other
similar bonds, or other similar obligations arising in the ordinary course of
Borrower's business;
(f) Judgment and other similar Liens on property other
than Collateral arising in connection with court proceedings not exceeding Five
Hundred Thousand Dollars ($500,000.00) in the aggregate outstanding at any time,
provided the execution or other enforcement of such Liens is effectively stayed
and the claims secured thereby are being actively contested in good faith and by
appropriate proceedings and for which adequate reserves have been established;
(h) Easements, rights-of-way, restrictions and other
similar encumbrances which, in the aggregate, do not materially interfere with
the occupation, use and enjoyment by the Borrower of the property or assets
encumbered thereby in the normal course of its business or materially impair the
value of the property subject thereto; or
(i) Purchase-money Liens on any property (other than
Collateral) hereafter acquired or the assumption of any Lien on property
existing at the time of such acquisition (and not created in contemplation of
such acquisition ) or a Lien incurred in connection with any conditional sale or
other title retention agreement or a Capital Lease; provided that
(i) Any property subject to any of the foregoing is
acquired by the Borrower in the ordinary course of its business and the Lien on
any such property attaches to such asset concurrently or within ninety (90)
Business Days after the acquisition thereof;
(ii) Each such Lien shall attach only to the
property so acquired and fixed improvements thereon;
(iii) The Debt secured by such Lien is permitted by
the provisions of Section 6B(2) hereof; or.
(2) Debt. Without the prior written consent of Bank, create,
incur, assume or suffer to exist, or permit any Debt (as defined herein) or
Indebtedness (as defined in the Senior Indenture), except:
(a) Indebtedness of the Borrower permitted to be
incurred under Section 4.16 of the Senior Indenture as such Senior Indenture is
in effect on the date hereof, which includes (i) Debt of the Borrower under the
Revolving Note and this Agreement; and (ii) Debt or Indebtedness of the Borrower
existing on the date hereof described in financial statements of Borrower
heretofore delivered to Bank; or
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(b) Accounts payable to trade creditors for goods or
services which are not aged more than ninety (90) days from the billing date and
current operating liabilities (other than for borrowed money) which are not more
than ninety (90) days past due, in each case incurred in the ordinary course of
business, as presently conducted, and paid within the specified time, unless
contested in good faith and by appropriate proceedings.
(3) Mergers, Etc. Wind up, liquidate or dissolve itself,
reorganize, merge or consolidate with or into, or enter into any merger
agreement with, or convey, sell, assign, transfer, lease or otherwise dispose of
(whether in one transaction or in a series of transactions) all or substantially
all of its assets (whether now owned or hereafter acquired) to any Person unless
Borrower is the surviving Organization.
(4) Sale of Assets. Sell, lease, assign, transfer or otherwise
dispose of any of the Mortgaged Property, except residential real estate
disposed of in the ordinary course of business and in accordance with the
provisions of this Agreement.
(5) Transactions with Affiliates. Enter into any transaction,
including, without limitation, the purchase, sale or exchange of property or the
rendering of any service, with any Affiliate of Borrower, except in the ordinary
course of and pursuant to the reasonable requirements of the Borrower's business
and upon fair and reasonable terms no less favorable to the Borrower than would
obtain in a comparable arm's-length transaction with a Person not an Affiliate
of Borrower.
(6) Pledge Bank's Credit. Pledge the Bank's credit on any
purchases or for any purpose whatsoever.
C. Financial Covenants - Consolidated Tangible Net Worth. Borrower
undertakes, covenants and agrees that, until the full and complete payment,
performance and observance of the Loan, Borrower will maintain at all times its
Consolidated Tangible Net Worth at not less than Seventy Million Dollars
($70,000,000.00).
8. EVENTS OF DEFAULT
-----------------
Upon the occurrence of any one or more of the following Events of Default, the
Loan shall, at the option of Bank, become immediately due and payable without
presentment, demand, protest, or notice of any kind, all of which are hereby
expressly waived by Borrower, and no further Line Advances will be made by Bank:
(a) failure by Borrower to pay any installment of principal or interest
under the Revolving Note within five (5) days after the same becomes due and
payable;
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(b) Financial Impairment of Borrower;
(c) if any statement or representation contained in the loan application
or any financial statements or other materials furnished to Bank by or on behalf
of Borrower prior or subsequent to the making of the Loan is discovered to have
been false or incorrect or incomplete in any material respect and is not cured
or corrected to Bank's satisfaction within 30 days after notice thereof;
(d) an action for foreclosure or martialling of liens is commenced
against all or any part of the Mortgaged Property and such action is not
dismissed within sixty five (65) days from the date of filing thereof;
(e) a default or event of default (after any required notice and cure
period) occurs under any other mortgage or security agreement encumbering all or
any part of the Mortgaged Property; or
(f) Failure of Borrower to promptly pay, perform, or observe when due,
whether upon demand, at maturity, by acceleration, or otherwise, or any event
which either results in or would result in (but for waiver by the holder(s) or
trustee(s) thereof) the acceleration of the maturity of, any or all
indebtedness, obligations, liabilities, contracts, indentures, and agreements
(including, without limitation, any and all warranties, covenants, guaranties,
provisions, terms, and conditions set forth or contained therein), of whatever
kind and however evidenced, evidencing, securing or involving indebtedness of
Borrower in excess of $2,500,000, in the aggregate, owed, incurred, or executed
by Borrower, to, in favor of, or with any and all Persons other than Bank, and
including any partial or total extension, renewal, amendment, restatement, and
substitution thereof or therefor, except for any such failure caused by any
breach or failure by Bank of any of its obligations to release Collateral
pursuant hereto or to the Mortgage;
(g) An Event of Default occurs under the Mortgage or any other Loan
Document;
(h) Any sale, transfer, conveyance, assignment, pledge, encumbrance, or
other disposition by any Person, or the issuance by Borrower, of any voting
stock, or any option, warrant, or other security convertible to voting stock, or
any other right to acquire voting stock, of the Borrower, whether with or
without consideration, voluntarily or by operation of law that would result in a
Change of Control of Borrower, as defined in the Senior Indenture as in effect
on the date hereof; or
(i) Breach or violation of any covenant in Section 6.B(3),(4) or (6)
hereof;
(j) failure by Borrower to observe or perform any other term, covenant
or agreement contained in this Agreement, in the Revolving Note or in the
Mortgage or in any other Loan Document; provided, however, that if the failure
is other than the payment of money, or the
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maintenance of insurance, is not intentional or grossly negligent on the part of
the Borrower, and does not constitute an emergency in the reasonable opinion of
Bank, such failure shall not constitute an Event of Default if (i) Borrower
institutes curative action and pursues such action to completion within thirty
(30) days after written notice of such failure has been given to Borrower by
Bank; or (ii) the failure is of such nature that it can be corrected but not
within thirty (30) days after written notice thereof has been given to Borrower
by Bank, and Borrower has within the aforesaid thirty (30) day period instituted
curative action and diligently and continuously pursued such action to
completion, provided that such failure shall become an Event of Default if not
cured to Bank's satisfaction within ninety (90) days after such written notice.
9. RIGHTS AND REMEDIES UPON EVENT OF DEFAULT
-----------------------------------------
(a) Upon occurrence of any Event of Default, the Loan shall, at the
option of Bank and without any further notice or demand not expressly required
herein, become immediately due and payable, and shall thereafter bear interest
at the Default Rate, and at all times thereafter Bank shall have all rights,
privileges, powers and remedies provided by law or equity and this Agreement,
the Mortgage and any other Loan Document, and which it may otherwise have
against the Borrower, the Collateral, or otherwise. The Bank may take possession
of the Collateral, either by lawful self-help or seizure under court authority.
Borrower agrees to permit the Bank to enter any premises where the Collateral
may be located for the purpose of taking possession of or removing the
Collateral. Bank may require the Borrower to assemble any personal property
included in the Collateral and to promptly make it available to Bank at any
reasonably convenient place designated by Bank, whether at the Borrower's
premises or elsewhere. Borrower shall make available to Bank all of its premises
and facilities for the purpose of Bank's taking possession of, removing or
putting any personal property included in the Collateral in saleable form. At
any time or times after the Loan becomes due, Bank is empowered to collect,
sell, assign, transfer, set over, deliver or otherwise dispose of the whole or
any part of the personal property Collateral through any broker or at public or
private sale, either for cash or on credit or for future delivery, whether in
its then condition or after further preparation or processing, in Borrower's
name, Bank's name or in the name of such party as Bank may designate, with or
without warranties or representations, and upon such other terms as Bank may
deem commercially reasonable, and at any such sale Bank may become the purchaser
of the whole or any part of such Collateral, discharged from right of
redemption. Public or private sales, for cash or credit, to a wholesaler or
retailer or investor, or user of property of the type of the Collateral, or
public auction, are commercially reasonable since differences in the sales
prices generally realized in different kinds of sales are ordinarily offset by
the differences in the costs and credit risks of such sales. Borrower agrees
that to the extent notice of sale shall be required by law, such requirement
shall be satisfied if such notice is mailed (deposited for delivery, postage
prepaid, by U.S. Mail) to either, at Bank's option (i) Borrower's Location (as
modified by any change therein which Borrower has supplied in writing to Bank),
or (ii) Borrower's address to which Bank customarily communicates with Borrower,
at least ten (10) days before the time of any public sale
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or the time after which any private sale is to be made. Bank shall not be
obligated to make any sale regardless of notice of sale having been given. Bank
may adjourn any public or private sale from time to time by announcement at the
time and place fixed therefor, and such sale may, without further notice, be
made at the time and place to which it was so adjourned. Upon any such sale
after deducting all costs and expenses of every kind, the residue of proceeds
thereof may be applied in such order as Bank may determine toward the payment of
all or any part of the Loan, whether due or not due, returning the surplus, if
any, to the Borrower, and the Borrower shall be and remain liable to Bank for
any and every deficiency after application of such proceeds. Bank shall not be
bound to take any steps to preserve any rights in the Collateral against prior
parties, which the Borrower hereby assumes to do, and Bank shall have exercised
reasonable care in the custody and preservation of the Collateral if it takes
such action for that purpose as the Borrower shall reasonably request, but no
omission to comply with any such request shall be deemed a failure to exercise
reasonable care.
(b) Bank shall be under no obligation to take any action authorized
herein and shall have no liability for failure to take any such action or for
any action taken pursuant hereto, except for its gross negligence or willful
misconduct; and Borrower hereby waives and releases any and all claims against
the Bank arising out of or in connection with this Agreement.
(c) After the occurrence of an Event of Default, Bank may at any time
and from time to time, to the fullest extent permitted by applicable law,
without advance notice to the Borrower (any such notice being expressly waived
by the Borrower), and in addition to all other rights and remedies available to
Bank, set off and apply any and all Cash Security and any other indebtedness or
obligation at any time owing by the Bank to or for the credit or the account of
the Borrower against any or all of the Loan, and with or without setting off, to
dishonor drafts, checks, transfer requests or any other means or direction of
withdrawal of any or all amounts owed by the Bank to or for the credit or the
account of the Borrower (including but not limited to general or special, time
or demand, provisional or final) at any time owed, irrespective of whether or
not Bank has exercised any other rights that it has or may have with respect to
the Loan or any such Event of Default. The Borrower warrants that it has no
special accounts including, without limitation, trust accounts. Nor will it
establish with Bank such accounts without notice to the Bank. The Borrower
agrees to immediately notify the Bank whenever any third party obtains or
asserts any interest in any of its accounts with Bank.
(d) All of the foregoing rights and powers herein granted Bank shall be
liberally construed. The enumeration of the foregoing rights and powers is not
intended to be exhaustive and the exercise of any right shall not preclude the
exercise of any other rights, all of which shall be cumulative. Bank need not
expend its own funds in the exercise of such powers, but if it does, such
amounts shall be considered as advances for and on behalf of Borrower evidenced
by the
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Revolving Note and secured by the Mortgage and this Agreement. Any amounts so
advanced shall bear interest at the Default Rate.
10. GENERAL
-------
(a) Severability. If any provision, term, or portion, of this Agreement
(including, without limitation, (1) any indebtedness, obligation, liability,
contract, agreement, indenture, warranty, covenant, guaranty, representation, or
condition of this Agreement made, assumed, or entered into, (2) any act or
action taken under this Agreement, or (3) any application of this Agreement) is
for any reason held to be illegal or invalid, such illegality or invalidity
shall not affect any other such provision, term, or portion of this Agreement,
each of which shall be construed and enforced as if such illegal or invalid
provision, term, or portion were not contained in this Agreement. Any illegality
or invalidity of any application of this Agreement shall not affect any legal
and valid application of this Agreement, and each provision, term, and portion
of this Agreement shall be deemed to be effective, operative, made, entered
into, or taken in the manner and to the full extent permitted by law.
(b) No Waiver; Remedies Cumulative. Bank shall not be deemed to have
waived any of Bank's rights under this Agreement or under any other agreement,
instrument, or document executed by Borrower, unless such waiver is in writing
and signed by Bank. No delay or omission on part of Bank in exercising any right
or remedy shall operate as a waiver of such right or remedy or any other right
or remedy. A waiver on any one occasion shall not be construed as a bar to or
waiver of any right or remedy on any future occasion. All Bank's rights and
remedies, whether evidenced by this Agreement or by any other agreement,
instrument, or document, or available by statute, at law or in equity shall be
cumulative and may be exercised singularly or concurrently and in such order as
Bank may determine.
(c) Notices. Any written demands, written requests, or written notices
to Borrower that Bank may elect to give shall be effective when deposited for
delivery, postage prepaid, by U.S. Mail, and addressed either, at Bank's option,
to (1) Borrower's Location (as modified by any change therein which Borrower has
supplied in writing to Bank) or, (2) Borrower's address at which Bank
customarily communicates with Borrower.
(d) Assignments by Bank. If at any time or times, by assignment or
otherwise, Bank transfers an interest in the Loan or any part of the Collateral
to another Person, such transfer shall carry with it Bank's powers and rights
under this Agreement with respect to the Loan or Collateral so transferred and
the transferee shall have said powers and rights, whether or not they are
specifically referred to in the transfer. Bank may not assign or transfer the
entire Loan without Borrower's prior written consent, but may assign or transfer
participation interests therein provided that Ohio Savings Bank shall at all
times be the "lead lender" for the purpose of exercising all
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powers, rights and duties hereunder and provided that there shall be not more
than three (3) other participants owning in the aggregate not more than fifty
percent (50%) of the Loan.
(e) Governing Law. The laws of the State of Florida shall govern the
construction of this Agreement and the rights and duties of Borrower and Bank.
(f) Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of Borrower and Bank and their respective successors and
assigns, provided that this Agreement may not be assigned by Borrower and any
such assignment or attempted assignment shall be void and of no force or effect
and an Event of Default hereunder. This Agreement may not be assigned by Bank
except as provided in Section 10(d) hereof. The rights and powers given in the
Agreement to the Bank are in addition to those otherwise created or existing in
the same Collateral by virtue of other agreements or writings.
(g) Indemnity. Borrower hereby releases Bank from and agrees to
indemnify and hold harmless Bank, and its officers, agents, and employees for
any and all claims of Borrower or any other Person for damage or loss caused by
any act or acts under this Agreement or in furtherance of this Agreement whether
by omission or commission, and whether based upon any error of judgment or
mistake of law or fact (except willful misconduct or gross negligence) on the
part of Bank, or its officers, agents, and employees.
(h) Amendments, Etc. No amendment, modification, termination or waiver
of any provision of any Loan Document, nor consent to any departure by the
Borrower from any Loan Document, shall in any event be effective unless the same
shall be in writing and signed by Bank, and then such waiver or consent shall be
effectively only in the specific instance and for the specific purpose for which
given.
(i) Reproduction of Original Financing Statements. Borrower hereby
authorizes Bank to file a carbon, photographic or other reproduction of a
financing statement, and any such filing shall constitute a sufficient financing
statement under the Code and shall have such other effects as may be provided
for by applicable law.
(j) Confidentiality. This Agreement shall not be filed or recorded with
the Mortgage or with any financing statement. The terms, covenants and
conditions of this Agreement, the Revolving Note and the other Loan Documents
(other than those filed for record) shall be confidential and shall not be
disclosed to any Person by Bank for any purpose other than (1) disclosure to all
regulatory agencies having jurisdiction of the operations of Bank; (2) attorneys
and accountants employed or retained by Bank; (3) prospective participants in
the Loan as contemplated by this Agreement, provided that Bank shall obtain from
such prospective participants a confidentiality agreement whereby such
participants agree not to disclose this Agreement to any other Person other than
as
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specifically permitted hereby; and (4) in connection with the enforcement of
this Agreement following an uncured Event of Default on the part of Borrower.
Borrower may disclose this Agreement or the contents thereof to other Persons as
required in the ordinary course of its business.
(k) Continuing Liability of Borrower for Underlying Obligations.
Anything herein to the contrary notwithstanding, (1) Borrower shall remain
liable under its contracts and agreements included in the Collateral to the
extent set forth therein to perform all of Borrower's duties and obligations
thereunder to the same extent as if this Agreement had not been executed, (2)
the exercise by Bank of any of the rights hereunder shall not release Borrower
from any of its duties or obligations under its contracts and agreements
included in the Collateral, and (3) Bank shall not have any obligation or
liability under the contracts and agreements included in the Collateral by
reason of this Agreement, nor shall Bank be obligated to perform any of the
obligations or duties of Borrower thereunder or to take any action to collect or
enforce any claim for payment.
(l) Conflict with Mortgage. In the event of any conflict or
inconsistency between any of the terms or provisions hereof and any of the terms
or provisions of the Mortgage, the terms and provisions of the Mortgage shall
govern and control. All Loan Documents shall be interpreted in a manner so as
not to be inconsistent with each other to the maximum extent possible.
(m) Compliance with Senior Indenture. Bank understands that the Senior
Indenture contains limitations and restrictions with respect to Borrower's
ability to obtain "Bank Facilities" and to grant "Permitted Liens". If the
Collateral Value for the Loan (as a "Bank Facility") shall at any time exceed or
violate the limitations and restrictions contained in the Senior Indenture, Bank
shall promptly, upon written request from Borrower, partially release from the
lien of the Mortgage so much of the Collateral (to be designated by Borrower,
subject to Bank's approval) as may be necessary to enable Borrower to comply
with the applicable limitations and restrictions contained in the Senior
Indenture. Simultaneously with any such partial Mortgage release to be delivered
by Bank pursuant hereto, Borrower shall deliver to Bank its Collateral Value
Certificate certifying the Collateral Value of the Mortgaged Property after
giving effect to such partial release, and any amount necessary to cause the
unpaid principal balance of the Loan to be maintained within the Loan Amount
Limitations provided in Section 3(a)(i).
(n) Attorneys' Fees. If any party to this Agreement retains counsel to
enforce or protect its rights hereunder after a breach by the other party to
this Agreement, including, without limitation, any action of or incidental to
the enforcement of any provision hereof, the Line Advances made hereunder, the
Revolving Note, the Mortgage, or any of the other Loan Documents or the
enforcement, compromise, or settlement of this Agreement, the Revolving Note,
the Mortgage, or any of the other Loan Documents, and for the curing thereof, or
defending or asserting any rights or claims in respect thereof, by litigation or
otherwise, regardless of whether suit may be brought or not, then in any such
event after such breach, the party retaining counsel shall be entitled to
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receive and recover from a breaching party the reasonable attorneys' fees,
paralegals' fees and expenses incurred in negotiations, pre-litigation
conferences or with respect to satisfaction of the Loan, or at trial and on
appeal, including post-judgment collection costs, in successfully enforcing or
protecting or defending its rights hereunder.
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IN WITNESS WHEREOF, the parties hereto have caused the Agreement to be
executed on the day and year first above written.
Borrower:
Oriole Homes Corp.,
a Florida corporation
By: ______________________
Title: ______________________
Bank:
OHIO SAVINGS BANK,
an Ohio corporation
By: ______________________
Title: ______________________
STATE OF FLORIDA )
)
COUNTY OF )
I HEREBY CERTIFY that on this day, before me, an officer duly authorized
in the State aforesaid and in the County aforesaid to take acknowledgements, the
foregoing instrument was acknowledged before me by
______________________________________, the ___________________, of ORIOLE HOMES
CORP., a Florida corporation, freely and voluntarily under authority duly vested
in him/her by said corporation and that the seal affixed thereto is the true
corporate seal of said corporation. He/She is personally known to me or has
produced ________________________ as identification and DID/DID NOT take an
oath.
WITNESS my hand and official seal in the County and State last aforesaid
this _____ day of _______________, 1993.
----------------------------------------
(SEAL) Notary Public
State of Florida
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----------------------------------------
Typed, printed or stamped name of
Notary Public
My Commission Expires:___________________
STATE OF OHIO )
)
COUNTY OF CUYAHOGA )
I HEREBY CERTIFY that on this day, before me, an officer duly authorized
in the State aforesaid and in the County aforesaid to take acknowledgements, the
foregoing instrument was acknowledged before me by
______________________________________, the ___________________, of Ohio Savings
Bank, an Ohio corporation, freely and voluntarily under authority duly vested in
him/her by said corporation and that the seal affixed thereto is the true
corporate seal of said corporation. He/She is personally known to me or has
produced ________________________ as identification and DID/DID NOT take an
oath.
WITNESS my hand and official seal in the County and State last aforesaid
this _____ day of _______________, 1993.
----------------------------------------
(SEAL) Notary Public
State of Florida
----------------------------------------
Typed, printed or stamped name of
Notary Public
My Commission Expires:___________________
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JS 8/8/95, 8/11/95, 8/16/95, 8/21/95
EXHIBIT 10.4
FIRST AMENDMENT
to
REVOLVING LOAN AGREEMENT
This First Amendment to Revolving Loan Agreement (the "First Amendment")
is executed and delivered as of the _____ day of August, 1995, by and between
ORIOLE HOMES CORP., a Florida corporation (the "Borrower"), Suite 200, 1690
South Congress Avenue, Delray Beach, Florida 33445-6327, and OHIO SAVINGS BANK,
F.S.B., a federal savings bank, f/k/a Ohio Savings Bank, an Ohio corporation
(the "Bank"), Ohio Savings Plaza, 1801 East Ninth Street, Cleveland, Ohio 44114;
W I T N E S S E T H:
--------------------
WHEREAS, in consideration for a revolving line of credit in the maximum
amount of Ten Million Dollars ($10,000,000.00) (the "Existing Loan") made by
Bank to Borrower, Borrower has executed and delivered to Bank its Revolving
Mortgage Note dated July 13, 1993, in the maximum principal amount of the
Existing Loan as aforesaid (the "Existing Note");
WHEREAS, the Existing Loan is evidenced by, among other things, a
Revolving Loan Agreement (the "Agreement") dated the 13th day of July, 1993, and
executed by Borrower and Bank;
WHEREAS, the Existing Note is secured by, among other things, a Mortgage
and Security Agreement dated as of July 13, 1993, and recorded July 16, 1993, in
Official Records Book 7800, Page 1590, of the Public Records of Palm Beach
County, Florida as modified by (i) a Mortgage, Assignment and Financing
Statement Spreader Agreement dated May 31, 1995, and recorded June 6, 1995, in
Official Records Book 8776, Page 262, of said Public Records, and (ii) a Future
Advance, Mortgage, Assignment and Financing Statement Extension, Modification
and Spreader Agreement of even date herewith (the Mortgage and Security
Agreement, as modified, is herein referred to as the "Mortgage") executed and
delivered by the Borrower to the Bank; and
WHEREAS, Borrower and Bank have agreed that Bank shall extend the
Termination Date (capitalized terms not defined herein shall have the meanings
ascribed to them in the Agreement) of the Existing Loan to July 1, 1997, and
make available to Borrower an increase in the Existing Loan not to exceed Ten
Million Dollars ($10,000,000.00) on the terms and conditions hereinafter set
forth.
NOW THEREFORE, in consideration of the sum of Ten Dollars ($10.00) and
other good and valuable consideration, the receipt and sufficiency of
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JS 8/8/95, 8/11/95, 8/16/95, 8/21/95
which are hereby acknowledged, and intending to be legally bound, the Borrower
and Bank hereby covenant and agree as follows:
1. Recitals. The aforementioned recitals are true and correct and
are hereby incorporated by this reference.
2. Existing Loan. As of the date hereof, the unpaid principal balance of
the Existing Loan is Ten Million Dollars ($10,000,000.00), and interest has been
paid on the Existing Note through ________________, 1995. Borrower acknowledges
that the indebtedness evidenced by the Existing Note is free of any and all
defenses, setoffs and counterclaims, and that Borrower has no claims against
Bank in connection with or related to the Existing Loan or any Loan Document as
of the date hereof.
3. Modification of Agreement. The Agreement is hereby amended,
modified and extended as follows:
(a) Definitions.
(i) The definition of the term "Bank" defined in Section 1(a)
is hereby replaced and superseded by the following:
"Bank" mean OHIO SAVINGS BANK, F.S.B., a federal savings bank, f/k/a Ohio
Savings Bank, a corporation incorporated under the laws of the State of Ohio.
(ii) The definition of the term "Borrowing Base" defined in
Section 1(a) is hereby replaced and superseded by the following:
"Borrowing Base" at any time means an amount not in excess of seventy five
percent (75%) of the aggregate amounts payable within the next succeeding twelve
(12) months from the date of computation pursuant to bona fide contracts between
Borrower and Persons not an Affiliate of Borrower for the sale of Single Family
Residences in all residential developments owned and operated by Borrower in
Broward, Palm Beach and Martin Counties, Florida.
(iii) The definition of the term "Maximum Loan Amount" defined
in Section 1(a) is hereby replaced and superseded by the following:
"Maximum Loan Amount" means Fifteen Million and no/100 Dollars
($15,000,000.00) (U.S.).
(iv) The definition of the term "Revolving Note" defined in
Section 1(a) is hereby replaced and superseded by the following:
"Revolving Note" means the Consolidated Revolving Mortgage Note dated August
___, 1995, executed and delivered to Bank by Borrower, in the maximum principal
amount of Fifteen Million and no/100 Dollars
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<PAGE>
JS 8/8/95, 8/11/95, 8/16/95, 8/21/95
($15,000,000.00), including any partial or total extension, restatement,
renewal, amendment, modification or substitution thereof or therefor.
(v) The definition of the term "Termination Date" defined in
Section 1(a) is hereby replaced and superseded by the following:
"Termination Date" means July 1, 1997.
(vi) The terms listed below shall have the following meanings
unless otherwise required by context, and such definitions shall be added to and
be a part of Section 1(a):
"Adjusted Net Book Value" at any time means an amount not in excess of the
lesser of the following:
(1) The Net Realizable Value of the Mortgaged Property, as shown on
Borrower's Financial Statements, under the heading
"Inventories," calculated in accordance with Financial
Accounting Standards Board Statement of Standards No. 67
Accounting for Costs and Initial Rental Operations of Real
Estate Projects (FAS 67), as established by Borrower's most
recent Quarterly Collateral Value Certificate;
(2) The Market Value of the Mortgaged Property, as established by
an appraisal, provided Bank has requested an appraisal pursuant
to Section 3(a)(20) of this Agreement.
"Market Value" means the most probable price which a property should bring in a
competitive and open market under all conditions requisite to a fair sale, the
buyer and seller, each acting prudently and knowledgeably, and assuming the
price is not affected by undue stimulus.
"Mortgaged Property" means the Mortgaged Property defined in the Mortgage.
"Net Realizable Value" means Net Realizable Value as defined in FAS 67.
(b) Section 2(a)(1). Clause (1) of Section 2(a) is hereby superseded,
restated and replaced by the following:
(1) Line Advances. Subject to the terms and conditions hereof, and in
reliance on the representations and warranties herein contained, Bank shall make
Line Advances from time to time during the period commencing on the date hereof
and ending on the Termination Date to or for the account of Borrower up to but
not exceeding an aggregate unpaid principal amount outstanding at any one time
on Line Advances equal to the least of (a) the Maximum Loan Amount then in
effect, (b) the Borrowing Base, (c) sixty percent (60%) of Adjusted Net Book
Value, or (d) such lesser amount as provided by this Agreement. Each of (a),
(b), (c) and (d) is a "Loan Amount Limitation." Borrower's obligation to repay
the Line Advances shall be evidenced by the Revolving Note.
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JS 8/8/95, 8/11/95, 8/16/95, 8/21/95
(c) Section 2 (a)(4). Clause (4) of Section 2(a) is hereby
superseded, restated and replaced by the following:
(4) Unused Line Fee. Within five (5) days after the end of each calendar
month during the term of the Revolving Note, commencing with the month ending
July 31, 1993, Borrower shall pay to Bank an "Unused Line Fee" equal to the rate
of three-eighths of one percent (0.375%) per annum of the average daily amount
for such month of the difference between (a) the Maximum Loan Amount; and (b)
the unpaid principal balance of the Loan.
(d) Section 2(b). The following clause (3) is hereby added to Section
2(b):
(3) Mandatory Repayments. For a period of not less than thirty (30)
consecutive calendar days during each calendar year during the term of the
Revolving Note, commencing with the calendar year ending December 31, 1996, the
unpaid principal balance of the Loan shall not exceed the amount of Five Million
Dollars ($5,000,000.00).
(e) Section 2. The following Section 2(d) is hereby added to Section 2:
(d) Increase in Maximum Loan Amount. Provided (i) the warranties and
representations of Borrower contained in this Agreement remain true, correct and
complete in all material respects; (ii) all the material covenants, terms and
conditions of this Agreement remain satisfied; and (iii) no Event of Default, or
event which upon the lapse of time, the giving of notice, or both, could become
an Event of Default, has occurred under this Agreement; Borrower shall have the
option to increase the Maximum Loan Amount by Five Million Dollars
($5,000,000.00) on and subject to the following terms and conditions:
(1) Notice and Closing. Borrower shall provide Bank with
written notice of Borrower's exercise of the option to increase the Maximum Loan
Amount on or before March 31, 1997. Closing on the increase of the Maximum Loan
Amount shall occur within thirty (30) days of the date notice is effective.
(2) Documents. At closing Borrower shall execute and deliver to
Bank a Future Advance Revolving Mortgage Note in the maximum principal amount of
$5,000,000.00, a Consolidated Revolving Mortgage Note in the maximum principal
amount of $20,000,000.00, a Future Advance and Mortgage Modification Agreement,
and such other documents and certificates as Bank may reasonably request, each
of which shall be satisfactory in form and substance to the Bank.
(3) Fees, Expenses and Other Payments. At closing Borrower
shall pay to Bank a Commitment Fee in the amount of Fifty Thousand Dollars
($50,000.00); and shall further pay all recording fees, documentary stamps and
intangible tax on the Future Advance Revolving Mortgage Note and the Future
Advance and Mortgage Modification Agreement, and all reasonable
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JS 8/8/95, 8/11/95, 8/16/95, 8/21/95
costs, fees and expenses incurred by Bank in connection with the increase in the
Maximum Loan Amount.
(4) Collateral Requirement. It shall be a condition precedent
to Bank's obligation to close and fund the increase in the Maximum Loan Amount
that Adjusted Net Book Value be an amount not less than Forty Million Dollars
($40,000,000.00) on the date of closing.
(5) Modification of Agreement. Upon closing of the increase
in the Maximum Loan Amount:
(i) The definitions of "Maximum Loan Amount" and
"Revolving Note" defined in Section 1(a) of this Agreement shall be construed to
have been replaced and superseded by the following:
"Maximum Loan Amount" means Twenty Million and no/100 Dollars
($20,000,000.00) (U.S.).
"Revolving Note" means the Consolidated Revolving Mortgage Note dated
________________, 199__, executed and delivered to Bank by Borrower, in the
maximum principal amount of Twenty Million and no/100 Dollars ($20,000,000.00),
including any partial or total extension, restatement, renewal, amendment,
modification or substitution thereof or therefor.
(ii) Section 2(b)(3) of this Agreement shall be
construed to have been replaced and superseded by the following:
(3) Mandatory Repayments. For a period of not less than thirty
(30) consecutive calendar days during each calendar year during the term of the
Revolving Note, commencing with the calendar year ending December 31, 199__, the
unpaid principal balance of the Loan shall not exceed the amount of Seven
Million Dollars ($7,000,000.00).
(f) Section 3 (a). The following clause (20) is hereby added to
-------------
Section 3 (a):
(20) Appraisals. At any time during the term of this Agreement, upon the
written request of Bank, but, provided no Event of Default has occurred under
this Agreement, not more frequently than one (1) time each Contract Year,
Borrower shall provide Bank a current (within 30 days) appraisal of the
Mortgaged Property, satisfactory in form and amount to the Bank, prepared by an
appraiser satisfactory to the Bank and in accordance with generally accepted and
established appraisal practices and in conformity with applicable law and
regulation and reviewed (at Borrower's expense) by the Bank's "in-house" senior
appraiser. Any appraisal may be adjusted by the Bank's appraiser to conform to
Bank's appraisal guidelines. Such appraisal, as adjusted by the Bank's
appraiser, shall conclusively establish Net Realizable Value as of the date
thereof. All appraisals, appraisal reviews and any updates thereof shall be at
Borrower's expense.
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JS 8/8/95, 8/11/95, 8/16/95, 8/21/95
(g) Exhibit A. Exhibit A to the Agreement (Borrower's Draw Certificate
and Borrowing Base and Collateral Certificate) is hereby superseded, restated
and replaced by the Exhibit A attached to this First Amendment.
4. Representations and Warranties. Borrower represents and warrants that
it has full power, authority and legal right to execute, deliver and perform the
Consolidated Revolving Mortgage Note, the Demand Revolving Promissory Note dated
August 8, 1995, executed and delivered to Bank by Borrower, in the maximum
principal amount of One Million and no/100 Dollars ($1,000,000.00) and the
Demand Revolving Promissory Note dated August 15, 1995, executed and delivered
to Bank by Borrower, in the maximum principal amount of Two Million and no/100
Dollars ($2,000,000.00) (together, the "Demand Notes"), the Future Advance
Revolving Mortgage Note of even date herewith, executed and delivered to Bank by
Borrower, in the maximum principal amount of Two Million and no/100 Dollars
($2,000,000.00) (the "Future Advance Note"), the Future Advance, Mortgage,
Assignment and Financing Statement Extension, Modification and Spreader
Agreement of even date herewith, executed and delivered to Bank by Borrower (the
"Mortgage Modification"), and this First Amendment, and that, as of the date
hereof (i) the warranties and representations of Borrower contained in the
Agreement are true, correct and complete in all material respects; (ii) all the
material covenants, terms and conditions of the Agreement remain satisfied;
(iii) no Event of Default, or event which upon the lapse of time, the giving of
notice, or both, could become an Event of Default, has occurred under the
Agreement; and (iv) Adjusted Net Book Value is an amount not less than Thirty
Million Dollars ($30,000,000.00).
5. Ratification of Loan Documents. Borrower and Bank each acknowledge
that the Loan Documents are valid and binding; that there are no defenses, set
offs or counterclaims thereto; nothing herein or in the Consolidated Revolving
Mortgage Note, the Demand Notes, the Future Advance Note and/or the Mortgage
Modification invalidates or shall impair or release any covenant, condition,
agreement or stipulation in the Loan Documents; and Borrower and Bank shall each
perform and comply with and abide by each of the covenants, agreements,
conditions and stipulations of the Loan Documents as amended hereby.
6. Fees, Expenses and Other Payments. At the time of execution and
delivery of this First Amendment, Borrower shall pay to Bank a Commitment Fee in
the amount of Fifty Thousand Dollars ($50,000.00); and shall further pay all
recording fees, documentary stamps and intangible tax on the Future Advance Note
and Mortgage Modification, and all reasonable costs, fees and expenses incurred
by Bank in connection with this First Amendment.
7. Miscellaneous.
(a) Severability. If any one or more of the
provisions of this First Amendment is held to be invalid, illegal or
unenforceable in any respect for any reason, the validity, legality and
enforceability of any such provision or provisions in every other respect
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JS 8/8/95, 8/11/95, 8/16/95, 8/21/95
and of the remaining provisions of this First Amendment shall not be in any way
impaired, and each term or provision shall be construed to be legal, valid,
binding and enforceable to the maximum extent permitted by law.
(b) Survival of Covenants, Agreements,
Representations and Warranties. All warranties, representations and covenants
made by Borrower herein or in any certificate or other instrument delivered by
it or on its behalf under this First Amendment shall be considered to have been
relied upon by Bank and shall survive regardless of any investigation made by
Bank or on its behalf. All such statements and any such certificate or other
instrument shall constitute warranties and representations by Borrower
hereunder.
(c) Headings. Paragraph headings have been inserted
in this First Amendment as a matter of convenience of reference only; such
paragraph headings are not part of this First Amendment and shall not be used in
the interpretation of this First Amendment.
(d) Time of the Essence. Time is hereby expressly
made of the essence with respect to the performance and/or satisfaction of each
of the provisions and conditions of this First Amendment.
(e) Governing Law. The laws of the State of Florida
shall govern the construction of this First Amendment and the rights and duties
of Borrower and Bank.
(f) Limited Modification/Conflicts. Except to the
limited extent expressly provided herein, the Loan Documents shall remain in
full force and effect. In the event of any inconsistency between the terms and
conditions of the Agreement and this First Amendment, the terms and provisions
of this First Amendment shall govern and control.
IN WITNESS WHEREOF, the parties hereto have caused the First Amendment
to be executed as of the day and year first above written.
Borrower:
ORIOLE HOMES CORP.,
a Florida corporation
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<PAGE>
JS 8/8/95, 8/11/95, 8/16/95, 8/21/95
By:____________________________________
Richard D. Levy, Chairman of the
Board and Chief Executive Officer
Bank:
OHIO SAVINGS BANK, F.S.B.,
a federal savings bank
By:______________________________________
Title:________________________________
STATE OF FLORIDA )
)
COUNTY OF )
Before me, a Notary Public in and for said County and State, on this
_______ day of _______________, 1995, personally appeared the above-named Oriole
Homes Corp., a Florida corporation, by Richard D. Levy, its Chairman of the
Board and Chief Executive Officer, who acknowledged that he did sign the
foregoing instrument on behalf of said corporation, and that such signing was
his free act and deed, individually and as such officer, and the free act and
deed of said corporation. Richard D. Levy is personally known to me or has
produced __________________ as identification.
---------------------------------------------
Print Name:__________________________________
(SEAL) Notary Public, State of Florida at Large
My Commission Expires:_____________________
STATE OF OHIO )
)
COUNTY OF CUYAHOGA )
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<PAGE>
JS 8/8/95, 8/11/95, 8/16/95, 8/21/95
Before me, a Notary Public in and for said County and State, on this
_______ day of _______________, 1995, personally appeared the above-named Ohio
Savings Bank, F.S.B., a federal savings bank, by __________________, its ______
President, who acknowledged that he did sign the foregoing instrument on behalf
of said bank and that such signing was his free act and deed, individually and
as such officer, and the free act and deed of said bank. ___________________ is
personally known to me.
---------------------------------------------
Print Name:__________________________________
(SEAL) Notary Public, State of Ohio
My Commission Expires:_____________________
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<PAGE>
JS 8/8/95, 8/11/95, 8/16/95, 8/21/95
EXHIBIT A TO LOAN AGREEMENT
BORROWER'S DRAW CERTIFICATE
Oriole Homes Corp. hereby requests an Advance in the amount of
$___________ pursuant to the Revolving Loan Agreement dated as of July 13, 1993,
as amended by that certain First Amendment to Revolving Loan Agreement dated as
of August ___, 1995, between the undersigned and Ohio Savings Bank, F.S.B. (the
"Agreement") and, in connection therewith, hereby certifies and represents as
follows:
1. All of the warranties and representations contained in the
Agreement and the Mortgage are true, correct and complete in
all material respects; all covenants, terms and conditions
contained in the Agreement and the Mortgage remain satisfied
or have been performed; and no Event of Default has occurred
as of the date hereof.
2. After giving effect to the requested Advance, the aggregate
unpaid principal amount of Line Advances outstanding will not
exceed any Loan Amount Limitation (as defined in Section
2(a)(1) of the Agreement); and
3. The Adjusted Net Book Value (of the Mortgaged Property) as of
the date hereof is $_____________.
Unless otherwise specified below, please deposit the entire proceeds of
the requested Advance in Account No. 001-0168206 at AmTrust Bank, a division of
Ohio Savings Bank, F.S.B., Boca Raton, Florida.
Capitalized terms not defined herein are used as defined in the
Agreement, and if not defined therein, as defined in the Mortgage. Each Advance
requested and made pursuant hereto shall be an Advance pursuant to the
Agreement, evidenced by the Consolidated Revolving Mortgage Note from the
undersigned to Bank dated ______________, 1995, and secured by the Mortgage.
Oriole Homes Corp.,
a Florida corporation
Dated:______________, 199__
By:______________________________
Its:_____________________________
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<PAGE>
JS 8/8/95, 8/11/95, 8/16/95, 8/21/95
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<PAGE>
JS 8/8/95, 8/11/95, 8/16/95, 8/21/95
ORIOLE HOMES CORP.
BORROWING BASE AND COLLATERAL CERTIFICATE
The undersigned, Oriole Homes Corp., being the Borrower under a
Revolving Loan Agreement dated as of July 13, 1993, as amended by that certain
First Amendment to Revolving Loan Agreement dated as of August ___, 1995,
between the undersigned and Ohio Savings Bank, F.S.B. (the "Agreement"), hereby
certifies to the Bank as follows:
1. The aggregate amount payable within the next succeeding twelve
(12) months after the date hereof pursuant to bona fide
contracts between Borrower and one or more Persons not an
Affiliate of Borrower for the sale of Single Family Residences
in all residential developments owned and operated by Borrower
in Broward, Palm Beach and Martin Counties, Florida, is
$-------------.
2. As of the date hereof, the Borrowing Base, as defined in the
Agreement, is $____________, calculated as seventy five
percent (75%) of $________________ (Item 1 above) =
$______________.
3. The Adjusted Net Book Value (of the Mortgaged Property) as of
the date hereof is $____________.
Capitalized terms not defined herein are used as defined in the
Agreement and, if not defined therein, as defined in the Mortgage.
Oriole Homes Corp.,
a Florida corporation
Dated:______________, 199__
By:______________________________
Its:_____________________________
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<PAGE>
JS 10/30/97
Exhibit 10.5
SECOND AMENDMENT
to
REVOLVING LOAN AGREEMENT
------------------------
This Second Amendment to Revolving Loan Agreement (the "Second
Amendment") is executed and delivered as of the 1st day of July, 1997, by and
between ORIOLE HOMES CORP., a Florida corporation (the "Borrower"), Suite 200,
1690 South Congress Avenue, Delray Beach, Florida 33445-6327, and OHIO SAVINGS
BANK, a federal savings bank, f/k/a Ohio Savings Bank, F.S.B. and f/k/a Ohio
Savings Bank, an Ohio corporation (the "Bank"), 200 Ohio Savings Plaza, 1801
East Ninth Street, Cleveland, Ohio 44114;
W I T N E S S E T H:
--------------------
WHEREAS, in consideration for a revolving line of credit in the maximum
amount of Twenty Million Dollars ($20,000,000.00) (the "Consolidated Loan") made
by Bank to Borrower, Borrower has executed and delivered to Bank its
Consolidated Revolving Mortgage Note dated January 12, 1996, in the maximum
principal amount of the Consolidated Loan as aforesaid (the "Second Consolidated
Note");
WHEREAS, the Consolidated Loan is evidenced by, among other things, a
Revolving Loan Agreement dated the 13th day of July, 1993, as modified by a
First Amendment to Revolving Loan Agreement dated the 23rd day of August, 1995,
both executed by Borrower and Bank (together, the "Agreement");
WHEREAS, the Second Consolidated Note is secured by, among other things,
a Mortgage and Security Agreement dated as of July 13, 1993, and recorded July
16, 1993, in Official Records Book 7800, Page 1590, of the Public Records of
Palm Beach County, Florida, as modified, extended and spread by (i) a Mortgage,
Assignment and Financing Statement Spreader Agreement dated May 31, 1995, and
recorded June 6, 1995, in Official Records Book 8776, Page 262, of said Public
Records, (ii) a Future Advance, Mortgage, Assignment and Financing Statement
Extension, Modification and Spreader Agreement dated August 23, 1995, and
recorded August 30, 1995, in Official Records Book 8897, Page 53, of said Public
Records, (iii) a Future Advance, Mortgage, Assignment and Financing Statement
Modification and Spreader Agreement dated January 12, 1996 and recorded January
17, 1996, in Official Records Book 9085, Page 547, of said Public Records, and
(iv) a Mortgage and Loan Modification and Extension Agreement of even date
herewith, all executed and delivered by the Borrower to the Bank (the Mortgage
and Security Agreement, as modified, extended and spread, is herein referred to
as the "Mortgage"); and
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JS 10/30/97
WHEREAS, Borrower and Bank have agreed that Bank shall extend the
Termination Date (capitalized terms not defined herein shall have the meanings
ascribed to them in the Agreement) of the Consolidated Loan to June 30, 1999,
and reduce the Maximum Loan Amount to an amount not to exceed Ten Million
Dollars ($10,000,000.00) on the terms and conditions hereinafter set forth.
NOW THEREFORE, in consideration of the sum of Ten Dollars ($10.00) and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, and intending to be legally bound, the Borrower and Bank
hereby covenant and agree as follows:
1. Recitals. The aforementioned recitals are true and correct and
are hereby incorporated by this reference.
2. Consolidated Loan. As of the date hereof, the unpaid principal
balance of the Consolidated Loan is One Hundred Thousand Dollars ($100,000.00),
and interest has been paid on the Second Consolidated Note through May 31, 1997.
Borrower acknowledges that the indebtedness evidenced by the Second Consolidated
Note is free of any and all defenses, setoffs and counterclaims, and that
Borrower has no claims against Bank in connection with or related to the
Consolidated Loan or any Loan Document as of the date hereof.
3. Modification of Agreement. The Agreement is hereby amended,
modified and extended as follows:
(a) Definitions.
(i) The definition of the term "Bank" defined in Section 1(a)
is hereby replaced and superseded by the following:
"Bank" means OHIO SAVINGS BANK, a federal savings bank, f/k/a Ohio Savings Bank,
F.S.B. and f/k/a Ohio Savings Bank, a corporation incorporated under the laws of
the State of Ohio.
(ii) The definition of the term "Contract Year" defined in
Section 1(a) is hereby replaced and superseded by the following:
"Contract Year" means each twelve (12) month period commencing on July 1 of each
calendar year and ending on June 30 of the following calendar year.
(iii) The definition of the term "Maximum Loan Amount" defined
in Section 1(a) is hereby replaced and superseded by the following:
"Maximum Loan Amount" means Ten Million and no/100 Dollars
($10,000,000.00) (U.S.).
(iv) The definition of the term "Revolving Note" defined in
Section 1(a) is hereby replaced and superseded by the following:
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<PAGE>
JS 10/30/97
"Revolving Note" means the Renewal Amended and Restated Consolidated Revolving
Mortgage Note dated as of July 1, 1997, executed and delivered to Bank by
Borrower, in the maximum principal amount of Ten Million and no/100 Dollars
($10,000,000.00), including any partial or total extension, restatement,
renewal, amendment, modification or substitution thereof or therefor.
(v) The definition of the term "Termination Date" defined in
Section 1(a) is hereby replaced and superseded by the following:
"Termination Date" means June 30, 1999.
(b) Section 2(a) (1). Clause (1) of Section 2 (a) is hereby
superseded, restated and replaced by the following:
(1) Line Advances. Subject to the terms and conditions hereof, and in
reliance on the representations and warranties herein contained, Bank shall make
Line Advances from time to time during the period commencing on the date hereof
and ending on the Termination Date to or for the account of Borrower up to but
not exceeding an aggregate unpaid principal amount outstanding at any one time
on Line Advances equal to the least of (a) the Maximum Loan Amount, (b) the
Borrowing Base, (c) fifty percent (50%) of Adjusted Net Book Value, or (d) such
lesser amount as provided by this Agreement. Each of (a), (b), (c) and (d) is a
"Loan Amount Limitation." Borrower's obligation to repay the Line Advances shall
be evidenced by the Revolving note.
(c) Section 2 (b) (3). Clause (3) of Section 2 (b) is hereby
superseded, restated and replaced by the following:
(3) Mandatory Repayments. For a period of not less than thirty (30)
consecutive calendar days during each Contract Year prior to the Termination
Date, commencing with the Contract Year beginning on July 1, 1998, the unpaid
principal balance of the Loan shall not exceed Thirty three and one-third
percent (33.3334%) of the Maximum Loan Amount.
(d) Section 2 (c). Section 2 (c) is hereby superseded, restated and
replaced by the following:
(c) Use of Proceeds. The proceeds of the Loan hereunder shall be used by
the Borrower solely to provide working capital to finance ongoing development
and construction of residential real estate and short term capital requirements
related to the Borrower's Florida real estate projects and/or other appropriate
short term general corporate purposes. The Borrower will not, directly or
indirectly, use any part of such proceeds for personal, consumer, family,
household, educational, agricultural or similar uses or for the purpose of
purchasing or carrying any margin stock within the meaning of Regulation G of
the Board of Governors of the Federal Reserve System or to extend credit to any
Person for the purpose of purchasing or carrying any such margin stock, or for
- - 79 - -
<PAGE>
JS 10/30/97
any purpose which violates, or is inconsistent with, Regulation X of such Board
of Governors.
(e) Section 2 (d). Section 2 (d) is hereby superseded, restated and
replaced by the following:
d. Loan Extension. Commencing no later than March 31, 1998, and on each
anniversary thereof if the Termination Date has been extended each year as
hereinafter provided, the Borrower may deliver to Bank a written request that
the Termination Date be extended for one (1) additional Contract Year. Provided
(i) the warranties and representations of Borrower contained in the Agreement
remain true, correct and complete in all material respects; (ii) all the
material covenants, terms and conditions of the Agreement remain satisfied;
(iii) no Event of Default, or event which upon the lapse of time, the giving of
notice, or both, could become an Event of Default, has occurred under the
Agreement; and (iv) Bank is in receipt of the quarterly and annual financial
statements mentioned in Sections 6 A (1)(c) and (d) of the Agreement, Bank will,
without prejudice, consider Borrower's request.
If Bank, at its sole option and in its sole and absolute discretion,
elects to offer an extension of the Termination Date for one (1) additional
Contract Year, Bank shall notify Borrower no later than July 1, 1998, and on
each anniversary thereof if the Termination Date has been extended the preceding
year and a like request for an additional one (1) Contract Year extension of the
Termination Date has been timely received by Bank from Borrower. If Bank does
not notify Borrower of Bank's election to offer to extend any Termination Date
within the time limit as aforesaid, the applicable Termination Date shall not be
extended. Any offer by Bank to extend the Termination Date for an additional
Contract Year shall be on and subject to the following terms and conditions:
(1) Closing. Closing on the one (1) Contract Year extension of
the Termination Date shall occur within thirty (30) days of the date Bank's
notice of its election to offer Borrower an extension of the Termination Date is
effective, but not later than August 1 following each Contract Year that a
request is received from Borrower.
(2) Documents. At closing Borrower shall execute and deliver to
Bank a Mortgage and Loan Extension Agreement and such other documents and
certificates and title insurance endorsements as Bank may reasonably request,
each of which shall be satisfactory in form and substance to Bank.
(3) Fees, Expenses and Other Payments. At closing Borrower
shall pay to Bank a Commitment Fee in the amount of one-quarter of one percent
(0.25%) of the then current Maximum Loan Amount; and shall further pay all
recording fees, documentary stamps (if any) and intangible tax on the Mortgage
and Loan Extension Agreement, and reasonable costs, fees and expenses incurred
by Bank in connection with the extension of the Termination Date.
- - 80 - -
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JS 10/30/97
(4) Limitation on Extension. Anything herein to the contrary
notwithstanding, the Termination Date shall not be extended by Bank more than
five (5) times.
(f) Section 3 (a) (20). Clause (20) of Section 3(a) is hereby
superseded, restated and replaced by the following:
(20) Appraisals. At any time during the term of this Agreement, upon the
election of Bank, but, provided no Event of Default has occurred under this
Agreement, not more frequently than two (2) times each Contract Year, Bank may
procure (at Borrower's expense) a current (within 30 days) appraisal of the
Mortgaged Property, satisfactory in form and amount to the Bank, prepared by an
appraiser selected by the Bank and in accordance with generally accepted and
established appraisal practices and in conformity with applicable law and
regulation and reviewed (at Borrower's expense) by the Bank's "in-house" senior
appraiser. Any appraisal may be adjusted by the Bank's appraiser to conform to
Bank's appraisal guidelines. Such appraisal, as adjusted by the Bank's
appraiser, shall conclusively establish Net Realizable Value as of the date
thereof. All appraisals, appraisal reviews and any updates thereof shall be at
Borrower's expense.
(g) Section 6 A (5). The following is hereby added to Section 6 A (5):
Once the aggregate of all Advances equal the Maximum Loan Amount Borrower shall
pay additional intangible tax which may be due on each subsequent Advance to the
Clerk of the Circuit Court in accordance with Chapter 199.143, Florida Statutes,
using the form of Affidavit attached hereto as Exhibit F or, at Borrower's
option, payment may be made directly to the Florida Department of Revenue.
Within thirty (30) days after each such Advance Borrower shall provide Bank with
evidence of the payment of additional intangible tax thereon.
(h) Section 6 C. Section 6 (C) is hereby superseded, restated and
replaced by the following:
C. Financial Covenants - Consolidated Tangible Net Worth. Borrower
undertakes, covenants and agrees that, until the full and complete payment,
performance and observance of the Loan, Borrower will maintain at all times its
Consolidated Tangible Net Worth at not less than Forty Two Million Dollars
($42,000,000.00).
4. Representations and Warranties. Borrower represents and warrants that
it has full power, authority and legal right to execute, deliver and perform the
Renewal Amended and Restated Consolidated Revolving Mortgage Note of even date
herewith, executed and delivered to Bank by Borrower (the "Renewal Note"), the
Mortgage and Loan Modification and Extension Agreement of even date herewith,
executed and delivered to Bank by Borrower (the "Mortgage Modification"), and
this Second Amendment, and that, as of the date hereof (i) the warranties and
representations of
- - 81 - -
<PAGE>
JS 10/30/97
Borrower contained in the Agreement (as may be amended hereby) are true, correct
and complete in all material respects; (ii) all the material covenants, terms
and conditions of the Agreement (as may be amended hereby) remain satisfied;
(iii) no Event of Default, or event which upon the lapse of time, the giving of
notice, or both, could become an Event of Default, has occurred under the
Agreement; and (iv) Adjusted Net Book Value is an amount not less than Twenty
Million Dollars ($20,000,000.00).
5. Ratification of Loan Documents. Borrower and Bank each acknowledge
that the Loan Documents are valid and binding; that there are no defenses, set
offs or counterclaims thereto; nothing herein or in the Renewal Note and/or the
Mortgage Modification invalidates or shall impair or release any covenant,
condition, agreement or stipulation in the Loan Documents; and Borrower and Bank
shall each perform and comply with and abide by each of the covenants,
agreements, conditions and stipulations of the Loan Documents as amended hereby.
6. Fees, Expenses, Appraisal and Other Payments. At the time of
execution and delivery of this Second Amendment, Borrower shall pay to Bank a
Commitment Fee in the amount of Fifty Thousand Dollars ($50,000.00); and shall
further pay all recording fees, documentary stamps (if any) and intangible tax
on the Mortgage Modification, and all reasonable costs, fees and expenses
incurred by Bank in connection with this Second Amendment, including without
limitation the cost of the initial appraisal for the Contract Year July 1, 1997
to June 30, 1998, pursuant to Section 3(a) (20) of the Agreement as modified by
this Second Amendment, to be procured by Bank within thirty (30) days of the
date of this Second Amendment.
7. Miscellaneous.
--------------
(a) Severability. If any one or more of the
provisions of this Second Amendment is held to be invalid, illegal or
unenforceable in any respect for any reason, the validity, legality and
enforceability of any such provision or provisions in every other respect and of
the remaining provisions of this Second Amendment shall not be in any way
impaired, and each term or provision shall be construed to be legal, valid,
binding and enforceable to the maximum extent permitted by law.
(b) Survival of Covenants, Agreements,
Representations and Warranties. All warranties, representations and covenants
made by Borrower herein or in any certificate or other instrument delivered by
it or on its behalf under this Second Amendment shall be considered to have been
relied upon by Bank and shall survive regardless of any investigation made by
Bank or on its behalf. All such statements and any such certificate or other
instrument shall constitute warranties and representations by Borrower
hereunder.
(c) Headings. Paragraph headings have been inserted
in this Second Amendment as a matter of convenience of reference only;
- - 82 - -
<PAGE>
JS 10/30/97
such paragraph headings are not part of this Second Amendment and shall not be
used in the interpretation of this Second Amendment.
(d) Time of the Essence. Time is hereby expressly
made of the essence with respect to the performance and/or satisfaction of each
of the provisions and conditions of this Second Amendment.
(e) Governing Law. The laws of the State of Florida
shall govern the construction of this Second Amendment and the rights and duties
of Borrower and Bank.
(f) Limited Modification/Conflicts. Except to the
limited extent expressly provided herein, the Loan Documents shall remain in
full force and effect. In the event of any inconsistency between the terms and
conditions of the Agreement and this Second Amendment, the terms and provisions
of this Second Amendment shall govern and control.
(g) Prior Negotiations Superseded. The terms and
conditions of this Second Amendment supersede and replace all prior discussions,
negotiations and side letter agreements with respect to the subject matter
hereof, including, without limitation, all those certain letters from Bank to
Borrower dated as of March 12, 1997, May 9, 1997, June 12, 1997, July 21, 1997,
August 27, 1997, September 7, 1997 and October 31, 1997.
IN WITNESS WHEREOF, the parties hereto have caused the Second Amendment
to be executed as of the day and year first above written.
Borrower:
ORIOLE HOMES CORP.,
a Florida corporation
By:____________________________________
Richard D. Levy, Chairman of the
Board and Chief Executive Officer
Bank:
OHIO SAVINGS BANK,
a federal savings bank
By:______________________________________
Name Printed:___________________________
Title:________________________________
STATE OF FLORIDA )
)
COUNTY OF PALM BEACH )
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<PAGE>
JS 10/30/97
Before me, a Notary Public in and for said County and State, on this
_______ day of November, 1997, personally appeared the above-named Oriole Homes
Corp., a Florida corporation, by Richard D. Levy, its Chairman of the Board and
Chief Executive Officer, who acknowledged that he did sign the foregoing
instrument on behalf of said corporation, and that such signing was his free act
and deed, individually and as such officer, and the free act and deed of said
corporation. Richard D. Levy is personally known to me.
---------------------------------------------
Print Name:__________________________________
(SEAL) Notary Public, State of Florida at Large
My Commission Expires:_____________________
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<PAGE>
JS 10/30/97
STATE OF OHIO )
)
COUNTY OF CUYAHOGA )
Before me, a Notary Public in and for said County and State, on this
_____ day of November, 1997, personally appeared the above-named Ohio Savings
Bank, a federal savings bank, by __________________, its ______ President, who
acknowledged that he did sign the foregoing instrument on behalf of said bank
and that such signing was his free act and deed, individually and as such
officer, and the free act and deed of said bank.
___________________ is personally known to me.
---------------------------------------------
Print Name:__________________________________
(SEAL) Notary Public, State of Ohio
My Commission Expires:_____________________
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JS 10/30/97
EXHIBIT F TO LOAN AGREEMENT
NONRECURRING INTANGIBLE
PERSONAL PROPERTY TAX
AFFIDAVIT
STATE OF FLORIDA )
:ss
COUNTY OF PALM BEACH )
BEFORE ME, the undersigned authority, personally appeared
____________________, who, after duly being placed under oath, deposes and
states as follows:
1. Affiant is ____________________ of Oriole Homes Corp., a Florida
corporation.
2. Affiant makes this Affidavit in connection with that certain Mortgage
and Security Agreement (Revolving Loan) to Ohio Savings Bank, dated July 13,
1993, in the initial amount of $10,000,000, recorded in Official Records Book
7800, Page 1590, of the Public Records of Palm Beach County, Florida, as
modified, extended and spread of record (the "Revolving Mortgage").
3. An additional amount of $________________ is being/will be borrowed
under the Revolving Mortgage and this Affidavit is made and executed for the
purpose of paying Nonrecurring Intangible Personal Property Tax upon such
additional amount in accordance with Chapter 199.143 Florida Statutes.
Further Affiant sayeth naught.
- ------------------------------------
Name Printed:_______________________
Sworn to, subscribed and acknowledged before me this ___ day of __________ ,
199__, by __________________________.
- -------------------------------------
Notary Public, State of Florida at Large
Name Printed:________________________
My Commission Expires:_______________
Personally known ______or produced ____________________Driver License.
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<PAGE>
MWF 7/7/93
EXHIBIT 10.6
MORTGAGE AND SECURITY AGREEMENT
(Revolving Loan)
THIS MORTGAGE AND SECURITY AGREEMENT (the "Mortgage"), dated as of July
_____, 1993, is executed and delivered by ORIOLE HOMES CORP., a Florida
corporation, (the "Mortgagor" or "Borrower") having its principal place of
business at Suite 200, 1690 South Congress Avenue, Delray Beach, Florida
33445-6327, to OHIO SAVINGS BANK, an Ohio corporation (the "Mortgagee"), having
its principal place of business at l80l East Ninth Street, Cleveland, Ohio
44ll4, under the circumstances summarized in the following recitals:
A. In consideration for a revolving line of credit in the maximum amount
of Ten Million Dollars ($10,000,000.00)(the "Loan") made by Mortgagee to
Borrower, Borrower has executed and delivered to Mortgagee a certain Revolving
Mortgage Note of even date herewith in the maximum principal amount of the Loan
as aforesaid, payable in full as to principal and accrued interest on June 30,
1996 (the "Note");
B. This Mortgage secures the payment of the unpaid principal balance of
the Note, together with interest as therein provided and any other obligations
of the Borrower pursuant to said Note, this Mortgage, the Revolving Loan
Agreement of even date herewith between Borrower and Mortgagee (the "Agreement")
and any other documents or instruments evidencing or securing the Loan or
otherwise executed in connection with the Loan and any partial or total
extensions, renewals, modifications, amendments, restatements or substitutions
thereof or therefor (collectively referred to herein as the "Loan Documents");
C. It is intended that this Mortgage may secure unpaid balances of
advances made after this Mortgage is delivered to the Clerk of the Circuit Court
of Palm Beach County, Florida.
This Instrument Prepared By:
Marc W. Freimuth, Esq.
Ohio Savings Plaza
1801 East Ninth Street
Cleveland, Ohio 44114
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<PAGE>
MWF 7/7/93
NOW, THEREFORE, in consideration of the Loan made by Mortgagee to
Borrower, as evidenced by the Note, and for other valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, and for the purpose of
securing: (i) all payments to be made by the Borrower pursuant to the Note, the
Mortgage and/or any other Loan Document, (ii) any future or additional advances
made at the option of Mortgagee as contemplated herein, (iii) any amounts
advanced or costs incurred by the Mortgagee for the protection of the Mortgaged
Property (as hereinafter defined) or the enforcement of this Mortgage, the Note,
the Agreement and/or any other Loan Document, (iv) any other cost or expense
which, by the terms of this Mortgage, the Note, the Agreement and/or any other
Loan Document, may be the subject of reimbursement to Mortgagee by Mortgagor,
and (v) the performance and observance of each covenant and agreement of the
Borrower contained in this Mortgage, the Note, the Agreement and/or any other
Loan Document, the Mortgagor does hereby grant, bargain, sell, convey, mortgage,
assign, grant a security interest in and transfer unto the Mortgagee, its
successors and assigns, the following property whether now owned or hereafter
acquired (the "Mortgaged Property"):
(a) The land described in Exhibit A attached hereto (the "Land"),
together with all buildings, structures, additions, improvements,
facilities and fixtures and other property, now or hereafter
located in, upon or under or based at, such land (the "Premises");
(b) All easements, rights of way or use, licenses, privileges,
franchises, servitudes, tenements, hereditaments and appurtenances
now or hereafter belonging or in anyway appertaining thereto,
including, without limitation, all right, title and interest of
the Mortgagor in any street, alley, sidewalk, open or proposed,
and in front of, adjoining or adjacent or contiguous thereto, and
all rights and estates in reversion or remainder;
(c) All leases, rentals, revenues, payments, repayments, income,
charges, moneys, issues and profits thereof;
(d) The proceeds from any insurance or condemnation award pertaining
thereto, or compensation in lieu thereof, including but not
limited to any award or compensation for the alteration of the
grade of any street or any other injury to or decrease in the
value of the Mortgaged Property;
(e) All of Mortgagor's right, title, interest, estate, claim or
demand, either at law or in equity, in and to all architectural,
engineering and similar plans, specifications, drawings,
renderings, profiles, studies, shop drawings, reports, plats,
permits, surveys and the like, and all sewer taps, permits and
allocations, agreements for utilities, bonds, sureties and the
like, relating to the Premises or appurtenant facilities erected
or to be erected upon or about the Land;
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MWF 7/7/93
(f) All proceeds of the conversion, voluntary or involuntary, of any
of the foregoing into cash or liquidated claims, including,
without limitation, the proceeds of insurance;
(g) All contracts and other agreements for the sale of any of the
Mortgaged Property or any part thereof or interest therein now or
hereafter entered into by Mortgagor, and all right, title and
interest of Mortgagor thereunder, including, without limitation,
all right, title and interest of Mortgagor in cash or securities
deposited thereunder to secure performance by the contract
purchasers of their obligations thereunder, and including, without
limitation, the right to receive and collect the proceeds thereof;
provided that, so long as no Event of Default has occurred
hereunder, the Mortgagor shall have the right to receive, retain
and use any and all amounts paid pursuant to any such agreements,
including without limitation security or other deposits, upon, but
not prior to, accrual, and to retain possession of any and all
such contracts and agreements;
(h) All of Mortgagor's rights, powers and privileges (but not the
burdens and obligations) under any construction contract or
architect's (or engineer's) agreement now or hereafter entered
into by Mortgagor relating to the Mortgaged Property, and all
bonds and surety agreements related thereto, provided that
Mortgagor shall be entitled to exercise any and all rights
pursuant thereto and to receive any and all amounts payable
pursuant to any of the foregoing at, but not prior to, accrual, so
long as no Event of Default has occurred;
(i) All contracts and other agreements, if any, relating to the sale,
lease, brokerage, development, management, maintenance and/or
operation of the Mortgaged Property (or of any part thereof or
interest therein) or otherwise pertaining thereto, provided that,
so long as no Event of Default has occurred hereunder, the
Mortgagor shall have the right to receive, retain and use any and
all amounts paid pursuant to any such agreements, including
without limitation security or other deposits, upon, but not prior
to, accrual, and to retain possession of any and all such
contracts and agreements;
(j) All rights of Mortgagor under any commitment for any other loan
secured by the Mortgaged Property or any part thereof or interest
of Mortgagor therein;
(k) All right, title and interest of Mortgagor in all tradenames,
trademarks and/or servicemarks hereinafter used in connection with
the Mortgaged Property (including without limitation subdivision
or community names, but not including the name of the Borrower or
any of its Affiliates or the word "Oriole") and all contract
rights and contracts, franchise agreements, general intangibles,
actions and rights of action, deposits, prepaid expenses, permits,
licenses owned by Mortgagor and used in connection with or related
to the Mortgaged Property;
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(l) All machinery, apparatus, equipment, fittings, fixtures,
inventory, appliances, furniture and articles of personal property
of every kind and nature whatsoever, other than consumable goods,
now or hereafter located in or upon said Premises or any part
thereof owned by Mortgagor and used or useable in connection with
any present or future operation of said Premises (herein
collectively called "Equipment"), including, but without limiting
the generality of the foregoing, all heating, lighting, laundry,
incinerating, plumbing, lifting, cleaning, fire-prevention,
fire-extinguishing, refrigerating, ventilating, communications,
air-conditioning and air-cooling equipment or apparatus, engines,
pipes, pumps, tanks, motors, conduits, switchboards, elevators,
escalators, shades, awnings, screens, storm doors and windows,
stoves, wall beds, refrigerators, attached cabinets, partitions,
ducts and compressors, and all of the right, title and interest of
the Mortgagor in and to any Equipment which may be subject to any
conditional bill of sale, chattel mortgage or security interest
superior to the lien or security interest established by this
Mortgage; and
(m) All proceeds, additions, replacements and substitutions of and to
any of the foregoing.
TO HAVE AND TO HOLD the Mortgaged Property unto the Mortgagee, its
successors and assigns, forever;
AND, IT IS HEREBY COVENANTED that this Mortgage is given and the Mortgaged
Property is to be held upon and subject to the terms, provisions and conditions
herein set forth.
Section 1. Representations and Warranties. The Mortgagor represents and
warrants that:
(i) The Mortgagor is lawfully seized with good and marketable title in fee
simple absolute to the Mortgaged Property free and clear of all liens and
encumbrances whatsoever, except taxes and assessments (other than respread
assessments) general and special not delinquent, zoning ordinances and except
for those matters set forth in Exhibit B attached hereto (hereinafter "Permitted
Prior Encumbrances"), and has good and marketable title to all personal property
included in the Mortgaged Property, subject only to the Permitted Prior
Encumbrances; (ii) it has full right, power and authority to bargain, sell,
mortgage and convey the Mortgaged Property as herein provided; and (iii) except
as expressly provided above, it will warrant and defend to the Mortgagee such
title to the Mortgaged Property and the lien and interest of the Mortgagee
therein and thereon against all claims and demands whatsoever and will maintain
the priority of the lien of, and the security interest granted by, this Mortgage
upon the Mortgaged Property until the Mortgagor shall be entitled to defeasance
as provided herein.
Section 2. After-Acquired Property. All property of every kind acquired by
the Mortgagor after the date hereof and located at, on or under the Premises,
shall, without further mortgage, conveyance or assignment, become subject to the
lien of this Mortgage as fully as though now
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owned by the Mortgagor and specifically described herein. Nevertheless, the
Mortgagor shall take such actions and execute and deliver such additional
instruments as the Mortgagee shall reasonably require to further evidence or
confirm the subjection to the lien of this Mortgage of any such property.
Section 3. Payment of Indebtedness. Mortgagor will pay the indebtedness
secured hereby in the manner and at the times provided herein and/or in the Note
or any other Loan Document, and, until the indebtedness secured hereby is fully
paid, will comply with all the covenants, terms and provisions contained herein,
in the Agreement and in any other Loan Documents.
Section 4. Loan Advances. Advances made under the Note shall be in the
form of a continual revolving credit whereby advances may be made, repaid and
readvanced from time to time. The Mortgagee shall maintain an account on its
books (the "Loan Account"), which shall evidence at all times the amount from
time to time outstanding under the Note. This Mortgage secures the unpaid
balances of any advances or readvances made under the Note, this Mortgage, the
Agreement or any other Loan Document after this Mortgage has been delivered to
the appropriate County Officer for recordation. It is also expressly provided
for and agreed that this Mortgage secures said future advances and readvances,
whether such advances and readvances are obligatory or to be made at the option
of Mortgagee or otherwise, to the same extent as if such future advances and
readvances were made on the date of the execution of this Mortgage although
there may be no advance made at the time of execution of this Mortgage or no
indebtedness outstanding at the time any advance or readvance is made. The total
amount of indebtedness that may be secured by this Mortgage may decrease or
increase from time to time; provided, however, that the total unpaid balance
secured at any time shall not exceed Twenty Million Dollars ($20,000,000.00)
plus interest thereon, and advances made by Mortgagee pursuant to this Mortgage,
including without limitation, for the payment of taxes, assessments, insurance
premiums, costs for the protection of the Mortgaged Property, reasonable
attorneys' fees (at all tribunal levels) and court costs incurred in the
collection of any or all of such sums of money and interest thereon. It shall be
an Event of Default hereunder if Mortgagor shall file a notice pursuant to
Section 697.04(1)(b), Florida Statutes, limiting the amount of indebtedness that
may be secured by this Mortgage. All future advances and readvances shall be
made within twenty (20) years from the date hereof or such longer period of time
as may be authorized by Florida law, and all indebtedness created by such future
advances and readvances shall be secured hereby. All provisions of this Mortgage
shall apply to any future advances or readvances made pursuant to the provisions
of this Section. Nothing herein contained shall limit the amount secured by this
Mortgage if such amount is increased by advances made by Mortgagee as herein
elsewhere provided.
Section 5. Continuing Lien. Mortgagor expressly agrees that any and all of
the Mortgaged Property, howsoever and whensoever acquired, received or arising,
shall secure any and all obligations, howsoever and whensoever incurred, without
apportionment between obligations of the Borrower to Mortgagee under or with
respect to any of the Loan Documents. Accordingly, all
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of the Mortgaged Property is mortgaged, assigned and conveyed, and a security
interest in favor of Mortgagee is granted therein, to secure (a) the entire
indebtedness which may be owed to the Mortgagee from time to time pursuant to
the Note, the Agreement or any other Loan Document, and (b) all other
obligations of the Borrower under or with respect to any of the Loan Documents,
and in no manner shall the rights of the Mortgagee in all or any portion of the
Mortgaged Property be limited by virtue of the fact that any portion of the
Mortgaged Property may have been (1) mortgaged, assigned and conveyed to
Mortgagee, or a security interest in favor of Mortgagee granted therein, or (2)
placed in the possession or control of the Mortgagee ancillary to the making of
a particular advance hereunder or the incurrence of any other obligation, and
Mortgagee shall have the right, in its sole and absolute discretion, to
determine the order in which its rights in or remedies against any Mortgaged
Property are to be exercised, which type(s) or portion(s) of Mortgaged Property
are to be proceeded against, and the order of application of proceeds of
Mortgaged Property as against any particular obligations.
Upon the sale, exchange or other disposition of any of the Mortgaged
Property, the lien and security interest created and provided for herein shall,
without break in continuity and without further formality or act, continue in
and attach to the instruments for the payment of money, accounts receivable,
contract rights and all other cash and non-cash proceeds of such sale, exchange
or disposition. The Mortgagee's right to proceeds specifically set forth herein
or indicated in any financing statement shall never constitute an express or
implied authorization on the part of the Mortgagee to Borrower' sale, exchange
or other disposition of any or all of the Mortgaged Property except as expressly
authorized in the Loan Documents or consented to in writing by Mortgagee.
The lien, security interests and rights granted to the Mortgagee hereunder
shall continue in full force and effect until expressly released by Mortgagee,
notwithstanding the termination of the line of credit provided in the Note and
Agreement or the fact that the Loan Account may from time to time be temporarily
in a credit position.
Section 6. Hazardous Substances. (a) Mortgagor hereby represents that
neither Mortgagor nor, to the best of Mortgagor's knowledge, after due inquiry,
any other person or entity has ever generated, used or disposed of any Hazardous
Substance (as defined below) from or in connection with the Mortgaged Property
or used the Mortgaged Property as a storage facility for any Hazardous
Substance.
(b) Mortgagor hereby agrees to indemnify Mortgagee and hold Mortgagee
harmless from and against any and all losses, liabilities, including strict
liability, damages, injuries, expenses, including reasonable attorneys' and
paralegals' fees, costs of any settlement or judgment and claims of any and
every kind whatsoever paid, incurred or suffered by, or asserted against,
Mortgagee by any person or entity or governmental agency for, with respect to,
or as a direct or indirect result of, the presence, usage, storage, generation
or disposal on or under or in connection with the Mortgaged
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Property, or the escape, seepage, leakage, spillage, discharge, emission,
discharging or release from the Mortgaged Property, of any Hazardous Substance
(including, without limitation, any losses, liabilities, including strict
liability, damages, injuries, expenses, including reasonable attorneys' and
paralegals' fees, costs of any settlement or judgment or claims asserted or
arising under the Comprehensive Environmental Response, Compensation and
Liability Act, under any so called Federal, state or local "superfund" or
"superlien" law, or under any statute, law, ordinance, code, rule, regulation,
order or decree regulating, relating to or imposing liability, including strict
liability, or standards of conduct concerning any Hazardous Substance),
regardless of whether within the control of Mortgagee.
(c) For purposes of this Section 6, "Hazardous Substance" shall mean and
include those elements or compounds which are from time to time contained in the
list of hazardous substances adopted by the United States Environmental
Protection Agency ("EPA") and the list of toxic pollutants designated by
Congress or the EPA or defined by any other Federal, Florida, state or local
statute, law, ordinance, code, rule, regulation, order or decree regulating,
relating to, or imposing liability or standards of conduct concerning, any
hazardous, toxic or dangerous waste, substance or material as now or at any time
hereafter in effect.
(d) If Mortgagor receives any notice of (i) the happening of any event
involving the spill, release, leak, seepage, discharge or cleanup of any
Hazardous Substance on or in connection with the Mortgaged Property or in
connection with operations thereon or (ii) any complaint, order, citation or
notice with regard to air emissions, water discharges, or any other
environmental, health or safety matter affecting or related to the Mortgaged
Property (an "Environmental Complaint") from any person or entity (including
without limitation the EPA), then Mortgagor shall within five (5) days notify
Mortgagee orally and in writing of said notice.
(e) If Mortgagor shall not effect the cleanup or removal, containment and
other action required as the result of such Environmental Complaint with
diligence and continuity in a manner reasonably satisfactory to Mortgagee within
180 days after notice thereof, then Mortgagee shall have the right but not the
obligation, and without limitation of Mortgagee's rights under this Mortgage, to
enter onto the Mortgaged Property or to take such actions as Mortgagee deems
necessary or advisable to cleanup, remove, resolve or minimize the impact of, or
otherwise deal with, any such Hazardous Substance or Environmental Complaint
following receipt of any notice from any person or entity (including without
limitation the EPA) asserting the existence of any Hazardous Substance or any
Environmental Complaint pertaining to the Mortgaged Property or any part thereof
which, if true, could result in an order, suit or other action against Mortgagor
and/or which, in the absolute and sole opinion of Mortgagee, could jeopardize
Mortgagee's security under this Mortgage. All reasonable costs and expenses
incurred by Mortgagee in the exercise of any such rights and shall be payable by
Mortgagor within ten (10) days following receipt of a notice therefor, shall
bear interest thereafter at the Default Rate and shall be secured by this
Mortgage.
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(f) Mortgagee shall have the right, in its reasonable discretion, to
require Mortgagor to periodically (but not more frequently than annually unless
an Environmental Complaint is then outstanding) perform (at Mortgagor's expense)
an environmental audit and, if deemed necessary by Mortgagee, an environmental
risk assessment, each of which must be satisfactory to Mortgagee, of the
Mortgaged Property, of hazardous waste management practices and/or hazardous
waste disposal sites used in connection with operations conducted at the
Mortgaged Property. Said audit and/or risk assessment must be an environmental
consultant reasonably satisfactory to Mortgagee. Should Mortgagor fail to
perform said environmental audit and/or risk assessment within thirty (30) days
of Mortgagee's written request, Mortgagee shall have the right but not the
obligation to retain an environmental consultant to perform said environmental
audit and/or risk assessment. All costs and expenses incurred by Mortgagee in
the exercise of such rights shall be secured by this Mortgage and shall be
payable by Mortgagor upon demand or charged to Mortgagor's loan balance at the
discretion of Mortgagee.
(g) Any breach of any warranty, representation or agreement contained in
this Section 6 shall, after any required notice and opportunity to cure by use
of diligence and continuity, be an Event of Default under this Mortgage and
shall entitle Mortgagee to exercise any and all remedies provided in this
Mortgage or otherwise permitted by law. The provisions of this Section 6 shall
survive satisfaction, release or foreclosure of this Mortgage and shall inure to
the benefit of any transferee of title to the Mortgaged Property through
foreclosure of the Mortgage or any Loan Document or through deed in lieu thereof
(but only to the extent such transferee is Mortgagee, its successor, an assignee
of the Note, a participant of any of the foregoing or an affiliate or entity
related to any of the foregoing).
Section 7. Commercial Code and Financing Statement. This Mortgage
constitutes a security agreement, and creates a continuing security interest as
to all or any part of the Mortgaged Property which is of a nature that a
security interest therein can be created and perfected under the Uniform
Commercial Code from time to time in effect in the State in which the Mortgaged
Property is located, and all replacements and additions thereto and
substitutions and proceeds thereof. Mortgagee shall have all remedies of a
secured party under the Uniform Commercial Code with respect to any property
subject to the security interest created pursuant to this Section. This Mortgage
also constitutes a financing statement with respect to any and all property
included in the Mortgaged Property which is or may become fixtures. Mortgagor
hereby authorizes Mortgagee to file carbon, photographic or other reproduction
of a financing statement, and any such filing shall constitute a sufficient
financing statement under the Uniform Commercial Code.
Section 8. Maintenance and Use of Mortgaged Property. The Mortgagor at its
expense, shall keep the Mortgaged Property in good order and in a clean and safe
condition (ordinary wear and tear excepted) and shall make all necessary or
appropriate repairs, replacements, restorations and renewals thereof, interior,
exterior, structural and non-structural, ordinary and extraordinary, foreseen
and unforeseen. The Mortgagor will not do, or permit to be done, any act or
thing which
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might impair the value or usefulness of the Mortgaged Property or any part
thereof, will not commit or permit any waste of the Mortgaged Property or any
part thereof, and will not permit any unlawful occupation, business or trade to
be conducted on the Mortgaged Property or any part thereof. The Mortgagor shall
also, at its expense, promptly comply with all rights of way, privileges,
franchises, servitudes, licenses, easements, tenements, hereditaments,
restrictions of record and appurtenances being a part of, or burdening, the
Mortgaged Property. The Mortgagee understands that construction of subdivision
improvements, the movement of earth and soil and the construction of buildings
and other amenities is occurring upon the Mortgaged Property and agrees that the
same do not constitute waste to the extent done for the purpose of such
improvements and in accordance with applicable law and regulation.
Section 9. Compliance with Legal and Insurance Requirements. The
Mortgagor, at its expense, shall promptly comply with all Legal Requirements and
Insurance Requirements, and shall procure, maintain and comply with all permits,
licenses and other authorizations required for the construction, installation,
operation, maintenance and use of the Mortgaged Property. As used in this
Section, "Legal Requirements" means all laws, statutes, codes, acts, ordinances,
resolutions, orders, judgments, decrees, injunctions, rules, regulations,
permits, licenses, authorizations, directions and requirements of all
governmental entities, departments, commissions, boards, courts, authorities,
agencies, officials and officers, foreseen and unforeseen, ordinary or
extraordinary, which now or at any time hereafter may be applicable to the
Mortgaged Property or any part thereof, or any use or condition of the Mortgaged
Property or any part thereof, and "Insurance Requirements" means all provisions
of any insurance policy covering or applicable to the Mortgaged Property or any
part thereof, all requirements of the issuer of any such policy, and all orders,
rules, regulations and other requirements of the National Board of Fire
Underwriters (or any other body exercising similar functions) applicable to or
affecting the Mortgaged Property or any part thereof, or any use or condition
thereof. The Mortgagor may, at its expense and after prior written notice to the
Mortgagee, contest in good faith by appropriate legal proceedings any Legal
Requirement and postpone compliance therewith pending the resolution or
settlement of such contest provided that (i) such postponement does not, in the
reasonable opinion of the Mortgagee, adversely affect the condition, or value
of, or the lien of this Mortgage as to, any part of the Mortgaged Property, and
(ii) the Mortgagor shall deposit in escrow with the Mortgagee pending such
contest moneys sufficient in amount to cover the cost of compliance with Legal
Requirement in excess of Five Hundred Thousand Dollars ($500,000.00)so
contested.
Sections 10 and 11. Intentionally omitted.
Section 12. Payment of Taxes and Other Governmental Charges. The Mortgagor
shall pay promptly when due all taxes, assessments (whether general or special),
and other governmental charges of any kind whatsoever, foreseen or unforeseen,
ordinary or extraordinary, that now or may at any time hereafter be imposed,
assessed or levied against or with respect to the Mortgaged Property or any part
thereof, or upon the Mortgagee's interest therein (without regard to any law
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heretofore or hereafter enacted imposing payment of the whole or any part
thereof upon the Mortgagee). If requested by Mortgagee, within five (5) Business
Days after receipt of evidence of payment of real estate taxes or assessments
relating to the Mortgaged Property, and in any case not more than thirty (30)
days after the same are due and payable, Mortgagor shall deliver to Mortgagee
evidence of such payment in form and substance satisfactory to Mortgagee.
Mortgagor shall pay any and all documentary stamps and intangible taxes which
may be due with respect to any advance or readvance of loan proceeds. If at any
time any agency of the State of Florida shall determine that the documentary
stamps affixed to the Note are insufficient or if no documentary stamps have
been affixed and that such stamps should thereafter be affixed, the Mortgagor
shall pay for the same, together with any interest or penalties imposed in
connection with such determination and the amount of money needed to pay for
such stamps and penalties shall, until such stamps are purchased and affixed, be
a portion of the indebtedness secured hereby and bear interest from the date of
such determination at the rate set forth in the Note applicable to a period when
default exists thereunder.
If at any time applicable law shall require Internal Revenue Stamps to be
affixed to the Note, Mortgagor shall pay for the same, together with any
interest or penalties imposed in connection therewith. In the event of the
passage after the date of this Mortgage of any Federal, state or local law,
deducting from the value of real property for the purposes of taxation any lien
thereon, or changing in any way the laws of or the taxation of mortgages or
debts secured by mortgages for Federal, State or local purposes, or the manner
of the collection of any such taxes, and imposing a tax, either directly or
indirectly, on this Mortgage, the Note, any other indebtedness secured hereby or
any instrument securing the indebtedness secured hereby, the holder of this
Mortgage and of the debt which it secures shall have the right to declare the
debt secured by this Mortgage and any interest thereon due on a date to be
specified by written notice to Mortgagor from Mortgagee, which date shall be not
less than one hundred eighty (180) days after the date of such notice unless an
Event of Default exists, provided, however, that such election shall be
ineffective if the Mortgagor is permitted by law to pay the whole of such tax in
addition to all other payments required hereunder and if the Mortgagor, prior to
such specified date, does pay such tax and agrees to pay any such tax when
thereafter levied or assessed against the Mortgaged Property, and such agreement
shall constitute a modification of this Mortgage.
The Mortgagor may, at its expense and after prior notice to the Mortgagee,
by appropriate proceedings diligently prosecuted, contest in good faith the
validity or amount of any such taxes, assessments and other charges and, during
the period of such contest, permit the items so contested to remain unpaid.
During the period when the taxes, assessments or other charges so contested
remain unpaid, the Mortgagor shall deposit in escrow with the Mortgagee moneys
equal in amount to the amount of such contested taxes, assessments or charges in
excess of Two Hundred Fifty Thousand Dollars ($250,000.00) in the aggregate.
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Section 13. Required Insurance Coverage. (a) The Mortgagor shall keep the
Mortgaged Property continuously insured for the benefit of the Mortgagee against
loss or damage by fire and other hazards included in a standard fire insurance
policy with extended coverage endorsement, including vandalism and malicious
mischief coverage and such other coverage as Mortgagee may reasonably require,
duly endorsed to show the interest of the Mortgagee under a standard
non-contributing mortgagee clause, in an amount equal to the greater of 80% of
the then replacement value of the Mortgaged Property (excluding such amounts as
are not insured by standard fire insurance policies, such as excavations,
underground foundations, piping, underground utilities, footings below ground
level lakes and ponds, and architect's fees relating to repair or restoration
resulting from damage covered by such insurance); but in no event shall the
amount of such insurance be less than that required to avoid co-insurance. The
loss deductible provision for any such insurance shall not exceed Ten Thousand
Dollars ($10,000.00).
(b) Intentionally omitted.
(c) The Mortgagor shall obtain and continuously maintain single limit
comprehensive general accident and public liability insurance in minimum amounts
of $2,500,000, with a loss deductible clause not to exceed Ten Thousand Dollars
($10,000.00), and naming the Mortgagee as an additional insured, and the
Mortgagee may, in its reasonable discretion, require such increases in coverage
as it deems necessary or advisable as a result of the operations conducted by
the Mortgagor on the Mortgaged Property and/or the insurance coverage carried by
other entities conducting similar operations.
(d) All insurance required to be obtained and maintained pursuant to this
Mortgage shall be obtained from generally recognized, responsible insurance
companies qualified or licensed to transact such business in the State of
Florida and otherwise satisfactory to the Mortgagee. Each policy of insurance
shall not be subject to cancellation or substantial modification without at
least thirty (30) days prior written notice to the Mortgagee.
(e) Mortgagor shall deposit with the Mortgagee all such policies of
insurance or, at the option of the Mortgagee, binders, certificates or other
evidence satisfactory to the Mortgagee that (i) the insurance required hereby
has been obtained and is in full force and effect, and (ii) all premiums thereon
have been paid in full. Prior to the expiration of any such insurance, the
Mortgagor shall furnish the Mortgagee with evidence satisfactory to the
Mortgagee that such insurance has been renewed or replaced and that all premiums
thereon have been paid in full, and all insurance policies required hereby are
in full force and effect.
(f) Subject to Section 18, Mortgagor hereby assigns to the Mortgagee all
of the Mortgagor's right, title and interest in and to all such policies of
insurance and in and to any insurance proceeds resulting therefrom to the full
extent of the indebtedness secured hereby, and authorizes and directs the
insurer to pay any and all such proceeds directly to the Mortgagee. The
Mortgagor shall have
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the right to adjust and compromise any claims under any such insurance policies,
with the approval of Mortgagee with respect to any claim in excess of
$1,000,000, which approval shall not be unreasonably withheld. In the event of a
foreclosure of this Mortgage, the purchaser of the Mortgaged Property shall
succeed to all the rights of the Mortgagor (including any right to unearned
premiums) in and to all policies of insurance assigned to the Mortgagee pursuant
hereto.
(g) Mortgagor shall maintain or cause to be maintained in connection with
the Mortgaged Property any workers' compensation coverage required by the laws
of the State in which the Mortgaged Property is located. If the Mortgaged
Property is used for (1) manufacturing purposes, or (2) any purpose involving
the use of machinery, mobile or production equipment, tank storage, or the
production of any gases, chemicals, or any use other than general office,
apartment living or storage purposes only, Mortgagor shall also maintain
liability insurance coverage to insure against any liability risks not covered
by workers' compensation coverage.
Section 14. Intentionally omitted.
Section l5. Disposition of Mortgaged Property; Liens and Encumbrances.
Except in connection with sales of single family residential dwellings or units
pursuant to bona fide contracts between Borrower and one or more Persons not an
Affiliate of Borrower as permitted by the Agreement, and except as expressly
permitted by Sections 11, 19 and 49 of this Mortgage, the Mortgagor shall not
sell, convey, assign, transfer, lease, or dispose of all or any part of the
Mortgaged Property, or any interest therein, or enter into any agreement for any
of the foregoing, in each case without the prior written consent of the
Mortgagee. The Mortgagor shall not directly or indirectly create or permit to
remain, and will promptly discharge, any mortgage, lien, encumbrance or charge
on, pledge of, security interest in or conditional sale or other title retention
agreement with respect to all or any part of the Mortgaged Property, or any
interest therein, or any revenues, income or profit or other sums arising from
the Mortgaged Property or any part thereof (including, without limitation, any
lien, encumbrance or charge as a result of operation of law) other than: (i) the
lien and security interest of this Mortgage; (ii) liens for taxes, assessments
and other governmental charges which are not at the time required to be paid
pursuant to Section l2 hereof; (iii) liens of mechanics', materialmen, suppliers
or vendors or rights thereto to the extent permitted by Section l6 hereof; and
(iv) the Permitted Prior Encumbrances specified in Section 1 hereof, if any.
Section l6. Mechanics' and Other Liens. The Mortgagor shall not permit any
construction or other liens to be filed or to exist against the Mortgaged
Property or any part thereof in an amount in excess of One Hundred Thousand
Dollars ($100,000.00) in any one instance or Two Hundred Fifty Thousand Dollars
($250,000.00) in the aggregate, and the Mortgagor shall, within sixty (60) days
after notice of the filing of any such lien, cause the same to be discharged of
record by payment, deposit, bond, order of a Court of competent jurisdiction or
otherwise.
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Section l7. No Claims Against Mortgagee. This Mortgage does not relate to
the construction of specific improvements and is for working capital pursuant to
the Agreement. Nothing contained in this Mortgage shall be construed as a
request by the Mortgagee, expressed or implied, for the performance of any labor
or services or the furnishing of any materials or other property with respect to
the Mortgaged Property or any part thereof, or be construed to give the
Mortgagor any right, power or authority to contract for or permit the
performance of any labor or services or the furnishing of any materials or other
property with respect to the Mortgaged Property or any part thereof, or be
construed to give the Mortgagor any right, power or authority to contract for or
permit the performance of any labor or services or the furnishing of any
material or other property on behalf of Mortgagee, or in such manner as to
provide the basis for any claim either against the Mortgagee or that any lien
based on the performance of such labor or services or the furnishing of any such
material or other property is prior to the lien of this Mortgage.
Section l8. Damage, Destruction, Eminent Domain.
(a) Mortgagor shall promptly notify Mortgagee in writing of any damage to
or destruction of any part of the Mortgaged Property, including a description of
the nature, extent and date of the damage, the estimated cost of repair, and
estimated net proceeds of insurance. Mortgagor shall promptly notify Mortgagee
in writing of any proposed, threatened or actual taking or injury to any part of
the Mortgaged Property pursuant to use of the power of eminent domain, including
a description of the nature, extent and date of the taking or proposed taking
and the estimated net proceeds of the condemnation award, or price for
conveyance under threat of condemnation.
(b) Mortgagor hereby assigns to Mortgagee all of Mortgagor's right, title
and interest in and to any and all such proceeds of insurance and/or eminent
domain awards (including any amount paid for a conveyance under threat of
condemnation), and all such proceeds shall be paid to Mortgagee for application
to the Mortgagee's costs of collection, any amounts then due pursuant to the
Note, the Agreement or this Mortgage, and then to the prepayment without premium
of principal; provided, however, that, subject to paragraph (c) below, and so
long as no Event of Default, or event which with notice or lapse of time or both
would constitute an Event of Default, has occurred, the Mortgagee shall promptly
remit to Mortgagor such insurance proceeds to the extent less than $1,000,000
resulting from a single loss and shall further permit such insurance proceeds
(to the extent not remitted to Borrower as aforesaid) to be used for the purpose
of repairing, replacing, restoring and rebuilding the Mortgaged Property as
nearly as practicable to the value, condition and character thereof immediately
prior to such damage or destruction, with such changes or alterations, however,
as the Mortgagor may deem necessary for proper use or operation of the Mortgaged
Property and as may be approved by the Mortgagee, in accordance with Section
18(e) hereof.
(c) If (i) any building being part of the Mortgaged Property is damaged or
destroyed to such an extent that (y) it cannot be reasonably repaired, replaced
or restored within a period of six (6)
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months to the condition thereof immediately preceding such damage or
destruction, or (z) its normal use and operation is prevented for a period of
six (6) months, or (ii) title to, or the temporary use of a significant portion
of the Mortgaged Property shall have been taken to such an extent that (v) the
Mortgaged Property cannot be reasonably repaired, replaced or restored within a
period of six (6) months to a condition not substantially different from that
existing prior to such taking, or (w) normal use and operation of the Mortgaged
Property is prevented for a period of six (6) months, then, in any of such
events, Mortgagor shall within thirty (30) days after receiving notice of any
such events, cause the value of such property to be re-appraised in a manner
satisfactory to Mortgagee and shall cause the amount outstanding pursuant to the
Agreement to be permitted within the applicable Loan Amount Limitation, whether
by subjecting additional Collateral hereto or by reducing the principal amount
outstanding pursuant to the Note and Agreement.
(d) Intentionally omitted.
(e) Mortgagor shall, regardless of the adequacy or availability of
insurance proceeds, if any, promptly commence and complete the restoration,
repair, replacement and rebuilding of the Mortgaged Property as nearly as
practicable to the value, condition and character thereof immediately prior to
any damage or destruction. Mortgagor shall, regardless of the adequacy or
availability of proceeds of condemnation, if any, promptly commence and complete
the restoration, repair, replacement and rebuilding of the Mortgaged Property as
nearly as practicable to the value, condition and character thereof immediately
prior to such taking. If no Event of Default or event which with notice or lapse
of time or both would constitute an Event of Default has occurred, Mortgagee
shall make any insurance proceeds remaining in its possession, as provided in
Paragraph (b) above, available for any such repair or restoration, and shall
disburse such funds as work progresses in accordance with and subject to
Mortgagee's then normal and customary construction loan disbursement practices
and procedures, provided that Mortgagee may require Mortgagor either to deposit
with Mortgagee, for disbursement prior to the disbursement of any such insurance
proceeds, the amount in addition to such available net proceeds of insurance
that will be required (in Mortgagee's judgment) to complete such repair or
restoration, or to provide Mortgagee with evidence satisfactory to Mortgagee
that such additional funds are available for such purposes.
Section l9. Leases. The Mortgagor shall not enter into any lease of all or
any part of the Mortgaged Property ("Lease") except for leases of individual
single family residences, lots or units to Persons not Affiliates of Borrower in
the ordinary course of business or except with the prior written consent of the
Mortgagee and pursuant to lease terms in form and substance satisfactory to the
Mortgagee. Unless otherwise provided by written instrument signed by the
Mortgagee, any and all Leases (other than Permitted Prior Encumbrances, if any)
shall be subordinated to this Mortgage. This Mortgage constitutes an absolute
and present assignment of all rentals, income and other revenues payable under
or derived from any and all Leases, subject only to the conditional license
granted by the Mortgagee to the Mortgagor to collect such rentals, income and
revenues during such times as no Event of Default shall have occurred hereunder.
Concurrently with the
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execution and delivery hereof, the Mortgagor has also executed and delivered to
the Mortgagee a collateral assignment of its interests as lessor in all Leases
and to all rentals, income and other revenues payable thereunder or derived
therefrom, as additional collateral for the indebtedness hereby secured.
The Mortgagor will perform, fulfill, comply with and observe each and
every material covenant, agreement and condition to be performed, fulfilled,
complied with and observed by the Mortgagor as lessor under the Leases, and will
not suffer or permit any material default of the Mortgagor as lessor thereunder
to occur (except defaults which are duly cured within the time provided in the
Leases for the curing thereof).
Section 20. Inspection. Mortgagee, its agents and employees shall have the
right to enter upon and inspect the Mortgaged Property at any and all reasonable
times for the protection of its interest in the Mortgaged Property and for such
other purposes as may in Mortgagee's sole discretion be necessary or desirable
in connection with the exercise of its rights hereunder or under the Agreement.
Section 2l. Intentionally omitted.
Section 22. Indemnification. The Mortgagor hereby protects, indemnifies
and saves harmless the Mortgagee, its officers, directors, agents and employees,
from and against any and all liabilities, obligations, claims, damages,
penalties, causes of action, costs and expenses (including without limitation,
reasonable attorneys' fees and expenses) imposed upon, incurred by or asserted
against the Mortgagee or any of such persons by reason of (a) ownership of any
interest in the Mortgaged Property or any part thereof, (b) any accident, injury
to or death of persons or loss of or damage to property occurring on or about
the Mortgaged Property or any part thereof or the adjoining sidewalks, curbs,
vaults and vault space, if any, streets or ways, excepting for those caused by
the negligence of the Mortgagee, (c) any use, disuse or condition of the
Mortgaged Property or any part thereof, or the adjoining sidewalks, curbs,
vaults and vault space, if any, or any streets or ways, excepting for those
caused by the negligence of the Mortgagee, (d) any failure on the part of the
Mortgagor to perform or comply with any of the terms hereof or of the Agreement,
or any inaccuracy in any representation or warranty made by Mortgagor herein or
in the Agreement, (e) any necessity to defend any of the right, title or
interest conveyed by this Mortgage, (f) the performance of any labor or services
or the furnishing of any materials or other property in respect of the Mortgaged
Property or any part thereof, (g) any subsidence or erosion of any part of the
surface of the Mortgaged Premises, including any shoreline or any bank of any
river, stream, creek, lake, ocean or other water source, or (h) the location or
existence of asbestos or any toxic or hazardous waste, chemicals, materials or
substance on, at, in or under the Mortgaged Property or any part thereof. If any
action, suit or proceeding is brought against the Mortgagee, or any of its
officers, directors, agents or employees, for any such reason, the Mortgagor,
upon the request of such party, will at the Mortgagor's expense, cause such
action, suit or proceeding to be resisted
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and defended by counsel satisfactory to the Mortgagee or such person. Any
amounts payable to an indemnified party under this Section which are not paid
within ten (10) days after written demand therefor shall bear interest at the
Default Rate from the date of such demand, and such amounts, together with such
interest, shall be indebtedness secured by this Mortgage. The obligations of the
Mortgagor under this Section shall survive any defeasance of the Mortgage.
Section 23. Events of Default. An Event of Default as defined in the
Agreement shall be an "Event of Default" under this Mortgage.
Section 24. Right to Cure. If the Mortgagor or any Borrower shall fail to
make any payment or perform any act required to be made or performed under this
Mortgage or the Agreement, the Mortgagee, upon reasonable notice to Mortgagor of
its intent to do so (not to exceed five (5) days) and without waiving or
releasing any obligation or default, may (but shall be under no obligation to)
make such payment or perform such act for the account and at the expense of the
Mortgagor and may enter upon the Mortgaged Property or any part thereof for such
purpose and take all such action thereon as, in its sole opinion, may be
necessary or appropriate therefor, all without prejudice to any other rights or
remedies available to Mortgagee. All payments so made by the Mortgagee and all
costs, fees and expenses incurred in connection therewith or in connection with
the performance by the Mortgagee of any such act, together with interest thereon
at the Default Rate (as hereinafter defined) from the date of payment or
incurrence, shall constitute additional indebtedness secured by this Mortgage
and shall be paid by the Mortgagor to the Mortgagee on demand.
Section 25. Remedies. If an Event of Default shall have occurred, the
Mortgagee may exercise any or all or any combination of the remedies conferred
upon or reserved to it under this Mortgage, the Agreement or any other Loan
Document, or now or hereafter existing at law or in equity or by statute.
Without limitation, the Mortgagee may (a) declare the entire unpaid principal
balance of the indebtedness secured hereby to be immediately due and payable,
without notice or demand, except as expressly required by the Loan Documents,
the same being expressly waived by the Mortgagor, and upon such declaration the
entire indebtedness secured hereby shall become immediately due and payable and
shall thereafter bear interest at a rate equal to five percent (5%) per annum in
excess of the rate that would otherwise be applicable pursuant to the terms of
the Note (the "Default Rate"); (b) proceed at law or equity to collect all
indebtedness secured by this Mortgage then due hereunder, whether at maturity or
by acceleration; (c) foreclose the lien of this Mortgage as against all or any
part of the Mortgaged Property; and (d) exercise any rights, powers and remedies
it may have as a secured party under the Uniform Commercial Code of the State in
which the Mortgaged Property is located, including, without limitation, the
option of proceeding as to both personal property and fixtures in accordance
with the Mortgagee's rights with respect to real property.
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Section 26. Waiver of Appraisement, Valuation. The Mortgagor hereby
waives, to the full extent that it may lawfully do so, the benefit of all
appraisement, valuation, stay and extension laws now or hereafter in force and
all rights of marshalling of assets in the event of any sale of the Mortgaged
Property, any part thereof or any interest therein, and any court having
jurisdiction to foreclose the lien hereof may sell the Mortgaged Property (real
or personal, or both) as an entirety or in such parcels, lots, manner or order
as the Mortgagee in its sole discretion may elect.
Section 27. Appointment of Receiver. If an Event of Default shall have
occurred, the Mortgagee shall be entitled, to the extent permitted by law, to
the appointment of a receiver for all or any part of the Mortgaged Property,
whether such receivership is incidental to a proposed sale of the Mortgaged
Property or otherwise. The foregoing is agreed to, in part, in recognition of
the fact that a delay in the management, development, disposition or other
activity involving the Mortgaged Property may substantially adversely affect
Mortgagee's security by virtue of the effects of Florida's Growth Management Act
and concurrency requirements and documents and instruments of record affecting
development of the Mortgaged Property.
Section 28. Possession, Management and Income; Assignment. If an Event of
Default shall have occurred, the Mortgagee, to the extent permitted under
applicable law, may enter upon and take possession of the Mortgaged Property or
any part thereof by force, summary proceedings, ejectment or otherwise, and may
remove Mortgagor and all other persons and any and all property therefrom and
may hold, operate and manage the same and receive all revenues, income or
profits accruing with respect thereto or any part thereof. The Mortgagee shall
have no liability for or by reason of any such taking of possession, entry,
removal or holding, operation or management, or for the failure to do so, except
for grossly negligent or intentional misconduct.
Section 29. Remedies Cumulative. Each right, power and remedy of the
Mortgagee provided for in this Mortgage, in the Note, in the Agreement or now or
hereafter existing at law or in equity or by statute or otherwise, shall be
cumulative and concurrent and shall be in addition to every other such right,
power or remedy, and the exercise or beginning of the exercise or partial
exercise by the Mortgagee of any one or more of such rights, powers or remedies
shall not preclude the simultaneous or later exercise by the Mortgagee of any or
all such other rights, powers or remedies.
Section 30. Provisions Subject to Applicable Law. All rights, powers and
remedies provided herein may be exercised only to the extent that the exercise
thereof does not violate any applicable law, and are intended to be limited to
the extent necessary so that they will not render this Mortgage invalid,
unenforceable or not entitled to be recorded, registered or filed under any
applicable law.
Section 3l. No Waiver by Mortgagee. No failure by the Mortgagee to insist
upon the strict performance of any term hereof or to exercise any right, power
or remedy consequent upon a breach thereof shall constitute a waiver of any such
term or of any such breach. No waiver of any
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breach shall affect or alter this Mortgage, which shall continue in full force
and effect with respect to any other then existing or subsequent breach.
Section 32. Right to Sue for Installments. Mortgagee shall have the right
from time to time to sue for any sums required to be paid pursuant to the terms
of this Mortgage (whether principal, interest, taxes, insurance premiums, or
otherwise) as the same become due, without regard to whether or not the
principal or any other sums secured hereby shall then be due and payable, and
without prejudice to the right of the Mortgagee to accelerate the indebtedness
secured hereby or to commence an action for foreclosure or any other action for
a default or defaults by the Mortgagor existing at the time such earlier action
was commenced.
Section 33. Additional Security. Without impairment of the lien and rights
created by this Mortgage, the Mortgagee may accept additional security for the
indebtedness secured by this Mortgage from the Mortgagor or (without notice to
or the consent of the Mortgagor) from any other person or persons. Mortgagee may
release or subordinate any part of the security for the indebtedness secured by
this Mortgage without in any way impairing or affecting the validity or priority
of this Mortgage as to the Mortgaged Property not specifically released.
Mortgagee may resort to the security created by this Mortgage or to any such
additional security in such manner and order as Mortgagee may elect, in each
case without affecting the lien hereof and the rights conferred hereunder.
Section 34. Notices. Any notice, demand or request required or permitted
by this Mortgage shall be in writing and shall be deemed to have been
sufficiently given at the earlier of when personally delivered or at 6:00 P.M.
on the second Business Day after deposit in the United States certified or
registered mail, postage prepaid, and addressed to the address of the party to
whom such notice is directed as such address as is set forth at the beginning of
this Mortgage, and in the case of the Mortgagee, to the attention of the Legal
Department, or at such other address as any party may from time to time notify
the other by notice in writing as aforesaid. A Business Day is any day other
than a Saturday, Sunday or any day on which savings and loan associations are
authorized or required to be closed in the State of Ohio.
Section 35. Reimbursement of Attorneys' Fees and Expenses. If the
Mortgagee becomes a party to any action wherein the Mortgagee must establish or
defend the validity or priority of this Mortgage, the Mortgagor shall reimburse
the Mortgagee on demand for any and all such costs or expenses incurred by
Mortgagee, including, without limitation, attorneys' fees at all tribunal
levels, together with interest thereon at the Default Rate from the date such
costs and expenses are incurred, and all of said amounts, including interest,
shall constitute indebtedness secured by this Mortgage to the extent permitted
by law.
Section 36. Discharge of Mortgage. If the Note and all other sums payable
under this Mortgage and the Agreement shall have been fully paid, the line of
credit provided by the Note and
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Agreement shall have been terminated, then, upon the written request and at the
expense of the Mortgagor, the Mortgagee will execute and deliver the original
Note and such proper instruments of release and discharge as may reasonably be
requested to evidence the defeasance, release and discharge of this Mortgage.
The lien, security interests and rights granted to the Mortgagee herein
shall continue in full force and effect until expressly released by Mortgagee,
notwithstanding the termination of the line of credit provided by the Note and
Agreement or the fact that the Loan Account may from time to time be in a credit
position.
Section 37. Recordation. The Mortgagor, at its expense, shall cause this
Mortgage, any instruments supplemental hereto, and financing statements,
including all necessary amendments, supplements and appropriate continuation
statements, to be recorded, registered and filed, and to be kept recorded,
registered and filed, in such manner and in such places as may be required in
order to establish, preserve and protect the lien of this Mortgage as a valid,
first mortgage lien on all real property and fixtures included in the Mortgaged
Property and a valid, perfected first priority security interest in all fixtures
included in the Mortgaged Property (including in each such case, without
limitation, any such properties acquired after the execution hereof). If
requested by the Mortgagee, but in each case not more than once in each calendar
year, the Mortgagor, at its expense, will furnish the Mortgagee an opinion of
counsel satisfactory to the Mortgagee specifying the action required and taken
by the Mortgagor to comply with this Section 37 since the date of this Mortgage
or the date of the most recent such opinion (or stating that no such action is
or was necessary) and specifying all action which will be required to be taken
in the next succeeding twelve month period.
Section 38. Further Assurances. Mortgagor will properly execute and
deliver, or cause to be executed and delivered from time to time, at the request
of Mortgagee, all such further mortgages, security agreements, financing
statements, assignments of leases now existing or hereafter entered into,
transfers and such other assurances as the Mortgagee shall require for better
assuring, mortgaging, pledging, assigning and confirming unto the Mortgagee all
and singular the Mortgaged Property and the title thereto; provided, however,
that no such assurance shall create liability or security not contemplated by
the Agreement.
Section 39. Estoppel Affidavits. The Mortgagor or the Mortgagee, as the
case may be, within ten (l0) days after written request from the other party,
shall furnish a written statement, duly acknowledged, setting forth the unpaid
principal of, and interest on the indebtedness secured hereby, and in the case
of the Mortgagor only, whether or not any offsets or defenses exist against the
obligations of Mortgagor to pay such principal and interest.
Section 40. Amendments, Changes and Modifications. Except as otherwise
provided in this Mortgage, this Mortgage may not be effectively amended,
changed, modified, altered or terminated
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without the prior written consent of the Mortgagee. If the payment of the
indebtedness secured by this Mortgage, or any part thereof, be extended or
varied, or if any part of the security or guaranties therefor be released, then
all persons now or at any time hereafter liable therefor, or interested in the
Mortgaged Property, shall be held to assent to such extension, variation or
release and their liability and the lien of this Mortgage and all provisions
hereof shall continue in full force and effect. The right of recourse against
all such persons is expressly reserved by Mortgagee, notwithstanding any such
extension, variation or release. Any person, firm or corporation taking a junior
mortgage, or other lien upon the Mortgaged Property or any part thereof or any
interest therein, shall take said lien subject to the rights of Mortgagee to
amend, modify, extend or release this Mortgage, the Agreement or any other
document or instrument evidencing, securing or guarantying the indebtedness
secured by this Mortgage, in each and every case without obtaining the consent
of the holder of such junior lien and without the lien of this Mortgage losing
its priority over the rights of any such junior lien. Any acceptance by the
Mortgagee of part payment of any installment of principal or interest, or both,
or part performance of any covenant, or delay by mortgagee for any period of
time in exercising the option to accelerate any indebtedness evidenced by the
Note or secured by this Mortgage shall not operate as a waiver of the right to
exercise such option to accelerate such indebtedness.
Section 4l. Governing Law. This Mortgage shall be deemed to be made under
the laws of the State of Florida and for all purposes shall be governed by and
construed in accordance with the laws of the State of Florida.
Section 42. Binding Effect. This Mortgage shall inure to the benefit of
and be binding upon the Mortgagor, its successors and assigns, and the
Mortgagee, its successors and assigns, provided that this Mortgage may not be
assigned by the Mortgagor without the prior written consent of the Mortgagee and
may not be assigned by the Mortgagee, except as provided in the Agreement.
Section 43. Severability. If any term or provision of this Mortgage, or
the operation thereof, shall be held to be invalid, illegal or unenforceable,
the validity of the remaining provisions hereof, and the operation thereof,
shall in no way be affected thereby, each of which shall be deemed to be
effective to the full extent permitted by law.
Section 44. Captions. The captions or headings herein shall be solely for
convenience of reference and in no way define, limit or describe the scope or
intent of any provisions or sections of this Mortgage.
Section 45. Counterparts. This Mortgage may be executed in any number of
counterparts, each of which shall be regarded as an original and all of which
shall constitute but one and the same instrument; it shall not be necessary in
proving this Mortgage to produce or account for more than one such counterpart,
or a copy hereof certified by the appropriate recording officer.
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Section 46. Joint and Several Liability. If Mortgagor consists of more
than one party, each of the undersigned shall be jointly and severally liable
for the performance of all of the obligations, covenants and agreements of the
Mortgagor contained herein.
Section 47. No Setoffs. Mortgagor acknowledges that the indebtedness
secured hereby was incurred in good faith for full value received, and the
Mortgagor has no defenses, setoffs or counterclaims thereto.
Section 48. Definitions. Whenever in this instrument the context so admits
or requires, the terms "Mortgagor" and "Mortgagee" shall be construed as
including their respective heirs, legal representatives, successors and assigns,
as the case may be (provided, however, that nothing herein shall be construed to
permit the assignment of this Mortgage by Mortgagor; and the pronoun as used
herein to refer to either Mortgagor or Mortgagee in the third person, singular
number and masculine gender, shall be construed as meaning the person, number
and gender appropriate to the first designation to the respective parties
hereto.
Section 49. Partial Releases. Mortgagee will consent to the sale of any
Single Family Residence (as defined in the Agreement) and a partial release of
such Single Family Residence from the lien and operation of this Mortgage can be
obtained upon Mortgagor's request and at Mortgagor's expense, subject to the
following terms and conditions:
(a) No Event of Default has occurred and is existing;
(b) Mortgagor, at its own expense, has submitted to Mortgagee at least two
(2) weeks prior to the date the release is required: (i) a legal description and
sketch of survey or recorded plat of the portion of the Mortgaged Property to be
released and other documentation as Mortgagee may deem reasonably necessary; and
(ii) a properly prepared partial release instrument in form and substance
satisfactory to Mortgagee, in Mortgagee's reasonable judgment;
(c) Suitable ingress and egress are assured for the remaining portion of
the Premises subject to this Mortgage in the reasonable judgment of Mortgagee;
and
(d) Evidence of compliance with the requirements of such Federal, State or
local laws and regulations as may from time to time apply to such sales,
satisfactory to Mortgagee in its reasonable judgment.
When all of the foregoing conditions are satisfied in Mortgagee's determination,
Mortgagee will, within ten (10) days after its receipt of the last of such
items, execute and deliver the partial release of Mortgage to the appropriate
escrow agent to be held in escrow pending the closing of the sale by Mortgagor
of the Mortgaged Property to be released.
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Section 50. WAIVER OF JURY TRIAL. THE MORTGAGOR AND MORTGAGEE EACH WAIVES
THE RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING BASED UPON, OR RELATED
TO, ANY ASPECT OF THE TRANSACTION IN CONNECTION WITH WHICH THIS DOCUMENT IS
BEING GIVEN OR ANY DOCUMENT EXECUTED OR DELIVERED IN CONNECTION WITH SUCH
TRANSACTION. THIS WAIVER IS KNOWINGLY, INTENTIONALLY AND VOLUNTARILY MADE BY
MORTGAGOR AND MORTGAGEE, AND EACH OF THE MORTGAGOR AND MORTGAGEE EACH
ACKNOWLEDGES THAT NO ONE HAS MADE ANY REPRESENTATIONS OF FACT TO INDUCE THIS
WAIVER OF TRIAL BY JURY OR IN ANY WAY TO MODIFY OR NULLIFY ITS EFFECT. MORTGAGOR
AND MORTGAGEE EACH FURTHER ACKNOWLEDGES HAVING BEEN REPRESENTED IN CONNECTION
WITH THE TRANSACTION WITH RESPECT TO WHICH THIS DOCUMENT IS BEING GIVEN AND IN
THE MAKING OF THIS WAIVER BY INDEPENDENT LEGAL COUNSEL, SELECTED BY ITS OWN FREE
WILL, AND THAT IT HAS HAD THE OPPORTUNITY TO DISCUSS THIS WAIVER WITH SUCH
COUNSEL. MORTGAGOR AND MORTGAGEE EACH ACKNOWLEDGES HAVING READ AND UNDERSTOOD
THE MEANING AND RAMIFICATIONS OF THIS WAIVER PROVISION.
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IN WITNESS WHEREOF, this instrument has been signed and acknowledged this
day of _______________, 1993.
Signed and Acknowledged
in the Presence of:
ORIOLE HOMES CORP.
Name Printed:
By: ________________________________________
and: ________________________________________
Name Printed:
Witnesses as to ORIOLE HOMES CORP.
STATE OF FLORIDA )
)
COUNTY OF )
I HEREBY CERTIFY that on this day, before me, an officer duly authorized
in the State aforesaid and in the County aforesaid to take acknowledgements, the
foregoing instrument was acknowledged before me by
______________________________________, the ___________________, of ORIOLE HOMES
CORP., a Florida corporation, freely and voluntarily under authority duly vested
in him/her by said corporation and that the seal affixed thereto is the true
corporate seal of said corporation. He/She is personally known to me or has
produced ________________________ as identification and DID/DID NOT take an
oath.
WITNESS my hand and official seal in the County and State last aforesaid
this _____ day of _______________, 1993.
-------------------------------------------
(SEAL)
Notary Public
State of Florida
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-----------------------------------------
Typed, printed or stamped name of
Notary Public
My Commission Expires:___________________
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EXHIBIT A
---------
(Legal Description)
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Exhibit B
---------
(Permitted Encumbrances)
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JS 4/21/95, 5/22/95
Exhibit 10.7
This Instrument Prepared by:
James Sadock, Jr., Esq.
5550 Glades Road, Suite 100
Boca Raton, Florida 33431
--------------------------------------------------------------------------
MORTGAGE, ASSIGNMENT AND FINANCING
STATEMENT SPREADER AGREEMENT
(Revolving Loan)
THIS MORTGAGE, ASSIGNMENT AND FINANCING STATEMENT SPREADER AGREEMENT
("Spreader"), made this ____ day of __________, 1995, by ORIOLE HOMES CORP., a
Florida corporation (the "Mortgagor"), having its principal place of business at
Suite 200, 1690 South Congress Avenue, Delray Beach, Florida 33445-6327, to OHIO
SAVINGS BANK, F.S.B., a federal savings bank, f/k/a Ohio Savings Bank, an Ohio
corporation (the "Mortgagee"), having its principal place of business at Ohio
Savings Plaza, 1801 East Ninth Street, Cleveland, Ohio 44114;
W I T N E S S E T H:
--------------------
WHEREAS, in consideration for a revolving line of credit in the maximum
amount of Ten Million Dollars ($10,000,000.00) (the "Loan") made by Mortgagee to
Mortgagor, Mortgagor has executed and delivered to Mortgagee a certain Revolving
Mortgage Note dated July 13, 1993, in the maximum principal amount of the Loan
as aforesaid (the "Note");
WHEREAS, the Note is secured by a Mortgage and Security Agreement
(Revolving Loan) dated July 13, 1993, from Mortgagor to Mortgagee and recorded
on July 16, 1993, in Official Records Book 7800, Page 1590, of the Public
Records of Palm Beach County, Florida (the "Mortgage"), an Assignment of Rents
and Leases and Agreements Affecting Real Estate dated July 13, 1993, from
Mortgagor to Mortgagee and recorded on July 16, 1993, in Official Records Book
7800, Page 1617, of said Public Records (the "Assignment") and a UCC-1 Financing
Statement from Mortgagor, as Debtor,
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to Mortgagee, as Secured Party, and recorded on July 16, 1993 in Official
Records Book 7800, Page 1631, of said Public Records (the "Financing
Statement"), each of which encumbers the land described on Exhibit A attached
thereto (the "Land"); and
NOTE TO RECORDER: DOCUMENTARY
PLEASE CROSS REFERENCE TO:
STAMPS AND INTANGIBLE TAX ON THE OFFICIAL RECORDS BOOK 7800,
INDEBTEDNESS EVIDENCED HEREBY ARE
PAGE 1590, OFFICIAL RECORDS
AFFIXED TO THE MORTGAGE RECORDED
BOOK 7800, PAGE 1617, AND OFFICIAL
IN OFFICIAL RECORDS BOOK 7800,
RECORDS BOOK 7800, PAGE 1631,
PAGE 1590, PUBLIC RECORDS OF
PUBLIC RECORDS OF PALM BEACH
PALM BEACH COUNTY, FLORIDA.
COUNTY, FLORIDA.
WHEREAS, Mortgagor and Mortgagee have agreed to modify the Mortgage,
Assignment and Financing Statement to expand and spread the lien and encumbrance
thereof to additional land, pursuant to the terms and conditions of that certain
Revolving Loan Agreement dated July 13, 1993 between Mortgagor and Mortgagee
(the "Agreement"), in order to secure Advances made under the Note.
NOW THEREFORE, in consideration of the sum of Ten Dollars ($10.00) and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, and intending to be legally bound, Mortgagor and Mortgagee
hereby covenant and agree as follows:
1. Recitals. The aforementioned recitals are true and correct and
are hereby incorporated by this reference.
2. Spreading of Mortgage, Assignment and Financing Statement. The lien,
charge, encumbrance, operation and effect of the Mortgage, Assignment and
Financing Statement shall be and the same are hereby expanded and spread so as
to encumber and affect in addition to the Land presently encumbered and affected
thereby, the additional land owned by Mortgagor and more particularly described
on Schedule A attached hereto (the "Additional Land"). The incorporation of the
Additional Land into the Mortgage, Assignment and Financing Statement shall have
the same force and effect as if such Additional Land was described in Exhibit A
to the
- - 115 - -
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JS 4/21/95, 5/22/95
Mortgage, Assignment and Financing Statement at the time of the execution and
delivery thereof to Mortgagee.
3. Definitions. (a) All references in the Mortgage to "Land", "Premises"
and "Mortgaged Property," and all references in the Assignment and Financing
Statement to "Premises," shall be construed to refer to the entire real and
personal property now encumbered and affected by the Mortgage, Assignment and
Financing Statement, together with the Additional Land described on Schedule A
attached hereto.
(b) Capitalized terms not defined herein shall have the same
meaning as in the Mortgage, the Assignment or the Agreement, as the case may be.
4. Representations and Warranties. Mortgagor represents and warrants that:
(a)(i) Mortgagor is lawfully seized with good and marketable title in fee simple
absolute to the Additional Land free and clear of all liens and encumbrances
whatsoever, except taxes and assessments general and special not delinquent,
zoning ordinances and except for those matters set forth in Schedule B attached
hereto (hereinafter "Permitted Prior Encumbrances"), and has good and marketable
title to all personal property included in the Additional Land, subject only to
the Permitted Prior Encumbrances; (ii) it has full right, power and authority to
bargain, sell, mortgage and convey the Additional Land as provided herein and in
the Mortgage; and (iii)except as expressly provided above, it will warrant and
defend to the Mortgagee such title to the Additional Land and the lien and
interest of the Mortgagee therein and thereon against all claims and demands
whatsoever and will maintain the priority of the lien, and the security interest
granted by, the Mortgage upon the Additional Land until the Mortgagor shall be
entitled to defeasance as provided therein.
(b) Mortgagor has full power, authority and legal right to execute this
Spreader and to keep and observe all of the terms of this Spreader on
Mortgagor's part to be observed or performed, and that, as of the date hereof
(i) the warranties and representations of Mortgagor contained in the Agreement
are true, correct and complete in all material respects; (ii) all the covenants,
terms and conditions of the Agreement remain satisfied; and (iii) no Event of
Default, or event which upon the lapse of time, the giving of notice, or both,
could become an Event of Default, has occurred under the Agreement.
(c) Mortgagor has not availed, is not availing and has no intention to
avail itself of the right and opportunity available to it under Chapter
697.04(1) (b) Florida Statutes to file of record a notice limiting the
- - 116 - -
<PAGE>
JS 4/21/95, 5/22/95
maximum principal amount that may be secured under the future advance provisions
of the Mortgage. Mortgagor makes this representation and warranty knowing that
Mortgagee shall rely upon the same in consideration of the terms and conditions
agreed to herein.
5. Ratification of Loan Documents. Mortgagor acknowledges that the Note,
the Mortgage, as amended hereby, the Assignment, as amended hereby, the
Financing Statement, as amended hereby, and any other document or instrument
related thereto are valid and binding; and there are no defenses, set offs or
counterclaims thereto; nothing herein invalidates or shall impair or release any
covenant, condition, agreement or stipulation in the Loan Documents; and
Mortgagor shall perform and comply with and abide by each of the covenants,
agreements, conditions and stipulations of the Loan Documents as amended hereby.
6. Limited Modification. Except to the limited extent expressly set forth
herein, all other terms and provisions contained in the Mortgage, Assignment and
Financing Statement remain in full force and effect, and nothing herein and
nothing done pursuant hereto shall affect or be construed to affect the lien,
charge and encumbrance of, or warranty of title in the Mortgage, Assignment or
Financing Statement nor the priority thereof over other liens, charges,
encumbrances or conveyances, and the Mortgaged Property (as that term is defined
in the Mortgage), the real and personal property described in Exhibit B to the
Financing Statement, and the Additional Collateral (as that term is defined in
the Assignment) shall remain in all respects subject to the lien, charge and
encumbrance of the Mortgage, Assignment and Financing Statement.
7. Miscellaneous.
--------------
(a) Recording. Mortgagor shall promptly cause this Spreader to be
filed, registered or recorded in such manner and in such places as may be
required by any present or future law in order to publish notice of and fully to
protect the lien of the Mortgage upon, and the interest of Mortgagee in, the
Mortgaged Property, and the lien of the Assignment upon, and the interest of
Mortgagee in, the Additional Collateral. Mortgagor will pay all filing,
administration and recording fees, and all expenses incident to the preparation,
execution and acknowledgement of this Spreader, and all Federal, state, county
and municipal taxes, duties, assessments and charges now or hereafter arising
out of or in connection with the filing, registration, recording, execution and
delivery of this Spreader, including without limitation any and all documentary
stamps and/or intangible taxes. Mortgagor agrees to hold harmless and indemnify
Mortgagee against any liability incurred by reason of the imposition of any such
tax, duty, assessment or charge. Mortgagor shall pay such sums
- - 117 - -
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JS 4/21/95, 5/22/95
immediately upon receipt of notice of such amounts from the authority to which
they are due and payable or from Mortgagee or its assigns. In the event
Mortgagor fails to pay said sums, Mortgagee or its assignee may at its option
pay such taxes and/or purchase and affix such documentary stamps. Any such
payment by Mortgagee or its assignee shall be added to the indebtedness
evidenced by the Note and shall bear interest from the date advanced to the date
of recovery at a rate equal to the lesser of five percent (5%) per annum higher
than the rate of interest then accruing in accordance with the provisions of the
first paragraph of the Note or the maximum rate permissible under Florida Law.
(b) Severability. If any one or more of the provisions of this
Spreader is held to be invalid, illegal or unenforceable in any respect for any
reason, the validity, legality and enforceability of any such provision or
provisions in every other respect and of the remaining provisions of this
Spreader shall not be in any way impaired, and each term or provision shall be
construed to be legal, valid, binding and enforceable to the maximum extent
permitted by law.
(c) Survival of Covenants, Representations and Warranties. All
warranties, representations and covenants made by Mortgagor herein or in any
certificate or other instrument delivered by it or on its behalf under this
Spreader shall be considered to have been relied upon by Mortgagee and shall
survive regardless of any investigation made by Mortgagee or on its behalf.
(d) Headings. Paragraph headings have been inserted in this
Spreader as a matter of convenience of reference only; such paragraph headings
are not part of this Spreader and shall not be used in the interpretation of
this Spreader.
(e) Governing Law. This Spreader shall be governed by and
construed in accordance with the laws of the State of Florida.
(f) Further Instruments. Mortgagor agrees from time to time, as
may be reasonably required by Mortgagee, to execute and deliver such further
instruments and documents and do all matters and things which may be convenient
or necessary to more effectively and completely carry out the intention
herewith.
(g) Conflicts. In the event of any conflict between the provisions
hereof and of the Mortgage, Assignment or Financing Statement, the provisions
hereof shall govern and control.
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JS 4/21/95, 5/22/95
THE MORTGAGOR AND MORTGAGEE EACH WAIVES THE RIGHT TO A TRIAL BY JURY IN
ANY ACTION OR PROCEEDING BASED UPON, OR RELATED TO, ANY ASPECT OF THE
TRANSACTION IN CONNECTION WITH WHICH THIS DOCUMENT IS BEING GIVEN OR ANY
DOCUMENT EXECUTED OR DELIVERED IN CONNECTION WITH SUCH TRANSACTION. THIS WAIVER
IS KNOWINGLY, INTENTIONALLY AND VOLUNTARILY MADE BY MORTGAGOR AND MORTGAGEE AND
THE MORTGAGOR AND MORTGAGEE EACH ACKNOWLEDGES THAT NO ONE HAS MADE ANY
REPRESENTATIONS OF FACT TO INDUCE THIS WAIVER OF TRIAL BY JURY OR IN ANY WAY TO
MODIFY OR NULLIFY ITS EFFECT. THE MORTGAGOR AND MORTGAGEE EACH FURTHER
ACKNOWLEDGES HAVING BEEN REPRESENTED IN CONNECTION WITH THE TRANSACTION WITH
RESPECT TO WHICH THIS DOCUMENT IS BEING GIVEN AND IN THE MAKING OF THIS WAIVER
BY INDEPENDENT LEGAL COUNSEL, SELECTED BY ITS OWN FREE WILL, AND THAT IT HAS HAD
THE OPPORTUNITY TO DISCUSS THIS WAIVER WITH SUCH COUNSEL. THE MORTGAGOR AND
MORTGAGOR EACH ACKNOWLEDGES HAVING READ AND UNDERSTOOD THE MEANING AND
RAMIFICATIONS OF THIS WAIVER PROVISION.
IN WITNESS WHEREOF, the Mortgagor has caused this Spreader to be executed
as of the date first above written.
MORTGAGOR:
Signed and Acknowledged
in the Presence of:
ORIOLE HOMES CORP.,
a Florida corporation
- -----------------------------
Name Printed:________________
---------------------------------
Richard D. Levy, Chairman of the
Board and Chief Executive Officer
- -----------------------------
Name Printed:________________
- - 119 - -
<PAGE>
JS 4/21/95, 5/22/95
STATE OF FLORIDA )
) SS:
COUNTY OF )
Before me, a Notary Public in and for said County and State, on this day
of __________, 1995, personally appeared the above-named Oriole
Homes Corp., a Florida corporation, by Richard D. Levy, its Chairman of the
Board and Chief Executive Officer, who acknowledged to me that he did sign the
foregoing instrument on behalf of said corporation, and that such signing was
his free act and deed as such officer, and the free act and deed of said
corporation. Richard D. Levy is personally known to me or has produced
__________________ as identification.
- --------------------------------------------------------------------------------
Print Name: (SEAL)
- --------------------------------------------------------------------------------
Notary Public, State of Florida
My Commission Expires: __________________________________________________
- - 120 - -
<PAGE>
JS 4/21/95, 5/22/95
SCHEDULE A
----------
Legal Description of the Additional Land to be added to
the Land previously mortgaged to the Mortgagee.
- - 121 - -
<PAGE>
JS 4/21/95, 5/22/95
SCHEDULE B
----------
Permitted Prior Encumbrances
- - 122 - -
<PAGE>
JS 8/4/95, 8/16/95, 8/21/95
Exhibit 10.8
This Instrument Prepared by:
James Sadock, Jr., Esq.
5550 Glades Road, Suite 100
Boca Raton, Florida 33431
FUTURE ADVANCE, MORTGAGE, ASSIGNMENT AND FINANCING
STATEMENT EXTENSION, MODIFICATION AND SPREADER AGREEMENT
--------------------------------------------------------
(Revolving Loan)
THIS FUTURE ADVANCE, MORTGAGE, ASSIGNMENT AND FINANCING STATEMENT
EXTENSION, MODIFICATION AND SPREADER AGREEMENT (the "Second Spreader"), made
this ____ day of August, 1995, by ORIOLE HOMES CORP., a Florida corporation (the
"Mortgagor"), having its principal place of business at Suite 200, 1690 South
Congress Avenue, Delray Beach, Florida 33445-6327, to OHIO SAVINGS BANK, F.S.B.,
a federal savings bank, f/k/a Ohio Savings Bank, an Ohio corporation (the
"Mortgagee"), having its principal place of business at Ohio Savings Plaza, 1801
East Ninth Street, Cleveland, Ohio 44114;
W I T N E S S E T H:
--------------------
WHEREAS, in consideration for a revolving line of credit in the maximum
amount of Ten Million Dollars ($10,000,000.00) (the "Loan") made by Mortgagee to
Mortgagor, Mortgagor has executed and delivered to Mortgagee a certain Revolving
Mortgage Note dated July 13, 1993, in the maximum principal amount of the Loan
as aforesaid (the "Original Note");
WHEREAS, the Original Note is secured by a Mortgage and Security Agreement
(Revolving Loan) dated July 13, 1993, from Mortgagor to Mortgagee and recorded
on July 16, 1993, in Official Records Book 7800, Page 1590, of the Public
Records of Palm Beach County, Florida (the "Mortgage"), an Assignment of Rents
and Leases and Agreements Affecting Real Estate dated July 13, 1993, from
Mortgagor to Mortgagee and recorded on July 16, 1993, in Official Records Book
7800, Page 1617, of said Public Records (the "Assignment") and a UCC-1 Financing
Statement from Mortgagor, as Debtor, to Mortgagee, as Secured Party, and
recorded on July 16, 1993 in Official
- - 123 - -
<PAGE>
JS 8/4/95, 8/16/95, 8/21/95
NOTE TO RECORDER: DOCUMENTARY STAMPS
PLEASE CROSS REFERENCE TO:
ON THE FUTURE ADVANCE NOTE ($2,000,000)
OFFICIAL RECORDS BOOK 7800
AND INTANGIBLE TAX ON THE FUTURE ADVANCE
PAGE 1590, OFFICIAL RECORDS
NOTE AND DEMAND NOTES ($5,000,000) ARE
BOOK 7800, PAGE 1617, AND
AFFIXED HERETO. DOCUMENTARY STAMPS ON THE
OFFICIAL RECORDS BOOK 7800,
DEMAND NOTES ($3,000,000) ARE AFFIXED
PAGE 1631, PUBLIC RECORDS OF THERETO. DOCUMENTARY STAMPS AND
INTANGIBLE PALM BEACH COUNTY, FLORIDA.
TAX ON THE ORIGINAL AMOUNT OF THE ORIGINAL NOTE ($10,000,000) ARE AFFIXED TO THE
MORTGAGE RECORDED IN OFFICIAL RECORDS BOOK 7800, PAGE 1590, PUBLIC RECORDS OF
PALM BEACH COUNTY, FLORIDA.
Records Book 7800, Page 1631, of said Public Records (the "Financing
Statement"), each of which encumbers the land described on Exhibit A attached
thereto (the "Original Land");
WHEREAS, by Mortgage, Assignment and Financing Statement Spreader
Agreement dated May 31, 1995, from Mortgagor to Mortgagee recorded on June 6,
1995, in Official Records Book 8776, Page 262, of the Public Records of Palm
Beach County, Florida, the lien, charge, encumbrance, operation and effect of
the Mortgage, Assignment and Financing Statement were expanded and spread so as
to encumber and affect the land described in Schedule A attached thereto (the
"First Additional Land");
WHEREAS, Mortgagor and Mortgagee have agreed that Mortgagee will increase
the Loan by the maximum amount of Five Million Dollars ($5,000,000.00) (the
"Additional Loan") such Additional Loan being evidenced by a $1,000,000 Demand
Revolving Promissory Note dated August 8, 1995 and a $2,000,000 Demand Revolving
Promissory Note dated August 15, 1995 (collectively, the "Demand Notes") and a
$2,000,000 Revolving Future Advance Mortgage Note (the "Future Advance Note") of
even date herewith, each executed and delivered to Mortgagee by Mortgagor, and
pursuant to Section 4 of the Mortgage, Mortgagor and Mortgagee have agreed that
said Additional Loan shall be secured by the Mortgage (the Loan and the
Additional Loan are hereinafter collectively referred to as the "Consolidated
Loan"); and
WHEREAS, Mortgagor and Mortgagee have agreed to extend the maturity date
of the Mortgage; and to modify the Mortgage, Assignment and Financing
- - 124 - -
<PAGE>
JS 8/4/95, 8/16/95, 8/21/95
Statement to expand and spread the lien and encumbrance of the Mortgage,
Assignment and Financing Statement to additional land, pursuant to the terms and
conditions of that certain Revolving Loan Agreement dated July 13, 1993 between
Mortgagor and Mortgagee as amended by First Amendment to Revolving Loan
Agreement of even date herewith (together the "Agreement") in order to secure
Advances made under the Consolidated Note (hereinafter defined).
NOW THEREFORE, in consideration of the Consolidated Loan, the premises,
and Ten Dollars ($10.00) and other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, and intending to be legally
bound, Mortgagor and Mortgagee hereby covenant and agree as follows:
1. Recitals. The aforementioned recitals are true and correct and are
hereby incorporated by this reference.
2. Existing Indebtedness. The indebtedness evidenced by the Original Note
was incurred in good faith for value received and as of the date hereof the
unpaid balance of the Original Note is $10,000,000.00, and the Mortgagor has no
defenses, counterclaims or offsets thereto.
3. Consolidation. Mortgagor and Mortgagee have agreed to consolidate the
Original Note, the Demand Notes and the Future Advance Note, and in furtherance
thereof, Mortgagor has executed and delivered to Mortgagee a Consolidated
Revolving Mortgage Note of even date herewith in the principal amount of Fifteen
Million Dollars ($15,000,000.00) (the "Consolidated Note") which Consolidated
Note supercedes and replaces the Original Note, the Demand Notes and the Future
Advance Note.
4. Extension and Modification. Clause A on the first page of the Mortgage
is hereby superseded, restated and replaced by the following:
A. In consideration for a revolving line of credit in the maximum amount
of Fifteen Million Dollars ($15,000,000.00) (the "Loan") made by Mortgagee to
Borrower, Borrower has executed and delivered to Mortgagee a certain
Consolidated Revolving Mortgage Note dated August ___, 1995, in the maximum
principal amount of the Loan as aforesaid, payable in full as to principal and
accrued interest on July 1, 1997 (the "Note");
5. Spreading of Mortgage, Assignment and Financing Statement. The lien,
charge, encumbrance, operation and effect of the Mortgage, Assignment and
Financing Statement shall be and the same are hereby expanded and spread so as
to encumber and affect in addition to the Land and Additional Land presently
encumbered and affected thereby, the additional land owned by Mortgagor and more
particularly described on
- - 125 - -
<PAGE>
JS 8/4/95, 8/16/95, 8/21/95
Schedule A attached hereto (the "Second Additional Land"). The incorporation of
the Second Additional Land into the Mortgage, Assignment and Financing Statement
shall have the same force and effect as if such Second Additional Land was
described in Exhibit A to the Mortgage, Assignment and Financing Statement at
the time of the execution and delivery thereof to Mortgagee.
6. Definitions. (a) All references in the Mortgage to "Land", "Premises"
and "Mortgaged Property," and all references in the Assignment and Financing
Statement to "Premises," shall be construed to refer to the entire real and
personal property now encumbered and affected by the Mortgage, Assignment and
Financing Statement, together with the Second Additional Land described on
Schedule A attached hereto.
(b) All references in the Mortgage and Assignment to the "Note"
shall be construed to refer to the Consolidated Note.
(c) Capitalized terms not defined herein shall have the same
meaning as in the Mortgage, the Assignment or the Agreement, as the case may be.
7. Representations and Warranties. Mortgagor represents and warrants that:
(a)(i) Mortgagor is lawfully seized with good and marketable title in fee simple
absolute to the Second Additional Land free and clear of all liens and
encumbrances whatsoever, except taxes and assessments general and special not
delinquent, zoning ordinances and except for those matters set forth in Schedule
B attached hereto (hereinafter "Permitted Prior Encumbrances"), and has good and
marketable title to all personal property included in the Second Additional
Land, subject only to the Permitted Prior Encumbrances; (ii) it has full right,
power and authority to bargain, sell, mortgage and convey the Second Additional
Land as provided herein and in the Mortgage; and (iii) except as expressly
provided above, it will warrant and defend to the Mortgagee such title to the
Second Additional Land and the lien and interest of the Mortgagee therein and
thereon against all claims and demands whatsoever and will maintain the priority
of the lien, and the security interest granted by, the Mortgage upon the Second
Additional Land until the Mortgagor shall be entitled to defeasance as provided
therein.
(b) Mortgagor has full power, authority and legal right to execute this
Second Spreader and to keep and observe all of the terms of this Second Spreader
on Mortgagor's part to be observed or performed, and that, as of the date hereof
(i) the warranties and representations of Mortgagor contained in the Agreement
are true, correct and complete in all material respects; (ii) all the covenants,
terms and conditions of the Agreement remain satisfied; and (iii) no Event of
Default, or event which upon the
- - 126 - -
<PAGE>
JS 8/4/95, 8/16/95, 8/21/95
lapse of time, the giving of notice, or both, could become an Event of Default,
has occurred under the Agreement.
(c) The aggregate principal obligation of the Mortgagor secured by the
Mortgage is Fifteen Million and no/100 Dollars ($15,000,000.00) which sum (or
such lesser amount as shall have been actually borrowed by Mortgagor from
Mortgagee) shall be repaid in accordance with the terms of the Consolidated
Note.
(d) Mortgagor has not availed, is not availing and has no intention to
avail itself of the right and opportunity available to it under Chapter
697.04(1) (b) Florida Statutes to file of record a notice limiting the maximum
principal amount that may be secured under the future advance provisions of the
Mortgage. Mortgagor makes this representation and warranty knowing that
Mortgagee shall rely upon the same in consideration of the terms and conditions
agreed to herein.
8. Ratification of Loan Documents. Mortgagor acknowledges that the
Consolidated Note, the Mortgage, as amended hereby, the Assignment, as amended
hereby, the Financing Statement, as amended hereby, and any other document or
instrument related thereto are valid and binding; and there are no defenses, set
offs or counterclaims thereto; nothing herein invalidates or shall impair or
release any covenant, condition, agreement or stipulation in the Loan Documents;
and Mortgagor shall perform and comply with and abide by each of the covenants,
agreements, conditions and stipulations of the Loan Documents as amended hereby.
9. Limited Modification. Except to the limited extent expressly set forth
herein, all other terms and provisions contained in the Mortgage, Assignment and
Financing Statement remain in full force and effect, and nothing herein and
nothing done pursuant hereto shall affect or be construed to affect the lien,
charge and encumbrance of, or warranty of title in the Mortgage, Assignment or
Financing Statement nor the priority thereof over other liens, charges,
encumbrances or conveyances, and the Mortgaged Property (as that term is defined
in the Mortgage), the real and personal property described in Exhibit B to the
Financing Statement, and the Additional Collateral (as that term is defined in
the Assignment) shall remain in all respects subject to the lien, charge and
encumbrance of the Mortgage, Assignment and Financing Statement. This Second
Spreader constitutes a modification or amendment, and not a novation.
10. Miscellaneous.
--------------
(a) Recording. Mortgagor shall promptly cause this Second
Spreader to be filed, registered or recorded in such manner and in such
places as may be required by any present or future law in order to publish
- - 127 - -
<PAGE>
JS 8/4/95, 8/16/95, 8/21/95
notice of and fully to protect the lien of the Mortgage upon, and the interest
of Mortgagee in, the Mortgaged Property, and the lien of the Assignment upon,
and the interest of Mortgagee in, the Additional Collateral. Mortgagor will pay
all filing, administration and recording fees, and all expenses incident to the
preparation, execution and acknowledgement of this Second Spreader, and all
Federal, state, county and municipal taxes, duties, assessments and charges now
or hereafter arising out of or in connection with the filing, registration,
recording, execution and delivery of this Second Spreader, including without
limitation any and all documentary stamps and/or intangible taxes. Mortgagor
agrees to hold harmless and indemnify Mortgagee against any liability incurred
by reason of the imposition of any such tax, duty, assessment or charge.
Mortgagor shall pay such sums immediately upon receipt of notice of such amounts
from the authority to which they are due and payable or from Mortgagee or its
assigns. In the event Mortgagor fails to pay said sums, Mortgagee or its
assignee may at its option pay such taxes and/or purchase and affix such
documentary stamps. Any such payment by Mortgagee or its assignee shall be added
to the indebtedness evidenced by the Consolidated Note and shall bear interest
from the date advanced to the date of recovery at a rate equal to the lesser of
five percent (5%) per annum higher than the rate of interest then accruing in
accordance with the provisions of the first paragraph of the Consolidated Note
or the maximum rate permissible under Florida Law.
(b) Severability. If any one or more of the provisions of this
Second Spreader is held to be invalid, illegal or unenforceable in any respect
for any reason, the validity, legality and enforceability of any such provision
or provisions in every other respect and of the remaining provisions of this
Second Spreader shall not be in any way impaired, and each term or provision
shall be construed to be legal, valid, binding and enforceable to the maximum
extent permitted by law.
(c) Survival of Covenants, Representations and Warranties. All
warranties, representations and covenants made by Mortgagor herein or in any
certificate or other instrument delivered by it or on its behalf under this
Second Spreader shall be considered to have been relied upon by Mortgagee and
shall survive regardless of any investigation made by Mortgagee or on its
behalf.
(d) Headings. Paragraph headings have been inserted in this Second
Spreader as a matter of convenience of reference only; such paragraph headings
are not part of this Second Spreader and shall not be used in the interpretation
of this Second Spreader.
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JS 8/4/95, 8/16/95, 8/21/95
(e) Governing Law. This Second Spreader shall be governed by and
construed in accordance with the laws of the State of Florida.
(f) Further Instruments. Mortgagor agrees from time to time, as
may be reasonably required by Mortgagee, to execute and deliver such further
instruments and documents and do all matters and things which may be convenient
or necessary to more effectively and completely carry out the intention
herewith.
(g) Conflicts. In the event of any conflict between the provisions
hereof and of the Mortgage, Assignment or Financing Statement, the provisions
hereof shall govern and control.
THE MORTGAGOR AND MORTGAGEE EACH WAIVES THE RIGHT TO A TRIAL BY JURY IN
ANY ACTION OR PROCEEDING BASED UPON, OR RELATED TO, ANY ASPECT OF THE
TRANSACTION IN CONNECTION WITH WHICH THIS DOCUMENT IS BEING GIVEN OR ANY
DOCUMENT EXECUTED OR DELIVERED IN CONNECTION WITH SUCH TRANSACTION. THIS WAIVER
IS KNOWINGLY, INTENTIONALLY AND VOLUNTARILY MADE BY MORTGAGOR AND MORTGAGEE AND
THE MORTGAGOR AND MORTGAGEE EACH ACKNOWLEDGES THAT NO ONE HAS MADE ANY
REPRESENTATIONS OF FACT TO INDUCE THIS WAIVER OF TRIAL BY JURY OR IN ANY WAY TO
MODIFY OR NULLIFY ITS EFFECT. THE MORTGAGOR AND MORTGAGEE EACH FURTHER
ACKNOWLEDGES HAVING BEEN REPRESENTED IN CONNECTION WITH THE TRANSACTION WITH
RESPECT TO WHICH THIS DOCUMENT IS BEING GIVEN AND IN THE MAKING OF THIS WAIVER
BY INDEPENDENT LEGAL COUNSEL, SELECTED BY ITS OWN FREE WILL, AND THAT IT HAS HAD
THE OPPORTUNITY TO DISCUSS THIS WAIVER WITH SUCH COUNSEL. THE MORTGAGOR AND
MORTGAGOR EACH ACKNOWLEDGES HAVING READ AND UNDERSTOOD THE MEANING AND
RAMIFICATIONS OF THIS WAIVER PROVISION.
IN WITNESS WHEREOF, the Mortgagor has caused this Second Spreader to be
executed as of the date first above written.
MORTGAGOR:
Signed and Acknowledged
in the Presence of:
ORIOLE HOMES CORP.,
a Florida corporation
- -----------------------------
Name Printed:________________
By:_________________________________
- - 129 - -
<PAGE>
JS 8/4/95, 8/16/95, 8/21/95
Richard D. Levy, Chairman of the
Board and Chief Executive Officer
- -----------------------------
Name Printed:________________
STATE OF FLORIDA )
) SS:
COUNTY OF )
Before me, a Notary Public in and for said County and State, on this day
of August, 1995, personally appeared the above-named Oriole Homes Corp., a
Florida corporation, by Richard D. Levy, its Chairman of the Board and Chief
Executive Officer, who acknowledged to me that he did sign the foregoing
instrument on behalf of said corporation, and that such signing was his free act
and deed as such officer, and the free act and deed of said corporation. Richard
D. Levy is personally known to me or has produced __________________ as
identification.
Print Name:__________________________________(SEAL)_______________________
Notary Public, State of Florida at Large
My Commission Expires: _______________________
- - 130 - -
<PAGE>
JS 8/4/95, 8/16/95, 8/21/95
SCHEDULE A
----------
Legal Description of the Second Additional Land to be
added to the Land previously mortgaged to the Mortgagee.
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<PAGE>
JS 8/4/95, 8/16/95, 8/21/95
SCHEDULE B
----------
Permitted Prior Encumbrances
- - 132 - -
<PAGE>
JS 1/4/96, 1/9/96
Exhibit 10.9
This Instrument Prepared by:
James Sadock, Jr., Esq.
5550 Glades Road, Suite 100
Boca Raton, Florida 33431
FUTURE ADVANCE, MORTGAGE, ASSIGNMENT AND FINANCING
STATEMENT MODIFICATION AND SPREADER AGREEMENT
(Revolving Loan)
THIS FUTURE ADVANCE, MORTGAGE, ASSIGNMENT AND FINANCING STATEMENT
MODIFICATION AND SPREADER AGREEMENT (the "Third Spreader"), made this ____ day
of January, 1996, by ORIOLE HOMES CORP., a Florida corporation (the
"Mortgagor"), having its principal place of business at Suite 200, 1690 South
Congress Avenue, Delray Beach, Florida 33445-6327, to OHIO SAVINGS BANK, F.S.B.,
a federal savings bank, f/k/a Ohio Savings Bank, an Ohio corporation (the
"Mortgagee"), having its principal place of business at Ohio Savings Plaza, 1801
East Ninth Street, Cleveland, Ohio 44114;
W I T N E S E T H:
------------------
WHEREAS, in consideration for a revolving line of credit in the maximum
amount of Ten Million Dollars ($10,000,000.00) (the "Loan") made by Mortgagee to
Mortgagor, Mortgagor has executed and delivered to Mortgagee a certain Revolving
Mortgage Note dated July 13, 1993, in the maximum principal amount of the Loan
as aforesaid (the "Original Note");
WHEREAS, the Original Note is secured by a Mortgage and Security Agreement
(Revolving Loan) dated July 13, 1993, from Mortgagor to Mortgagee and recorded
on July 16, 1993, in Official Records Book 7800, Page 1590, of the Public
Records of Palm Beach County, Florida (the "Mortgage"), an Assignment of Rents
and Leases and Agreements Affecting Real Estate dated
NOTE TO RECORDER: DOCUMENTARY STAMPS AND
PLEASE CROSS REFERENCE TO:
INTANGIBLE TAX ON THE FUTURE ADVANCE NOTE
OFFICIAL RECORDS BOOK 7800
- - 133 - -
<PAGE>
JS 1/4/96, 1/9/96
($5,000,000) ARE AFFIXED HERETO. DOCUMENTARY
PAGE 1590, OFFICIAL RECORDS
STAMPS AND INTANGIBLE TAX ON THE FUTURE
BOOK 7800, PAGE 1617 AND
ADVANCE NOTE ($2,000,000) AND INTANGIBLE
OFFICIAL RECORDS BOOK 7800,
TAX ON THE DEMAND NOTES ($3,000,000)
PAGE 1631, PUBLIC RECORDS OF
ARE AFFIXED TO THE AGREEMENT RECORDED IN
PALM BEACH COUNTY, FLORIDA.
OFFICIAL RECORDS BOOK 8897, PAGE 53, PUBLIC RECORDS OF PALM BEACH COUNTY,
FLORIDA. DOCUMENTARY STAMPS ON THE DEMAND NOTES ($3,000,000) ARE AFFIXED
THERETO. DOCUMENTARY STAMPS AND INTANGIBLE TAX ON THE ORIGINAL AMOUNT OF THE
ORIGINAL NOTE ($10,000,000) ARE AFFIXED TO THE MORTGAGE RECORDED IN OFFICIAL
RECORDS BOOK 7800, PAGE 1590, PUBLIC RECORDS OF PALM BEACH COUNTY, FLORIDA.
July 13, 1993, from Mortgagor to Mortgagee and recorded on July 16, 1993, in
Official Records Book 7800, Page 1617, of said Public Records (the "Assignment")
and a UCC-1 Financing Statement from Mortgagor, as Debtor, to Mortgagee, as
Secured Party, and recorded on July 16, 1993 in Official Records Book 7800, Page
1631, of said Public Records (the "Financing Statement"), each of which
encumbers the land described on Exhibit A attached thereto (the "Original
Land");
WHEREAS, by Mortgage, Assignment and Financing Statement Spreader
Agreement dated May 31, 1995, from Mortgagor to Mortgagee recorded on June 6,
1995, in Official Records Book 8776, Page 262, of the Public Records of Palm
Beach County, Florida, the lien, charge, encumbrance, operation and effect of
the Mortgage, Assignment and Financing Statement were expanded and spread so as
to encumber and effect the land described in Schedule A attached thereto (the
"First Additional Land");
WHEREAS, by Future Advance, Mortgage, Assignment and Financing Statement
Extension, Modification and Spreader Agreement dated August 23, 1995, from
Mortgagor to Mortgagee recorded on August 30, 1995, in Official Records Book
8897, Page 53, of the Public Records of Palm Beach County, Florida (i) the lien,
charge, encumbrance, operation and effect of the Mortgage, Assignment and
Financing Statement were expanded and spread so as to encumber and effect the
land described in Schedule A attached thereto (the "Second Additional Land");
(ii) the maturity date of the Mortgage was extended to July 1, 1997; and (iii)
the Mortgage was modified
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<PAGE>
JS 1/4/96, 1/9/96
to secure an additional $5,000,000 of indebtedness evidenced by a $1,000,000
Demand Revolving Promissory Note dated August 8, 1995, a $2,000,000 Demand
Revolving Promissory Note dated August 15, 1995 and a $2,000,000 Revolving
Future Advance Mortgage Note dated August 23, 1995 (collectively, the "August
Notes") [the Original Note and the August Notes were consolidated by a
$15,000,000 Consolidated Revolving Mortgage Note dated August 23, 1995 (the
"First Consolidated Note")];
WHEREAS, Mortgagor and Mortgagee have agreed that Mortgagee will increase
the Loan, as heretofore increased by the August Notes and consolidated by the
First Consolidated Note, by the maximum amount of Five Million Dollars
($5,000,000.00) (the "Additional Loan") such Additional Loan being evidenced by
a $5,000,000 Revolving Future Advance Mortgage Note (the "Future Advance Note")
of even date herewith, executed and delivered to Mortgagee by Mortgagor, and
pursuant to Section 4 of the Mortgage, Mortgagor and Mortgagee have agreed that
said Additional Loan shall be secured by the Mortgage (the Loan, as heretofore
increased by the August Notes and consolidated by the First Consolidated Note,
and the Additional Loan are hereinafter collectively referred to as the
"Consolidated Loan"); and
WHEREAS, Mortgagor and Mortgagee have agreed to modify the Mortgage,
Assignment and Financing Statement to expand and spread the lien and encumbrance
of the Mortgage, Assignment and Financing Statement to additional land, pursuant
to the terms and conditions of that certain Revolving Loan Agreement dated July
13, 1993 between Mortgagor and Mortgagee as amended by First Amendment to
Revolving Loan Agreement dated August 23, 1995 (together the "Agreement") in
order to secure Advances made under the Second Consolidated Note (hereinafter
defined).
NOW THEREFORE, in consideration of the Consolidated Loan, the premises,
and Ten Dollars ($10.00) and other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, and intending to be legally
bound, Mortgagor and Mortgagee hereby covenant and agree as follows:
1. Recitals. The aforementioned recitals are true and correct and
are hereby incorporated by this reference.
2. Existing Indebtedness. The indebtedness evidenced by the Original Note
and the August Notes, as consolidated by the First Consolidated Note, was
incurred in good faith for value received and as of the date hereof the unpaid
balance of the First Consolidated Note is $15,000,000.00, and the Mortgagor has
no defenses, counterclaims or offsets thereto.
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JS 1/4/96, 1/9/96
3. Consolidation. Mortgagor and Mortgagee have agreed to consolidate the
Original Note and the August Notes as consolidated by the First Consolidated
Note and the Future Advance Note, and in furtherance thereof, Mortgagor has
executed and delivered to Mortgagee a Consolidated Revolving Mortgage Note of
even date herewith in the principal amount of Twenty Million Dollars
($20,000,000.00) (U.S.) (the "Second Consolidated Note") which Second
Consolidated Note supercedes and replaces the Original Note, the August Notes,
the First Consolidated Note and the Future Advance Note.
4. Modification. Clause A on the first page of the Mortgage is hereby
superseded, restated and replaced by the following:
A. In consideration for a revolving line of credit in the maximum amount
of Twenty Million Dollars ($20,000,000.00) (U.S.) (the "Loan") made by Mortgagee
to Borrower, Borrower has executed and delivered to Mortgagee a certain
Consolidated Revolving Mortgage Note dated January ___, 1996, in the maximum
principal amount of the Loan as aforesaid, payable in full as to principal and
accrued interest on July 1, 1997 (the "Note");
5. Spreading of Mortgage, Assignment and Financing Statement. The lien,
charge, encumbrance, operation and effect of the Mortgage, Assignment and
Financing Statement shall be and the same are hereby expanded and spread so as
to encumber and effect in addition to the Original Land, First Additional Land
and Second Additional Land presently encumbered and effected thereby, the
additional land owned by Mortgagor and more particularly described on Schedule A
attached hereto (the "Third Additional Land"). The incorporation of the Third
Additional Land into the Mortgage, Assignment and Financing Statement shall have
the same force and effect as if such Third Additional Land was described in
Exhibit A to the Mortgage, Assignment and Financing Statement at the time of the
execution and delivery thereof to Mortgagee.
6. Definitions. (a) All references in the Mortgage to "Land", "Premises"
and "Mortgaged Property," and all references in the Assignment and Financing
Statement to "Premises," shall be construed to refer to the entire real and
personal property now encumbered and affected by the Mortgage, Assignment and
Financing Statement, together with the Third Additional Land described on
Schedule A attached hereto.
(b) All references in the Mortgage and Assignment to the "Note"
shall be construed to refer to the Second Consolidated Note.
(c) Capitalized terms not defined herein shall have the same
meaning as in the Mortgage, the Assignment or the Agreement, as the case may be.
- - 136 - -
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JS 1/4/96, 1/9/96
7. Representations and Warranties. Mortgagor represents and warrants that:
(a)(i) Mortgagor is lawfully seized with good and marketable title in fee simple
absolute to the Third Additional Land free and clear of all liens and
encumbrances whatsoever, except taxes and assessments general and special not
delinquent, zoning ordinances and except for those matters set forth in Schedule
B attached hereto (hereinafter "Permitted Prior Encumbrances"), and has good and
marketable title to all personal property included in the Third Additional Land,
subject only to the Permitted Prior Encumbrances; (ii) it has full right, power
and authority to bargain, sell, mortgage and convey the Third Additional Land as
provided herein and in the Mortgage; and (iii) except as expressly provided
above, it will warrant and defend to the Mortgagee such title to the Third
Additional Land and the lien and interest of the Mortgagee therein and thereon
against all claims and demands whatsoever and will maintain the priority of the
lien, and the security interest granted by, the Mortgage upon the Third
Additional Land until the Mortgagor shall be entitled to defeasance as provided
therein.
(b) Mortgagor has full power, authority and legal right to execute this
Third Spreader and to keep and observe all of the terms of this Third Spreader
on Mortgagor's part to be observed or performed, and that, as of the date hereof
(i) the warranties and representations of Mortgagor contained in the Agreement
are true, correct and complete in all material respects; (ii) all the covenants,
terms and conditions of the Agreement remain satisfied; and (iii) no Event of
Default, or event which upon the lapse of time, the giving of notice, or both,
could become an Event of Default, has occurred under the Agreement.
(c) The aggregate principal obligation of the Mortgagor secured by the
Mortgage is Twenty Million and no/100 Dollars ($20,000,000.00) (U.S.) which sum
(or such lesser amount as shall have been actually borrowed by Mortgagor from
Mortgagee) shall be repaid in accordance with the terms of the Second
Consolidated Note.
(d) Mortgagor has not availed, is not availing and has no intention to
avail itself of the right and opportunity available to it under Chapter
697.04(1)(b) Florida Statutes to file of record a notice limiting the maximum
principal amount that may be secured under the future advance provisions of the
Mortgage. Mortgagor makes this representation and warranty knowing that
Mortgagee shall rely upon the same in consideration of the terms and conditions
agreed to herein.
8. Ratification of Loan Documents. Mortgagor acknowledges that the Second
Consolidated Note, the Mortgage, as amended hereby, the Assignment, as amended
hereby, the Financing Statement, as amended hereby, and any
- - 137 - -
<PAGE>
JS 1/4/96, 1/9/96
other document or instrument related thereto are valid and binding; and there
are no defenses, set offs or counterclaims thereto; nothing herein invalidates
or shall impair or release any covenant, condition, agreement or stipulation in
the Loan Documents; and Mortgagor shall perform and comply with and abide by
each of the covenants, agreements, conditions and stipulations of the Loan
Documents as amended hereby.
9. Limited Modification. Except to the limited extent expressly set forth
herein, all other terms and provisions contained in the Mortgage, Assignment and
Financing Statement remain in full force and effect, and nothing herein and
nothing done pursuant hereto shall affect or be construed to affect the lien,
charge and encumbrance of, or warranty of title in the Mortgage, Assignment or
Financing Statement nor the priority thereof over other liens, charges,
encumbrances or conveyances, and the Mortgaged Property (as that term is defined
in the Mortgage), the real and personal property described in Exhibit B to the
Financing Statement, and the Additional Collateral (as that term is defined in
the Assignment) shall remain in all respects subject to the lien, charge and
encumbrance of the Mortgage, Assignment and Financing Statement. This Third
Spreader constitutes a modification or amendment, and not a novation.
10. Miscellaneous.
--------------
(a) Recording. Mortgagor shall promptly cause this Third Spreader
to be filed, registered or recorded in such manner and in such places as may be
required by any present or future law in order to publish notice of and fully to
protect the lien of the Mortgage upon, and the interest of Mortgagee in, the
Mortgaged Property, and the lien of the Assignment upon, and the interest of
Mortgagee in, the Additional Collateral. Mortgagor will pay all filing,
administration and recording fees, and all expenses incident to the preparation,
execution and acknowledgement of this Third Spreader, and all Federal, state,
county and municipal taxes, duties, assessments and charges now or hereafter
arising out of or in connection with the filing, registration, recording,
execution and delivery of this Third Spreader, including without limitation any
and all documentary stamps and/or intangible taxes. Mortgagor agrees to hold
harmless and indemnify Mortgagee against any liability incurred by reason of the
imposition of any such tax, duty, assessment or charge. Mortgagor shall pay such
sums immediately upon receipt of notice of such amounts from the authority to
which they are due and payable or from Mortgagee or its assigns. In the event
Mortgagor fails to pay said sums, Mortgagee or its assignee may at its option
pay such taxes and/or purchase and affix such documentary stamps. Any such
payment by Mortgagee or its assignee shall be added to the indebtedness
evidenced by the Second Consolidated Note and shall bear interest from the
- - 138 - -
<PAGE>
JS 1/4/96, 1/9/96
date advanced to the date of recovery at a rate equal to the lesser of five
percent (5%) per annum higher than the rate of interest then accruing in
accordance with the provisions of the first paragraph of the Second Consolidated
Note or the maximum rate permissible under Florida Law.
(b) Severability. If any one or more of the provisions of this
Third Spreader is held to be invalid, illegal or unenforceable in any respect
for any reason, the validity, legality and enforceability of any such provision
or provisions in every other respect and of the remaining provisions of this
Third Spreader shall not be in any way impaired, and each term or provision
shall be construed to be legal, valid, binding and enforceable to the maximum
extent permitted by law.
(c) Survival of Covenants, Representations and Warranties. All
warranties, representations and covenants made by Mortgagor herein or in any
certificate or other instrument delivered by it or on its behalf under this
Third Spreader shall be considered to have been relied upon by Mortgagee and
shall survive regardless of any investigation made by Mortgagee or on its
behalf.
(d) Headings. Paragraph headings have been inserted in this Third
Spreader as a matter of convenience of reference only; such paragraph headings
are not part of this Third Spreader and shall not be used in the interpretation
of this Third Spreader.
(e) Governing Law. This Third Spreader shall be governed by and
construed in accordance with the laws of the State of Florida.
(f) Further Instruments. Mortgagor agrees from time to time, as
may be reasonably required by Mortgagee, to execute and deliver such further
instruments and documents and do all matters and things which may be convenient
or necessary to more effectively and completely carry out the intention
herewith.
(g) Conflicts. In the event of any conflict between the provisions
hereof and of the Mortgage, Assignment or Financing Statement, the provisions
hereof shall govern and control.
THE MORTGAGOR AND MORTGAGEE EACH WAIVES THE RIGHT TO A TRIAL BY JURY IN
ANY ACTION OR PROCEEDING BASED UPON, OR RELATED TO, ANY ASPECT OF THE
TRANSACTION IN CONNECTION WITH WHICH THIS DOCUMENT IS BEING GIVEN OR ANY
DOCUMENT EXECUTED OR DELIVERED IN CONNECTION WITH SUCH TRANSACTION. THIS WAIVER
IS KNOWINGLY, INTENTIONALLY AND VOLUNTARILY MADE BY MORTGAGOR AND MORTGAGEE AND
THE MORTGAGOR AND MORTGAGEE EACH ACKNOWLEDGES THAT NO ONE
- - 139 - -
<PAGE>
JS 1/4/96, 1/9/96
HAS MADE ANY REPRESENTATIONS OF FACT TO INDUCE THIS WAIVER OF TRIAL BY JURY OR
IN ANY WAY TO MODIFY OR NULLIFY ITS EFFECT. THE MORTGAGOR AND MORTGAGEE EACH
FURTHER ACKNOWLEDGES HAVING BEEN REPRESENTED IN CONNECTION WITH THE TRANSACTION
WITH RESPECT TO WHICH THIS DOCUMENT IS BEING GIVEN AND IN THE MAKING OF THIS
WAIVER BY INDEPENDENT LEGAL COUNSEL, SELECTED BY ITS OWN FREE WILL, AND THAT IT
HAS HAD THE OPPORTUNITY TO DISCUSS THIS WAIVER WITH SUCH COUNSEL. THE MORTGAGOR
AND MORTGAGOR EACH ACKNOWLEDGES HAVING READ AND UNDERSTOOD THE MEANING AND
RAMIFICATIONS OF THIS WAIVER PROVISION.
IN WITNESS WHEREOF, the Mortgagor has caused this Third Spreader to be
executed as of the date first above written.
MORTGAGOR:
Signed and Acknowledged
in the Presence of:
ORIOLE HOMES CORP.,
a Florida corporation
- -----------------------------
Name Printed:________________
By:_________________________________
Richard D. Levy, Chairman of the
Board and Chief Executive Officer
- -----------------------------
Name Printed:________________
STATE OF FLORIDA )
) SS:
COUNTY OF )
- - 140 - -
<PAGE>
JS 1/4/96, 1/9/96
Before me, a Notary Public in and for said County and State, on this day
of January, 1996, personally appeared the above-named Oriole Homes Corp., a
Florida corporation, by Richard D. Levy, its Chairman of the Board and Chief
Executive Officer, who acknowledged to me that he did sign the foregoing
instrument on behalf of said corporation, and that such signing was his free act
and deed as such officer, and the free act and deed of said corporation. Richard
D. Levy is personally known to me or has produced __________________ as
identification.
- --------------------------------------------------------------------------------
Print Name: (SEAL)
- --------------------------------------------------------------------------------
Notary Public, State of Florida at Large
My Commission Expires: ____________________
- - 141 - -
<PAGE>
JS 1/4/96, 1/9/96
SCHEDULE A
----------
Legal Description of the Third Additional Land to be
added to the Land previously mortgaged to the Mortgagee.
- - 142 - -
<PAGE>
JS 1/4/96, 1/9/96
SCHEDULE B
----------
Permitted Prior Encumbrances
- - 143 - -
<PAGE>
JS 10/30/97
Exhibit 10.10
This Instrument Prepared By:
James Sadock, Jr., Esq.
5550 Glades Road, Suite 100
Boca Raton, Florida 33431
MORTGAGE AND LOAN
MODIFICATION AND EXTENSION AGREEMENT
(Revolving Loan)
THIS MORTGAGE AND LOAN MODIFICATION AND EXTENSION AGREEMENT (the
"Extension Agreement"), made as of this 1st day of July, 1997, by ORIOLE HOMES
CORP., a Florida corporation (the "Mortgagor"), having its principal place of
business at Suite 200, 1690 South Congress Avenue, Delray Beach, Florida
33445-6327, to OHIO SAVINGS BANK, a federal savings bank, f/k/a Ohio Savings
Bank, F.S.B. and f/k/a Ohio Savings Bank, an Ohio corporation (the "Mortgagee"),
having its principal place of business at 200 Ohio Savings Plaza, 1801 East
Ninth Street, Cleveland, Ohio 44114;
NOTE TO RECORDER: IN ACCORDANCE WITH
PLEASE CROSS REFERENCE TO:
CHAPTER 199.143 FLORIDA STATUTES,
OFFICIAL RECORDS BOOK 7800,
INTANGIBLE TAX IS PAID HEREIN ON
PAGE 1590, PUBLIC RECORDS OF
$________________ OF INDEBTEDNESS.
PALM BEACH COUNTY, FLORIDA.
DOCUMENTARY STAMPS AND INTANGIBLE TAX ON THE FUTURE ADVANCE NOTE ($5,000,000)
ARE AFFIXED TO THE AGREEMENT RECORDED IN OFFICIAL RECORDS BOOK 9085, PAGE 547,
PUBLIC RECORDS OF PALM BEACH COUNTY, FLORIDA. DOCUMENTARY STAMPS AND INTANGIBLE
TAX ON THE FUTURE ADVANCE NOTE ($2,000,000) AND INTANGIBLE TAX ON THE DEMAND
NOTES ($3,000,000) ARE AFFIXED TO THE AGREEMENT RECORDED IN OFFICIAL RECORDS
BOOK 8897, PAGE 53, OF SAID PUBLIC RECORDS. DOCUMENTARY STAMPS ON THE DEMAND
NOTES ($3,000,000) ARE AFFIXED THERETO. DOCUMENTARY STAMPS AND
- - 144 - -
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JS 10/30/97
INTANGIBLE TAX ON THE ORIGINAL AMOUNT OF THE ORIGINAL NOTE ($10,000,000) ARE
AFFIXED TO THE MORTGAGE RECORDED IN OFFICIAL RECORDS BOOK 7800, PAGE 1590 OF
SAID PUBLIC RECORDS.
W I T N E S E T H:
------------------
WHEREAS, in consideration for a revolving line of credit in the maximum
amount of Ten Million Dollars ($10,000,000.00) (the "Loan") made by Mortgagee to
Mortgagor, Mortgagor has executed and delivered to Mortgagee a certain Revolving
Mortgage Note dated July 13, 1993, in the maximum principal amount of the Loan
as aforesaid (the "Original Note");
WHEREAS, the Original Note is secured by, among other things, a Mortgage
and Security Agreement (Revolving Loan) dated July 13, 1993, from Mortgagor to
Mortgagee and recorded on July 16, 1993, in Official Records Book 7800, Page
1590, of the Public Records of Palm Beach County, Florida (the "Mortgage"),
which encumbers the land described on Exhibit A attached thereto (the "Original
Land");
WHEREAS, by Mortgage, Assignment and Financing Statement Spreader
Agreement dated May 31, 1995, from Mortgagor to Mortgagee recorded on June 6,
1995, in Official Records Book 8776, Page 262, of the Public Records of Palm
Beach County, Florida, the lien, charge, encumbrance, operation and effect of
the Mortgage was expanded and spread so as to encumber and effect the land
described in Schedule A attached thereto (the "First Additional Land");
WHEREAS, by Future Advance, Mortgage, Assignment and Financing Statement
Extension, Modification and Spreader Agreement dated August 23, 1995, from
Mortgagor to Mortgagee recorded on August 30, 1995, in Official Records Book
8897, Page 53, of the Public Records of Palm Beach County, Florida (i) the lien,
charge, encumbrance, operation and effect of the Mortgage was expanded and
spread so as to encumber and effect the land described in Schedule A attached
thereto (the "Second Additional Land"); (ii) the maturity date of the Mortgage
was extended to July 1, 1997; and (iii) the Mortgage was modified to secure an
additional $5,000,000 of indebtedness evidenced by a $1,000,000 Demand Revolving
Promissory Note dated August 8, 1995, a $2,000,000 Demand Revolving Promissory
Note dated August 15, 1995 and a $2,000,000 Revolving Future Advance Mortgage
Note dated August 23, 1995 (collectively, the "August Notes") [the Original Note
and the August Notes were consolidated by a $15,000,000 Consolidated Revolving
Mortgage Note dated August 23, 1995 (the "First Consolidated Note")];
- - 145 - -
<PAGE>
JS 10/30/97
WHEREAS, by Future Advance, Mortgage, Assignment and Financing Statement
Extension, Modification and Spreader Agreement dated January 12, 1996, from
Mortgagor to Mortgagee recorded on January 17, 1996, in Official Records Book
9085, Page 547, of the Public Records of Palm Beach County, Florida (i) the
lien, charge, encumbrance, operation and effect of the Mortgage was expanded and
spread so as to encumber and effect the land described in Schedule A attached
thereto (the "Third Additional Land"); and (ii) the Mortgage was modified to
secure an additional $5,000,000 of indebtedness evidenced by a $5,000,000
Revolving Future Advance Mortgage Note dated January 12, 1996 (the "Future
Advance Note") [the Future Advance Note and the First Consolidated Note were
consolidated by a $20,000,000 Consolidated Revolving Mortgage Note dated January
12, 1996 (the "Second Consolidated Note")];
WHEREAS, Mortgagor and Mortgagee have agreed that Mortgagee will reduce
the Loan, as heretofore increased by the August Notes and the Future Advance
Note and consolidated by the First Consolidated Note and the Second Consolidated
Note (the "Consolidated Loan"), to the maximum amount of Ten Million Dollars
($10,000,000.00) (the "Reduced Consolidated Loan") such Reduced Consolidated
Loan being evidenced by a $10,000,000 Renewal Amended and Restated Consolidated
Revolving Mortgage Note of even date herewith (the "Third Consolidated Note"),
executed and delivered to Mortgagee by Mortgagor and secured by the Mortgage;
and Mortgagor and Mortgagee have agreed to extend the maturity date of the
Mortgage, pursuant to the terms and conditions of that certain Revolving Loan
Agreement dated July 13, 1993 between Mortgagor and Mortgagee as amended by
First Amendment to Revolving Loan Agreement dated August 23, 1995 and Second
Amendment to Revolving Loan Agreement of even date herewith (collectively, the
"Agreement").
NOW THEREFORE, in consideration of the Reduced Consolidated Loan, the
premises, and Ten Dollars ($10.00) and other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, and intending to
be legally bound, Mortgagor and Mortgagee hereby covenant and agree as follows:
1. Recitals. The aforementioned recitals are true and correct and
are hereby incorporated by this reference.
2. Existing Indebtedness. The indebtedness evidenced by the Original Note,
the August Notes and the Future Advance Note, as consolidated by the First
Consolidated Note and the Second Consolidated Note, was incurred in good faith
for value received and as of the date hereof the unpaid balance of the Second
Consolidated Note is $100,000.00, and the Mortgagor has no defenses,
counterclaims or offsets thereto.
- - 146 - -
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JS 10/30/97
3. Reduction of Consolidated Loan. Mortgagor and Mortgagee have agreed to
reduce the Consolidated Loan and in furtherance thereof Mortgagor has executed
and delivered to Mortgagor the Third Consolidated Note which replaces and
supersedes the Second Consolidated Note. From and after the date of this
Extension Agreement the maximum amount of the revolving line of credit evidenced
by the Third Consolidated Note and secured by the Mortgage, as hereby modified
and extended, shall never exceed Ten Million Dollars ($10,000,000.00) (U.S.).
4. Extension and Modification. Clause A on the first page of the Mortgage
is hereby superseded, restated and replaced by the following:
A. In consideration for a revolving line of credit in the maximum amount
of Ten Million Dollars ($10,000,000.00) (U.S.) (the "Loan") made by Mortgagee to
Borrower, Borrower has executed and delivered to Mortgagee a certain Renewal
Amended and Extended Consolidated Revolving Mortgage Note dated as of July 1,
1997, in the maximum principal amount of the Loan as aforesaid, payable in full
as to principal and accrued interest on June 30, 1999 (the "Note");
5. Definitions. (a) All references in the Mortgage and in that certain
Assignment of Rents and Leases and Agreements Affecting Real Estate dated July
13, 1993, from Mortgagor to Mortgagee and recorded on July 16, 1993, in Official
Records Book 7800, Page 1617, of the Public Records of Palm Beach County,
Florida to the "Note" shall be construed to
refer to the Third Consolidated Note.
(b) Capitalized terms not defined herein shall have the same
meaning as in the Mortgage or the Agreement, as the case may be.
6. Representations and Warranties. Mortgagor represents and warrants that:
(a) Mortgagor has full power, authority and legal right to execute this
Modification Agreement and to keep and observe all of the terms of this
Modification Agreement on Mortgagor's part to be observed or performed, and
that, as of the date hereof (i) the warranties and representations of Mortgagor
contained in the Agreement are true, correct and complete in all material
respects; (ii) all the covenants, terms and conditions of the Agreement remain
satisfied; and (iii) no Event of Default, or event which upon the lapse of time,
the giving of notice, or both, could become an Event of Default, has occurred
under the Agreement.
(b) The aggregate principal obligation of the Mortgagor secured by the
Mortgage is Ten Million and no/100 Dollars ($10,000,000.00) (U.S.) which sum (or
such lesser amount as shall have been actually borrowed by
- - 147 - -
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JS 10/30/97
Mortgagor from Mortgagee) shall be repaid in accordance with the terms of the
Third Consolidated Note.
(c) Mortgagor has not availed, is not availing and has no intention to
avail itself of the right and opportunity available to it under Chapter
697.04(1)(b) Florida Statutes to file of record a notice limiting the maximum
principal amount that may be secured under the future advance provisions of the
Mortgage. Mortgagor makes this representation and warranty knowing that
Mortgagee shall rely upon the same in consideration of the terms and conditions
agreed to herein.
7. Ratification of Loan Documents. Mortgagor acknowledges that the Third
Consolidated Note, the Mortgage, as amended hereby, and any other document or
instrument related thereto are valid and binding; and there are no defenses, set
offs or counterclaims thereto; nothing herein invalidates or shall impair or
release any covenant, condition, agreement or stipulation in the Loan Documents;
and Mortgagor shall perform and comply with and abide by each of the covenants,
agreements, conditions and stipulations of the Loan Documents as amended hereby.
8. Limited Modification. Except to the limited extent expressly set forth
herein, all other terms and provisions contained in the Mortgage remain in full
force and effect, and nothing herein and nothing done pursuant hereto shall
affect or be construed to affect the lien, charge and encumbrance of, or
warranty of title in the Mortgage, nor the priority thereof over other liens,
charges, encumbrances or conveyances, and the Mortgaged Property (as that term
is defined in the Mortgage) shall remain in all respects subject to the lien,
charge and encumbrance of the Mortgage. This Modification Agreement constitutes
a modification or amendment, and not a novation.
9. Miscellaneous.
--------------
(a) Recording. Mortgagor shall promptly cause this Modification
Agreement to be filed, registered or recorded in such manner and in such places
as may be required by any present or future law in order to publish notice of
and fully to protect the lien of the Mortgage upon, and the interest of
Mortgagee in, the Mortgaged Property. Mortgagor will pay all filing,
administration and recording fees, and all expenses incident to the preparation,
execution and acknowledgment of this Modification Agreement, and all Federal,
state, county and municipal taxes, duties, assessments and charges now or
hereafter arising out of or in connection with the filing, registration,
recording, execution and delivery of this Modification Agreement, including
without limitation any and all documentary stamps and/or intangible taxes.
Mortgagor agrees to hold
- - 148 - -
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JS 10/30/97
harmless and indemnify Mortgagee against any liability incurred by reason of the
imposition of any such tax, duty, assessment or charge. Mortgagor shall pay such
sums immediately upon receipt of notice of such amounts from the authority to
which they are due and payable or from Mortgagee or its assigns. In the event
Mortgagor fails to pay said sums, Mortgagee or its assignee may at its option
pay such taxes and/or purchase and affix such documentary stamps. Any such
payment by Mortgagee or its assignee shall be added to the indebtedness
evidenced by the Second Consolidated Note and shall bear interest from the date
advanced to the date of recovery at a rate equal to the lesser of five percent
(5%) per annum higher than the rate of interest then accruing in accordance with
the provisions of the first paragraph of the Second Consolidated Note or the
maximum rate permissible under Florida Law.
(b) Severability. If any one or more of the provisions of this
Modification Agreement is held to be invalid, illegal or unenforceable in any
respect for any reason, the validity, legality and enforceability of any such
provision or provisions in every other respect and of the remaining provisions
of this Modification Agreement shall not be in any way impaired, and each term
or provision shall be construed to be legal, valid, binding and enforceable to
the maximum extent permitted by law.
(c) Survival of Covenants, Representations and Warranties. All
warranties, representations and covenants made by Mortgagor herein or in any
certificate or other instrument delivered by it or on its behalf under this
Modification Agreement shall be considered to have been relied upon by Mortgagee
and shall survive regardless of any investigation made by Mortgagee or on its
behalf.
(d) Headings. Paragraph headings have been inserted in this
Modification Agreement as a matter of convenience of reference only; such
paragraph headings are not part of this Modification Agreement and shall not be
used in the interpretation of this Modification Agreement.
(e) Governing Law. This Modification Agreement shall be governed
by and construed in accordance with the laws of the State of Florida.
(f) Further Instruments. Mortgagor agrees from time to time, as
may be reasonably required by Mortgagee, to execute and deliver such further
instruments and documents and do all matters and things which may be convenient
or necessary to more effectively and completely carry out the intention
herewith.
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JS 10/30/97
(g) Conflicts. In the event of any conflict between the provisions
hereof and of the Mortgage, the provisions hereof shall govern and control.
THE MORTGAGOR AND MORTGAGEE EACH WAIVES THE RIGHT TO A TRIAL BY JURY IN
ANY ACTION OR PROCEEDING BASED UPON, OR RELATED TO, ANY ASPECT OF THE
TRANSACTION IN CONNECTION WITH WHICH THIS DOCUMENT IS BEING GIVEN OR ANY
DOCUMENT EXECUTED OR DELIVERED IN CONNECTION WITH SUCH TRANSACTION. THIS WAIVER
IS KNOWINGLY, INTENTIONALLY AND VOLUNTARILY MADE BY MORTGAGOR AND MORTGAGEE AND
THE MORTGAGOR AND MORTGAGEE EACH ACKNOWLEDGES THAT NO ONE HAS MADE ANY
REPRESENTATIONS OF FACT TO INDUCE THIS WAIVER OF TRIAL BY JURY OR IN ANY WAY TO
MODIFY OR NULLIFY ITS EFFECT. THE MORTGAGOR AND MORTGAGEE EACH FURTHER
ACKNOWLEDGES HAVING BEEN REPRESENTED IN CONNECTION WITH THE TRANSACTION WITH
RESPECT TO WHICH THIS DOCUMENT IS BEING GIVEN AND IN THE MAKING OF THIS WAIVER
BY INDEPENDENT LEGAL COUNSEL, SELECTED BY ITS OWN FREE WILL, AND THAT IT HAS HAD
THE OPPORTUNITY TO DISCUSS THIS WAIVER WITH SUCH COUNSEL. THE MORTGAGOR AND
MORTGAGOR EACH ACKNOWLEDGES HAVING READ AND UNDERSTOOD THE MEANING AND
RAMIFICATIONS OF THIS WAIVER PROVISION.
IN WITNESS WHEREOF, the Mortgagor has caused this Modification Agreement
to be executed as of the date first above written.
MORTGAGOR:
Signed and Acknowledged
in the Presence of:
ORIOLE HOMES CORP.,
a Florida corporation
- -----------------------------
Name Printed:________________
By:_________________________________
Richard D. Levy, Chairman of the
Board and Chief Executive Officer
- -----------------------------
Name Printed:________________
- - 150 - -
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JS 10/30/97
STATE OF FLORIDA )
)SS:
COUNTY OF PALM BEACH )
Before me, a Notary Public in and for said County and State, on this day
of November, 1997, personally appeared the above-named Oriole Homes Corp., a
Florida corporation, by Richard D. Levy, its Chairman of the Board and Chief
Executive Officer, who acknowledged to me that he did sign the foregoing
instrument on behalf of said corporation, and that such signing was his free act
and deed as such officer, and the free act and deed of said corporation. Richard
D. Levy is personally known to me.
- --------------------------------------------------------------------------------
Print Name: (SEAL)
- --------------------------------------------------------------------------------
Notary Public, State of Florida at Large
My Commission Expires: _________________________
- - 151 - -
<PAGE>
JS 10/30/97,9/28/98
Exhibit 10.11
This Instrument Prepared By:
James Sadock, Jr., Esq.
5550 Glades Road, Suite 100
Boca Raton, Florida 33431
MORTGAGE AND LOAN
MODIFICATION AND EXTENSION AGREEMENT
------------------------------------
(Revolving Loan)
THIS MORTGAGE AND LOAN MODIFICATION AND EXTENSION AGREEMENT (the
"Extension Agreement"), made as of this 15th day of October, 1998, by and
between ORIOLE HOMES CORP., a Florida corporation (the "Mortgagor"), having its
principal place of business at Suite 200, 1690 South Congress Avenue, Delray
Beach, Florida 33445-6327, and OHIO SAVINGS BANK, a federal savings bank, f/k/a
Ohio Savings Bank, F.S.B. and f/k/a Ohio Savings Bank, an Ohio corporation (the
"Mortgagee"), having its principal place of business at 200 Ohio Savings Plaza,
1801 East Ninth Street, Cleveland, Ohio 44114;
NOTE TO RECORDER:
PLEASE CROSS REFERENCE TO:
DOCUMENTARY STAMPS AND INTANGIBLE TAX
OFFICIAL RECORDS BOOK 7800,
ON THE FUTURE ADVANCE NOTE ($5,000,000)
PAGE 1590, PUBLIC RECORDS OF
ARE AFFIXED TO THE AGREEMENT RECORDED
PALM BEACH COUNTY, FLORIDA IN OFFICIAL RECORDS BOOK 9085, PAGE
547, PUBLIC RECORDS OF PALM BEACH COUNTY, FLORIDA. DOCUMENTARY STAMPS AND
INTANGIBLE TAX ON THE FUTURE ADVANCE NOTE ($2,000,000) AND INTANGIBLE TAX ON THE
DEMAND NOTES ($3,000,000) ARE AFFIXED TO THE AGREEMENT RECORDED IN OFFICIAL
RECORDS BOOK 8897,
- - 152 - -
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JS 10/30/97,9/28/98
PAGE 53, OF SAID PUBLIC RECORDS. DOCUMENTARY STAMPS ON THE DEMAND NOTES
($3,000,000) ARE AFFIXED THERETO. DOCUMENTARY STAMPS AND INTANGIBLE TAX ON THE
ORIGINAL AMOUNT OF THE ORIGINAL NOTE ($10,000,000) ARE AFFIXED TO THE MORTGAGE
RECORDED IN OFFICIAL RECORDS BOOK 7800, PAGE 1590 OF SAID PUBLIC RECORDS.
W I T N E S E T H:
------------------
WHEREAS, in consideration for a revolving line of credit in the maximum
amount of Ten Million Dollars ($10,000,000.00) (the "Loan") made by Mortgagee to
Mortgagor, Mortgagor has executed and delivered to Mortgagee a certain Revolving
Mortgage Note dated July 13, 1993, in the maximum principal amount of the Loan
as aforesaid (the "Original Note");
WHEREAS, the Original Note is secured by, among other things, a Mortgage
and Security Agreement (Revolving Loan) dated July 13, 1993, from Mortgagor to
Mortgagee and recorded on July 16, 1993, in Official Records Book 7800, Page
1590, of the Public Records of Palm Beach County, Florida (the "Mortgage"),
which encumbers the land described on Exhibit A attached thereto (the "Original
Land");
WHEREAS, by Mortgage, Assignment and Financing Statement Spreader
Agreement dated May 31, 1995, from Mortgagor to Mortgagee recorded on June 6,
1995, in Official Records Book 8776, Page 262, of the Public Records of Palm
Beach County, Florida, the lien, charge, encumbrance, operation and effect of
the Mortgage was expanded and spread so as to encumber and effect the land
described in Schedule A attached thereto (the "First Additional Land");
WHEREAS, by Future Advance, Mortgage, Assignment and Financing Statement
Extension, Modification and Spreader Agreement dated August 23, 1995, from
Mortgagor to Mortgagee recorded on August 30, 1995, in Official Records Book
8897, Page 53, of the Public Records of Palm Beach County, Florida (i) the lien,
charge, encumbrance, operation and effect of the Mortgage was expanded and
spread so as to encumber and effect the land described in Schedule A attached
thereto (the "Second Additional Land"); (ii) the maturity date of the Mortgage
was extended to July 1, 1997; and (iii) the Mortgage was modified to secure an
additional $5,000,000 of indebtedness evidenced by a $1,000,000 Demand Revolving
Promissory Note dated August 8, 1995, a $2,000,000 Demand Revolving Promissory
Note dated August 15, 1995 and a $2,000,000 Revolving Future Advance Mortgage
Note
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JS 10/30/97,9/28/98
dated August 23, 1995 (collectively, the "August Notes") [the Original Note and
the August Notes were consolidated by a $15,000,000 Consolidated Revolving
Mortgage Note dated August 23, 1995 (the "First Consolidated Note")];
WHEREAS, by Future Advance, Mortgage, Assignment and Financing Statement
Extension, Modification and Spreader Agreement dated January 12, 1996, from
Mortgagor to Mortgagee recorded on January 17, 1996, in Official Records Book
9085, Page 547, of the Public Records of Palm Beach County, Florida (i) the
lien, charge, encumbrance, operation and effect of the Mortgage was expanded and
spread so as to encumber and effect the land described in Schedule A attached
thereto (the "Third Additional Land"); and (ii) the Mortgage was modified to
secure an additional $5,000,000 of indebtedness evidenced by a $5,000,000
Revolving Future Advance Mortgage Note dated January 12, 1996 (the "Future
Advance Note") [the Future Advance Note and the First Consolidated Note were
consolidated by a $20,000,000 Consolidated Revolving Mortgage Note dated January
12, 1996 (the "Second Consolidated Note")];
WHEREAS, by Mortgage and Loan Modification and Extension Agreement dated
July 1, 1997, from Mortgagor to Mortgagee recorded on November 25, 1997, in
Official Records Book 10101, Page 1103, of the Public Records of Palm Beach
County, Florida (i) the Loan, as increased by the August Notes and the Future
Advance Note and consolidated by the First Consolidated Note and the Second
Consolidated Note (the "Consolidated Loan"), was reduced to the maximum amount
of Ten Million Dollars ($10,000,000.00) (the "Reduced Consolidated Loan") such
Reduced Consolidated Loan being evidenced by a $10,000,000 Renewal Amended and
Restated Consolidated Revolving Mortgage Note dated July 1, 1997 (the "Third
Consolidated Note"), executed and delivered to Mortgagee by Mortgagor and
secured by the Mortgage; and (ii) the maturity date of the Mortgage, pursuant to
the terms and conditions of that certain Revolving Loan Agreement dated July 13,
1993 between Mortgagor and Mortgagee as amended by First Amendment to Revolving
Loan Agreement dated August 23, 1995 and Second Amendment to Revolving Loan
Agreement dated July 1, 1997 (collectively, the "Agreement") was extended to
June 30, 1999;
WHEREAS, Mortgagor and Mortgagee have agreed to extend the maturity date
of the Mortgage for one (1) additional year pursuant to the terms and conditions
of the Agreement.
NOW THEREFORE, in consideration of the Reduced Consolidated Loan, the
premises, and Ten Dollars ($10.00) and other good and valuable consideration,
the receipt and sufficiency of which are hereby
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JS 10/30/97,9/28/98
acknowledged, and intending to be legally bound, Mortgagor and Mortgagee hereby
covenant and agree as follows:
1. Recitals. The aforementioned recitals are true and correct and are
hereby incorporated by this reference.
2. Existing Indebtedness. The indebtedness evidenced by the Original Note,
the August Notes and the Future Advance Note, as consolidated by the First
Consolidated Note, the Second Consolidated Note and the Third Consolidated Note,
was incurred in good faith for value received and as of the date hereof the
unpaid balance of the Third Consolidated Note is $10,000.00, and the Mortgagor
has no defenses, counterclaims or offsets thereto.
3. Extension. The maturity date of the Third Consolidated Note, as
modified by this Extension Agreement, is extended to June 30, 2000, anything in
said Third Consolidated Note to the contrary notwithstanding.
4. Modification. Clause A on the first page of the Mortgage is hereby
superseded, restated and replaced by the following:
A. In consideration for a revolving line of credit in the maximum amount
of Ten Million Dollars ($10,000,000.00) (U.S.) (the "Loan") made by Mortgagee to
Borrower, Borrower has executed and delivered to Mortgagee a certain Renewal
Amended and Extended Consolidated Revolving Mortgage Note dated as of July 1,
1997, in the maximum principal amount of the Loan as aforesaid, payable in full
as to principal and accrued interest on June 30, 2000 (the "Note");
5. Definitions. Capitalized terms not defined herein shall have the same
meaning as in the Mortgage or the Agreement, as the case may be.
6. Representations and Warranties. Mortgagor represents and warrants that:
(a) Mortgagor has full power, authority and legal right to execute this
Extension Agreement and to keep and observe all of the terms of this Extension
Agreement on Mortgagor's part to be observed or performed, and that, as of the
date hereof (i) the warranties and representations of Mortgagor contained in the
Agreement are true, correct and complete in all material respects; (ii) all the
covenants, terms and conditions of the Agreement remain satisfied; and (iii) no
Event of Default, or event which upon the lapse of time, the giving of notice,
or both, could become an Event of Default, has occurred under the Agreement.
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<PAGE>
JS 10/30/97,9/28/98
(b) The aggregate principal obligation of the Mortgagor secured by the
Mortgage is Ten Million and no/100 Dollars ($10,000,000.00) (U.S.) which sum (or
such lesser amount as shall have been actually borrowed by Mortgagor from
Mortgagee) shall be repaid in accordance with the terms of the Third
Consolidated Note.
(c) Mortgagor has not availed, is not availing and has no intention to
avail itself of the right and opportunity available to it under Chapter
697.04(1)(b) Florida Statutes to file of record a notice limiting the maximum
principal amount that may be secured under the future advance provisions of the
Mortgage. Mortgagor makes this representation and warranty knowing that
Mortgagee shall rely upon the same in consideration of the terms and conditions
agreed to herein.
7. Ratification of Loan Documents. Mortgagor acknowledges that the Third
Consolidated Note, as amended hereby, the Mortgage, as amended hereby, and any
other document or instrument related thereto are valid and binding; and there
are no defenses, set offs or counterclaims thereto; nothing herein invalidates
or shall impair or release any covenant, condition, agreement or stipulation in
the Loan Documents; and Mortgagor shall perform and comply with and abide by
each of the covenants, agreements, conditions and stipulations of the Loan
Documents as amended hereby.
8. Limited Modification. Except to the limited extent expressly set forth
herein, all other terms and provisions contained in the Third Consolidated Note
and the Mortgage remain in full force and effect, and nothing herein and nothing
done pursuant hereto shall affect or be construed to affect the lien, charge and
encumbrance of, or warranty of title in the Mortgage, nor the priority thereof
over other liens, charges, encumbrances or conveyances, and the Mortgaged
Property (as that term is defined in the Mortgage) shall remain in all respects
subject to the lien, charge and encumbrance of the Mortgage. This Extension
Agreement constitutes a modification or amendment, and not a novation.
9. Miscellaneous.
--------------
(a) Recording. Mortgagor shall promptly cause this Extension
Agreement to be filed, registered or recorded in such manner and in such places
as may be required by any present or future law in order to publish notice of
and fully to protect the lien of the Mortgage upon, and the interest of
Mortgagee in, the Mortgaged Property. Mortgagor will pay all filing,
administration and recording fees, and all expenses incident to the preparation,
execution and acknowledgment of this Extension Agreement, and all Federal,
state, county and municipal taxes, duties, assessments
- - 156 - -
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JS 10/30/97,9/28/98
and charges now or hereafter arising out of or in connection with the filing,
registration, recording, execution and delivery of this Extension Agreement,
including without limitation any and all documentary stamps and/or intangible
taxes. Mortgagor agrees to hold harmless and indemnify Mortgagee against any
liability incurred by reason of the imposition of any such tax, duty, assessment
or charge. Mortgagor shall pay such sums immediately upon receipt of notice of
such amounts from the authority to which they are due and payable or from
Mortgagee or its assigns. In the event Mortgagor fails to pay said sums,
Mortgagee or its assignee may at its option pay such taxes and/or purchase and
affix such documentary stamps. Any such payment by Mortgagee or its assignee
shall be added to the indebtedness evidenced by the Third Consolidated Note and
shall bear interest from the date advanced to the date of recovery at a rate
equal to the lesser of five percent (5%) per annum higher than the rate of
interest then accruing in accordance with the provisions of the first paragraph
of the Third Consolidated Note or the maximum rate permissible under Florida
Law.
(b) Severability. If any one or more of the provisions of this
Extension Agreement is held to be invalid, illegal or unenforceable in any
respect for any reason, the validity, legality and enforceability of any such
provision or provisions in every other respect and of the remaining provisions
of this Extension Agreement shall not be in any way impaired, and each term or
provision shall be construed to be legal, valid, binding and enforceable to the
maximum extent permitted by law.
(c) Survival of Covenants, Representations and Warranties. All
warranties, representations and covenants made by Mortgagor herein or in any
certificate or other instrument delivered by it or on its behalf under this
Extension Agreement shall be considered to have been relied upon by Mortgagee
and shall survive regardless of any investigation made by Mortgagee or on its
behalf.
(d) Headings. Paragraph headings have been inserted in this
Extension Agreement as a matter of convenience of reference only; such paragraph
headings are not part of this Extension Agreement and shall not be used in the
interpretation of this Extension Agreement.
(e) Governing Law. This Extension Agreement shall be governed by
and construed in accordance with the laws of the State of Florida.
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<PAGE>
JS 10/30/97,9/28/98
(f) Further Instruments. Mortgagor agrees from time to time, as
may be reasonably required by Mortgagee, to execute and deliver such further
instruments and documents and do all matters and things which may be convenient
or necessary to more effectively and completely carry out the intention
herewith.
(g) Conflicts. In the event of any conflict between the provisions
hereof and of the Third Consolidated Note and/or the Mortgage, the provisions
hereof shall govern and control.
THE MORTGAGOR AND MORTGAGEE EACH WAIVES THE RIGHT TO A TRIAL BY JURY IN
ANY ACTION OR PROCEEDING BASED UPON, OR RELATED TO, ANY ASPECT OF THE
TRANSACTION IN CONNECTION WITH WHICH THIS DOCUMENT IS BEING GIVEN OR ANY
DOCUMENT EXECUTED OR DELIVERED IN CONNECTION WITH SUCH TRANSACTION. THIS WAIVER
IS KNOWINGLY, INTENTIONALLY AND VOLUNTARILY MADE BY MORTGAGOR AND MORTGAGEE AND
THE MORTGAGOR AND MORTGAGEE EACH ACKNOWLEDGES THAT NO ONE HAS MADE ANY
REPRESENTATIONS OF FACT TO INDUCE THIS WAIVER OF TRIAL BY JURY OR IN ANY WAY TO
MODIFY OR NULLIFY ITS EFFECT. THE MORTGAGOR AND MORTGAGEE EACH FURTHER
ACKNOWLEDGES HAVING BEEN REPRESENTED IN CONNECTION WITH THE TRANSACTION WITH
RESPECT TO WHICH THIS DOCUMENT IS BEING GIVEN AND IN THE MAKING OF THIS WAIVER
BY INDEPENDENT LEGAL COUNSEL, SELECTED BY ITS OWN FREE WILL, AND THAT IT HAS HAD
THE OPPORTUNITY TO DISCUSS THIS WAIVER WITH SUCH COUNSEL. THE MORTGAGOR AND
MORTGAGOR EACH ACKNOWLEDGES HAVING READ AND UNDERSTOOD THE MEANING AND
RAMIFICATIONS OF THIS WAIVER PROVISION.
IN WITNESS WHEREOF, the Mortgagor has caused this Extension Agreement to
be executed as of the date first above written.
MORTGAGOR:
Signed and Acknowledged
in the Presence of:
ORIOLE HOMES CORP.,
a Florida corporation
- -----------------------------
Name Printed:________________
By:_________________________________
Richard D. Levy, Chairman of the
- - 158 - -
<PAGE>
JS 10/30/97,9/28/98
Board and Chief Executive Officer
- -----------------------------
Name Printed:________________
- - 159 - -
<PAGE>
JS 10/30/97,9/28/98
STATE OF FLORIDA )
)SS:
COUNTY OF PALM BEACH )
Before me, a Notary Public in and for said County and State, on this day
of October, 1998, personally appeared the above-named Oriole Homes Corp., a
Florida corporation, by Richard D. Levy, its Chairman of the Board and Chief
Executive Officer, who acknowledged to me that he did sign the foregoing
instrument on behalf of said corporation, and that such signing was his free act
and deed as such officer, and the free act and deed of said corporation. Richard
D. Levy is personally known to me.
- --------------------------------------------------------------------------------
Print Name:________________________________________
- --------------------------------------------------------------------------------
(SEAL) Notary Public, State of Florida at Large
My Commission Expires: _____________________
- - 160 - -
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JS 10/30/97,9/28/98
IN WITNESS WHEREOF, the Mortgagee has caused this Extension Agreement to
be executed as of the date first above written.
MORTGAGEE:
Signed and Acknowledged
in the Presence of:
OHIO SAVINGS BANK, a federal savings
bank, f/k/a Ohio Savings Bank,
F.S.B.,
f/k/a Ohio Savings Bank, an Ohio
corporation
Name Printed:
By:
Ralph C. Kirk, Vice President
Name Printed:
STATE OF OHIO
)
)SS:
COUNTY OF CUYAHOGA
)
Before me, a Notary Public in and for said County and State, on this ____ day of
October, 1998, personally appeared the above-named Ralph C. Kirk, the Vice
president of Ohio Savings Bank, a federal savings bank, f/k/a Ohio Savings Bank,
F.S.B., f/k/a Ohio Savings Bank, an Ohio corporation, personally known by me,
who acknowledged to me that he did sign the foregoing instrument on behalf of
said Bank and that the same was the free act and deed of said Bank and his free
act and deed, individually and as such officer.
Print Name:
- - 161 - -
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(SEAL)
Notary Public, State of Ohio
My Commission Expires:
- - 162 - -
<PAGE>
Exhibit 10.12
SECOND AMENDMENT
to
REVOLVING LOAN AGREEMENT
This Second Amendment to Revolving Loan Agreement (the "Second Amendment")
is executed and delivered as of the 1st day of July, 1997, by and between ORIOLE
HOMES CORP., a Florida corporation (the "Borrower"), Suite 200, 1690 South
Congress Avenue, Delray Beach, Florida 33445-6327, and OHIO SAVINGS BANK, a
federal savings bank, f/k/a Ohio Savings Bank, F.S.B. and f/k/a Ohio Savings
Bank, an Ohio corporation (the "Bank"), 200 Ohio Savings Plaza, 1801 East Ninth
Street, Cleveland, Ohio 44114;
W I T N E S S E T H:
--------------------
WHEREAS, in consideration for a revolving line of credit in the maximum
amount of Twenty Million Dollars ($20,000,000.00) (the "Consolidated Loan") made
by Bank to Borrower, Borrower has executed and delivered to Bank its
Consolidated Revolving Mortgage Note dated January 12, 1996, in the maximum
principal amount of the Consolidated Loan as aforesaid (the "Second Consolidated
Note");
WHEREAS, the Consolidated Loan is evidenced by, among other things, a
Revolving Loan Agreement dated the 13th day of July, 1993, as modified by a
First Amendment to Revolving Loan Agreement dated the 23rd day of August, 1995,
both executed by Borrower and Bank (together, the "Agreement");
WHEREAS, the Second Consolidated Note is secured by, among other things, a
Mortgage and Security Agreement dated as of July 13, 1993, and recorded July 16,
1993, in Official Records Book 7800, Page 1590, of the Public Records of Palm
Beach County, Florida, as modified, extended and spread by (i) a Mortgage,
Assignment and Financing Statement Spreader Agreement dated May 31, 1995, and
recorded June 6, 1995, in Official Records Book 8776, Page 262, of said Public
Records, (ii) a Future Advance, Mortgage, Assignment and Financing Statement
Extension, Modification and Spreader Agreement dated August 23, 1995, and
recorded August 30, 1995, in Official Records Book 8897, Page 53, of said Public
Records, (iii) a Future Advance, Mortgage, Assignment and Financing Statement
Modification and Spreader Agreement dated January 12, 1996 and
- - 163 - -
<PAGE>
recorded January 17, 1996, in Official Records Book 9085, Page 547, of said
Public Records, and (iv) a Mortgage and Loan Modification and Extension
Agreement of even date herewith, all executed and delivered by the Borrower to
the Bank (the Mortgage and Security Agreement, as modified, extended and spread,
is herein referred to as the "Mortgage"); and
WHEREAS, Borrower and Bank have agreed that Bank shall extend the
Termination Date (capitalized terms not defined herein shall have the meanings
ascribed to them in the Agreement) of the Consolidated Loan to June 30, 1999,
and reduce the Maximum Loan Amount to an amount not to exceed Ten Million
Dollars ($10,000,000.00) on the terms and conditions hereinafter set forth.
NOW THEREFORE, in consideration of the sum of Ten Dollars ($10.00) and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, and intending to be legally bound, the Borrower and Bank
hereby covenant and agree as follows:
1. Recitals. The aforementioned recitals are true and correct and are
hereby incorporated by this reference.
2. Consolidated Loan. As of the date hereof, the unpaid principal balance
of the Consolidated Loan is One Hundred Thousand Dollars ($100,000.00), and
interest has been paid on the Second Consolidated Note through May 31, 1997.
Borrower acknowledges that the indebtedness evidenced by the Second Consolidated
Note is free of any and all defenses, setoffs and counterclaims, and that
Borrower has no claims against Bank in connection with or related to the
Consolidated Loan or any Loan Document as of the date hereof.
3. Modification of Agreement. The Agreement is hereby amended, modified
and extended as follows:
(a) Definitions.
(i) The definition of the term "Bank" defined in Section 1(a) is
hereby replaced and superseded by the following:
"Bank" means OHIO SAVINGS BANK, a federal savings bank, f/k/a Ohio Savings Bank,
F.S.B. and f/k/a Ohio Savings Bank, a corporation incorporated under the laws of
the State of Ohio.
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(ii) The definition of the term "Contract Year" defined in Section
1(a) is hereby replaced and superseded by the following:
"Contract Year" means each twelve (12) month period commencing on July 1 of each
calendar year and ending on June 30 of the following calendar year.
(iii) The definition of the term "Maximum Loan Amount" defined in
Section 1(a) is hereby replaced and superseded by the following:
"Maximum Loan Amount" means Ten Million and no/100 Dollars
($10,000,000.00) (U.S.).
(iv) The definition of the term "Revolving Note" defined in
Section 1(a) is hereby replaced and superseded by the following:
"Revolving Note" means the Renewal Amended and Restated Consolidated Revolving
Mortgage Note dated as of July 1, 1997, executed and delivered to Bank by
Borrower, in the maximum principal amount of Ten Million and no/100 Dollars
($10,000,000.00), including any partial or total extension, restatement,
renewal, amendment, modification or substitution thereof or therefor.
(v) The definition of the term "Termination Date" defined in
Section 1(a) is hereby replaced and superseded by the following:
"Termination Date" means June 30, 1999.
(b) Section 2(a) (1). Clause (1) of Section 2 (a) is hereby superseded,
restated and replaced by the following:
(1) Line Advances. Subject to the terms and conditions hereof, and in
reliance on the representations and warranties herein contained, Bank shall make
Line Advances from time to time during the period commencing on the date hereof
and ending on the Termination Date to or for the account of Borrower up to but
not exceeding an aggregate unpaid principal amount outstanding at any one time
on Line Advances equal to the least of (a) the Maximum Loan Amount, (b) the
Borrowing Base, (c) fifty percent (50%) of Adjusted Net Book Value, or (d) such
lesser amount as provided by this Agreement. Each of (a), (b), (c) and (d) is a
"Loan Amount Limitation." Borrower's obligation to repay the Line Advances shall
be evidenced by the Revolving note.
(c) Section 2 (b) (3). Clause (3) of Section 2 (b) is hereby superseded,
restated and replaced by the following:
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(3) Mandatory Repayments. For a period of not less than thirty (30)
consecutive calendar days during each Contract Year prior to the Termination
Date, commencing with the Contract Year beginning on July 1, 1998, the unpaid
principal balance of the Loan shall not exceed Thirty three and one-third
percent (33.3334%) of the Maximum Loan Amount.
(d) Section 2 (c). Section 2 (c) is hereby superseded, restated and
replaced by the following:
(c) Use of Proceeds. The proceeds of the Loan hereunder shall be used by
the Borrower solely to provide working capital to finance ongoing development
and construction of residential real estate and short term capital requirements
related to the Borrower's Florida real estate projects and/or other appropriate
short term general corporate purposes. The Borrower will not, directly or
indirectly, use any part of such proceeds for personal, consumer, family,
household, educational, agricultural or similar uses or for the purpose of
purchasing or carrying any margin stock within the meaning of Regulation G of
the Board of Governors of the Federal Reserve System or to extend credit to any
Person for the purpose of purchasing or carrying any such margin stock, or for
any purpose which violates, or is inconsistent with, Regulation X of such Board
of Governors.
(e) Section 2 (d). Section 2 (d) is hereby superseded, restated and
replaced by the following:
d. Loan Extension. Commencing no later than March 31, 1998, and on each
anniversary thereof if the Termination Date has been extended each year as
hereinafter provided, the Borrower may deliver to Bank a written request that
the Termination Date be extended for one (1) additional Contract Year. Provided
(i) the warranties and representations of Borrower contained in the Agreement
remain true, correct and complete in all material respects; (ii) all the
material covenants, terms and conditions of the Agreement remain satisfied;
(iii) no Event of Default, or event which upon the lapse of time, the giving of
notice, or both, could become an Event of Default, has occurred under the
Agreement; and (iv) Bank is in receipt of the quarterly and annual financial
statements mentioned in Sections 6 A (1)(c) and (d) of the Agreement, Bank will,
without prejudice, consider Borrower's request.
If Bank, at its sole option and in its sole and absolute discretion,
elects to offer an extension of the Termination Date for one (1) additional
Contract Year, Bank shall notify Borrower no later than July 1, 1998, and on
each anniversary thereof if the Termination Date has been extended the preceding
year and a like request for an additional one (1)
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Contract Year extension of the Termination Date has been timely received by Bank
from Borrower. If Bank does not notify Borrower of Bank's election to offer to
extend any Termination Date within the time limit as aforesaid, the applicable
Termination Date shall not be extended. Any offer by Bank to extend the
Termination Date for an additional Contract Year shall be on and subject to the
following terms and conditions:
(1) Closing. Closing on the one (1) Contract Year extension of the
Termination Date shall occur within thirty (30) days of the date Bank's notice
of its election to offer Borrower an extension of the Termination Date is
effective, but not later than August 1 following each Contract Year that a
request is received from Borrower.
(2) Documents. At closing Borrower shall execute and deliver to
Bank a Mortgage and Loan Extension Agreement and such other documents and
certificates and title insurance endorsements as Bank may reasonably request,
each of which shall be satisfactory in form and substance to Bank.
(3) Fees, Expenses and Other Payments. At closing Borrower shall
pay to Bank a Commitment Fee in the amount of one-quarter of one percent (0.25%)
of the then current Maximum Loan Amount; and shall further pay all recording
fees, documentary stamps (if any) and intangible tax on the Mortgage and Loan
Extension Agreement, and reasonable costs, fees and expenses incurred by Bank in
connection with the extension of the Termination Date.
(4) Limitation on Extension. Anything herein to the contrary
notwithstanding, the Termination Date shall not be extended by Bank more than
five (5) times.
(f) Section 3 (a) (20). Clause (20) of Section 3(a) is hereby superseded,
restated and replaced by the following:
(20) Appraisals. At any time during the term of this Agreement, upon the
election of Bank, but, provided no Event of Default has occurred under this
Agreement, not more frequently than two (2) times each Contract Year, Bank may
procure (at Borrower's expense) a current (within 30 days) appraisal of the
Mortgaged Property, satisfactory in form and amount to the Bank, prepared by an
appraiser selected by the Bank and in accordance with generally accepted and
established appraisal practices and in conformity with applicable law and
regulation and reviewed (at Borrower's expense) by the Bank's "in-house" senior
appraiser. Any appraisal may be adjusted by the Bank's appraiser to conform to
Bank's appraisal guidelines. Such appraisal, as adjusted by the Bank's
appraiser, shall
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conclusively establish Net Realizable Value as of the date thereof. All
appraisals, appraisal reviews and any updates thereof shall be at Borrower's
expense.
(g) Section 6 A (5). The following is hereby added to Section 6 A (5):
Once the aggregate of all Advances equal the Maximum Loan Amount Borrower shall
pay additional intangible tax which may be due on each subsequent Advance to the
Clerk of the Circuit Court in accordance with Chapter 199.143, Florida Statutes,
using the form of Affidavit attached hereto as Exhibit F or, at Borrower's
option, payment may be made directly to the Florida Department of Revenue.
Within thirty (30) days after each such Advance Borrower shall provide Bank with
evidence of the payment of additional intangible tax thereon.
(h) Section 6 C. Section 6 (C) is hereby superseded, restated and
replaced by the following:
C. Financial Covenants - Consolidated Tangible Net Worth. Borrower
undertakes, covenants and agrees that, until the full and complete payment,
performance and observance of the Loan, Borrower will maintain at all times its
Consolidated Tangible Net Worth at not less than Forty Two Million Dollars
($42,000,000.00).
4. Representations and Warranties. Borrower represents and warrants that
it has full power, authority and legal right to execute, deliver and perform the
Renewal Amended and Restated Consolidated Revolving Mortgage Note of even date
herewith, executed and delivered to Bank by Borrower (the "Renewal Note"), the
Mortgage and Loan Modification and Extension Agreement of even date herewith,
executed and delivered to Bank by Borrower (the "Mortgage Modification"), and
this Second Amendment, and that, as of the date hereof (i) the warranties and
representations of Borrower contained in the Agreement (as may be amended
hereby) are true, correct and complete in all material respects; (ii) all the
material covenants, terms and conditions of the Agreement (as may be amended
hereby) remain satisfied; (iii) no Event of Default, or event which upon the
lapse of time, the giving of notice, or both, could become an Event of Default,
has occurred under the Agreement; and (iv) Adjusted Net Book Value is an amount
not less than Twenty Million Dollars ($20,000,000.00).
5. Ratification of Loan Documents. Borrower and Bank each acknowledge that
the Loan Documents are valid and binding; that there are no defenses, set offs
or counterclaims thereto; nothing herein or in the Renewal Note and/or the
Mortgage Modification invalidates or shall impair
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<PAGE>
or release any covenant, condition, agreement or stipulation in the Loan
Documents; and Borrower and Bank shall each perform and comply with and abide by
each of the covenants, agreements, conditions and stipulations of the Loan
Documents as amended hereby.
6. Fees, Expenses, Appraisal and Other Payments. At the time of execution
and delivery of this Second Amendment, Borrower shall pay to Bank a Commitment
Fee in the amount of Fifty Thousand Dollars ($50,000.00); and shall further pay
all recording fees, documentary stamps (if any) and intangible tax on the
Mortgage Modification, and all reasonable costs, fees and expenses incurred by
Bank in connection with this Second Amendment, including without limitation the
cost of the initial appraisal for the Contract Year July 1, 1997 to June 30,
1998, pursuant to Section 3(a) (20) of the Agreement as modified by this Second
Amendment, to be procured by Bank within thirty (30) days of the date of this
Second Amendment.
7. Miscellaneous.
--------------
(a) Severability. If any one or more of the provisions of this
Second Amendment is held to be invalid, illegal or unenforceable in any respect
for any reason, the validity, legality and enforceability of any such provision
or provisions in every other respect and of the remaining provisions of this
Second Amendment shall not be in any way impaired, and each term or provision
shall be construed to be legal, valid, binding and enforceable to the maximum
extent permitted by law.
(b) Survival of Covenants, Agreements, Representations and
Warranties. All warranties, representations and covenants made by Borrower
herein or in any certificate or other instrument delivered by it or on its
behalf under this Second Amendment shall be considered to have been relied upon
by Bank and shall survive regardless of any investigation made by Bank or on its
behalf. All such statements and any such certificate or other instrument shall
constitute warranties and representations by Borrower hereunder.
(c) Headings. Paragraph headings have been inserted in this Second
Amendment as a matter of convenience of reference only; such paragraph headings
are not part of this Second Amendment and shall not be used in the
interpretation of this Second Amendment.
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<PAGE>
(d) Time of the Essence. Time is hereby expressly made of the
essence with respect to the performance and/or satisfaction of each of the
provisions and conditions of this Second Amendment.
(e) Governing Law. The laws of the State of Florida shall govern the
construction of this Second Amendment and the rights and duties of Borrower and
Bank.
(f) Limited Modification/Conflicts. Except to the limited extent
expressly provided herein, the Loan Documents shall remain in full force and
effect. In the event of any inconsistency between the terms and conditions of
the Agreement and this Second Amendment, the terms and provisions of this Second
Amendment shall govern and control.
(g) Prior Negotiations Superseded. The terms and conditions of this
Second Amendment supersede and replace all prior discussions, negotiations and
side letter agreements with respect to the subject matter hereof, including,
without limitation, all those certain letters from Bank to Borrower dated as of
March 12, 1997, May 9, 1997, June 12, 1997, July 21, 1997, August 27, 1997,
September 7, 1997 and October 31, 1997.
IN WITNESS WHEREOF, the parties hereto have caused the Second Amendment to
be executed as of the day and year first above written.
Borrower:
ORIOLE HOMES CORP.,
a Florida corporation
By:____________________________________
Richard D. Levy, Chairman of the
Board and Chief Executive Officer
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<PAGE>
Bank:
OHIO SAVINGS BANK,
a federal savings bank
By:______________________________________
Name
Printed:___________________________
Title:________________________________
STATE OF FLORIDA )
)
COUNTY OF PALM BEACH )
Before me, a Notary Public in and for said County and State, on this
_______ day of November, 1997, personally appeared the above-named Oriole Homes
Corp., a Florida corporation, by Richard D. Levy, its Chairman of the Board and
Chief Executive Officer, who acknowledged that he did sign the foregoing
instrument on behalf of said corporation, and that such signing was his free act
and deed, individually and as such officer, and the free act and deed of said
corporation. Richard D. Levy is personally known to me.
---------------------------------------------
Print Name:__________________________________
(SEAL)
Notary Public, State of Florida at Large
My Commission Expires:_____________________
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<PAGE>
STATE OF OHIO
)
)
COUNTY OF CUYAHOGA )
Before me, a Notary Public in and for said County and State, on this _____
day of November, 1997, personally appeared the above-named Ohio Savings Bank, a
federal savings bank, by __________________, its ______ President, who
acknowledged that he did sign the foregoing instrument on behalf of said bank
and that such signing was his free act and deed, individually and as such
officer, and the free act and deed of said bank.
___________________ is personally known to me.
---------------------------------------------
Print Name:__________________________________
(SEAL)
Notary Public, State of Ohio
My Commission Expires:_____________________
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<PAGE>
EXHIBIT F TO LOAN AGREEMENT
NONRECURRING INTANGIBLE
PERSONAL PROPERTY TAX
AFFIDAVIT
---------
STATE OF FLORIDA )
:ss
COUNTY OF PALM BEACH )
BEFORE ME, the undersigned authority, personally appeared
____________________, who, after duly being placed under oath, deposes and
states as follows:
1. Affiant is ____________________ of Oriole Homes Corp., a Florida
corporation.
2. Affiant makes this Affidavit in connection with that certain Mortgage
and Security Agreement (Revolving Loan) to Ohio Savings Bank, dated July 13,
1993, in the initial amount of $10,000,000, recorded in Official Records Book
7800, Page 1590, of the Public Records of Palm Beach County, Florida, as
modified, extended and spread of record (the "Revolving Mortgage").
3. An additional amount of $________________ is being/will be borrowed
under the Revolving Mortgage and this Affidavit is made and executed for the
purpose of paying Nonrecurring Intangible Personal Property Tax upon such
additional amount in accordance with Chapter 199.143 Florida Statutes.
Further Affiant sayeth naught.
- ------------------------------------
Name Printed:_______________________
Sworn to, subscribed and acknowledged before me this ___ day of __________ ,
199__, by __________________________.
- -------------------------------------
Notary Public, State of Florida at Large
Name Printed:________________________
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<PAGE>
My Commission Expires:_______________
Personally known ______or produced ____________________Driver License.
- - 174 - -
<PAGE>
EXHIBIT 10.13
CONSTRUCTION LOAN AGREEMENT
DATE: December __, 1998
THIS CONSTRUCTION LOAN AGREEMENT ("Agreement"), made by and between ORIOLE
HOMES CORP., a Florida corporation (hereinafter called the "Borrower"), whose
address is 1690 South Congress Avenue, Suite 200, Delray Beach, Florida 33445,
and FIRST UNION NATIONAL BANK, a national banking association organized and
existing under the laws of the United States of America, (hereinafter called the
"Lender"), whose address is: 5581 West Oakland Park Boulevard, 2nd Floor,
Lauderhill, Florida 33313.
WITNESSETH:
WHEREAS, Borrower is the fee simple owner of certain real property located
in Palm Beach County, Florida, more particularly described on Exhibit "A"
attached hereto and made a part hereof (the "Land"); and
WHEREAS, Borrower intends to construct One Hundred Thirty (130) single
family residential homes on the Land which is part of the development project to
be known as Addison Green of the Aberdeen PUD in Boynton Beach, Palm Beach
County, Florida 33437 (the "Project"); and
WHEREAS, Borrower has requested of Lender and Lender is willing to lend to
Borrower, upon the terms and conditions contained in the Loan Documents
(hereinafter defined) and as hereinafter set forth, the total aggregate sum of
SIX MILLION SEVEN HUNDRED FIFTY THOUSAND AND 00/100 U.S. DOLLARS ($6,750,000.00)
(the "Loan") evidenced by an Acquisition Real Estate Promissory Note of even
date herewith (the "Acquisition Note") in the original principal sum THREE
MILLION SEVEN HUNDRED FIFTY THOUSAND AND 00/100 U.S. DOLLARS ($3,750,000.00) and
a Construction Revolver Real Estate Promissory Note ("Construction Note") of
even date herewith in the original principal amount of THREE MILLION AND 00/100
U.S. DOLLARS ($3,000,000.00) (the Acquisition Note and Construction Note are
sometimes hereinafter collectively
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referred to as the "Note") and by a Letter of Credit Facility in the amount of
Two Hundred Thousand and 00/100 U.S. Dollars ($200,000.00); and
WHEREAS, the Loan will be secured by that certain Mortgage and Security
Agreement of even date herewith (the "Mortgage") encumbering inter-alia the Land
and the Houses (hereinafter defined) to be constructed thereon, and by all the
Loan Documents associated with this Loan transaction (the "Loan Documents"); and
WHEREAS, the Lender has agreed to make the Loan only upon the terms and
conditions hereinafter stated and not otherwise.
IT IS THEREFORE AGREED between the parties hereto as follows:
ARTICLE I
DISBURSEMENT OF FUNDS
(A) Purpose. The proceeds of the Loan shall be utilized for the acquisition of
the Project, and for hard and soft construction costs and related interest
carry relating to the construction of 130 single family residential homes
("Houses" or "Units") all to be located within the Project. The terms
"Houses" and "Project" shall include any and all buildings, structures,
and improvements now or hereafter erected on or in the Project, including,
but not limited to, fixtures, attachments, appliances, equipment,
machinery, and other articles attached to said buildings, structures, and
improvements and shall sometimes hereinafter collectively be referred to
as the "Improvements".
(B) Use of Proceeds. The Borrower shall use the Loan Proceeds as follows:
(a) The proceeds from the Acquisition Note shall be used to acquire the
Land. Borrower shall pay and deliver to Lender upon execution hereof its
own equity totaling at least One Million Seven Hundred Seventy-One
Thousand Eighty-Three and 32/100 U.S. Dollars ($1,771,083.32) to pay for
that portion of the Project Costs as shown on the "Loan Budget" and
defined as "Borrower's Equity," all defined and described in Exhibit "C"
hereto; and
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<PAGE>
(b) The Proceeds of the Construction Note shall only be utilized to fund
the Lender approved vertical hard and soft construction costs. Except as
set forth hereinbelow, all Houses must be "Pre-Sold" as hereinafter
defined. Pre-Sold Houses shall mean Houses for which a fully executed
arms-length contract ("Contract") has been executed between Borrower and a
third party purchaser which contain no unsatisfied contingencies,
including end-loan financing evidenced by a pre-qualification letter, and
which meet full conformity with Lender's standards, and for which at least
a five percent (5%) non-refundable deposit has been given to Borrower or
its escrow agent by a third party purchaser. All Contract deposits must be
escrowed with Lender, unless Buyer waives it rights to have its deposit
escrowed. All contracts must be fully subordinated to the Loan and the
Mortgage. Notwithstanding the foregoing, and upon the execution hereof ,
Borrower shall have the right to construct five (5) types of model Houses
approved in advance by Lender (the "Models") and one speculative house
("Speculative House"). After the Speculative House is Pre-Sold, the
Borrower shall only be permitted to have one (1) Speculative House under
construction and/or unsold at any one time. A Speculative House is defined
as a House which is not Pre-Sold. The five (5) Models and Speculative
House which may be constructed by Borrower with the use of proceeds from
the Construction Note shall be referred to herein as the "Spec/Model
Allowance." Upon the execution hereof, Borrower may construct two (2) more
Houses in addition to the Spec/Model Allowance (the "Additional Spec
Houses"). The Additional Spec Houses will be funded by Lender using the
same formula as if each was a Speculative House. However, the Additional
Spec Houses must be converted to Pre-Sold Houses within ninety (90) days
of the date hereof. In the event the Additional Spec Houses are not
converted to Pre-Sold Houses within said ninety (90) days, then any
amounts funded under the Construction Note for the Additional Spec Houses
shall be immediately due and payable and failure to pay said amount within
said ninety (90) days shall constitute an Event of Default under the Note,
the Mortgage and the terms herein. In addition to construction of
individual Houses which will be funded from the proceeds of the
Construction Note, portions of the Loan proceeds shall be utilized for
amounts which may be set forth on the Loan Budget which must be acceptable
to Lender's Inspector and will be funded from the proceeds of the
Construction Note.
(C) Request for Disbursement. No sums shall be due and payable until Borrower
shall deliver a signed requisition to the Lender for payment, in form and
content previously approved by the Lender, and until and unless:
(1) Payroll and material invoices and/or contracts shall have been
confirmed by the Borrower to the satisfaction of the Lender.
(2) Labor and materials shall have been delivered to and used upon or
incorporated in the Improvements in a manner satisfactory to the
Lender and in compliance with the plans, specifications and
addenda aforesaid.
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(3) Such payment shall be in accordance with any applicable laws of
Florida, subject to any rights of the Lender reserved to it
herein.
(4) Payment shall be subject to and contingent upon receipt of such
additional documents and/or information as the title insurance
company which is insuring the lien of the Mortgage may reasonably
require.
Notwithstanding anything herein to the contrary in this Paragraph (C),
funds shall only be disbursed by Lender to Borrower for work actually in
place.
(D) Conditions to each Advance. The proceeds of the Construction Note shall
be disbursed for the Models and the Speculative House on the basis of a
draw schedule to be approved by Lender prior to the execution hereof, up
to certain maximum amounts per model type on a standard (non-premium) lot
to be established by Lender prior to the execution hereof upon its review
of plans and budgets submitted to Lender by Borrower. Funding under the
Construction Note on a per House basis for a Speculative House and/or one
of the five (5) Models shall, in no event, exceed the lesser of : (a) 65%
of the appraised value of a completed House less the Acquisition Note
basis per lot of $28,846.00; or (b) 65% of the sales price for the House,
less the Acquisition Note basis per lot of $28,846.00; or (c) 100% of the
approved vertical hard and soft costs per House. For "Pre-Sold" Houses,
funding under the Construction Note on a per House basis shall in no
event exceed the lesser of: (a) 75% of the appraised value of the House,
less the Acquisition Note basis per lot of $28,846.00; (b) 75% of the
sales price for the House, less the Acquisition Note basis of $28,846.00;
or (c) 100% of the approved vertical hard and soft costs per House. All
draw requests shall be subject to the review and approval of Lender, and
all draw requests shall be funded, if possible, within five (5) working
days of receipt of all required information. All requests shall be
limited to one (1) draw per month. Lender shall make disbursements
through a disbursement agent, such as a title company, at the expense of
Borrower, which disbursement agent shall monitor project notices to owner
and partial releases. No funds shall be disbursed by Lender to Borrower
under the Construction Note for the construction of a House, unless such
House is the subject of a Contract, except with respect to Models and the
Speculative Houses as set forth herein. The maximum number of Units which
may be funded under the Construction Note at any one time (which includes
the Models and Speculative Houses) shall be based upon the combined cost
of completion of such Houses then under construction, such that the
combined cost of completion thereof shall be equal to or less than the
remaining availability under the Construction Note. Should any Contract
be canceled, Borrower shall have ninety (90) days to replace such
canceled Contract with a new Contract or pay off the amount disbursed by
Lender related to such Contract, unless considered one of the Models or a
permitted Speculative House. Should a Contract allow for a purchaser's
funds to be used in construction, funding available under the
Construction Note for the particular House shall be correspondingly
reduced. All advances shall be contingent upon compliance with the
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following conditions precedent which shall be in form and substance
satisfactory to Lender, in its sole discretion:
(a) Building Permit: Borrower must have obtained
and delivered to Lender and its Inspector an
unconditional, irrevocable building permit
fully approved by all governmental authorities
covering the Improvements for which Lender is
advancing funds.
(b) No Default: The warranties and representations
contained in this Agreement shall be correct
and true, all the covenants, terms and
conditions of this Agreement shall remain
satisfied, and no Event of Default (after all
grace periods have expire), or circumstances or
events which, upon the lapse of time, the
giving of notice, or both, could become an
Event of Default, shall have occurred as of the
date of the Advance.
(c) Borrower's Request and Evidence of Construction
and Payment: Within five (5) business days
prior to each Advance, Borrower shall supply
Lender with a written request for an Advance,
which request shall set forth the amounts
sought, and shall be accompanied by the
application form required by Lender, fully
executed, and a certificate signed by Borrower,
the Lender's Inspector (the "Inspector") and
the Contractor ("Borrower's Certificate")
certifying that (1) the work for which payment
is requested has been completed in accordance
with the final plans and specifications for the
Project and the Houses to be constructed
thereon submitted to Lender by Borrower prior
to the execution hereof and approved by Lender
("Final Plans and Specifications"), (2) the
said work has been fully paid or will be fully
paid for with the proceeds of the Advance, (3)
the work completed to date is in conformity
with the schedule of completion of the
Improvements previously provided to Lender, and
(4) states the anticipated completion date of
the
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Improvements, and discloses all known or
anticipated change orders in the Contract or
the Final Plans and Specifications. Each
Borrower's Certificate shall constitute a
representation by Borrower that it reaffirms as
true all representations made to Lender herein
or herewith; that all conditions to such
disbursement have been fulfilled; that any
materials to be paid for have been physically
incorporated into the Improvements, free of
liens and encumbrances; and that the work
conforms to the approved Final Plans and
Specifications. Each request for an Advance
shall be accompanied by such other evidence as
may, from time to time, be requested by Lender,
including, but not limited to, applications,
certificates, and affidavits of Borrower,
Inspector, Architect, Contractor, Disbursing
Agent and Title Company, showing:
(i) the percentage of completion of the Improvements and the value of
that portion of the Improvements completed at that time;
(ii) that all outstanding claims for labor, materials, and fixtures
through the date of the last Advance have been paid, and liens
therefore waived in writing, except for non-paid claims approved
in writing by Lender;
(iii) that there are no liens outstanding against the premises, except
for Lender's lien and security interest, liens for property taxes
not yet payable and other liens approved in writing by Lender;
(iv) that Borrower has complied with all of Borrower's obligations
under the Loan Documents as of the date of the request for an
Advance;
(v) that all work prior to the date of the request for an Advance has
been done in a workmanlike manner by the Contractor and all
Subcontractors, and in accordance with the Final Plans and
Specifications;
(vi) copies of all bills or statements for expenses for which the
Advance is required (paid bills are required only for the last
Advance);
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(vii) that all change orders and extras in any amount whatsoever have
been approved in writing by Lender, except as otherwise provided
for in this Agreement;
(viii) that the undisbursed portion of the construction fund is
sufficient to pay the cost of completing the Improvements in
accordance with the Final Plans and Specifications; and
(ix) that each Advance is to be used for the specific account for which
the disbursement is made.
(x) any other conditions precedent to loan disbursements that may be
required by Lender, including, but not limited to, items set forth
in the Loan Commitment executed by Lender and Borrower and dated
December 11, 1998 (the "Loan Commitment").
The request for an Advance shall contain claims for labor and materials to
the date of the last inspection by the Inspector, and not for labor and
materials rendered thereafter. Upon Lender's receipt for request for Advance,
the Inspector will inspect the premises to determine the percentage of
completion as well as the workmanship of the contractors and compliance with the
approved final Plans and Specifications for the Houses. The Inspector will
review all progress draw requests based on the percentage of work completed and
the cost-to-complete. Each draw will be contingent upon the Lender's receipt of
the Inspector's approval thereof.
(d) Subcontractors. If requested by Lender, and if
reasonably available, Borrower shall furnish
copies, certified by Borrower to be true and
correct, of all major subcontracts and purchase
orders for the provision of labor and materials
for the construction of the Improvements, and a
statement from each Subcontractor and supplier:
(i) stating the amount of its contract and the
amount paid to date; and
(ii) acknowledging full payment (less retainage) for
all work done and/or materials supplied.
(e) Title Insurance. Lender shall receive an
endorsement to the policy of title insurance
updating the policy to the date of the current
Advance, and increasing the insurance coverage
to an amount equal to the sum of all prior
Advances and the current Advance, without
additional exceptions or objections.
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(f) Survey. Upon the foundation of each House being
completed, a sketch of survey of the premises
shall be furnished to Lender showing each House
foundation to be within property lines and
building set back lines, and also showing
easements, roads, etc.
(g) Materials. If requested by Lender, Borrower
shall furnish to Lender evidence reasonably
satisfactory to Lender that Borrower and
Contractor have obtained or can obtain all
necessary materials as and when required for
the completion of the Improvements in
accordance with the Final Plans and
Specifications. Lender shall be the sole, but
reasonable judge of the sufficiency of such
evidence. Lender, at its option, may, but shall
not be required to, disburse funds from
materials stored on the Land or off-site;
provided, however, in each instance, said
materials will not be purchased on a retained
title basis, and title to the materials shall
be in Borrower, and shall be free of any and
all claims of lien. With regard to materials
stored on the Land, any Advances therefore are
solely at the discretion of Lender, and said
materials shall be stored in a secure manner,
and protected from damage or theft. Materials
stored off-site shall be either in a bonded
warehouse, or, if in a supplier's warehouse,
the supplier shall supply evidence of adequate
insurance. Borrower shall also provide to
Lender evidence of insurance in transit. Lender
further reserves the right to have its
Inspector verify the quantity and location of
said materials.
(h) Photographs. If requested by Lender, monthly
photographs of the progress of construction of
each Residence.
(i) Inspector's Report. The Lender shall have
reviewed and approved from the Lender's
inspector, an acceptable "Front End" analytical
report, satisfactory to Lender, approving the
Plans
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and Specifications, cost budget for the
project, any construction contracts, and such
other construction documentation and all other
information required by Lender.
Lender need not make any requested Advance unless Lender shall approve the
Borrower's Certificate and all other required documentation. The approval of
such Borrower's Certificate and required documentation by Lender shall not
constitute an acceptance of the work and materials, nor be binding upon Lender,
except to the extent that the facts are as represented when so approved. With
respect to all disbursements under the Loan, Lender shall have the right to make
payment by check or joint check to Borrower, the Contractor, Subcontractors and
Suppliers and any combination or by credit directly to Borrower or the
Contractor's account, all of which shall be separately or in any combination,
constitute proper disbursement.
(E) Final Advance. When the Improvements have been completed, Borrower shall
supply Lender with the following documents in addition to satisfying all
of the conditions and supply all of the documents required under paragraph
(D) hereof, prior to payment of the final Advance and retainage held by
Lender:
(a) Certificates from the Architect and Engineers,
if applicable, and the Inspector that the
Improvements have been completed in accordance
with the Final Plans and Specifications, in
good and workmanlike manner, and in accordance
with the requirements of all governmental
authorities having or purporting to have
jurisdiction over the premises.
(b) A certificate from Borrower stating the total
construction for costs of the Improvements for
which the final Advance is requested.
(c) A photographic copy of a final Certificate of
Occupancy for each House which the final
Advance is requested issued by the appropriate
official of the jurisdiction in which the
premises is located, and any other governmental
certificates necessary to evidence that the
completed House complies with all zoning
ordinances and building regulations.
- - 183 - -
<PAGE>
(d) Two (2) originals of an "As-Built" survey for
each House for which the final Advance is
requested prepared by a registered surveyor
satisfactory to Lender, and containing a
certification to Lender in such form as Lender
may require, showing each House as completed to
be within the property lines and building set
back lines, and also showing easements, roads,
etc.
(e) Contractor's and Borrower's Final Affidavit in
form and substance satisfactory to Lender and
the Title Company, stating that all bills and
expenses in connection with the construction of
each House for which the final Advance is
requested have been paid, and complete releases
of liens signed by the Contractor and all
Subcontractors and persons furnishing
materials, services or labor to or on the
premises.
(f) A policy of title insurance containing no
exceptions unacceptable to Lender and issued by
the Title Company in the name of the Lender and
the amount of the Note.
(g) Policies of fire, lightening and extended
coverage insurance and such other types of
insurance as may be required by Lender in such
amounts and containing such terms as required
in the Mortgage or as otherwise required by
Lender, endorsed to show the interest of Lender
and in form and substance and written by
company satisfactory to Lender.
(h) All other instruments and documents reasonably
required by Lender.
(F) Right to Withhold Funds. In addition to the right to require Equity Funds
(hereinafter defined), Lender may elect to withhold any Advance,
notwithstanding the substance of any report of any Inspector or Architect,
or any documentation submitted to Lender in connection with a request for
an Advance, if Lender determines, at any time, that the actual cost,
budget or progress of construction differs materially from that as shown
on the breakdown of costs or that the
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percentage of progress of construction of the Improvements differs
materially from that as shown on the request for an Advance for the period
in question. Furthermore, if any instrument or document submitted by
Borrower in connection with any request for an Advance shall not, in the
reasonable exercise of Lender's reasonable discretion, comply in all
respects with the conditions and requirements of this Agreement, then
Lender may amend, reduce or withhold funding of a request for an Advance,
as Lender, in its reasonable discretion, shall deem proper under the
circumstances.
(G) Equity Funds. Borrower shall supply a minimum equity contribution of not
less than $1,771,083.32 as set forth within the Loan Commitment. Also, at
any time, and from time to time, Lender may require a construction cost
breakdown of the Project in progress by the Borrower or Inspector, or by
an expert in the construction cost field to be designated by Lender. If,
in the judgment of Lender, the balance of the total estimated construction
costs of the Improvements, including all soft costs and interest carry,
exceeds the amount of the total construction fund remaining to be
disbursed, Lender must be provided with evidence to show where the funds
necessary to complete the Improvements are to be derived. Lender shall
have the right to demand that Borrower, within five (5) days of being
notified, deposit equity funds in an amount equivalent to the deficiency
with Lender to be disbursed during the course of construction of the
Improvements ("Equity Funds"). Failure to provide the required Equity
Funds within said five (5) days shall be an Event of Default under the
Note, Mortgage, and hereunder.
Any Equity Funds deposited by Borrower with Lender shall be held in a
separate account to be disbursed by Lender or the Disbursing Agent to fund
all subsequent requests for Advances and in a manner so as to comply with
the Florida Construction Lien Law, it being agreed that no Advances of
Loan proceeds shall be made until the Equity Funds have been exhausted
unless Lender otherwise agrees in writing. Lender may, at any time, and
from time to time, require Borrower to deposit additional Equity Funds
within five (5) days of notification whenever it shall appear to Lender
that the remaining proceeds of the Loan to be disbursed and remaining
Equity Funds will be insufficient to pay the remaining portion of the
construction cost not already paid and to otherwise complete construction
of each House in accordance with the Final Plans and Specifications. If
Lender does not require a deposit of Equity Funds, Borrower shall pay and
deliver to Lender satisfactory evidence of the payment of any portion of
the construction cost in excess of the amount of the construction fund
which remains to be disbursed, together with a lien waiver satisfactory to
Lender and Title Company.
(H) Disbursement Schedule. Said payments shall be made in accordance with the
schedule approved by Lender, and Contractor (hereinafter defined) subject
to the provisions of the Florida Construction Lien Law, and the other
provisions hereof. Lender may, in its sole discretion, establish a ten
percent (10%) "hold-back" requirement for the disbursements of the funds
hereunder which will be released upon the completion of any particular
subcontract or line item.
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(I) Revolving Nature of Loan. The Borrower shall be permitted to borrow, repay
and reborrow under the Loan, from time to time, subject to the terms and
conditions of the Construction Note governed by this Construction Note
Agreement, provided, however, that the aggregate principal amount
outstanding under the Construction Note may increase or decrease, but
shall never exceed the sum of THREE MILLION and 00/100 DOLLARS
($3,000,000.00). The proceeds of the Construction Note shall only be
utilized to fund the acquisition cost of the individual lots to be
mortgaged hereunder, and to fund Lender approved vertical hard and soft
construction costs. Additionally, Borrower shall not be entitled to
receive any advances under the Construction Note if the total outstanding
principal balance of the Construction Note, plus all sums yet to be
disbursed to complete construction of Houses for which disbursement has
already commenced, exceeds the sum of THREE MILLION and 001/00 DOLLARS
($3,000,00.00).
(J) Default. Upon any default to comply with any of the terms hereunder or an
Event of Default, as such term is defined in the Note, Mortgage or in the
other Loan Documents, Lender shall not be obligated to make disbursements.
(K) Correction of Defects. The Lender has the right to reject defective work
and materials and shall withhold payments until defects are corrected.
(L) Lender's Inspection Rights. The Lender shall have the unrestricted right
of making inspections of the Property encumbered by the Mortgage from time
to time and each Residence by its duly authorized agent from time to time,
at Borrower's sole cost and expense, during the period of construction but
same is solely for the benefit of Lender. Furthermore, Lender has the
right to select any Inspector of its choice to make any of the inspections
and/or inspection reports that may be referenced herein. The cost of any
such inspector(s), inspections, or inspection reports shall be paid for by
Borrower.
(M) Payments to Lienors. The Lender, upon an Event of Default, may make
payments for labor and materials and services due under the terms of the
contract directly to the lienor who has furnished or performed same.
(N) Inspection Fees. A Construction Plan and Budget Review Fee shall be paid
by Borrower to Lender in the amount of $625.00. Additionally, a Draw
Inspection Fee in the amount of $150.00 per House, shall be collected at
the time of the first draw for construction of a particular House. Also,
all costs incurred by Lender in connection with the Lender's use of an
Inspector, including, but not limited to, any architect or engineer costs,
shall be paid by Borrower.
(O) Disbursing Agent. The Loan proceeds of the Construction Note shall be
disbursed by Lender through its Project Administrator ("Disbursing
Agent"). All costs associated with disbursing the Loan and the costs of
the Disbursing Agent shall be borne by the Borrower.
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<PAGE>
ARTICLE II
----------
MISCELLANEOUS
(A) Drawings, Specifications and Addenda. The drawings, specifications and
addenda form a part of this Agreement and any work shown on the drawings
but not mentioned in the specifications and addenda, or vice versa, is to
be executed the same as though particularly specified or set forth in the
drawings to the true meaning and intent of said drawings and
specifications.
(B) Property of Lender. All drawings, specifications and addenda filed with
the Lender are and remain the Property of the Lender.
(C) Change Request. No change in said plans, drawings and specifications,
exclusive of buyer options, the cost of which exceeds $10,000.00 per
House, shall be made without the express prior written approval of Lender,
which approval shall not be unreasonably withheld or delayed. Lender's
approval may be unreasonably withheld or delayed for change orders which
exceed, in the aggregate, $250,000.00.
(D) Itemized Breakdown. The Borrower, when requested by the Lender, shall
promptly furnish the Lender and/or Inspector with an itemized breakdown of
the hard and soft construction costs of the Improvements which are to be
or have been made subject to the terms of this Agreement. Loan proceeds
for items not associated with the construction of project Improvements
(e.g., architect's and engineer's fees, impact fees, equipment, reserved
interest and other soft cost reserves) will be advanced no more frequently
than twice a month, in accordance with the approved budget for the project
and upon presentation of a proper, fully documented request satisfactory
to and approved by Lender. Lender may require the submission of
corresponding invoices, paid receipts, canceled checks, lien waivers,
and/or bills-of-sale, as it may determine, from time to time, in its sole
discretion.
(E) Survey. A foundation survey, in form and scope satisfactory to Lender,
shall be required when the foundation of each House is completed.
(F) Final Survey. A final survey, in form and scope satisfactory to Lender,
shall be required when each House is completed.
(G) Title Insurance. An endorsement to Lender's mortgagee title insurance
policy ("Title Policy"), satisfactory to Lender, shall be provided to
Lender at the time of each disbursement of funds under the Loan. Each
endorsement shall show all matters of record since the last endorsement
and increase its coverage to include the amount of the disbursement.
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<PAGE>
(H) Financial Covenants.
(i) Annually, during the term of the Loan, Borrower shall provide
Lender with fiscal year end audited income statements, balance
sheets, cash flow analysis, projections, tax returns, contingent
liability statements and a Quarterly Financial Presentation which
shall be certified, true and correct in all material respects by
an officer of the Borrower. The Quarterly Financial Presentation
shall include the following schedules for Borrower and its
subsidiaries:
(1) Consolidated Balance Sheets;
(2) Consolidated Statement of Operations;
(3) Consolidated Statement of Cash Flows;
(4) Interest, Rental and Other Income Schedule;
(5) Net Inventories Schedule;
(6) Consolidated Statement of Operations By Quarters- one page
schedule for applicable period;
(7) Cost of Houses and Condominiums Sold;
(8) Selling, General and Administrative Expenses;
(9) Operations Earnings Analysis - Current Period;
(10) Operations Earnings Analysis - Prior Year;
(11) Report of New Contracts, Closings and Backlog of Houses and
Condominiums;
(12) Estimated Cost of Completion Included in Inventories; and
(13) Houses/Condominiums Completed or Under Construction.
(ii) During the term of the Loan, Borrower shall provide Lender with
income and expense statements (quarterly), cash flow analysis
(annually), projections (annually) and sales reports (quarterly)
relating to the Project which shall be certified, true and correct
in all material respects by an officer of the Borrower.
(I) Conformance with Law. Borrower agrees to comply with all federal, state
and local laws, rules and regulations of any nature whatsoever, including,
without limitation, all applicable zoning ordinances and building codes,
throughout the term of the Loan. The Borrower certifies that all
Improvements, when completed, will comply with all applicable law.
Borrower represents that it has obtained all licenses, building permits
and approvals for the construction of all Improvements according to the
terms hereof and the Loan Documents and has furnished Lender with copies
of such items.
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<PAGE>
(J) Insurance. Borrower shall, at its sole expense, comply with all of the
insurance requirements set forth in the Mortgage and the other Loan
Documents throughout the term of the Loan.
(K) Florida Law. In the event of enforcement of this Agreement or any dispute
as to the interpretation or construction hereof, the laws of the State of
Florida shall apply. In the event either party deems it necessary to cause
litigation to enforce, interpret or construe the terms of this Agreement,
court costs and attorneys' fees, including those incurred in appellate
proceedings, shall be awarded to the prevailing party. Venue shall be in
State Court in and for Broward or Palm Beach County, Florida, the
jurisdiction of which court the parties hereby consent to.
(L) Commitment Letter Incorporated. All of the terms, covenants and conditions
set forth in the Loan Commitment are hereby incorporated herein by
reference and made a part hereof. In the event of a conflict between the
Loan Documents and the Commitment, the Loan Documents shall prevail.
(M) Appraisal. Prior to closing, Lender must receive a satisfactory current
MAI appraisal of the Project (consisting of the Land and the proposed
Improvements) expressing an opinion of Market Value ((i) as is, (ii) upon
completion, and (iii) upon sell out). The Lender must arrange for the
appraisal and engage the appraiser. The appraisal must be ordered directly
by the Lender and must conform to the Financial Institutions Reform
Recovery and Enforcement Act of 1989 (FIRREA) and the related rules and
regulations of the Office of the Comptroller of the Currency (the OCC), 12
CFR Part 34, effective August 24, 1990, as amended. The appraisal,
including, without limitation, the appraisal methodology and the
conclusion(s) of Market Value, shall be subject to Lender's review and
approval. All appraisal costs and fees shall be paid by Borrower, and
Borrower hereby agrees to immediately pay or prepay such appraisal costs
or fees upon the request of Lender. Lender acknowledges receipt of a
satisfactory MAI appraisal sufficient for the closing of the Loan.
If at any time, but no more than once per year, Lender has reasonable
belief that the value of the Mortgaged Premises may have declined or
diminished in value from the value stated in the appraisal previously
submitted to Lender, or at any time in the event the Loan is in default,
then in that event, within seventy-five (75) days from Lender's written
request to Borrower therefor, Borrower shall provide to Lender, at
Borrower's sole cost and expense, a current appraisal of the Mortgaged
Premises to be ordered by Lender from an appraiser designated by Lender
and in form and content as required by Lender. Borrower shall cooperate
fully with any such appraiser and provide all such documents and
information as such appraiser may request in connection with such
appraiser's performance and preparation of such appraisal. Borrower's
failure to promptly and fully comply with Lender's requirements shall,
without further notice, constitute an Event of Default under the Mortgage
and the other Loan documents.
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<PAGE>
(N) Partial Releases. The Borrower shall be required to repay principal
amounts outstanding under the Acquisition Note and Construction Note from
the proceeds of the sale of Houses. If, upon the execution hereof, the
outstanding principal balance of the Acquisition Note is Three Million
Seven Hundred Fifty Thousand and 00/100 U. S. Dollars ($3,750,000.00),
then the Lender shall release each House from the lien operation and
effect of the Mortgage upon Lender's receipt of $42,000.00, which sum will
be allocated against the amounts outstanding under the Acquisition Note,
together with 100% for all monies funded by Lender towards all hard and
soft construction costs and interest carry for the particular House for
which a release is requested, which sum shall be allocated against the
amounts funded under the Construction Note (hereinafter referred to as the
"Release Price"). If Borrower pays down the principal of the Acquisition
Note by Six Hundred Eighty-Eight Thousand Four Hundred and 00/100 U.S.
Dollars ($688,400.00) within ninety (90) days after the date the
Acquisition Note is funded, then the Release Price shall be reduced from
Forty-Two Thousand and 00/100 U.S. Dollars ($42,000.00) to Thirty-Three
Thousand and 00/100 U.S. Dollars ($33,000.00) after the principal
reduction under the Acquisition Note is made. If, upon the execution
hereof, the principal balance of the Acquisition Note is Three Million
Sixty-One Thousand Six Hundred and 00/100 U.S. Dollars ($3,061,600.00),
then the Release Price shall be $33,000.00. The Release Price shall be
utilized to repay the principal amount outstanding under the Note. In
addition, Borrower shall pay accrued but unpaid interest. The Borrower
shall be responsible for paying all of Lender's expenses and costs
incurred in connection with the release of Residences from the lien
operation and effect of the Mortgage.
(O) Lender's Cooperation. Lender shall provide reasonable assistance to
Borrower, at no cost or unreasonable inconvenience to Lender, in
Borrower's efforts to secure from Palm Beach County the return of Lender's
check number 528652794 in the amount of $688,400.00 reflecting the amount
funded to Palm Beach County under that certain Letter of Credit dated
November 12, 1996, Letter of Credit Number S538620, or obtain Palm Beach
County's check in the amount of $688,400.00 payable to Lender.
ARTICLE III
CONSTRUCTION LIEN LAW AND NOTICE OF COMMENCEMENT
------------------------------------------------
(A) Proper Payments. The right of the Borrower to make proper payments under
its construction contract will be limited by any Notice to Borrower or
Claims of Lien which may be served by any person supplying labor or
materials to the project.
(B) Lender Notification. The Borrower shall furnish the Lender a copy of all
Notices or Claims of Lien filed against the Land immediately upon receipt
of same.
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<PAGE>
(C) Lender's Right to Disburse. Upon an Event of Default, the Lender may
disburse as directed by this Agreement without regard to the provisions of
Florida's Construction Lien Law, and without responsibility or liability
to the Borrower, Contractor, subcontractors, laborers or materialmen.
(D) Release of Lien. Borrower further agrees to furnish releases of lien for
all persons or entities who have filed a Claim of Lien against any
property encumbered by the Mortgage or transfer the lien to bond within
ten (10) days after its receipt of notice of the filing of same as set
forth in paragraph (J) hereof provided same must be released or
transferred to bond no more than thirty (30) days after the filing thereof
and provided that a Notice of Commencement must be filed for each House.
(E) Contractor's Final Affidavit. Borrower shall furnish the Contractor's
Final Affidavit as required by the Florida Construction Lien Law.
(F) Lender's Right to Make Payments to Lienors. Nothing in this article shall
in any way restrict the Lender's prerogative for protection of its
security interests, to make payments directly to lienors, as authorized by
the Florida Construction Lien Law upon an Event of Default.
(G) Notice of Commencement. Borrower agrees not to permit recordation of any
Notice of Commencement prior to recording the Mortgage of the Lender. In
the event a Notice of Commencement should be recorded prior to the
recording of the Lender's Mortgage, the Lender shall have the right to
cancel this Agreement and be reimbursed for its costs and expenses
incurred to date.
(H) Commencement and Completion of the Project. The construction of the
Improvements shall commence on or before thirty (30) days after the date
hereof. Borrower shall take all necessary steps to assure that such
construction shall proceed continuously and diligently, without
interruption, and Borrower shall complete each House, as evidenced by a
certificate of completion and certificate of occupancy from the
appropriate governmental agencies having jurisdiction, not later than
eight (8) months from the date Lender funds proceeds toward the
construction of each House, subject to force majeure events not to exceed
a period of ninety (90) days which are beyond the reasonable control of
Borrower.
(I) Post Copy. Borrower is required to post a certified copy of the Notice of
Commencement for each lot which is encumbered by the Mortgage in
accordance with Florida's Construction Lien Law.
(J) Transfer of Lien. Borrower is required, at Lender's request, to transfer
any lien to other security (cash deposit or transfer bond) within 10 days
after receipt of notice that a Claim of Lien is
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recorded and no more than thirty (30) days of the recording of the same,
provided a Notice of Commencement must be filed for each House.
(K) Contested Lien. Lender has the right to contest any lien filed or to
transfer said lien to other security if Borrower fails to do so in a
timely manner.
(L) General Contractor. Borrower will be acting as the General Contractor
(sometimes referenced to herein as "Contractor") for the construction of
the Improvements.
ARTICLE IV
LENDER'S LIABILITY
------------------
(A) Disbursement Obligation of Lender. The Borrower agrees that the holding,
application and disbursement of the Loan funds shall be for the account of
the Borrower, however, it is expressly understood by the parties that the
holding, application and disbursement of the Loan funds is for the
protection of the Lender.
(B) Protection of Lender. Lender's activities concerning Florida's
Construction Lien Law are for the protection of the Lender not the
protection of the Borrower or potential lienors.
(C) Liability To Third Persons. This Agreement shall not be construed to make
the Lender liable to materialmen, contractors, craftsmen, laborers, or
others for goods or services delivered by them upon any property
encumbered by the Mortgage, or for debts or claims accruing to any such
parties against the Borrower.
(D) Inspection/Service. It is expressly agreed that all inspections and other
services rendered by the Lender's officers or agents shall be rendered
solely for the protection and benefit of the Lender and the Borrower shall
not be entitled to claim any loss or damage against the Lender, or its
officers, employees or agents. Lender shall not be liable for the failure
of any dealer, contractor, craftsmen or laborer to deliver the goods or
perform the services to be delivered or performed by them.
(E) Indemnification. Borrower hereby agrees to indemnify and hold harmless
Lender, its directors, officers, employees, agents, successors and
assigns, of and from any and all loss or damage, of whatever kind, and
defend Lender and such other indemnified parties of, from and against any
suits, claims or demands, including, without limitation, Lender's
reasonable legal fees, paralegal fees, costs and expenses at the trial and
appellate levels, on account of any matters or anything arising out of
this Agreement or in connection with the Loan. Such obligations shall
survive completion of the Improvements and repayment of the Loan. The
foregoing indemnification
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shall not apply to any acts or claims which result solely from the gross
negligence or willful misconduct of Lender. The foregoing indemnification
shall not apply to occurrences taking place after Borrower is no longer
the owner of the Land with regard to claims not attributable in any manner
to Borrower. Borrower shall also indemnify Lender with respect to any and
all damages and/or liability arising out of any development work existing
and previously completed on the Land, whether or not inspected by Lender
or Palm Beach County, and any requirements that Palm Beach County may
impose subject to the Closing, including, but not limited to, correcting
any defects which Palm Beach County may require upon inspection of the
project.
ARTICLE V
LENDER'S REMEDIES
-----------------
(A) Failure to Perform. Upon the failure of the Borrower or its contractors or
agents to perform according to the terms of this Agreement, or in the
event they should prevent the Lender from so performing, or if they should
cause or permit conditions to arise so that performance would be rendered
impossible or hazardous for the Lender or in the event of the breach of
any material condition by the Borrower under this Agreement or the Loan
Documents, the Lender is authorized to withhold further disbursements of
funds until all objections are removed.
(B) Breach Or Default. Borrower shall have a ten (10) day grace period from
each respective due date in which to make any periodic installment of
interest required under the terms of the Note. Additionally, in the event
of any non-monetary breach or default hereunder (expressly excluding
voluntary or involuntary bankruptcy proceedings filed by or against the
Borrower and/or judgments rendered against the Borrower which in the
aggregate exceed $200,000.00), the Lender shall give the Borrower 30 days
written notice to correct such breach or default, and upon failure of the
Borrower to comply with such written notice, within said 30 day period and
such reasonable extensions thereof as may be granted by the Lender, solely
at its option, the Lender may either credit all Loan funds then in its
control upon the mortgage debt, and declare the Mortgage to be forthwith
due and payable, and proceed to foreclose the Mortgage for the balance
then remaining unpaid under the Note; or the Lender may assume full charge
of the construction of the Improvements as agent of the Borrower and
Borrower's Contractor, and proceed to enter into a contract for the
completion of the Improvements.
(C) Payment to Lender. In the event Lender completes the Improvements, the
Borrower expressly agrees to pay to the Lender, upon demand, all amounts
that may be disbursed in completing the Improvements, together with
reasonable compensation to the Lender for extra services rendered by it in
completing the Improvements in excess of the aggregate Loan amount, and
agrees that such excess sum shall be secured by the lien of the Lender's
Mortgage if said excess sum shall not be paid immediately upon demand or
arrangements satisfactory to the Lender made for the payment thereof, the
Lender may declare the Mortgage immediately due and payable and may
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proceed to foreclose the same, for said excess sum and for the principal
sum then remaining unpaid under the Note.
(D) Reimbursement of Lender. Borrower agrees to reimburse Lender for all costs
and expenses incurred by Lender in connection with any controversy, claim,
demand or suit filed in connection with the construction of the
Improvements, the performance by either party under this Agreement,
including all court costs and Lender's reasonable attorneys' fees incurred
in connection with any matter relating hereto.
ARTICLE VI
BORROWER'S COVENANTS
--------------------
(A) Selection of Contractors and Subcontractors. The Borrower has accepted,
and hereby accepts, the full responsibility for the selection of its
Contractor and subcontractors and all materials, supplies and equipment to
be used in the construction of the Improvements, and the Lender assumes no
responsibility for the completion of the Improvements, according to the
plans and specifications and for the contract price.
(B) Borrower's Compliance With Florida's Construction Lien Law. Borrower has
further accepted, and hereby accepts, full responsibility for compliance
with Florida's Construction Lien Law and hereby relieves the Lender from
any and all liability thereunder of any nature whatsoever.
(C) Non-Commencement of Work. Borrower certifies that there has been no
commencement of construction on the Land incident to the date hereof which
could result in any Construction Lien or similar lien being filed against
the Land which would be superior to the lien of the Lender's Mortgage.
(D) Default and Non-Performance. Anything herein contained to the contrary
notwithstanding, there shall be no obligation upon the Lender to make any
additional disbursements hereunder, if at the time of the request for such
disbursements the Borrower is in default or has failed to perform any
provision of this Agreement or of the Note and Mortgage.
(E) Liability for Claims, Demands, Losses or Damages. It is understood and
agreed that the Lender shall not be liable for any claims, demands, losses
or damages made, claimed or suffered by the Borrower excepting such as may
arise through or could be caused by the Lender's willful or gross
negligence.
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<PAGE>
(F) Power of Completion. In the event of the bankruptcy of the Borrower or
Contractor, or in the event of the general assignment to creditors by the
Borrower or Contractor during the period of construction of each Residence
and before completion thereof, or upon any other occasion which might
result in cessation of work, the Lender shall have full power to take
charge of and complete the construction and make disbursements of the Loan
funds.
(G) Cross Default. In the event that Borrower shall be in default with respect
to the Mortgage and the Loan evidenced by the Note, then Borrower shall be
deemed in default with respect to all loans from Lender to Borrower. In
the event that Borrower shall be in default with respect to any loan
whatsoever from Lender, then Borrower shall be deemed to be in default
with respect to the Mortgage and the Loan evidenced by the Note.
(H) Palm Beach Inspectors. Within ninety (90) days hereof, Borrower shall
secure Palm Beach County inspection of all existing Improvements made on
the Land.
(I) Principal Reduction Payment. Within three hundred sixty (360) days of the
date that the Acquisition Note is funded, Borrower shall make a principal
reduction payment under the Acquisition Note in the amount of $688,400.00.
Failure to make such payment within said time shall be deemed an Event of
Default hereunder and under the Note, Mortgage, and all other Loan
Documents.
ARTICLE VII
NOTICES OR COPIES
-----------------
All notices or copies referred to herein shall be sent certified or return
receipt requested mail to the Lender at the address specified in this Agreement
with a copy to Lender's Counsel, Michael S. Ross, Esq., Greenspoon, Marder,
Hirschfeld, Rafkin, Ross & Berger, P.A., Trade Centre South, Suite #700, 100
West Cypress Creek Road, Ft. Lauderdale, Florida 33309.
ARTICLE VIII
SEVERABILITY
------------
If any one or more of the provisions of this Agreement shall, for any
reason, be held to be invalid, illegal or unenforceable in any respect, then
such invalidity, illegality or unenfoceability shall not affect any other
provision hereof.
- - 195 - -
<PAGE>
ARTICLE IX
WAIVER OF JURY TRIAL
--------------------
LENDER AND BORROWER HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE
THE RIGHT THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT TO ANY LITIGATION ARISING
OUT OF, UNDER, OR IN CONNECTION WITH THIS AGREEMENT OR ANY OF THE LOAN
DOCUMENTS, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER ORAL
OR WRITTEN), OR ACTIONS OF ANY PARTIES HERETO. THIS PROVISION IS A MATERIAL
INDUCEMENT FOR LENDER ENTERING INTO THIS AGREEMENT.
- - 196 - -
<PAGE>
IN WITNESS WHEREOF, the Borrower and Lender have caused these presents to
be signed, the day and year first above written.
WITNESSES:
BORROWER:
- -------------------------
ORIOLE HOMES CORP., a Florida
- -------------------------
corporation
(Printed Name of Witness)
By:_________________________________
- -------------------------
Mark A. Levy, President
- -------------------------
(Printed Name of Witness)
[Corporate Seal]
LENDER:
- -------------------------
FIRST UNION NATIONAL BANK, a
- -------------------------
national banking association
(Printed Name of Witness)
By:__________________________ _________________________
Name: ______________________
- -------------------------
Title: ______________________
(Printed Name of Witness)
- - 197 - -
<PAGE>
STATE OF FLORIDA )
) SS.
COUNTY OF ___________ )
The foregoing instrument was acknowledged before me this ___ day of
December, 1998, by Mark A. Levy, as President of ORIOLE HOMES CORP., a Florida
corporation, on behalf of the corporation. He is personally known to me or has
produced _____________________ (type of identification) as identification. .
----------------------------------------
NOTARY PUBLIC, STATE OF FLORIDA
Printed Name:____________________________
My Commission Expires:___________________
[Notary Seal]
My Commission No.:______________________
- - 198 - -
<PAGE>
STATE OF FLORIDA )
) SS.
COUNTY OF ___________ )
The foregoing instrument was acknowledged before me this ___ day of
December, 1998, by _________________, as ____________ of FIRST UNION NATIONAL
BANK, a national banking association, on behalf of the banking association. He
is personally known to me or has produced _____________________ (type of
identification) as identification.
----------------------------------------
NOTARY PUBLIC, STATE OF FLORIDA
Printed Name:____________________________
My Commission Expires:___________________
[Notary Seal]
My Commission No.:______________________
- - 199 - -
<PAGE>
Exhibit 10.14
This instrument prepared by and return to:
MICHAEL S. ROSS, ESQ.
Greenspoon, Marder, Hirschfeld, Rafkin, Ross & Berger, P.A.
100 West Cypress Creek Road
Trade Centre South, Suite #700
Ft. Lauderdale, FL 33309
MORTGAGE AND SECURITY AGREEMENT
THIS MORTGAGE AND SECURITY AGREEMENT executed December __, 1998, by and
between FIRST UNION NATIONAL BANK, whose address is 5581 West Oakland Park
Boulevard, 2nd Floor, Lauderhill, Florida 33313 (hereinafter referred to as the
"Mortgagee" or "Lender") and ORIOLE HOMES CORP., a Florida corporation, whose
address for notice under this Mortgage is 1690 South Congress Avenue, Suite 200,
Delray Beach, Florida 33445 (hereinafter collectively referred to as the
"Mortgagor" or "Borrower").
WITNESSETH:
That for divers good and valuable considerations and to secure the payment
of an indebtedness or so much thereof as may be advanced, evidenced by two
Promissory Notes in the original aggregate principal amount of Six Million Seven
Hundred Fifty Thousand and 00/100 U.S. Dollars ($6,750,000.00), and more
specifically an Acquisition Real Estate Promissory Note in the original
principal amount of Three Million Seven Hundred Fifty Thousand and 00/100 U.S.
Dollars ($3,750,000.00) (the "Acquisition Note") and a Construction Revolver
Real Estate Promissory Note in the original principal amount of Three Million
and 00/100 U.S. Dollars ($3,000,000.00) (the "Construction Note") (the
Acquisition Note and the Construction Note shall sometimes be collectively
referred to herein as the "Note"), and a Letter of Credit Facility in the amount
of Two Hundred Thousand and 00/100 U.S. Dollars ($200,000.00) (the "L/C
Facility") of even date herewith to be paid in accordance with their terms,
together with interest thereon and any and all obligations, whether absolute or
contingent, due or which may become due from the Mortgagor to the Mortgagee in
connection with any ISDA Master Agreement, Schedule to Master agreement,
Confirmation Letter and any other documents executed in connection therewith
(collectively the "Master Swap Agreement"), the Mortgagor does grant, bargain,
sell, alien, remise, release, convey and confirm unto the Mortgagee, its
successors and assigns, in fee simple, all of that certain tract of land of
which the Mortgagor is now seized and possessed and in actual possession,
situate in the County of Palm Beach,
- - 200 - -
<PAGE>
State of Florida, which is more fully described in Exhibit "A" attached hereto
and made a part hereof, together with the buildings and Houses thereon erected
or to be erected (hereinafter referred to as the "Premises").
TOGETHER with:
(i) all leasehold estate, and all right, title and interest of Mortgagor
in and to all leases or subleases covering the Premises or any portion thereof
now or hereafter existing or entered into, and all right, title and interest of
Mortgagor thereunder, including, without limitation, all cash or security
deposits, advance rentals, and deposits or payments of similar nature;
(ii) all right, title and interest of Mortgagor in and to all options to
purchase or lease the Premises or any portion thereof or interest therein, and
any greater estate in the Premises owned or hereafter acquired;
(iii) all easements, streets, ways, and, rights-of-way and rights used in
connection therewith or as a means of access thereto, and all tenements,
hereditaments and appurtenances thereof and thereto, and all water rights;
(iv) any and all buildings, structures and improvements now or hereafter
erected thereon, including, but not limited to the fixtures, attachments,
appliances, equipment, machinery, and other articles attached to said buildings,
structures and improvements (sometimes hereinafter referred to as the "Houses").
(v) all fixtures, appliances, machinery, equipment, furniture, furnishings
and articles of personal property now or hereafter affixed to, placed upon or
used in connection with the operation of any of said properties and all gas,
steam, electric, water and other heating, cooking, refrigerating, lighting,
plumbing, ventilating, irrigating and power systems, machines, appliances,
fixtures, and appurtenances which are now or may hereafter pertain or be used
within or on said premises, even though they may be detached or detachable and
all building improvement and construction materials, supplies and equipment
hereafter delivered to said land contemplating installation or use in the
constructions thereon and all rights and interests of Mortgagor in building
permits and architectural plans and specifications relating to contemplated
constructions or Houses on said Premises and all rights and interests of
Mortgagor in present or future mortgage loan commitments pertaining to any of
said Premises or Houses thereon (sometimes hereinafter referred to as the
"Personal Property"). See attached Exhibit "B" for additional personalty.
(vi) all awards and proceeds of condemnation for the Premises or any part
thereof to which Mortgagor is entitled for any taking of all or any part of the
Premises by condemnation or exercise of the right of eminent domain. All such
awards and condemnation proceeds are hereby assigned to
- - 201 - -
<PAGE>
Mortgagee and the Mortgagee is hereby authorized, subject to the provisions
contained in this Mortgage, to apply such awards and condemnation proceeds or
any part thereof, after deducting therefrom any expenses incurred by the
Mortgagee in the collection or handling thereof, toward the payment, in full or
in part, of the Note, notwithstanding the fact that the amount owing thereon may
not then be due and payable;
(vii) all rents, issues and profits of the Premises and all the estate,
right, title and interest of every nature whatsoever of the Mortgagor in and to
the same;
(viii) all accounts (including contract rights) and general intangibles
pertaining to or arising from or in connection with all or any part of the
Mortgaged Property, as hereinafter defined, including without limitation a) all
proceeds and choses in action arising under any insurance policies maintained
with respect to all or any part of the Mortgaged Property (hereinafter defined);
and,
(ix) all proceeds, products, replacements, additions, substitutions,
renewals and accessions of any of the foregoing items.
All of the foregoing real and personal property, and all rights, privileges and
franchises are collectively referred to as the "Mortgaged Property."
TO HAVE AND TO HOLD all and singular the Mortgaged Property hereby
conveyed, and the tenements, hereditaments and appurtenances thereunto belonging
or in anywise appertaining, and the reversion and reversions, remainder and
remainders, rents, issues and profits thereof and also all the estate, right,
title, interest property, possession, claim and demand whatsoever as well in law
as in equity of the said Mortgagor in and to the same and every part and parcel
thereof unto the said Mortgagee in fee simple.
PROVIDED ALWAYS that if the Mortgagor shall pay to the Mortgagee any and
all indebtedness due by Mortgagor to Mortgagee (including the indebtedness
evidenced by the Note and any and all renewals of the same) and shall perform,
comply with and abide by each and every stipulation, agreement, condition, and
covenant of the Note, this Mortgage, the L/C Facility and the Loan Agreement
(defined herein); then this Mortgage and the estate hereby created shall cease
and be null and void. Provided, it is further covenanted and agreed by the
parties hereto that this Mortgage also secures the payment of and includes all
future or further advances as hereinafter set forth, to the same extent as if
such made on the date of the execution of this Mortgage, and any disbursements
made for the payment of tax, levies or insurance on the Mortgaged Property, with
interest on such disbursements at the Default Rate as hereinafter defined.
To protect the security of this Mortgage, the Mortgagor further covenants,
warrants and agrees with the Mortgagee as follows:
- - 202 - -
<PAGE>
ARTICLE I
COVENANTS AND AGREEMENTS OF MORTGAGOR
1.01 Payment of Secured Obligations. Mortgagor shall pay when due the
principal of, and the interest on, the indebtedness evidenced by the Note, and
the charges, fees and the principal of, and interest on, any future advances
secured by this Mortgage and shall otherwise comply with all the terms of the
Note, the Loan Agreement, the L/C Facility and this Mortgage.
1.02 Warranties and Representations. Mortgagor hereby covenants with
Mortgagee that Mortgagor is indefeasibly seized of the Mortgaged Property in fee
simple; that the Mortgagor has full power and lawful right to convey the same in
fee simple as aforesaid; that it shall be lawful for Mortgagor at all times
peaceably and quietly to enter upon, hold, occupy and enjoy said Mortgaged
Property and every part thereof; that Mortgagor will make such further
assurances to perfect the lien interest in said Premises in Mortgagee, as may
reasonably be required; and that Mortgagor does hereby fully warrant the title
to the Mortgaged Property and every part thereof and will defend the same
against the lawful claims of all persons whomsoever.
Mortgagor further represents and warrants to Mortgagee that all
information, reports, paper, and data given to Mortgagee with respect to
Mortgagor, and to the loan evidenced by the Note and Mortgage are accurate and
correct in all material respects and complete insofar as may be necessary to
give Mortgagee a true and accurate knowledge of the subject matter.
1.03 Ground Leases, Leases, Subleases and Easements. Mortgagor, at
Mortgagor's sole cost and expense, shall maintain and cause to be performed all
of the covenants, agreements, terms, conditions and provisions on its part to be
kept, observed and performed under any ground lease, lease, sublease or
easements which may constitute a portion of or an interest in the Premises,
shall require its tenants or subtenants to keep, observe and perform all the
covenants, agreements, terms, conditions and provisions on their part to be
kept, observed or performed under any and all ground leases, leases, subleases
or easements; and shall not suffer or permit any breach or default to occur with
respect to the foregoing; and in default thereof the Mortgagee shall have the
right to perform or to require performance of any such covenants, agreements,
terms, conditions or provisions of any such ground lease, lease, sublease or
easements and to add any expense incurred in connection therewith to this debt
secured hereby, which such expense shall bear interest from the date of payment
to the date of recovery by the Mortgagee at the Default Rate as hereinafter
defined. Any such payment by the Mortgagee with interest thereon shall be
immediately due and payable. The Mortgagor shall not, without the consent of the
Mortgagee, consent to the modification, amendment, cancellation, termination or
surrender of any such ground lease, lease, sublease, or easement; provided,
however, the consent of Mortgagee shall not be required for any leases entered
into by Mortgagor and residents of the Premises.
- - 203 - -
<PAGE>
No release or forbearance of any of Mortgagor's obligation under
any such ground lease, or sublease, shall release Mortgagor from any of its
obligations under this Mortgage.
1.04 Required Insurance. Mortgagor will, at Mortgagor's sole cost and
expense, maintain or cause to be maintained with respect to the Mortgaged
Property, and each part thereof, the following insurance:
(a) Insurance against loss or damage to the Improvement by fire
and any of the risks covered by insurance of the type now known as "fire and
extended coverage" (including vandalism and malicious mischief) in an amount not
less than the original amount of the Note or the full replacement cost of the
Houses;
(b) Reporting form "all risk" Builders' Risk Insurance (including
hazard and material stockpile clauses) without co-insurance in an amount not
less than 100% of the replacement cost of the Houses;
(c) Flood Hazardous Insurance in the amount of the principal
amount of the Note or the maximum limit of coverage available under the National
Flood Insurance Act of 1968, Disaster Protection Act of 1973, and the Housing
and Community Development Acts of 1974 and 1977, all as amended, whichever is
less;
(d) Single limit comprehensive general liability insurance for not
less than Three Million and 00/100 U.S. Dollars ($3,000,000.00) against claims
and liability for bodily injury or property damage to persons or property
occurring on the Mortgaged Property; and
(e) Such other insurance, and in such amounts, as may from time to
time be required by Mortgagee against the same or other hazards.
All policies of insurance required by the terms of this Mortgage
shall contain an endorsement or agreement by the insurer that any loss shall be
payable in accordance with the terms of such policy notwithstanding any act or
negligence of Mortgagor which might otherwise result in forfeiture of said
insurance and the further agreement of the insurer waiving all rights of set
off, counterclaim or deductions against Mortgagor.
Mortgagor may effect for its own account any insurance not
required under this Section 1.04, but any such insurance effected by Mortgagor
on the Premises, whether or not so required, shall be for the mutual benefit of
Mortgagor and Mortgagee and shall be subject to the other provisions of this
Mortgage.
- - 204 - -
<PAGE>
1.05 Delivery of Policies, Payment of Premiums. All policies of insurance
shall be issued by companies with ratings of A or better (Excellent or
Superior), and Class IX or better, in A.M. Best's Insurance Reports, licensed by
the Insurance Commissioner of the State of Florida to conduct business in the
State of Florida and in amounts in each company satisfactory to Mortgagee. All
policies of insurance shall have attached thereto a lender's loss payment
endorsement for the benefit of Mortgagee in form satisfactory to Mortgagee. Each
policy Mortgagee clause shall name "FIRST UNION NATIONAL BANK, ITS SUCCESSORS
AND/OR ASSIGNS" as first mortgagee. Mortgagor shall furnish Mortgagee with an
original policy of all policies of required insurance. If Mortgagee consents to
Mortgagor providing any of the required insurance through blanket policies
carried by Mortgagor and covering more than one location, then Mortgagor shall
furnish Mortgagee with a certificate of insurance for each such policy setting
forth the coverage, the limits of liability, the name of the carrier, the policy
number, and the expiration date. At least thirty (30) days prior to the
expiration of each such policy, Mortgagor shall furnish Mortgagee with evidence
satisfactory to Mortgagee of the Payment of premium and the reissuance of a
policy continuing insurance in force as required by this Mortgage. Policy
premiums for all coverages must be prepaid at least a quarter in advance and all
policy renewals must be forwarded to First Union National Bank, Attn: Insurance
Department, Va 7374, P.O. Box 50130, Roanoke, Virginia 24040. All policies shall
contain a provision that such policies will not be canceled or materially
amended, which term shall include any reduction in the scope or limits of
coverage, without at least thirty (30) days prior written notice to Mortgagee.
In the event Mortgagor fails to provide, maintain, keep in force or deliver and
furnish to Mortgagee the policies of insurance required by this Section,
Mortgagee may procure such insurance or single- interest insurance for such
risks covering Mortgagee's interest, and Mortgagor will pay all premiums thereon
promptly upon demand by Mortgagee, and until such payment is made by Mortgagor
the amount of all such premiums together with interest thereon at the rate of
interest after maturity or default provided in the Note or the maximum rate
permitted by Florida law, whichever is less.
1.06 Insurance Proceeds. After the happening of any casualty to the
Mortgaged Property or any part thereof, Mortgagor shall give prompt written
notice thereof to Mortgagee.
(a) In the event of any damage to or destruction of the Mortgaged
Property, Mortgagee shall have the option in its sole discretion of applying or
paying all or part of the insurance proceeds (i) to any indebtedness secured
hereby and in such order as Mortgagee may determine, or (ii) to the restoration
of the Houses, or (iii) to Mortgagor.
(b) In the event of such loss or damage, all proceeds of insurance
shall be payable to Mortgagee, and Mortgagor hereby authorizes and directs any
affected insurance company to make payment of such proceeds directly to
Mortgagee. Mortgagee is hereby authorized and empowered by Mortgagor to settle,
adjust or compromise any claims for loss, damage or destruction under any policy
or policies of insurance.
- - 205 - -
<PAGE>
(c) Nothing herein contained shall be deemed to excuse Mortgagor
from repairing or maintaining the Mortgaged Property as provided in this
Mortgage or restoring all damage or destruction to the Mortgaged Property,
regardless of whether or not there are insurance proceeds available or whether
any such proceeds are sufficient in amount, and the application or release by
Mortgagee of any insurance proceeds shall not cure or waive any default or
notice of default under this Mortgage or invalidate any act done pursuant to
such notice.
1.07 Assignment of Policies Upon Foreclosure. In the event of foreclosure
of this Mortgage or other transfer of title or assignment of the Mortgaged
Property in extinguishment, in whole or in part, of the debt secured hereby, all
right, title and interest of the Mortgagor in and to all policies of insurance
required by this Section shall inure to the benefit of and pass the successor in
interest to Mortgagor or the purchaser or grantee of the Mortgaged Property.
Mortgagor hereby appoints Mortgagee its attorney-in-fact to endorse any checks,
drafts or other instruments representing any proceeds of such insurance, whether
payable by reason of loss thereunder or otherwise.
1.08 Taxes, Utilities and Impositions. Mortgagor will pay, or cause to be
paid and discharged, on or before the last day on which they may be paid without
penalty or interest, all such duties, taxes, sewer rents, charges for water, or
for setting or repairing of meters, and all other utilities on the Mortgaged
Property or any part thereof, and any assessments and payments, usual or
unusual, extraordinary or ordinary, which shall be imposed upon or become due
and payable or become a lien upon the Premises or any part thereof and the
sidewalks or streets in front thereof and any vaults therein by virtue of any
present or future law of the United States or of the State, County, or City
wherein the Premises are located (all of the foregoing being herein collectively
called "Impositions"). In default of any such payment of any imposition,
Mortgagee may pay the same and the amount so paid by Mortgagee shall, at the
Mortgagee's option, become immediately due and payable with interest at the
Default Rate and shall be deemed part of the indebtedness secured by this
Mortgage.
If at any time there shall be assessed or imposed (i) a tax or
assessment on the Mortgaged Property in lieu of or in addition to the
Impositions payable by Mortgagor pursuant to this Section or (ii) a license fee,
tax or assessment imposed on Mortgagee and measured by or based in whole or in
part upon the amount of the outstanding obligations secured hereby, then all
such taxes, assessments or fees shall be deemed to be included within the term
"Impositions" as defined in this Section, and Mortgagor shall pay and discharge
the same as herein provided with respect to the payment at Impositions or, at
the option of Mortgagee, all obligations secured hereby, together with all
accrued interest thereon, shall immediately become due and payable. Anything to
the contrary herein notwithstanding, Mortgagor shall have no obligation to pay
any franchise, estate. inheritance, income, excess profits or similar tax levied
on Mortgagee or on the obligations secured hereby.
Mortgagor will pay all mortgage recording taxes and fees payable
with respect to this Mortgage or other mortgage or transfer taxes due on account
of this Mortgage or the Note secured hereby.
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<PAGE>
Mortgagor will exhibit to Mortgagee the original receipts or other
reasonably satisfactory proof of the payment of all Impositions which may affect
the Mortgaged Property or any part thereof or the lien of the Mortgage promptly
following the last date on which each Imposition is payable hereunder.
Notwithstanding the foregoing, Mortgagor shall have the right,
after prior written notice to Mortgagee, to contest at its own expense the
amount and validity of any Imposition affecting the Mortgaged Property by
appropriate proceedings conducted in good faith and with due diligence and to
postpone or defer payment thereof, if and so long as:
(a) Such proceedings shall operate to suspend the collection of
such Imposition from Mortgagor or the Mortgaged Property; or
(b) Neither the Mortgaged Property nor any part thereof would be
in immediate danger of being forfeited or lost by reason of such proceedings,
postponement or deferment; and
(c) In the case of any Imposition affecting the Mortgaged Property
which might be or become a lien, encumbrance or charge upon or result in any
forfeiture or loss of the Mortgaged Property or any part thereof, or which might
result in loss or damage to Mortgagor or Mortgagee, Mortgagor, prior to the date
such Imposition would become delinquent, shall have furnished Mortgagee with
security satisfactory to Mortgagee, and, in the event that such security is
furnished, Mortgagee shall not have the right during the period of the contest
to pay, remove or discharge the Imposition.
1.09 Escrow Reserves. If Mortgagor commits any Event of Default hereunder
or under the Note, or any other Loan Document, then Mortgagee may require, in
its discretion, Mortgagor to pay to Mortgagee on the date of each regular
installment of interest as required by the Note secured hereby (or on the first
day of each month if the interest payments are due other than monthly), until
the Note is fully paid, an amount equal to one-twelfth (1/12) or such
proportionate share of the yearly premiums for insurance and/or Impositions as
shall enable Mortgagee to pay for the insurance premiums and/or Impositions when
due. Such added payments shall not be, nor be deemed to be, trust funds, but may
be commingled with the general funds of the Mortgagee, and no interest shall be
payable to Mortgagor with respect thereof. Upon demand of the Mortgagee, the
Mortgagor agrees to deliver to the Mortgagee such additional monies as to enable
the Mortgagee to pay such insurance premiums and/or Impositions when due. In the
event of default by the Mortgagor in the performance of any of the terms,
covenants and conditions of this Mortgage or the Note secured hereby, the
Mortgagee may apply to the reduction of the principal sum or any other sum
secured hereby in such manner as the Mortgagee shall determine, any amount under
this Paragraph 1.09 remaining to the Mortgagor's credit.
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<PAGE>
1.10 Maintenance, Repairs, Alterations. Mortgagor shall keep the Mortgaged
Property, or cause the same to be kept, in good condition and repair and fully
protected from the elements to the satisfaction of Mortgagee; Mortgagor shall
not commit nor permit to be committed waste thereon and shall not do nor permit
to be done any act by which the Mortgaged Property shall become less valuable;
Mortgagor will not remove, demolish or structurally alter any of the Houses
(except such alterations as may be required by laws, ordinances or regulations)
without the prior written permission of the Mortgagee; Mortgagor shall complete
promptly and in good and workmanlike manner any building or other improvement
which may be constructed on the Premises and promptly restore in like manner any
improvements which may be damaged or destroyed thereon and will pay when due all
claims for labor performed and materials furnished therefor; Mortgagor shall use
and operate, and shall require its lessees or licensees to use or operate, the
Mortgaged Property in compliance with all applicable laws, ordinances,
regulations. covenants, conditions and restrictions, and with all applicable
requirements of any ground lease, lease or sublease now or hereafter affecting
the Premises or any part thereof. Unless required by law or unless Mortgagee has
otherwise agreed in writing, Mortgagor shall not allow changes in the stated use
of Mortgaged Property from that which was disclosed to Mortgagee at the time of
execution hereof. Mortgagor shall not initiate or acquiesce to a zoning change
of the Mortgaged Property without the prior notice to and consent of Mortgagee.
Mortgagee and its representatives shall have access to the Premises at all
reasonable times to determine whether Mortgagor is complying with its
obligations under this Mortgage, including, but not limited to, those set out in
this Section.
1.11 Eminent Domain. Should the Mortgaged Property, or any part thereof or
interest therein, be taken or damaged by reason of any public use or improvement
or condemnation proceeding, or in any other manner ("Condemnation"), or should
Mortgagor receive any notice or other information regarding such Condemnation,
Mortgagor shall give prompt written notice thereof to Mortgagee.
(a) Mortgagee shall be entitled to all compensation, awards and
other payments or relief granted in connection with such Condemnation, and shall
be entitled, at its option, to commence, appear in and prosecute in its own name
any action or proceedings relating thereto. Mortgagee shall also be entitled to
make any compromise or settlement in connection with such taking or damage. All
such compensation, awards, damages, rights of action and proceeds awarded to
Mortgagor (the "Proceeds") are hereby assigned to Mortgagee and Mortgagor agrees
to execute such further assignments of the Proceeds as Mortgagee may require.
(b) In the event any portion of the Mortgaged Property is so taken
or damaged, Mortgagee shall have the option in its sole and absolute discretion,
to apply all such Proceeds, after deducting therefrom all outstanding expenses
(regardless of the particular nature thereof and whether incurred with or
without suit), including attorneys' fees, incurred by it in connection with such
Proceeds, upon any indebtedness secured hereby, or to apply all such Proceeds,
after such deductions, to the restoration of the Mortgaged Property upon such
conditions as Mortgagee
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may determine. Such application or release shall not cure or waive any default
or notice of default hereunder or invalidate any act done pursuant to such
notice.
(c) Any amounts received by Mortgagee hereunder (after payment of
any costs in connection with obtaining same), shall, if retained by Mortgagee,
be applied in payment of any accrued interest and then in reduction of the then
outstanding principal sum of the Note, notwithstanding that the same may not
then be due and payable. Any amount so applied to principal shall be applied to
the payment of installments of principal on the Note in inverse order of their
due dates.
1.12 Actions by Mortgagee to Preserve the Security of this Mortgage. If
the Mortgagor fails to make any payment or to do any act as and in the manner
provided for in this Mortgage or the Note, the Mortgagee, in its own discretion,
without obligation so to do and without notice to or demand upon Mortgagor and
without releasing Mortgagor from any obligation, may make or do the same in such
manner and to such extent as the Mortgagee may deem necessary to protect the
security hereof. Mortgagor will pay upon demand all expenses incurred or paid by
Mortgagee (including, but not limited to attorneys' fees and court costs
including those of appellate and bankruptcy proceedings) on account of the
exercise of any of the aforesaid rights or privileges or on account of any
litigation which may arise in connection with this Mortgage or the Note or on
account of any attempt, without litigation, to enforce the terms of this
Mortgage or said Note. In case the Mortgaged Property or any part thereof shall
be advertised for foreclosure sale and not sold, Mortgagor shall pay all costs
in connection therewith.
In the event that the Mortgagee is called upon to pay any sums of
money to protect this Mortgage and the Note as aforesaid, all monies advanced or
due hereunder shall become immediately due and payable, together with interest
at the Default Rate, computed from the date of such advance to the date of the
actual receipt of payment thereof by the Mortgagee.
1.13 Cost of Collection. In the event this Mortgage is placed in the hands
of an attorney for the collection of any sum payable hereunder, the Mortgagor
agrees to pay all costs of collection, including reasonable attorney's fees
including those in all appellate and bankruptcy proceedings, incurred by the
Mortgagee, either with or without the institution of any action or proceeding,
and in addition to all costs, disbursements and allowances provided by law. All
such costs so incurred shall be deemed to be secured by this Mortgage.
1.14 Survival of Warranties. All representations, warranties and covenants
of Mortgagor contained herein or incorporated by reference shall survive funding
of the loan evidenced by the Note and shall remain continuing obligations,
warranties and representations of Mortgagor during any time when any portion of
the obligations secured by this Mortgage remain outstanding.
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1.15 Additional Security. In the event Mortgagee at any time holds
additional security for any of the obligations secured hereby, it may enforce
the sale thereof or otherwise realize upon the same, as its option, either
before or concurrently herewith or after a sale is made hereunder,
1.16 Inspections. Mortgagee, or its agents, representatives or workmen,
are authorized to enter at any reasonable time upon or on any part of the
Premises for the purpose of inspecting the same, and for the purpose of
performing any of the acts it is authorized to perform under the terms of this
Mortgage.
1.17 Liens. Mortgagor shall pay and promptly discharge, at Mortgagor's
cost and expense, all liens, encumbrances and charges upon the Mortgaged
Property or any part thereof or interest therein. Mortgagor shall have the right
to contest in good faith the validity of any such lien, encumbrance or charge,
provided Mortgagor shall first deposit with Mortgagee a bond or other security
satisfactory to Mortgagee in such amounts as Mortgagee shall reasonably require,
and provided further that Mortgagor shall thereafter diligently proceed to cause
such lien, encumbrance or charge to be removed and discharged. If Mortgagor
shall fail to discharge any such lien, encumbrance or charge, then, in addition
to any other right or remedy of Mortgagee, may, but shall not be obligated to,
discharge the same, either by paying the amount claimed to be due, or by
procuring the discharge of such lien by depositing in court a bond for the
amount claimed or otherwise giving security for such claim, or in such manner as
is or may be prescribed by law. Any amount so paid by the Mortgagee shall, at
Mortgagee's option, become immediately due and payable with interest at the
Default Rate, and shall be deemed part of the indebtedness secured by this
Mortgage.
1.18 Future Advances. This Mortgage is given to secure not only existing
indebtedness, but also future advances, whether such advances are obligatory or
are to be made at the option of Mortgagee, or otherwise, as are made within
twenty (20) years from the date hereof, to the same extent as if such future
advances are made on the date of the execution of this Mortgage. The total
amount of indebtedness that may be so secured may decrease to a zero amount from
time to time, or may increase from time to time, but the total unpaid balance so
secured at one time shall not exceed twice the face amount of the Note, plus
interest thereon, and any disbursements made for the payment of taxes, levies or
insurance on the Mortgaged Property, with interest on such disbursements at the
Default Rate as hereinafter defined.
1.19 No Limitation of Future Advance Rights. Mortgagor covenants and
agrees with Mortgagee that:
(a) Mortgagor waives and agrees not to assert any right to limit
future advances under this Mortgage, and any such attempted limitation shall be
null, void and of no force and effect. Any correspondence by Mortgagor regarding
the future advances must be sent to Mortgagee at the address set forth above and
to Mortgagee's counsel.
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(b) An Event of Default under the Mortgage shall automatically
exist (i) if Mortgagor executes any instrument which purports to have or would
have the effect of impairing the priority of or limiting any future advance
which might ever be made under the Mortgage or (ii) if Mortgagor takes, suffers,
or permits any action or occurrence which would adversely affect the priority of
any future advance which might ever be made under the Mortgage.
1.20 Appraisals. Mortgagor covenants and agrees that Mortgagee may obtain
an appraisal of the Mortgaged Property when required by the regulations of the
Federal Reserve Board of the Office of the Comptroller of the Currency or at
such other times as the Mortgagee may reasonably require, but no more than once
per year, if Mortgagee has reasonable belief that the value of the Mortgaged
Property may have declined, or if the loan is in default. Such appraisals shall
be performed by an independent third party appraiser selected by the Mortgagee
and Mortgagor shall provide Lender, at Mortgagor's sole cost and expense, the
current appraisal of the Mortgaged Property within seventy-five (75) days of
Mortgagee's written request for the same. The cost of such appraisal shall be
borne by the Mortgagor. If requested by Mortgagee, the Mortgagor shall execute
an engagement letter addressed to the appraiser selected by the Mortgagee.
Mortgagor's failure or refusal to sign such an engagement letter however shall
not impair Mortgagee's right to obtain such an appraisal. Mortgagor agrees to
pay the cost of such appraisal within ten (10) days after receiving an invoice
for such appraisal. Mortgagor's failure to promptly comply with the terms herein
shall be deemed an Event of Default hereunder.
ARTICLE II
ASSIGNMENT OF LEASES, SUBLEASES,
FRANCHISES, RENTS, ISSUES AND PROFITS
2.01 Assignment of Rents. Mortgagor hereby collaterally assigns and
transfers to Mortgagee all the leases, subleases, franchises, rents, issues and
profits of the Mortgaged Property, and hereby gives to and confers upon
Mortgagee the right, power and authority to collect such rents, issues and
profits as herein set forth. Mortgagor irrevocably appoints Mortgagee its true
and lawful attorney-in-fact, at the option of Mortgagee, immediately and without
further legal action being necessary, to demand, receive and enforce payment, to
give receipts, releases and satisfactions, and to sue, in the name of Mortgagor
or Mortgagee, for all such rents, issues and profits and apply the same to the
indebtedness secured hereby; provided, however, that Mortgagor shall have the
right to collect such rents, issues and profits (but not more than one month in
advance) prior to or at any time there is not an Event of Default under this
Mortgage.
2.02 Collection Upon Default. Upon any Event of Default under this
Mortgage, Mortgagee may, at any time without notice, either in person, by agent
or by a receiver appointed by a court, and without regard to the adequacy of any
security for the indebtedness hereby secured, enter upon and take possession at
the Mortgaged Property, or any part thereof, in its own name, sue for or
otherwise
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collect such rents, issues and profits, including those past due and unpaid, and
apply the same, less costs and expenses of operation and collection, including
attorneys' fees, upon any indebtedness secured hereby, and in such order as
Mortgagee may determine. The collection of such rents, issues and profits, or
the entering upon and taking possession of the Mortgaged Property, or the
application thereof as aforesaid, shall not cure or waive any default or notice
of default hereunder or invalidate any act done in response to such default or
pursuant to such notice of default.
2.03 Restriction on Further Assignments, etc. Except as hereinafter
specifically provided, Mortgagor shall not, without the prior written consent of
the Mortgagee, assign the rents, issues or profits, or any part thereof, from
the Mortgaged Property or any part thereof, and shall not consent to the
modification, cancellation or surrender of any lease or sublease covering the
Mortgaged Property. An action of Mortgagor in violation of the terms of this
Section shall be void as against Mortgagee in addition to being a default under
this Mortgage.
The Mortgagor shall not, without the consent of the Mortgagee,
consent to the cancellation or surrender of, or accept prepayment of rents,
issues or profits, other than rent paid at the signing of a lease or sublease,
under any lease or sublease now or hereafter covering the Mortgaged Property or
any part thereof, nor modify any such lease or sublease so as to shorten the
term, decrease the rent, accelerate the payment of rent, or change the terms of
any renewal option; and any such purported assignment, cancellation, surrender,
prepayment or modification made without the written consent of the Mortgagee
shall be void as against the Mortgagee; provided, however, the consent of
Mortgagee shall not be required for any leases entered into by Mortgagor and the
residents of the Premises. The Mortgagor shall, upon demand of the Mortgagee,
enter into an agreement with the Mortgagee with respect to the provisions
contained in the preceding provision regarding any lease or sublease covering
said Mortgaged Property or any part thereof, and the Mortgagor hereby appoints
the Mortgagee attorney-in-fact of the Mortgagor to execute and deliver any such
agreement on behalf of the Mortgagor and deliver written notice thereof to the
tenant to whose lease such agreement relates.
The Mortgagor agrees to furnish to the Mortgagee a copy of any
modification of any lease presently in effect and copies of all future leases
affecting the Mortgaged Property covered by this Mortgage, and failure to
furnish to the Mortgagee a copy of any modification of a lease or a copy of any
future lease affecting said Mortgaged Property, shall be deemed an Event of
Default under this Mortgage and the Note, for which the holder of this Mortgage
may, at its option, declare the entire unpaid balance of the subject Mortgage
and Note to be immediately due and payable.
All leases or subleases hereafter entered into by Mortgagor with
respect to the Mortgaged Property or any part thereof, shall be subordinate to
the lien of this Mortgage unless expressly made superior to this Mortgage in the
manner hereinafter provided. At any time or times Mortgagee may execute and
record in the appropriate Office of the Register or County Clerk of the County
where the Premises are situated, a Notice of Subordination reciting that the
lease or leases therein described shall be superior to the lien of this
Mortgage. From and after the recordation of such Notice of
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Subordination, the lease or leases therein described shall be superior to the
lien of this Mortgage and shall not be extinguished by any foreclosure sale
hereunder.
ARTICLE III
ENVIRONMENTAL CONDITION OF PREMISES
3.01 Environmental Condition of Property. Mortgagor hereby warrants and
represents to Mortgagee after thorough investigation that, to the best of its
knowledge:
(a) the premises are now and at all times hereafter will continue
to be in full compliance with all Federal, State and local environmental laws
and regulations, including but not limited to, the Comprehensive Environmental
Response, Compensation and Liability Act of 1980 (CERCLA), Public Law No.
96-510, 94 Stat. 2767, and the Superfund Amendments and Reauthorization Act of
1986 (SARA), Public Law No. 99-499, 100 Stat. 1613, and
(b) (i) as of the date hereof there are no hazardous materials,
substances, waste or other environmentally regulated substances (including
without limitation, any materials containing asbestos) located on, in or under
the Premises or used in connection therewith, or (ii) Mortgagor has fully
disclosed to Mortgagee in writing the existence, extent and nature of any such
hazardous material, substance, waste or other environmentally regulated
substance, currently present or which Mortgagor is legally authorized and
empowered to maintain on, in or under the Premises or use in connection
therewith. Mortgagor has obtained and will maintain all licenses, permits and
approvals required with respect thereto, and is and will remain in full
compliance with all of the terms, conditions and requirements of such licenses,
permits and approvals. Mortgagor further warrants and represents that it will
promptly notify Mortgagee of any change in the environmental condition of the
Premises or in the nature or extent of any hazardous materials, substances or
wastes maintained on, in or under the Premises or used in connection therewith,
and will transmit to Mortgagee, within five (5) days of receipt, copies of any
citations, orders, notices or other material governmental of other communication
received with respect to any other hazardous materials, substances, waste or
other environmentally regulated substance affecting the Premises.
(c) Mortgagee shall have the right to require Mortgagor to
periodically (but not more frequently than annually (unless an Environmental
Complaint is then outstanding) perform (at Mortgagor's expense) an environmental
audit and, if deemed necessary by Mortgagee, an environmental risk assessment,
each of which must be satisfactory to Mortgagee in its sole discretion, of the
Mortgaged Property, hazardous waste management practices and/or hazardous waste
disposal sites used by Mortgagor. Such audit and/or risk assessment must be by
an environmental consultant satisfactory to Mortgagee. Should Mortgagor fail to
perform such environmental audit or risk assessment within thirty (30) days of
the Mortgagee's written request, Mortgagee shall have the right, but not the
obligation, to retain an environmental consultant to perform such environmental
audit or risk assessment. All costs and expenses incurred by Mortgagee
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in the exercise of such rights shall bear interest at the default rate set forth
in the Note, and shall be secured by this Mortgage, and shall be payable by
Mortgagor upon demand or charge to Mortgagor's loan balance at the discretion of
the Mortgagee.
Mortgagor hereby indemnifies and holds harmless Mortgagee from and
against any and all damages, penalties, fines, claims, suits, liabilities,
costs, judgments and expenses (including attorneys', consultant's or expert's
fees) of every kind and nature incurred, suffered by or asserted against
Mortgagee as a direct or indirect result of:
(a) any warranty or representation made by Mortgagor in this
paragraph being or becoming false or untrue in any material respect or
(b) any requirement under the law, regulation or ordinance, local,
state or federal, regarding the removal or elimination of any hazardous
materials, substances, waste or other environmentally regulated substances.
Mortgagor's obligations hereunder shall not be limited to any
extent by the term of the Note, and, any act or occurrence which happens prior
to payment in full and satisfaction of the Note which gives rise to liability
hereunder and/or hereafter, shall continue, survive and remain in full force and
effect notwithstanding foreclosure of this Mortgage, (where Mortgagee is the
purchaser at the foreclosure sale), or delivery of a deed in lieu of foreclosure
to Mortgagee.
ARTICLE IV
SECURITY AGREEMENT
4.01 Creation of Security Interest. Mortgagor hereby grants to Mortgagee a
security interest in any and all personal property included within the Mortgaged
Property (herein the "Personal Property") located on or at the Premises,
including without limitation, the Master Swap Agreement and any and all property
of similar type or kind hereafter located on or at the Premises for the purposes
of securing all obligations of Mortgagor set forth in this Mortgage. This
instrument is a self-operative security agreement with respect to the above
described property, but Mortgagor agrees to execute and deliver on demand such
other security agreements, financing statements and other instruments as
Mortgagee may request.
4.02 Warranties, Representations and Covenants of Mortgagor. Mortgagor
hereby warrants, represents and covenants as follows:
(a) Except for the security interest granted hereby, Mortgagor is,
and as to portions of the Personal Property to be acquired after the date hereof
will be, the sole owner of the Personal Property, free from any adverse lien,
security interest, encumbrance or adverse claims thereon of any kind whatsoever.
Mortgagor shall notify Mortgagee of, and shall
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defend the Personal Property against, all Claims and demands of all persons at
any time claiming the same or any interest therein.
(b) Mortgagor shall not lease, sell, convey or in any manner
transfer the Personal Property without the prior written consent of Mortgagee,
except in the ordinary course of Mortgagor's business.
(c) The Personal Property is not and shall not be used or bought
for personal, family or household purposes.
(d) The Personal Property shall be kept on or at the Premises and
Mortgagor will not remove the Personal Property from the Premises without the
prior written consent of Mortgagee, except such portions or items of Personal
Property which are consumed or worn out in ordinary usage, all of which shall be
promptly replaced by Mortgagor.
(e) Mortgagor maintains a place of business in the State of
Florida and Mortgagor shall immediately notify Mortgagee in writing of any
change in its place of business as set forth in the beginning of this Mortgage.
(f) At the request of the Mortgagee, Mortgagor shall join
Mortgagee in executing one or more financing statements and renewals and
amendments thereof pursuant to the Uniform Commercial Code of Florida in form
satisfactory to Mortgagee, and will pay the cost of filing the same in all
public offices wherever filing is deemed by Mortgagee to be necessary or
desirable.
(g) All covenants and obligations of Mortgagor contained herein
relating to the Mortgaged Property shall be deemed to apply to the Personal
Property whether or not expressly referred to herein.
(h) The Mortgaged Property is currently in compliance and will
comply with all applicable laws (including, without limitation, the Americans
With Disabilities Act of 1990), ordinances, rules, and regulations, and with all
events, conditions, easements, and restrictions to which the Mortgaged Property
is subject.
(i) This Mortgage constitutes a Security Agreement as that term is
used in the Uniform Commercial Code of Florida.
(j) Mortgagor shall, from time to time, at Mortgagee's request,
furnish Mortgagee or any other person or entity designated by Mortgagee, an
affidavit or certificate in a form satisfactory to Mortgagee which shall: (i)
indicate the unpaid principal balance and accrued interest on the Note; (ii)
acknowledge either that Mortgagor is not in default of the terms
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and conditions of the Note and the Loan Documents or that default exists, in
which case, any defaults shall be described in detail; (iii) state that
Mortgagor has no defense, right of set-off or counterclaim to the payment of the
indebtedness, or any part thereof, or the performance of any obligations (or
describe any such defense, set-off, or counterclaim). Any purchaser or assignee
of the Note and Loan Documents or any participating interest therein may rely on
the representations of the Mortgagor contained in such affidavit or certificate.
ARTICLE V
REMEDIES UPON DEFAULT
5.01 Events of Default. Any one or more of the following shall constitute
a default under this Mortgage and the Note hereby secured:
(a) Failure of Mortgagor to make one or more payments required by
the Note or the L/C Facility on the respective due date thereof after any
applicable grace period.
(b) Failure of Mortgagor to pay the amount of any costs, expenses
or fees (including counsel fees) of the Mortgagee, with interest thereon, as
required by any provision of this Mortgage.
(c) Failure to exhibit to the Mortgagee, within ten (10) days
after demand, receipts showing payment of real estate taxes and assessments.
(d) Except as hereinbefore permitted, the actual or threatened
alteration, demolition or removal of any building on the Premises without
written consent of the Mortgagee.
(e) Failure to maintain the Houses on the Premises as herein
required, free of any liens placed or threatened during the term hereof.
(f) Failure to comply with any requirements or order or notice of
violation of law or ordinance issued by any governmental department claiming
jurisdiction over the Mortgaged Property within three (3) months from the
issuance thereof, or before any such violation becomes a lien against the
Mortgaged Property, whichever first occurs
(g) Failure of Mortgagor or others to comply with or perform any
other warranty, covenant, condition, agreement contained herein, in the Note,
the L/C Facility, the Construction Loan Agreement, executed and dated on the
same date hereof (the "Loan
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Agreement"), the Commitment Letter dated December 11, 1998, or in any other
document executed by Mortgagor in conjunction with this transaction, of even
date herewith.
(h) Any breach of any covenant or warranty or material untruth of
any representation of Mortgagor contained in this Mortgage, or the Note or any
guaranty executed in conjunction herewith.
(i) The institution of any involuntary bankruptcy, reorganization
or insolvency proceedings against the then owner or Mortgagor in possession of
the Mortgaged Property, or any guarantee, or the appointment of a receiver or a
similar official with respect to all or a substantial part of the properties of
the then owner or Mortgagor in possession of the Mortgaged Property and a
failure to have such proceedings dismissed or such appointment vacated within a
period of forty-five (45) days.
(j) The institution of any voluntary bankruptcy, reorganization or
insolvency proceedings by the then owner or Mortgagor in possession of the
Mortgaged Property, or the appointment of a receiver or a similar official with
respect to all or a substantial part of the properties of the then owner or
Mortgagor in possession of the Mortgaged Property at the instance of the then
owner or Mortgagor in possession of the Mortgaged Property.
(k) The assertion or making of any levy, seizure, forfeiture
action, mechanic's or materialman's lien or attachment on the Mortgaged Property
or any part thereof; provided, however, Mortgagor shall be entitled to transfer
any claim of a mechanics lien to bond within ten (10) days of its receipt of
notice of its recording, but in no event longer then thirty (30) days, provided,
however, that a separate Notice of Commencement must be filed for each House, in
which event, the filing of such assertion or making of levy, seizure, forfeiture
action, mechanics or materialmans lien or attachment shall not constitute an
Event of Default hereunder.
(l) If default shall occur in any loan now or hereafter in
existence between Mortgagee and Mortgagor or any mortgagee which the Mortgagor
has any interest whatsoever, and, conversely, the occurrence of an Event of
Default hereunder shall also constitute a default under any such other loan.
(m) The violation (with respect to the Mortgaged Property) of any
growth management statutes, concurrency laws and regulations, zoning ordinances,
building codes or restrictions or present or future encumbrances.
(n) The occurrence of any Event of Default under the Note, the
Loan Agreement or any other loan agreement or guaranty, whether or not such
event is specifically set forth herein.
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(o) A payment default and any other event of default under any
Master Swap Agreement.
(p) Failure of Mortgagor, within three hundred sixty (360) days of
the date that the Acquisition Note is funded, to make a principal reduction
payment in the amount of $688,400.00 under the Acquisition Note.
5.02 Default Rate. The Default Rate shall be the highest, nonusurious rate
allowable by law at the time of default, provided, however, that at no time
shall any interest or charges in the nature of interest be taken, exacted,
received or collected which would exceed the maximum rate permitted by law.
5.03 Acceleration Upon Default, Additional Remedies. In the event that one
or more defaults as above provided shall occur, the remedies available to
Mortgagee shall include, but not necessarily be limited to, any one or more of
the following:
(a) Mortgagee shall declare the entire unpaid balance of the Note
immediately due and payable without demand or notice.
(b) Mortgagee may take immediate possession of the Mortgaged
Property or any part thereof (which Mortgagor agrees to surrender to Mortgagee)
and manage, control or lease the same to such person or persons and at such
rental as it may deem proper and collect all rents, issues and profits,
therefrom, including those past due as well as those thereafter accruing, with
the right in the Mortgagee to cancel any lease or sublease for any cause which
would entitle Mortgagor to cancel the same; to make such expenditures for
maintenance, repairs and costs of operation as it may deem advisable; and after
deducting the cost thereof and a commission of five (5%) percent upon the gross
amount of rents collected, to apply the residue to the payment of any sums which
are unpaid hereunder or under the Note. The taking of possession under this
paragraph shall not prevent concurrent or later proceedings for the foreclosure
sale of the Mortgaged Property as provided elsewhere herein.
(c) Mortgagee may apply to any court of competent jurisdiction for
the appointment of a receiver or similar official to manage and operate the
Mortgaged Property, or any part thereof, and to apply the net rents and profits
therefrom to the payment of the interest and/or principal of said Note and/or
any other obligations of Mortgagor to Mortgagee hereunder. In event of such
application, Mortgagor agrees to consent to the appointment of such receiver or
similar official, and agrees that such receiver or similar official may be
appointed without notice to Mortgagor, with regard to the adequacy of any
security for the debts and with regard to the solvency of Mortgagor or any other
person, firm or corporation who or which may be liable for the payment of the
Note or any other obligation of Mortgagor hereunder.
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(d) Without declaring the entire unpaid principal balance due, the
Mortgagee may foreclose as to the sum past due, without injury to this Mortgage
or the displacement or impairment of the remainder of the lien thereof, and such
foreclosure sale, the property shall be sold subject to all remaining items of
indebtedness, and Mortgagee may again foreclose, in the same manner, as often as
there may be any sum past due.
5.04 Additional Provisions. Mortgagor expressly agrees, on behalf of
itself, its successors and assigns and any future owner of the Mortgaged
Property, or any part thereof or interest therein, as follows:
(a) All remedies available to Mortgagee with respect to this
Mortgage shall be cumulative and may be pursued concurrently or successively. No
delay by Mortgagee in exercising any such remedy shall operate as a waiver
thereof or preclude the exercise thereof during the continuance of that or any
subsequent default.
(b) The obtaining of a judgment or decree on the Note, whether in
the State of Florida or elsewhere, shall not in any manner affect the lien of
this Mortgage upon the Mortgaged Property covered hereby, and any judgment or
decree so obtained shall be secured to the same extent as said Note is now
secured.
(c) ln the event of any foreclosure sale hereunder, all net
proceeds shall be available for application to the indebtedness hereby secured
whether or not such proceeds may exceed the value of the Mortgaged Property for
unpaid taxes, liens, assessments and any other costs relating to the Mortgaged
Property.
(d) The only limitation upon the foregoing agreements as to the
exercise of Mortgagee's remedies is that there shall be but one full and
complete satisfaction of the indebtedness secured hereby.
(e) The Mortgagor shall duly, promptly and fully perform each and
every term and provision of the Loan Agreement which has been executed and
delivered by the parties hereto simultaneously with the execution and delivery
hereof, the terms of which Loan Agreement are incorporated herein by reference.
The lien of this Mortgage secures the payment of all sums payable to Mortgagee
and the performance of all covenants and agreements of Mortgagor under the terms
of the Loan Agreement.
5.05 Remedies Not Exclusive. Mortgagee shall be entitled to enforce
payment and performance of any indebtedness or obligations secured hereby and to
exercise all rights and powers under this Mortgage, the Loan Agreement, the L/C
Facility, or the Note or under any other agreement or any laws now or hereafter
in force, notwithstanding some or all of the said indebtedness and obligations
secured hereby may now or hereafter be otherwise secured, whether by mortgage,
deed
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of trust, pledge, lien, assignment or otherwise. Neither the acceptance of this
Mortgage nor its enforcement shall prejudice or in any manner affect Mortgagee's
right to realize upon or enforce any other security now or hereafter held by
Mortgagee, it being agreed that Mortgagee shall be entitled to enforce this
Mortgage and any other security now or hereafter held by Mortgagee in such order
and manner as Mortgagee may in its absolute discretion determine. No remedy
herein conferred upon or reserved to Mortgagee is intended to be exclusive of
any other remedy herein or by law provided or permitted, but each shall be
cumulative and shall be in addition to every other remedy given hereunder or now
or hereafter existing at law or in equity or by statute. Every power or remedy
given to Mortgagee or to which it may be otherwise entitled, may be exercised,
concurrently or independently, from time to time and as often as may be deemed
expedient by Mortgagee and it may pursue inconsistent remedies.
5.06 Curative Periods. Mortgagor shall have a ten (10) day grace period
from each respective due date in which to make any periodic installment of
principal or interest required under the terms of the Note. Additionally, unless
a shorter period is otherwise set forth herein, Mortgagor shall have thirty (30)
days after receipt of written notice from Mortgagee in which to cure any
non-monetary Event of Default expressly excluding voluntary or involuntary
bankruptcy proceedings filed by or against the Mortgagor and/or judgments
rendered against the Mortgagor, which in the aggregate exceed $200,000.00.
ARTICLE VI
MISCELLANEOUS
6.01 Corporate Existence. So long as the Mortgaged Property shall be owned
or held by a corporation, such corporation shall at all times maintain its
corporate existence and shall be fully authorized to do business in the State of
Florida and shall maintain in the State of Florida a duly authorized registered
agent for the service of process. Failure to comply with such obligations shall
be a default under this Mortgage. Within ninety (90) days after the expiration
of the time for filing its annual report and the payment of the appropriate
corporate taxes in the State of Florida, Mortgagor will furnish to Mortgagee a
certificate of good standing or other evidence satisfactory to Mortgagee to show
compliance with the provisions of this Section.
6.02 Statements by Mortgagor. Mortgagor, within three (3) days after
request in person or within ten (10) days after request by mail, will furnish to
Mortgagor or any person, firm or corporation designated by Mortgagee, a duly
acknowledged written statement setting forth the amount of the debt secured by
this Mortgage, and stating either that no offsets of defenses exist against such
debt, or, if such offsets or defenses are alleged to exist, full information
with respect to such alleged offsets and/or defenses.
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<PAGE>
6.03 Successors and Assigns. The provisions hereof shall be binding upon
and shall inure to the benefit of the Mortgagor, its successors and assigns,
including without limitation subsequent owners of the Premises or the leasehold
estate of the Premises or any part thereof; shall be binding upon and shall
inure to the benefit of Mortgagee, its successors and assigns and any future
holder of the Note, and any successors or assigns of any future holder of the
Note. In the event the ownership of the Mortgaged Property or any leasehold
estate that may be covered by this Mortgage, becomes vested in a person other
than Mortgagor, Mortgagee may, without notice to Mortgagor, deal with such
successor or successors in interest with reference to this instrument and the
Note in the same manner as with the Mortgagor, and may alter the interest rate
and/or alter or extend the terms of payments of the Note without notice to
Mortgagor hereunder or under the Note hereby secured or the lien or priority of
this Mortgage with respect to any part of the Mortgaged Property covered hereby,
but nothing herein contained shall serve to relieve Mortgagor of any liability
under the Note or this Mortgage (or any other agreement executed in conjunction
therewith) unless Mortgagee shall expressly release Mortgagor in writing.
Mortgagor and any transferee or assignee shall be jointly and severally liable
for any documentary or intangible taxes imposed as a result of any transfer or
assumption.
6.04 Notices. All notices, demands and requests given by either party
hereto to the other party shall be in writing. All notices, demands and requests
by the Mortgagee to the Mortgagor shall be deemed to have been properly given if
sent by United States registered or certified mail, postage prepaid, addressed
to the Mortgagor at the address as the Mortgagor may from time to time designate
by written notice to the Mortgagee, given as herein required. All notices,
demands and requests by the Mortgagor to the Mortgagee shall be deemed to have
been properly given if sent by United States registered or certified mail,
postage prepaid, addressed to the Mortgagee, or to such other address as the
Mortgagee may from time to time designate by written notice to the Mortgagor
given as herein required. Notices, demands and requests given in the manner
aforesaid shall be deemed sufficiently served or given for all purposes
hereunder at the time such notice, demand or request shall be deposited in any
post office or branch post office regularly maintained by the United States
Government.
The Mortgagor shall deliver to the Mortgagee, promptly upon
receipt of same, copies of all notices, certificates, documents and instruments
received by it which materially affect any part of the Mortgaged Property
covered hereby, including, without limitation, notices, notices from any lessee
or sublessee claiming that the Mortgagor is in default under any terms of any
lease or sublease.
6.05 Modifications In Writing. This Mortgage may not be changed,
terminated or modified orally or in any other manner than by an instrument in
writing signed by the party against whom enforcement is sought.
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<PAGE>
6.06 Captions. The captions or headings at the beginning of each Section
hereof are for the convenience of the parties and are not a part of this
Mortgage.
6.07 Invalidity of Certain Provisions. If the lien of this Mortgage is
invalid or unenforceable as to any part of the debt, or if the lien is invalid
or unenforceable as to any part of the Mortgaged Property, the unsecured portion
of the debt shall be completely paid prior to the payments of the secured
portion of the debt, and all payments made on the debt, whether voluntary or
otherwise, shall be considered to have been first paid on and applied to the
full payment of that portion of the debt which is not secured or fully secured
by the lien of this Mortgage.
6.08 No Merger. If both the lessor's and lessee's estates under any lease
or any portion thereof which constitutes a part of the Mortgaged Property shall
at any time become vested in one owner, this Mortgage and the lien created
hereby shall not be destroyed or terminated by application of the doctrine of
merger and, in such event, Mortgagee shall continue to have and enjoy all of the
rights and privileges of Mortgagee as to the separate estates. In addition, upon
the foreclosure of the lien created by this Mortgage on the Mortgaged Property
pursuant to the provisions hereof, any leases or subleases then existing and
created by Mortgagor shall not be destroyed or terminated by application of the
law of merger or as a result of such foreclosure sale shall so elect. No act by
or on behalf of Mortgagee or any such purchaser shall constitute a termination
of any lease or sublease unless Mortgagee or such purchaser shall give written
notice thereof to such tenant or subtenant.
6.09 Governing Law and Construction of Clauses. This Mortgage shall be
governed and construed by the laws of the State of Florida. No act of the
Mortgagee shall be construed as an election to proceed under any one provision
of the Mortgage or of the applicable statutes of the State of Florida to the
exclusion of any other such provision, anything herein or otherwise to the
contrary notwithstanding. The venue for any action arising out of this Mortgage,
the Loan Agreement, and any other Loan Document or matters related hereto shall
be in a court of competent jurisdiction in Palm Beach or Broward County,
Florida.
6.10 Transfer. It shall be an Event of Default hereunder if any part of
the property encumbered by this Mortgage, or any interest therein, is sold,
conveyed, encumbered or otherwise transferred by the Mortgagor, without
Mortgagee's prior written consent.
6.11 Books and Records. Mortgagor and the Guarantors of Mortgagor, if any,
shall furnish annually to Mortgagee complete, true and accurate books of
accounts and records reflecting the results of the operation of the Mortgaged
Property. Mortgagor shall also furnish to Mortgagee within one hundred twenty
(120) days after the end of each fiscal year of Mortgagor, fiscal year end
audited income statements, balance sheets, cash flow analysis, projections, tax
returns, contingent liability statements, and a Quarterly Financial Presentation
which shall be certified as true and correct by an
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<PAGE>
officer of Mortgagor. The Quarterly Financial Presentation shall include the
following schedules for Borrower and its subsidiaries:
(1) Consolidated Balance Sheets;
(2) Consolidated Statement of Operations;
(3) Consolidated Statement of Cash Flows;
(4) Interest, Rental and Other Income Schedule;
(5) Net Inventories Schedule;
(6) Consolidated Statement of Operations By Quarters, one page
schedule for applicable period;
(7) Cost of Houses and Condominiums Sold;
(8) Selling, General and Administrative Expenses;
(9) Operations Earnings Analysis - Current Period;
(10) Operations Earnings Analysis - Prior Year;
(11) Report of New Contracts, Closings and Backlog of Houses and
Condominiums;
(12) Estimated Cost of Completion Included in Inventories; and
(13) Houses/Condominiums Completed or Under Construction.
6.12 Financial Statements. If requested by Mortgagee, Mortgagor will
within one hundred twenty (120) days after the end of each fiscal year, furnish
to Mortgagee annual tax returns and K-1's Schedules, together with a complete
financial statement including profit and loss and income and expense statements,
balance sheet and reconciliation of surplus which statement shall, at
Mortgagee's option, prepared by the certified public accountant regularly
serving the Mortgagor. All costs shall be paid by Mortgagor. Notwithstanding the
foregoing, Mortgagor may deliver its tax returns to Mortgagee when Mortgagor
delivers its tax returns to the Internal Revenue Service.
6.13 Other Indebtedness Secured. This Mortgage is also given as security
for any and all other sums, indebtedness, obligations and liabilities of any and
every kind now or hereafter during the term hereof owing and to become due from
Mortgagor to Mortgagee, however created, incurred, evidenced, acquired or
arising, whether under the Note or this Mortgage, or any other instrument,
obligation, contract, agreement or dealing of any and every kind now or
hereafter existing or entered into between Mortgagor and Mortgagee, or
otherwise, as amended, modified or supplemented from time to time, and whether
direct, indirect, primary, secondary, fixed or contingent, and any and all
renewals, modifications or extensions of any or all of the foregoing.
6.14 Additional Provisions if checked - see addendum.
X
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<PAGE>
WAIVER OF JURY TRIAL. MORTGAGOR HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY
WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION
BASED ON THIS MORTGAGE, OR ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS
MORTGAGE OR ANY AGREEMENT CONTEMPLATED TO BE EXECUTED IN CONNECTION WITH THIS
MORTGAGE, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER
VERBAL OR WRITTEN) OR ACTIONS OF ANY PARTY WITH RESPECT HERETO. THIS PROVISION
IS A MATERIAL INDUCEMENT FOR THE MORTGAGEE'S ACCEPTING THIS MORTGAGE FROM
MORTGAGOR.
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<PAGE>
IN WITNESS WHEREOF, Mortgagor has hereunto set hand and seal all done as
of the day and year first hereinabove written.
Signed, Sealed & Delivered in the Presence of:
- ------------------------------
ORIOLE HOMES CORP., a Florida
Print Name: __________________________
corporation
- ------------------------------
Print Name: __________________________ By:__________________________________
Mark A. Levy, President
("MORTGAGOR")
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<PAGE>
STATE OF FLORIDA )
)SS.
COUNTY OF _________ )
The foregoing instrument was acknowledged before me this ___ day of December,
1998, by Mark A. Levy, as President of ORIOLE HOMES CORP., a Florida
corporation, on behalf of the corporation. He is personally known to me or has
produced _____________________ (type of identification) as identification.
---------------------------------------
NOTARY PUBLIC, STATE OF FLORIDA
Printed Name:_________________________
My Commission Expires:________________
[Notary Seal]
My Commission No.:_____________________
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<PAGE>
ADDENDUM
--------
THIS ADDENDUM TO MORTGAGE AND SECURITY AGREEMENT ("Addendum") is entered
into simultaneously with that certain Mortgage and Security Agreement
("Mortgage") executed by ORIOLE HOMES CORP., a Florida corporation ("Mortgagor"
or "Borrower") in favor of FIRST UNION NATIONAL BANK, ("Mortgagee" or "Lender")
and is attached to said Mortgage.
1. Loan Documents. Mortgagor covenants to comply with and abide by each of
the stipulations, agreements, conditions and covenants contained in this
Mortgage, the Note, the Loan Agreement, the Loan Commitment (as hereinafter
defined) and in all other loan documents executed in connection therewith
(collectively, the "Loan Documents"). A default or delinquency under this
Mortgage after any applicable grace period shall automatically and immediately
constitute a default under the Note and under all other Loan Documents due to
which default Mortgagee may exercise all of its remedies thereunder (including
any other credit facility extended by Lender to Borrower). A default or
delinquency under the Note or under any other Loan Document (including any other
credit facility extended by Lender to Borrower) after any applicable grace
period shall automatically and immediately constitute a default under this
Mortgage due to which default Mortgagee may exercise all of its remedies
hereunder.
2. Mortgagee's Option to Cure. In the event the Mortgagor fails to pay any
charges or obligations required to be paid by the Mortgagor under the Mortgage
or this Addendum within the time set forth for such payment, the Mortgagee shall
have the right to pay such charge or obligation without waiving or affecting the
option of the Mortgagee to consider this Mortgage in default pursuant to Article
V of the Mortgage. Every such payment shall be deemed to be added the principal
of the Indebtedness, shall be secured by this Mortgage and shall be due and
payable on demand with interest at the rate set forth in the Note applicable to
a period when default exists thereunder.
3. Additional Financing. The obtaining of any additional financing secured
by the Mortgaged Property, or any part thereof, or any other encumbrance of the
Mortgaged Property, or any part thereof, including, without limitation, the
liens of unpaid real and personal taxes, and liens imposed by governmental or
quasi-governmental authority and also any "wraparound" financing, without the
prior written consent of the Mortgagee, shall constitute a material default and
an Event of Default under this Mortgage and Mortgagee may, at Mortgagee's
option, enforce any and all of Mortgagee's rights and remedies set forth in this
Mortgage.
4. Compliance with Loan Commitment. The Mortgagor shall timely comply
with, abide by and perform all of the terms and conditions of that certain
letter of commitment between the Mortgagor and the Mortgagee, dated December 11,
1998, as amended by that letter dated December 14, 1998, the terms of which are
incorporated herein by reference, including all attachments and
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<PAGE>
exhibits (the "Loan Commitment"), on its part to be complied with, abided by and
performed. In the event of any conflict between the terms of the Loan Commitment
and this Mortgage, the terms of this Mortgage shall control and govern.
5. Mechanics'/Materialmen's Liens. Mortgagor shall not permit any
mechanics', laborers' or materialmen's liens to stand against the Mortgaged
Property. If any such lien shall at any time be recorded against the Mortgaged
Property, then Mortgagor shall (A) give written notice thereof promptly to
Mortgagee; and (B) cause the same to be discharged of record within ten (10)
days after receipt of notice of same, either by payment, deposit or bond. If
Mortgagor fails to discharge any such lien within such period, the Mortgagee, in
addition to any other right or remedy hereunder, shall have the option (but not
the obligation) to procure the discharge of such lien either by depositing the
amount claimed to be due in court, or by bonding. Any amount paid or deposited
by Mortgagee to discharge such lien, and all costs and other expenses, including
all reasonable attorneys' fees and paralegals' fees, including any sales or
service tax due and payable upon the attorneys' fees and paralegals' fees,
incurred in defending any action to foreclose such lien, shall be deemed a part
of the Indebtedness, shall be due and payable, without demand, immediately, and
shall be payable with interest from the date of the advance thereof at the rate
set forth in the Note applicable to a period when default exists thereunder.
6. Loan Agreement. The Mortgagor will cause the improvements specified in
the Construction Loan Agreement dated on even date herewith executed by the
Mortgagor ("Loan Agreement") to be constructed in accordance with all of the
terms, provisions and conditions of the Loan Agreement, will pursue such
construction with due diligence and complete same on or before the date of
completion specified in the Loan Agreement, will comply with all the covenants
made by it in the Loan Agreement and will permit no default to occur thereunder.
Reference is made herein to the Loan Agreement for all purposes to the same
extent and effect as if the Loan Agreement was fully set forth herein and made a
part of this Mortgage.
In the event of the Mortgagor's failure to carry on or complete
construction or other default of the Mortgagor under the Loan Agreement and
whether or not the Mortgagee shall cause the indebtedness to become immediately
due and payable, the Mortgagee, after due notice to the Mortgagor, is hereby
vested with full and complete authority to enter upon the Mortgaged Property to
employ watchmen to protect the Mortgaged Property from depredation or injury and
to preserve and protect the personal property therein, to continue any and all
outstanding contracts for erection and completion of the improvements on the
Mortgaged Property, to make and enter into any contracts and obligations
wherever necessary, either in its own name as Mortgagee hereunder or in the name
of the Mortgagor, and pay and discharge all debts, obligations and liabilities
incurred thereby. All sums so advanced by the Mortgagee (exclusive of advances
of the principal of the indebtedness) shall be added to the principal of the
indebtedness, shall be secured by this Mortgage and shall be due and payable on
demand with interest at the rate set forth in the Promissory Note applicable to
a period when default exists thereunder.
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<PAGE>
7. Relief From Automatic Stay. Mortgagor hereby agrees that, in
consideration of the recitals and mutual covenants contained herein, and for
other good and valuable consideration, including the forbearance of Mortgagee
from exercising its rights and remedies otherwise available to it under the Loan
documents, as hereby amended, the receipt and sufficiency of which are hereby
acknowledged, in the event Mortgagor shall (i) file with any bankruptcy court of
competent jurisdiction or be the subject of any petition under Title 11 of the
U.S. Code, as amended, (ii) be the subject of any order for relief issued under
such Title 11 of the U.S. Code, as amended, (iii) file or be the subject of any
petition seeking any reorganization, arrangement, composition, readjustment,
liquidation, dissolution, or similar relief under any present or future federal
or state act or law relating to bankruptcy, insolvency or other relief for
debtors, (iv) have sought or consented to or acquiesced in the appointment of
any trustee, receiver, conservator or liquidator, (v) be the subject of any
order, judgment or decree entered by any court of competent jurisdiction
approving a petition filed against such party for any reorganization,
arrangement, composition, readjustment, liquidation, dissolution or similar
relief under any present or future federal or state act or law relating to
bankruptcy, insolvency or relief for debtors, Mortgagee shall thereupon be
entitled to relief from any automatic stay imposed by Section 362 of Title 11 of
the U.S. Code, as amended, or otherwise, on or against the exercise of the
rights and remedies otherwise available to Mortgagee as provided in the Loan
Documents, as hereby amended, and as otherwise provided by law.
8. Partial Releases. The Mortgagor shall be required to repay principal
amounts outstanding under the Note from the proceeds of the sale of Houses (as
defined in the Loan Agreement). The Mortgagee shall release each House from the
lien operation and effect of the Mortgage upon Mortgagee's receipt of
$42,000.00, which sum shall be allocated against the amounts outstanding under
the Acquisition Note, together with 100% of all monies funded by Mortgagee
towards all hard and soft construction costs and interest carry for the
particular House for which a release is requested which sum shall be allocated
against the amounts funded under the Construction Note (hereinafter referred to
as "Release Price"). The Release Price shall be utilized to repay the principal
amount outstanding under the Note. If Mortgagor pays the principal reduction
payment of Six Hundred Eighty-Eight Thousand Four Hundred and 00/100 U.S.
Dollars ($688,400.00) due under the Acquisition Note within ninety (90) days
after the date the Acquisition Note is funded, then the Release Price shall be
reduced from Forty-Two Thousand and 00/100 U.S. Dollars ($42,000.00) to
Thirty-Three Thousand 00/100 U.S. Dollars ($33,000.00). If, upon the execution
hereof, the principal amount funded under the Acquisition Note is not greater
than Three Million Sixty-One Thousand Six Hundred and 00/100 U.S. Dollars
($3,061,600.00), then the Release Price as of the date hereof shall be
Thirty-Three Thousand and 00/100 U.S. Dollars ($33,000.00). In addition,
Mortgagor shall pay accrued but unpaid interest. The Mortgagor shall be
responsible for paying all of Mortgagee's expenses and costs incurred in
connection with the release of Houses from the lien operation and effect of the
Mortgage.
9. Management/Marketing Firm. In an Event of Default hereunder, Mortgagee
has the right to review and approve any property management firm and/or
marketing firm selected by
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<PAGE>
Mortgagor with respect to the Mortgaged Property. Mortgagor shall not substitute
management or marketing firms, or change the terms of said agreement(s), without
Lender's prior written consent, which shall not be unreasonably withheld or
delayed.
10. Indemnification. The Mortgagor has read and does hereby approve the
legal description of the Property which is the subject of this Mortgage, as set
forth in Exhibit "A" attached hereto and incorporated by reference herein, and
hereby agrees to indemnify the Mortgagee and its attorneys with respect to any
liability which might arise as a consequence of Section 697.10 of the Florida
Statutes. Furthermore, Mortgagor shall indemnify Mortgagee with respect to any
and all liability or damages which may arise out of any development work
existing and previously completed on the Mortgaged Property, whether or not
inspected by Mortgagee or Palm Beach County, and any requirements that Palm
Beach County may impose subsequent to the Closing, including, but not limited
to, correcting any defects which Palm Beach County may require upon inspection
of the Mortgaged Property and the Improvements to be constructed thereon.
11. Cross Default. In the event that Mortgagor shall be in default with
respect to this Mortgage, the Loan Agreement, the L/C Facility and the loan
evidenced by the Note, then Mortgagor hereunder shall be deemed in default with
respect to all loans from Mortgagee to Mortgagor. In the event Mortgagor shall
be in default with respect to any loan whatsoever from Mortgagee, then Mortgagor
hereunder shall be deemed to be in default with respect to this Mortgage and the
loan evidenced by the Note.
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<PAGE>
IN WITNESS WHEREOF, Mortgagor has hereunto set hand and seal all done
simultaneously with the execution of the Mortgage.
- - 231 - -
<PAGE>
Signed, Sealed & Delivered in the Presence of:
- ------------------------------
ORIOLE HOMES CORP., a Florida
Print Name: __________________________
corporation
- ------------------------------
Print Name: __________________________ By:__________________________________
Mark A. Levy, President
("MORTGAGOR")
STATE OF FLORIDA )
)SS.
COUNTY OF _________ )
The foregoing instrument was acknowledged before me this ___ day of
December, 1998, by Mark A. Levy, as President of ORIOLE HOMES CORP., a Florida
corporation, on behalf of the corporation. He is personally known to me or has
produced _____________________ (type of identification) as identification.
---------------------------------------
NOTARY PUBLIC, STATE OF FLORIDA
Printed Name:_________________________
My Commission Expires:________________
[Notary Seal]
My Commission No.:_____________________
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<PAGE>
EXHIBIT "A"
-----------
(Legal Description)
To be determined
- - 233 - -
<PAGE>
EXHIBIT "B"
-----------
(a) all easements and other rights now or hereafter made appurtenant to
the real property described on Exhibit "A" ("Real Property");
(b) all goods, inventory, intangible personal property, licenses
(including without limitation, liquor licenses), apparatus, machinery,
equipment, furnishings, fixtures, fittings, appliances and air conditioning and
heating equipment, furniture, freezing equipment, and other property of every
kind and nature whatsoever owned by Mortgagor/Debtor, or in which
Mortgagor/Debtor has or shall have an interest, now or hereafter located upon
the Real Property, or appurtenant thereto, and usable in connection with the day
to day operation of the Real Property, and the right, title and interest of
Mortgagor/Debtor in and to any of the equipment located upon the Real Property,
which may be subject to any security agreements (as defined in the Uniform
Commercial Code);
(c) all awards or payments, including interest thereon, which may be made
with respect to the Real Property, whether from the exercise of the right of
eminent domain (including any transfer made in lieu of the exercise of said
right), or for any other injury to or decrease in the value of the Real
Property;
(d) all leases and other agreements affecting the use or occupancy of the
Real Property now or hereafter entered into and the right to receive and apply
the rents, issues and profits of the Real Property, and any security deposits
paid in connection therewith;
(e) all rights of Mortgagor/Debtor in and to all present and future fire,
flood, liability and/or hazard insurance policies pertaining to all or any
portion of the Real Property and/or any items covered by this instrument,
including without limitation any unearned premiums and all insurance proceeds or
sums payable in lieu of or as compensation for the loss of or damage to all or
any portion of the Real Property and/or any items covered by this instrument;
(f) the right (but not the obligation), in the name and on behalf of
Mortgagor/Debtor, to appear in and defend any action or proceeding brought with
respect to the Real Property and to commence any action or proceeding to protect
the interest of the Mortgagee/Secured Party in the Real Property;
(g) all tenements, hereditaments, easements, riparian or other rights and
appurtenances thereunto belonging or in any wise appertaining, including all
right, title and interest of Mortgagor/Debtor in and to the underlying title of
any roads or other dedicated area abutting the Real Property, and the
reversions, remainders, rents, issues and profits thereof, and all
after-acquired title of Mortgagor/Debtor in the Real Property;
- - 1 - -
<PAGE>
(h) all abstracts of title, contract rights, management, franchise and
service agreements, accounts, occupancy permits and licenses, building and other
permits, governmental approvals, licenses, agreements with utilities companies,
water and sewer capacity reservation agreements, bonds, governmental
applications and proceedings, feasibility studies, maintenance and service
contracts, marketing agreements, development agreements, surveys, engineering
work, architectural plans and engineering plans, site plans, landscaping plans,
engineering contracts, architectural contracts, and all other contracts
respecting the Real Property and all other consents, approvals and agreements
which Mortgagor/Debtor may now or hereafter own in connection with the Real
Property and/or any improvements constructed thereon, and all deposits, down
payments and profits paid or deposited thereunder, now existing or hereafter
obtained by or on behalf of Mortgagor/Debtor;
(i) all sanitary and storm sewer, water and utility service agreements
within the Real Property as to which Mortgagor/Debtor is a party or beneficiary;
(j) all building materials, appliances and fixtures now owned or hereafter
to be acquired by or on behalf of Mortgagor/Debtor and intended for use in the
construction of or incorporated, annexed to, or located in, or to be
incorporated in, annexed to, or located in the buildings and improvements to be
constructed on the Real Property or any part thereof. Said materials and
personal property shall include but not be limited to lumber, plaster, cement,
shingles, roofing, plumbing fixtures, pipe, lath, wallboard, cabinets, nails,
sinks, toilets, furnaces, heaters, brick, tile, water heaters, screens, window
frames, glass doors, flooring, paint, lighting fixtures and unattached
refrigerating, cooking, heating and ventilating appliances and equipment,
kitchen goods, hotel goods, restaurant goods, bar goods, tools, lawn equipment,
floor coverings;
(k) any monies and any escrow accounts established or accrued pursuant to
that certain Mortgage encumbering the Real Property made by Mortgagor/Debtor in
favor of Mortgagee/Secured Party;
(l) any property or other things of value acquired with or paid for by any
future advances pursuant to the said Mortgage;
(m) all contracts of sale and purchase agreements respecting the Real
Property, all contracts for deed and any notes and mortgages executed and
delivered to Mortgagor/Debtor in connection with any contracts for deed
otherwise, and any other contracts entered into by Mortgagor/Debtor respecting
or relating in any manner to the Real Property;
(n) all income and profits due or to become due under any contracts of
sale or purchase agreements respecting the Real Property, now existing or
hereafter obtained by or on behalf of Mortgagor/Debtor;
- - 2 - -
<PAGE>
(o) all refunds of property taxes relating to the Real Property or any
other property covered by this financing statement;
(p) all accounts receivable arising from operations conducted at the Real
Property;
(q) all of the water, sanitary and storm sewer systems now or hereafter
owned by the Mortgagor/Debtor which are now or hereafter located by, over, or
upon the Real Property or any part or parcel thereof, and which water system
includes all water mains, service laterals, hydrants, valves and appurtenances,
and which sewer system includes all sanitary sewer lines, including mains,
laterals, manholes and appurtenances;
(r) all of the right, title and interest of the Mortgagor/Debtor in and to
any copyrights, trademarks, service marks, trade names, names of businesses, or
fictitious names of any kind used in conjunction with the operation of any
business or endeavor located on the Real Property;
(s) all of Mortgagor/Debtor's interest in all utility security deposits or
bonds on the Real Property or any part or parcel thereof;
(t) any and all balances, credits, deposits, accounts or monies of the
Mortgagor/Debtor and all guarantors and all other such properties and securities
then or thereafter established with or in the possession of the
Mortgagee/Secured Party; and
(u) all warranties, guaranties, instruments, documents, chattel papers and
general intangibles relating to or arising from the foregoing collateral, now
owned or hereafter acquired by Mortgagor/Debtor.
(v) all rights of Mortgagor/Debtor under the terms and conditions of any
Master Swap Agreement which may be in effect from time to time.
Together with all substitutions for, alterations, repairs and replacements
of any of the foregoing and any and all proceeds (whether cash proceeds or
non-cash proceeds), products, renewals, accessions and additions or any of the
foregoing.
- - 3 - -
<PAGE>
Exhibit 10.15
INCENTIVE STOCK OPTION AGREEMENT
OF
ORIOLE HOMES CORP.
AGREEMENT dated this14th day of May, 1996, between Oriole Homes Corp., a
Florida corporation (hereinafter called the "Company"), and Richard D. Levy
(hereinafter called the "Employee").
W I T N E S S E T H:
--------------------
WHEREAS, the Company desires to grant Employee a proprietary interest in
the Company in order to increase his/her efforts on its behalf; and
WHEREAS, the Company has this day granted to the Employee an option to
purchase the number of shares of Class B Common Stock, par value $.10 per share,
of the Company, and at the option price, all as hereinafter stated, such option
to be exercisable not more than five (5) years after the date hereof; and
WHEREAS, the Employee is willing to accept said option and to be bound by
the terms and conditions thereof; and
WHEREAS, the execution and delivery of this Agreement has been duly
authorized by the Board of Directors of the Company;
NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants herein contained and other good and valuable considerations, the
receipt whereof is hereby acknowledged, the parties hereto, intending to be
legally bound hereby, agree as follows:
GRANT OF OPTION; ADJUSTMENT
OF SHARES COVERED BY OPTION
1.1 The Company hereby grants to the Employee an option to purchase from
the Company, upon the terms and conditions hereinafter set forth, 3,500 shares
of Class B Common Stock, par value $.10 per share, of the Company, for a
consideration of $7.625 per share.
- 4 -
<PAGE>
1.2 The number of shares of Common Stock above stated, and the purchase
price thereof, shall be subject to adjustment from time to time as provided
herein.
PAYMENT FOR SHARES
------------------
2.1 The option price of the shares to be purchased pursuant to each
exercise of the within option shall be paid to the Company by the Employee in
full, in cash or check or in whole or in part by:
a. transfer to the Company of shares of Class A or Class B Common Stock
having a Fair Market Value equal to the option exercise price at the time of
such exercise; or
b. delivery of instructions to the Company to withhold from the option
shares that would otherwise be issued on the exercise that number of option
shares having a Fair Market Value equal to the option exercise price at the time
of such exercise. If the Fair Market Value of the number of whole shares
transferred or the number of whole option shares surrendered is less than the
total exercise price of the option, the shortfall must be made up in cash or
check.
EXERCISE OF OPTION
------------------
3.1 The within option may be exercised during the lifetime of the Employee
and in whole or in part at any time after May 14, 1998 and thereafter until on
or before May 14, 2001.
3.2 At least twenty days prior to the date upon which all or any portion
of the within option is to be exercised, the person entitled to exercise the
option shall deliver to the Company written notice of his/her election to
exercise all or part of the option, which notice shall specify the date and time
for the exercise of the option and the number of shares in respect to which the
option is to be exercised. The date specified in such notice shall be a business
day and the time specified shall be during the regular business hours of the
Company.
3.3 The person entitled to exercise the option shall, at the date and time
specified in such notice, pay to the Company the consideration set forth in
Section 2 hereof at the principal office of the Company, the option price of the
shares in respect of which the option is being exercised, and contemporaneously,
or as soon thereafter as is practical, the Company shall deliver to the person
- 5 -
<PAGE>
entitled to exercise the option, registered in the name of such person,
certificates representing the number of shares of stock or other securities in
respect of which the option is being exercised.
EMPLOYMENT OF EMPLOYEE
----------------------
4. If the services of Employee are terminated for any reason on or prior
to May 14, 2001, the Company has the right to redeem the shares that have been
acquired at the exercise price. If such right of redemption is not exercised
within thirty (30) days from the termination date, the Company's rights of
redemption shall have no further force or effect.
RESTRICTIONS ON EXERCISE OF OPTION
AND SALE OF STOCK BY EMPLOYEE
-----------------------------
5. Unless the option and shares acquired upon the exercise of the option
are registered under the Securities Act of 1933, as amended (the "Securities
Act"), the Employee hereby represents and warrants to the Company that any and
all shares of Class B Common Stock which shall be acquired pursuant to the
exercise of the option shall be acquired for the Employee's own account and not
for the account or beneficial interest of any other person or entity, that such
shares of Class B Common Stock shall be acquired for the Employee's own
investment and that the shares of Class B Common Stock shall not be acquired
with a view to or for resale in connection with the distribution of all or any
part thereof. Furthermore, the Employee agrees that any shares of Class B Common
Stock so acquired will bear an appropriate legend to signify their restriction
under the applicable securities laws and that "stop-transfer" instructions will
be given to the Company's transfer agent.
The Employee agrees to be subject to and bound by any other restrictions
imposed by, or which the Company believes to be necessary or advisable to comply
with, any Federal or State securities laws, including but not limited to
restrictions governing the time and circumstances or disposition of the shares
being acquired by exercise of such option.
- 6 -
<PAGE>
NO RIGHTS AS SHAREHOLDER
OR TO CONTINUED EMPLOYMENT
6. The Employee shall not have any rights as a shareholder of the Company
with respect to any shares of Class B Common Stock prior to the date of issuance
to the Employee of the certificate or certificates for such shares and the grant
of the option does not confer to the Employee any right to be employed by the
Company and will not interfere in any way with the right of the Company to
terminate the employment of the Employee.
NO SECURITIES ACT
REGISTRATION OBLIGATION
-----------------------
7. The Company shall have no obligation to the Employee to register the
Common Stock under the Securities Act.
MISCELLANEOUS
8.1 This Agreement shall be binding upon and inure to the benefit of the
Company and its successors and the Employee and his executors and/or
administrators, provided that the within option shall be nontransferable by the
Employee otherwise than by will or by the laws of descent and distribution, and
during the lifetime of the Employee the option shall be exercisable only by him.
8.2 In the event there are any changes in the Class B Common Stock of the
Company through merger, consolidation, recapitalization, stock dividend or other
change in the corporate or capital structure of the Company, appropriate
adjustments, as may seem equitable to the Board of Directors of the Company,
shall be made in the number of shares and the exercise price per share of the
options to prevent dilution of the rights granted hereunder.
8.3 For the purposes of this Agreement, a transfer of the Employee from
the Company to a subsidiary, or vice versa, or from one subsidiary to another,
shall not be deemed a termination of employment.
8.4 This Agreement shall be deemed to be made under and shall be construed
in accordance with the laws of the State of Florida.
- 7 -
<PAGE>
8.5 This Agreement shall become effective as of the date hereof and,
unless sooner terminated, shall remain in effect for a period of five (5) years
from the date hereof. This Agreement may be terminated at any time by mutual
consent of the parties hereto, but no modification or amendment of this
Agreement shall become effective until such modification or amendment shall have
been approved by the Board of Directors of the Company.
8.6 The terms and conditions of the 1994 Stock Option Plan of Oriole Homes
Corp., as approved by Shareholders on April 5, 1994 (the "Plan") are hereby
incorporated herein by reference and if there is any conflict between this
Agreement and the Plan the provisions of the Plan shall govern.
IN WITNESS WHEREOF, the Company has caused this Stock Option Agreement to
be executed by its President or Vice President and the Employee has executed
this Agreement, the day and year first above written.
ORIOLE HOMES CORP.
By: /S/ MARK A. LEVY
--------------------
Mark A. Levy, President
/S/ RICHARD D. LEVY
-------------------
Employee
- 8 -
<PAGE>
Exhibit 10.16
INCENTIVE STOCK OPTION AGREEMENT
OF
ORIOLE HOMES CORP.
AGREEMENT dated this 14th day of May, 1996, between Oriole Homes Corp., a
Florida corporation (hereinafter called the "Company"), and Richard D. Levy
(hereinafter called the "Employee").
W I T N E S S E T H:
--------------------
WHEREAS, the Company desires to grant Employee a proprietary interest in
the Company in order to increase his/her efforts on its behalf; and
WHEREAS, the Company has this day granted to the Employee an option to
purchase the number of shares of Class B Common Stock, par value $.10 per share,
of the Company, and at the option price, all as hereinafter stated, such option
to be exercisable not more than five (5) years after the date hereof; and
WHEREAS, the Employee is willing to accept said option and to be bound by
the terms and conditions thereof; and
WHEREAS, the execution and delivery of this Agreement has been duly
authorized by the Board of Directors of the Company;
NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants herein contained and other good and valuable considerations, the
receipt whereof is hereby acknowledged, the parties hereto, intending to be
legally bound hereby, agree as follows:
GRANT OF OPTION; ADJUSTMENT
OF SHARES COVERED BY OPTION
---------------------------
1.1 The Company hereby grants to the Employee an option to purchase from
the Company, upon the terms and conditions hereinafter set forth, 3,500 shares
of Class B Common Stock, par value $.10 per share, of the Company, for a
consideration of $7.625 per share.
- 9 -
<PAGE>
1.2 The number of shares of Common Stock above stated, and the purchase
price thereof, shall be subject to adjustment from time to time as provided
herein.
PAYMENT FOR SHARES
------------------
2.1 The option price of the shares to be purchased pursuant to each
exercise of the within option shall be paid to the Company by the Employee in
full, in cash or check or in whole or in part by:
a. transfer to the Company of shares of Class A or Class B Common Stock
having a Fair Market Value equal to the option exercise price at the time of
such exercise; or
b. delivery of instructions to the Company to withhold from the option
shares that would otherwise be issued on the exercise that number of option
shares having a Fair Market Value equal to the option exercise price at the time
of such exercise. If the Fair Market Value of the number of whole shares
transferred or the number of whole option shares surrendered is less than the
total exercise price of the option, the shortfall must be made up in cash or
check.
EXERCISE OF OPTION
------------------
3.1 The within option may be exercised during the lifetime of the Employee
and in whole or in part at any time after May 14, 1998 and thereafter until on
or before May 14, 2001.
3.2 At least twenty days prior to the date upon which all or any portion
of the within option is to be exercised, the person entitled to exercise the
option shall deliver to the Company written notice of his/her election to
exercise all or part of the option, which notice shall specify the date and time
for the exercise of the option and the number of shares in respect to which the
option is to be exercised. The date specified in such notice shall be a business
day and the time specified shall be during the regular business hours of the
Company.
3.3 The person entitled to exercise the option shall, at the date and time
specified in such notice, pay to the Company the consideration set forth in
Section 2 hereof at the principal office of the Company, the option price of the
shares in respect of which the option is being exercised, and contemporaneously,
or as soon thereafter as is practical, the Company shall deliver to the person
- 10 -
<PAGE>
entitled to exercise the option, registered in the name of such person,
certificates representing the number of shares of stock or other securities in
respect of which the option is being exercised.
EMPLOYMENT OF EMPLOYEE
----------------------
4. If the services of Employee are terminated for any reason on or prior
to May 14, 2001, the Company has the right to redeem the shares that have been
acquired at the exercise price. If such right of redemption is not exercised
within thirty (30) days from the termination date, the Company's rights of
redemption shall have no further force or effect.
RESTRICTIONS ON EXERCISE OF OPTION
AND SALE OF STOCK BY EMPLOYEE
-----------------------------
5. Unless the option and shares acquired upon the exercise of the option
are registered under the Securities Act of 1933, as amended (the "Securities
Act"), the Employee hereby represents and warrants to the Company that any and
all shares of Class B Common Stock which shall be acquired pursuant to the
exercise of the option shall be acquired for the Employee's own account and not
for the account or beneficial interest of any other person or entity, that such
shares of Class B Common Stock shall be acquired for the Employee's own
investment and that the shares of Class B Common Stock shall not be acquired
with a view to or for resale in connection with the distribution of all or any
part thereof. Furthermore, the Employee agrees that any shares of Class B Common
Stock so acquired will bear an appropriate legend to signify their restriction
under the applicable securities laws and that "stop-transfer" instructions will
be given to the Company's transfer agent.
The Employee agrees to be subject to and bound by any other restrictions
imposed by, or which the Company believes to be necessary or advisable to comply
with, any Federal or State securities laws, including but not limited to
restrictions governing the time and circumstances or disposition of the shares
being acquired by exercise of such option.
- 11 -
<PAGE>
NO RIGHTS AS SHAREHOLDER
OR TO CONTINUED EMPLOYMENT
--------------------------
6. The Employee shall not have any rights as a shareholder of the Company
with respect to any shares of Class B Common Stock prior to the date of issuance
to the Employee of the certificate or certificates for such shares and the grant
of the option does not confer to the Employee any right to be employed by the
Company and will not interfere in any way with the right of the Company to
terminate the employment of the Employee.
NO SECURITIES ACT
REGISTRATION OBLIGATION
-----------------------
7. The Company shall have no obligation to the Employee to register the
Common Stock under the Securities Act.
MISCELLANEOUS
-------------
8.1 This Agreement shall be binding upon and inure to the benefit of the
Company and its successors and the Employee and his executors and/or
administrators, provided that the within option shall be nontransferable by the
Employee otherwise than by will or by the laws of descent and distribution, and
during the lifetime of the Employee the option shall be exercisable only by him.
8.2 In the event there are any changes in the Class B Common Stock of the
Company through merger, consolidation, recapitalization, stock dividend or other
change in the corporate or capital structure of the Company, appropriate
adjustments, as may seem equitable to the Board of Directors of the Company,
shall be made in the number of shares and the exercise price per share of the
options to prevent dilution of the rights granted hereunder.
8.3 For the purposes of this Agreement, a transfer of the Employee from
the Company to a subsidiary, or vice versa, or from one subsidiary to another,
shall not be deemed a termination of employment.
8.4 This Agreement shall be deemed to be made under and shall be construed
in accordance with the laws of the State of Florida.
- 12 -
<PAGE>
8.5 This Agreement shall become effective as of the date hereof and,
unless sooner terminated, shall remain in effect for a period of five (5) years
from the date hereof. This Agreement may be terminated at any time by mutual
consent of the parties hereto, but no modification or amendment of this
Agreement shall become effective until such modification or amendment shall have
been approved by the Board of Directors of the Company.
8.6 The terms and conditions of the 1994 Stock Option Plan of Oriole Homes
Corp., as approved by Shareholders on April 5, 1994 (the "Plan") are hereby
incorporated herein by reference and if there is any conflict between this
Agreement and the Plan the provisions of the Plan shall govern.
IN WITNESS WHEREOF, the Company has caused this Stock Option Agreement to
be executed by its President or Vice President and the Employee has executed
this Agreement, the day and year first above written.
ORIOLE HOMES CORP.
By: /S/ MARK A. LEVY
--------------------
Mark A. Levy, President
/S/ RICHARD D. LEVY
-------------------
Employee
- 13 -
<PAGE>
Exhibit 10.17
INCENTIVE STOCK OPTION AGREEMENT
OF
ORIOLE HOMES CORP.
AGREEMENT dated this 22nd day of February, 1995, between Oriole Homes
Corp., a Florida corporation (hereinafter called the "Company"), and Harry A.
Levy (hereinafter called the "Employee").
W I T N E S S E T H:
--------------------
WHEREAS, the Company desires to grant Employee a proprietary interest in
the Company in order to increase his/her efforts on its behalf; and
WHEREAS, the Company has this day granted to the Employee an option to
purchase the number of shares of Class B Common Stock, par value $.10 per share,
of the Company, and at the option price, all as hereinafter stated, such option
to be exercisable not more than five (5) years after the date hereof; and
WHEREAS, the Employee is willing to accept said option and to be bound by
the terms and conditions thereof; and
WHEREAS, the execution and delivery of this Agreement has been duly
authorized by the Board of Directors of the Company;
NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants herein contained and other good and valuable considerations, the
receipt whereof is hereby acknowledged, the parties hereto, intending to be
legally bound hereby, agree as follows:
GRANT OF OPTION; ADJUSTMENT
OF SHARES COVERED BY OPTION
---------------------------
1.1 The Company hereby grants to the Employee an option to purchase from
the Company, upon the terms and conditions hereinafter set forth, 3,500 shares
of Class B Common Stock, par value $.10 per share, of the Company, for a
consideration of $6.875 per share.
- 14 -
<PAGE>
1.2 The number of shares of Common Stock above stated, and the purchase
price thereof, shall be subject to adjustment from time to time as provided
herein.
PAYMENT FOR SHARES
------------------
2.1 The option price of the shares to be purchased pursuant to each
exercise of the within option shall be paid to the Company by the Employee in
full, in cash or check or in whole or in part by:
a. transfer to the Company of shares of Class A or Class B Common Stock
having a Fair Market Value equal to the option exercise price at the time of
such exercise; or
b. delivery of instructions to the Company to withhold from the option
shares that would otherwise be issued on the exercise that number of option
shares having a Fair Market Value equal to the option exercise price at the time
of such exercise. If the Fair Market Value of the number of whole shares
transferred or the number of whole option shares surrendered is less than the
total exercise price of the option, the shortfall must be made up in cash or
check.
EXERCISE OF OPTION
------------------
3.1 The within option may be exercised during the lifetime of the Employee
and in whole or in part at any time after February 22, 1997 and thereafter until
on or before February 22, 2000.
3.2 At least twenty days prior to the date upon which all or any portion
of the within option is to be exercised, the person entitled to exercise the
option shall deliver to the Company written notice of his/her election to
exercise all or part of the option, which notice shall specify the date and time
for the exercise of the option and the number of shares in respect to which the
option is to be exercised. The date specified in such notice shall be a business
day and the time specified shall be during the regular business hours of the
Company.
3.3 The person entitled to exercise the option shall, at the date and time
specified in such notice, pay to the Company the consideration set forth in
Section 2 hereof at the principal office of the Company, the option price of the
shares in respect of which the option is being exercised, and contemporaneously,
or as soon thereafter as is practical, the Company shall deliver to the person
- 15 -
<PAGE>
entitled to exercise the option, registered in the name of such person,
certificates representing the number of shares of stock or other securities in
respect of which the option is being exercised.
EMPLOYMENT OF EMPLOYEE
----------------------
4. If the services of Employee are terminated for any reason on or prior
to February 22, 2000, the Company has the right to redeem the shares that have
been acquired at the exercise price. If such right of redemption is not
exercised within thirty (30) days from the termination date, the Company's
rights of redemption shall have no further force or effect.
RESTRICTIONS ON EXERCISE OF OPTION
AND SALE OF STOCK BY EMPLOYEE
-----------------------------
5. Unless the option and shares acquired upon the exercise of the option
are registered under the Securities Act of 1933, as amended (the "Securities
Act"), the Employee hereby represents and warrants to the Company that any and
all shares of Class B Common Stock which shall be acquired pursuant to the
exercise of the option shall be acquired for the Employee's own account and not
for the account or beneficial interest of any other person or entity, that such
shares of Class B Common Stock shall be acquired for the Employee's own
investment and that the shares of Class B Common Stock shall not be acquired
with a view to or for resale in connection with the distribution of all or any
part thereof. Furthermore, the Employee agrees that any shares of Class B Common
Stock so acquired will bear an appropriate legend to signify their restriction
under the applicable securities laws and that "stop-transfer" instructions will
be given to the Company's transfer agent.
The Employee agrees to be subject to and bound by any other restrictions
imposed by, or which the Company believes to be necessary or advisable to comply
with, any Federal or State securities laws, including but not limited to
restrictions governing the time and circumstances or disposition of the shares
being acquired by exercise of such option.
- 16 -
<PAGE>
NO RIGHTS AS SHAREHOLDER
OR TO CONTINUED EMPLOYMENT
--------------------------
6. The Employee shall not have any rights as a shareholder of the Company
with respect to any shares of Class B Common Stock prior to the date of issuance
to the Employee of the certificate or certificates for such shares and the grant
of the option does not confer to the Employee any right to be employed by the
Company and will not interfere in any way with the right of the Company to
terminate the employment of the Employee.
NO SECURITIES ACT
REGISTRATION OBLIGATION
-----------------------
7. The Company shall have no obligation to the Employee to register the
Common Stock under the Securities Act.
MISCELLANEOUS
-------------
8.1 This Agreement shall be binding upon and inure to the benefit of the
Company and its successors and the Employee and his executors and/or
administrators, provided that the within option shall be nontransferable by the
Employee otherwise than by will or by the laws of descent and distribution, and
during the lifetime of the Employee the option shall be exercisable only by him.
8.2 In the event there are any changes in the Class B Common Stock of the
Company through merger, consolidation, recapitalization, stock dividend or other
change in the corporate or capital structure of the Company, appropriate
adjustments, as may seem equitable to the Board of Directors of the Company,
shall be made in the number of shares and the exercise price per share of the
options to prevent dilution of the rights granted hereunder.
8.3 For the purposes of this Agreement, a transfer of the Employee from
the Company to a subsidiary, or vice versa, or from one subsidiary to another,
shall not be deemed a termination of employment.
8.4 This Agreement shall be deemed to be made under and shall be construed
in accordance with the laws of the State of Florida.
- 17 -
<PAGE>
8.5 This Agreement shall become effective as of the date hereof and,
unless sooner terminated, shall remain in effect for a period of five (5) years
from the date hereof. This Agreement may be terminated at any time by mutual
consent of the parties hereto, but no modification or amendment of this
Agreement shall become effective until such modification or amendment shall have
been approved by the Board of Directors of the Company.
8.6 The terms and conditions of the 1994 Stock Option Plan of Oriole Homes
Corp., as approved by Shareholders on April 5, 1994 (the "Plan") are hereby
incorporated herein by reference and if there is any conflict between this
Agreement and the Plan the provisions of the Plan shall govern.
IN WITNESS WHEREOF, the Company has caused this Stock Option Agreement to
be executed by its President or Vice President and the Employee has executed
this Agreement, the day and year first above written.
ORIOLE HOMES CORP.
By: /S/ MARK A. LEVY
--------------------
Mark A. Levy, President
/S/ HARRY A. LEVY
-----------------
Employee
- 18 -
<PAGE>
Exhibit 10.18
INCENTIVE STOCK OPTION AGREEMENT
OF
ORIOLE HOMES CORP.
------------------
AGREEMENT dated this 14th day of May, 1996, between Oriole Homes Corp., a
Florida corporation (hereinafter called the "Company"), and Harry A. Levy
(hereinafter called the "Employee").
W I T N E S S E T H:
--------------------
WHEREAS, the Company desires to grant Employee a proprietary interest in
the Company in order to increase his/her efforts on its behalf; and
WHEREAS, the Company has this day granted to the Employee an option to
purchase the number of shares of Class B Common Stock, par value $.10 per share,
of the Company, and at the option price, all as hereinafter stated, such option
to be exercisable not more than five (5) years after the date hereof; and
WHEREAS, the Employee is willing to accept said option and to be bound by
the terms and conditions thereof; and
WHEREAS, the execution and delivery of this Agreement has been duly
authorized by the Board of Directors of the Company;
NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants herein contained and other good and valuable considerations, the
receipt whereof is hereby acknowledged, the parties hereto, intending to be
legally bound hereby, agree as follows:
GRANT OF OPTION; ADJUSTMENT
OF SHARES COVERED BY OPTION
---------------------------
1.1 The Company hereby grants to the Employee an option to purchase from
the Company, upon the terms and conditions hereinafter set forth, 3,500 shares
of Class B Common Stock, par value $.10 per share, of the Company, for a
consideration of $7.625 per share.
- 19 -
<PAGE>
1.2 The number of shares of Common Stock above stated, and the purchase
price thereof, shall be subject to adjustment from time to time as provided
herein.
PAYMENT FOR SHARES
------------------
2.1 The option price of the shares to be purchased pursuant to each
exercise of the within option shall be paid to the Company by the Employee in
full, in cash or check or in whole or in part by:
a. transfer to the Company of shares of Class A or Class B Common Stock
having a Fair Market Value equal to the option exercise price at the time of
such exercise; or
b. delivery of instructions to the Company to withhold from the option
shares that would otherwise be issued on the exercise that number of option
shares having a Fair Market Value equal to the option exercise price at the time
of such exercise. If the Fair Market Value of the number of whole shares
transferred or the number of whole option shares surrendered is less than the
total exercise price of the option, the shortfall must be made up in cash or
check.
EXERCISE OF OPTION
------------------
3.1 The within option may be exercised during the lifetime of the Employee
and in whole or in part at any time after May 14, 1998 and thereafter until on
or before May 14, 2001.
3.2 At least twenty days prior to the date upon which all or any portion
of the within option is to be exercised, the person entitled to exercise the
option shall deliver to the Company written notice of his/her election to
exercise all or part of the option, which notice shall specify the date and time
for the exercise of the option and the number of shares in respect to which the
option is to be exercised. The date specified in such notice shall be a business
day and the time specified shall be during the regular business hours of the
Company.
3.3 The person entitled to exercise the option shall, at the date and time
specified in such notice, pay to the Company the consideration set forth in
Section 2 hereof at the principal office of the Company, the option price of the
shares in respect of which the option is being exercised, and contemporaneously,
or as soon thereafter as is practical, the Company shall deliver to the person
- 20 -
<PAGE>
entitled to exercise the option, registered in the name of such person,
certificates representing the number of shares of stock or other securities in
respect of which the option is being exercised.
EMPLOYMENT OF EMPLOYEE
----------------------
4. If the services of Employee are terminated for any reason on or prior
to May 14, 2001, the Company has the right to redeem the shares that have been
acquired at the exercise price. If such right of redemption is not exercised
within thirty (30) days from the termination date, the Company's rights of
redemption shall have no further force or effect.
RESTRICTIONS ON EXERCISE OF OPTION
AND SALE OF STOCK BY EMPLOYEE
-----------------------------
5. Unless the option and shares acquired upon the exercise of the option
are registered under the Securities Act of 1933, as amended (the "Securities
Act"), the Employee hereby represents and warrants to the Company that any and
all shares of Class B Common Stock which shall be acquired pursuant to the
exercise of the option shall be acquired for the Employee's own account and not
for the account or beneficial interest of any other person or entity, that such
shares of Class B Common Stock shall be acquired for the Employee's own
investment and that the shares of Class B Common Stock shall not be acquired
with a view to or for resale in connection with the distribution of all or any
part thereof. Furthermore, the Employee agrees that any shares of Class B Common
Stock so acquired will bear an appropriate legend to signify their restriction
under the applicable securities laws and that "stop-transfer" instructions will
be given to the Company's transfer agent.
The Employee agrees to be subject to and bound by any other restrictions
imposed by, or which the Company believes to be necessary or advisable to comply
with, any Federal or State securities laws, including but not limited to
restrictions governing the time and circumstances or disposition of the shares
being acquired by exercise of such option.
- 21 -
<PAGE>
NO RIGHTS AS SHAREHOLDER
OR TO CONTINUED EMPLOYMENT
--------------------------
6. The Employee shall not have any rights as a shareholder of the Company
with respect to any shares of Class B Common Stock prior to the date of issuance
to the Employee of the certificate or certificates for such shares and the grant
of the option does not confer to the Employee any right to be employed by the
Company and will not interfere in any way with the right of the Company to
terminate the employment of the Employee.
NO SECURITIES ACT
REGISTRATION OBLIGATION
-----------------------
7. The Company shall have no obligation to the Employee to register the
Common Stock under the Securities Act.
MISCELLANEOUS
-------------
8.1 This Agreement shall be binding upon and inure to the benefit of the
Company and its successors and the Employee and his executors and/or
administrators, provided that the within option shall be nontransferable by the
Employee otherwise than by will or by the laws of descent and distribution, and
during the lifetime of the Employee the option shall be exercisable only by him.
8.2 In the event there are any changes in the Class B Common Stock of the
Company through merger, consolidation, recapitalization, stock dividend or other
change in the corporate or capital structure of the Company, appropriate
adjustments, as may seem equitable to the Board of Directors of the Company,
shall be made in the number of shares and the exercise price per share of the
options to prevent dilution of the rights granted hereunder.
8.3 For the purposes of this Agreement, a transfer of the Employee from
the Company to a subsidiary, or vice versa, or from one subsidiary to another,
shall not be deemed a termination of employment.
8.4 This Agreement shall be deemed to be made under and shall be construed
in accordance with the laws of the State of Florida.
- 22 -
<PAGE>
8.5 This Agreement shall become effective as of the date hereof and,
unless sooner terminated, shall remain in effect for a period of five (5) years
from the date hereof. This Agreement may be terminated at any time by mutual
consent of the parties hereto, but no modification or amendment of this
Agreement shall become effective until such modification or amendment shall have
been approved by the Board of Directors of the Company.
8.6 The terms and conditions of the 1994 Stock Option Plan of Oriole Homes
Corp., as approved by Shareholders on April 5, 1994 (the "Plan") are hereby
incorporated herein by reference and if there is any conflict between this
Agreement and the Plan the provisions of the Plan shall govern.
IN WITNESS WHEREOF, the Company has caused this Stock Option Agreement to
be executed by its President or Vice President and the Employee has executed
this Agreement, the day and year first above written.
ORIOLE HOMES CORP.
By: /S/ RICHARD D. LEVY
-----------------------
Richard D. Levy, Chief Executive Officer
/S/ HARRY A. LEVY
-----------------
Employee
- 23 -
<PAGE>
Exhibit 10.19
INCENTIVE STOCK OPTION AGREEMENT
OF
ORIOLE HOMES CORP.
------------------
AGREEMENT dated this 14th day of May, 1996, between Oriole Homes Corp., a
Florida corporation (hereinafter called the "Company"), and Mark A. Levy
(hereinafter called the "Employee").
W I T N E S S E T H:
--------------------
WHEREAS, the Company desires to grant Employee a proprietary interest in
the Company in order to increase his/her efforts on its behalf; and
WHEREAS, the Company has this day granted to the Employee an option to
purchase the number of shares of Class B Common Stock, par value $.10 per share,
of the Company, and at the option price, all as hereinafter stated, such option
to be exercisable not more than five (5) years after the date hereof; and
WHEREAS, the Employee is willing to accept said option and to be bound by
the terms and conditions thereof; and
WHEREAS, the execution and delivery of this Agreement has been duly
authorized by the Board of Directors of the Company;
NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants herein contained and other good and valuable considerations, the
receipt whereof is hereby acknowledged, the parties hereto, intending to be
legally bound hereby, agree as follows:
GRANT OF OPTION; ADJUSTMENT
OF SHARES COVERED BY OPTION
---------------------------
1.1 The Company hereby grants to the Employee an option to purchase from
the Company, upon the terms and conditions hereinafter set forth, 4,500 shares
of Class B Common Stock, par value $.10 per share, of the Company, for a
consideration of $7.625 per share.
- 24 -
<PAGE>
1.2 The number of shares of Common Stock above stated, and the purchase
price thereof, shall be subject to adjustment from time to time as provided
herein.
PAYMENT FOR SHARES
------------------
2.1 The option price of the shares to be purchased pursuant to each
exercise of the within option shall be paid to the Company by the Employee in
full, in cash or check or in whole or in part by:
a. transfer to the Company of shares of Class A or Class B Common Stock
having a Fair Market Value equal to the option exercise price at the time of
such exercise; or
b. delivery of instructions to the Company to withhold from the option
shares that would otherwise be issued on the exercise that number of option
shares having a Fair Market Value equal to the option exercise price at the time
of such exercise. If the Fair Market Value of the number of whole shares
transferred or the number of whole option shares surrendered is less than the
total exercise price of the option, the shortfall must be made up in cash or
check.
EXERCISE OF OPTION
------------------
3.1 The within option may be exercised during the lifetime of the Employee
and in whole or in part at any time after May 14, 1998 and thereafter until on
or before May 14, 2001.
3.2 At least twenty days prior to the date upon which all or any portion
of the within option is to be exercised, the person entitled to exercise the
option shall deliver to the Company written notice of his/her election to
exercise all or part of the option, which notice shall specify the date and time
for the exercise of the option and the number of shares in respect to which the
option is to be exercised. The date specified in such notice shall be a business
day and the time specified shall be during the regular business hours of the
Company.
3.3 The person entitled to exercise the option shall, at the date and time
specified in such notice, pay to the Company the consideration set forth in
Section 2 hereof at the principal office of the Company, the option price of the
shares in respect of which the option is being exercised, and contemporaneously,
or as soon thereafter as is practical, the Company shall deliver to the person
- 25 -
<PAGE>
entitled to exercise the option, registered in the name of such person,
certificates representing the number of shares of stock or other securities in
respect of which the option is being exercised.
EMPLOYMENT OF EMPLOYEE
----------------------
4. If the services of Employee are terminated for any reason on or prior
to May 14, 2001, the Company has the right to redeem the shares that have been
acquired at the exercise price. If such right of redemption is not exercised
within thirty (30) days from the termination date, the Company's rights of
redemption shall have no further force or effect.
RESTRICTIONS ON EXERCISE OF OPTION
AND SALE OF STOCK BY EMPLOYEE
-----------------------------
5. Unless the option and shares acquired upon the exercise of the option
are registered under the Securities Act of 1933, as amended (the "Securities
Act"), the Employee hereby represents and warrants to the Company that any and
all shares of Class B Common Stock which shall be acquired pursuant to the
exercise of the option shall be acquired for the Employee's own account and not
for the account or beneficial interest of any other person or entity, that such
shares of Class B Common Stock shall be acquired for the Employee's own
investment and that the shares of Class B Common Stock shall not be acquired
with a view to or for resale in connection with the distribution of all or any
part thereof. Furthermore, the Employee agrees that any shares of Class B Common
Stock so acquired will bear an appropriate legend to signify their restriction
under the applicable securities laws and that "stop-transfer" instructions will
be given to the Company's transfer agent.
The Employee agrees to be subject to and bound by any other restrictions
imposed by, or which the Company believes to be necessary or advisable to comply
with, any Federal or State securities laws, including but not limited to
restrictions governing the time and circumstances or disposition of the shares
being acquired by exercise of such option.
- 26 -
<PAGE>
NO RIGHTS AS SHAREHOLDER
OR TO CONTINUED EMPLOYMENT
--------------------------
6. The Employee shall not have any rights as a shareholder of the Company
with respect to any shares of Class B Common Stock prior to the date of issuance
to the Employee of the certificate or certificates for such shares and the grant
of the option does not confer to the Employee any right to be employed by the
Company and will not interfere in any way with the right of the Company to
terminate the employment of the Employee.
NO SECURITIES ACT
REGISTRATION OBLIGATION
-----------------------
7. The Company shall have no obligation to the Employee to register the
Common Stock under the Securities Act.
MISCELLANEOUS
-------------
8.1 This Agreement shall be binding upon and inure to the benefit of the
Company and its successors and the Employee and his executors and/or
administrators, provided that the within option shall be nontransferable by the
Employee otherwise than by will or by the laws of descent and distribution, and
during the lifetime of the Employee the option shall be exercisable only by him.
8.2 In the event there are any changes in the Class B Common Stock of the
Company through merger, consolidation, recapitalization, stock dividend or other
change in the corporate or capital structure of the Company, appropriate
adjustments, as may seem equitable to the Board of Directors of the Company,
shall be made in the number of shares and the exercise price per share of the
options to prevent dilution of the rights granted hereunder.
8.3 For the purposes of this Agreement, a transfer of the Employee from
the Company to a subsidiary, or vice versa, or from one subsidiary to another,
shall not be deemed a termination of employment.
8.4 This Agreement shall be deemed to be made under and shall be construed
in accordance with the laws of the State of Florida.
- 27 -
<PAGE>
8.5 This Agreement shall become effective as of the date hereof and,
unless sooner terminated, shall remain in effect for a period of five (5) years
from the date hereof. This Agreement may be terminated at any time by mutual
consent of the parties hereto, but no modification or amendment of this
Agreement shall become effective until such modification or amendment shall have
been approved by the Board of Directors of the Company.
8.6 The terms and conditions of the 1994 Stock Option Plan of Oriole Homes
Corp., as approved by Shareholders on April 5, 1994 (the "Plan") are hereby
incorporated herein by reference and if there is any conflict between this
Agreement and the Plan the provisions of the Plan shall govern.
IN WITNESS WHEREOF, the Company has caused this Stock Option Agreement to
be executed by its President or Vice President and the Employee has executed
this Agreement, the day and year first above written.
ORIOLE HOMES CORP.
By: /S/ RICHARD D. LEVY
-----------------------
Richard D. Levy, Chief Executive Officer
/S/ MARK A. LEVY
----------------
Employee
- 28 -
<PAGE>
Exhibit 10.20
INCENTIVE STOCK OPTION AGREEMENT
OF
ORIOLE HOMES CORP.
------------------
AGREEMENT dated this 14th day of May, 1996, between Oriole Homes Corp., a
Florida corporation (hereinafter called the "Company"), and Mark A. Levy
(hereinafter called the "Employee").
W I T N E S S E T H:
--------------------
WHEREAS, the Company desires to grant Employee a proprietary interest in
the Company in order to increase his/her efforts on its behalf; and
WHEREAS, the Company has this day granted to the Employee an option to
purchase the number of shares of Class B Common Stock, par value $.10 per share,
of the Company, and at the option price, all as hereinafter stated, such option
to be exercisable not more than five (5) years after the date hereof; and
WHEREAS, the Employee is willing to accept said option and to be bound by
the terms and conditions thereof; and
WHEREAS, the execution and delivery of this Agreement has been duly
authorized by the Board of Directors of the Company;
NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants herein contained and other good and valuable considerations, the
receipt whereof is hereby acknowledged, the parties hereto, intending to be
legally bound hereby, agree as follows:
GRANT OF OPTION; ADJUSTMENT
OF SHARES COVERED BY OPTION
---------------------------
1.1 The Company hereby grants to the Employee an option to purchase from
the Company, upon the terms and conditions hereinafter set forth, 4,500 shares
of Class B Common Stock, par value $.10 per share, of the Company, for a
consideration of $7.625 per share.
- 29 -
<PAGE>
1.2 The number of shares of Common Stock above stated, and the purchase
price thereof, shall be subject to adjustment from time to time as provided
herein.
PAYMENT FOR SHARES
------------------
2.1 The option price of the shares to be purchased pursuant to each
exercise of the within option shall be paid to the Company by the Employee in
full, in cash or check or in whole or in part by:
a. transfer to the Company of shares of Class A or Class B Common Stock
having a Fair Market Value equal to the option exercise price at the time of
such exercise; or
b. delivery of instructions to the Company to withhold from the option
shares that would otherwise be issued on the exercise that number of option
shares having a Fair Market Value equal to the option exercise price at the time
of such exercise. If the Fair Market Value of the number of whole shares
transferred or the number of whole option shares surrendered is less than the
total exercise price of the option, the shortfall must be made up in cash or
check.
EXERCISE OF OPTION
------------------
3.1 The within option may be exercised during the lifetime of the Employee
and in whole or in part at any time after May 14, 1998 and thereafter until on
or before May 14, 2001.
3.2 At least twenty days prior to the date upon which all or any portion
of the within option is to be exercised, the person entitled to exercise the
option shall deliver to the Company written notice of his/her election to
exercise all or part of the option, which notice shall specify the date and time
for the exercise of the option and the number of shares in respect to which the
option is to be exercised. The date specified in such notice shall be a business
day and the time specified shall be during the regular business hours of the
Company.
3.3 The person entitled to exercise the option shall, at the date and time
specified in such notice, pay to the Company the consideration set forth in
Section 2 hereof at the principal office of the Company, the option price of the
shares in respect of which the option is being exercised, and contemporaneously,
or as soon thereafter as is practical, the Company shall deliver to the person
- 30 -
<PAGE>
entitled to exercise the option, registered in the name of such person,
certificates representing the number of shares of stock or other securities in
respect of which the option is being exercised.
EMPLOYMENT OF EMPLOYEE
----------------------
4. If the services of Employee are terminated for any reason on or prior
to May 14, 2001, the Company has the right to redeem the shares that have been
acquired at the exercise price. If such right of redemption is not exercised
within thirty (30) days from the termination date, the Company's rights of
redemption shall have no further force or effect.
RESTRICTIONS ON EXERCISE OF OPTION
AND SALE OF STOCK BY EMPLOYEE
-----------------------------
5. Unless the option and shares acquired upon the exercise of the option
are registered under the Securities Act of 1933, as amended (the "Securities
Act"), the Employee hereby represents and warrants to the Company that any and
all shares of Class B Common Stock which shall be acquired pursuant to the
exercise of the option shall be acquired for the Employee's own account and not
for the account or beneficial interest of any other person or entity, that such
shares of Class B Common Stock shall be acquired for the Employee's own
investment and that the shares of Class B Common Stock shall not be acquired
with a view to or for resale in connection with the distribution of all or any
part thereof. Furthermore, the Employee agrees that any shares of Class B Common
Stock so acquired will bear an appropriate legend to signify their restriction
under the applicable securities laws and that "stop-transfer" instructions will
be given to the Company's transfer agent.
The Employee agrees to be subject to and bound by any other restrictions
imposed by, or which the Company believes to be necessary or advisable to comply
with, any Federal or State securities laws, including but not limited to
restrictions governing the time and circumstances or disposition of the shares
being acquired by exercise of such option.
- 31 -
<PAGE>
NO RIGHTS AS SHAREHOLDER
OR TO CONTINUED EMPLOYMENT
--------------------------
6. The Employee shall not have any rights as a shareholder of the Company
with respect to any shares of Class B Common Stock prior to the date of issuance
to the Employee of the certificate or certificates for such shares and the grant
of the option does not confer to the Employee any right to be employed by the
Company and will not interfere in any way with the right of the Company to
terminate the employment of the Employee.
NO SECURITIES ACT
REGISTRATION OBLIGATION
-----------------------
7. The Company shall have no obligation to the Employee to register the
Common Stock under the Securities Act.
MISCELLANEOUS
-------------
8.1 This Agreement shall be binding upon and inure to the benefit of the
Company and its successors and the Employee and his executors and/or
administrators, provided that the within option shall be nontransferable by the
Employee otherwise than by will or by the laws of descent and distribution, and
during the lifetime of the Employee the option shall be exercisable only by him.
8.2 In the event there are any changes in the Class B Common Stock of the
Company through merger, consolidation, recapitalization, stock dividend or other
change in the corporate or capital structure of the Company, appropriate
adjustments, as may seem equitable to the Board of Directors of the Company,
shall be made in the number of shares and the exercise price per share of the
options to prevent dilution of the rights granted hereunder.
8.3 For the purposes of this Agreement, a transfer of the Employee from
the Company to a subsidiary, or vice versa, or from one subsidiary to another,
shall not be deemed a termination of employment.
8.4 This Agreement shall be deemed to be made under and shall be construed
in accordance with the laws of the State of Florida.
- 32 -
<PAGE>
8.5 This Agreement shall become effective as of the date hereof and,
unless sooner terminated, shall remain in effect for a period of five (5) years
from the date hereof. This Agreement may be terminated at any time by mutual
consent of the parties hereto, but no modification or amendment of this
Agreement shall become effective until such modification or amendment shall have
been approved by the Board of Directors of the Company.
8.6 The terms and conditions of the 1994 Stock Option Plan of Oriole Homes
Corp., as approved by Shareholders on April 5, 1994 (the "Plan") are hereby
incorporated herein by reference and if there is any conflict between this
Agreement and the Plan the provisions of the Plan shall govern.
IN WITNESS WHEREOF, the Company has caused this Stock Option Agreement to
be executed by its President or Vice President and the Employee has executed
this Agreement, the day and year first above written.
ORIOLE HOMES CORP.
By: /S/ RICHARD D. LEVY
-----------------------
Richard D. Levy, Chief Executive Officer
/S/ MARK A. LEVY
----------------
Employee
- 33 -
<PAGE>
Exhibit 10.21
STOCK OPTION AGREEMENT
FOR
NONEMPLOYEE DIRECTORS
---------------------
AGREEMENT dated this 22nd day of May, 1997, between Oriole Homes Corp., a
Florida corporation (hereinafter called the "Company"), and George R. Richards
(hereinafter called the "Eligible Director").
W I T N E S S E T H:
--------------------
WHEREAS, the Company's shareholders approved (on May 9, 1994) the adoption
of the 1994 Stock Option Plan for Nonemployee Directors (the "Plan") pursuant to
which each Eligible Director is entitled to receive a grant to purchase 1,200
Shares per year, up to a maximum of 6,000 Shares:
WHEREAS, the Executive Committee of the Board of Directors of the Company
(the "Committee") has this day granted to each Eligible Director an option to
purchase 1,200 shares of Class B Common Stock, par value $.10 per share, (the
"Shares") of the Company, and at the option price, all as hereinafter stated,
such option to be exercisable not more than ten (10) years after the date
hereof; and
WHEREAS, the Eligible Director is willing to accept said option and to be
bound by the terms and conditions thereof; and
WHEREAS, the execution and delivery of this Agreement has been duly
authorized by the Board of Directors of the Company;
NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants herein contained and other good and valuable considerations, the
receipt whereof is hereby acknowledged, the parties hereto, including to be
legally bound hereby, agree as follows:
GRANT OF OPTION: ADJUSTMENT
OF SHARES COVERED BY OPTION
---------------------------
1.1 The Company hereby grants to the Eligible Director an option to
purchase from the Company, upon the terms and conditions hereinafter set forth,
1,200 shares of Class B Common Stock, par value $.10 per share (the "Shares"),
for a cash consideration of $7.375 per share.
1.2 The number of Shares above stated, and the purchase price thereof, may
be subject to adjustment from time to time as provided herein.
VESTING
- -------
2.1 This option shall vest and become nonforfeitable on the day of the
Annual Meeting following the date hereof if the Eligible Director continues to
serve as a Director.
- 34 -
<PAGE>
PAYMENTS FOR SHARES
-------------------
3.1 The option price of the shares to be purchased pursuant to each
exercise of the within option shall be paid to the Company by the Eligible
Director in full in cash or by bank certified, cashier's or personal check at
the time of exercise of the option.
EXERCISE OF OPTION
------------------
4.1 The within option may be exercised according to the following
schedule:
4.1.1 Fifty (50%) percent of the options granted become
exercisable on the date of the first Annual Meeting after the date hereof.
4.1.2 The remaining fifty (50%) percent of the options granted
become exercisable on the date of the second Annual Meeting after the date
hereof.
TERM OF OPTION
--------------
5.1 The options granted shall expire ten years from the date hereof, but
are subject to earlier termination as follows:
5.1.1 In the event of the termination of the optionee's service as
a Director, other than by reason of retirement, total and permanent disability,
or death, the options granted herein that have not been exercised shall
automatically expire on the effective date of termination.
5.1.2 In the event of termination of the optionee by reason of
retirement or total and permanent disability, all vested options shall become
exercisable to the full extent of the number of Shares remaining then
outstanding, regardless of whether such options were previously exercisable and
each such option shall expire four years after the date of such termination or
on the stated grant expiration date whichever is earlier.
5.1.3 In the event of the death of the optionee while he is still
a Director, vested options as per Section 2.1 hereof shall become exercisable,
to the full extent of Shares remaining covered by such options, regardless of
whether such options were previously exercisable and each such option shall
expire four years after the date of death of such optionee or on the stated
grant expiration, whichever is earlier.
RESTRICTIONS ON EXERCISE OF OPTION
AND SALE OF STOCK BY ELIGIBLE DIRECTOR
--------------------------------------
6.1 The within option shall not be exercisable if:
(a) The exercise thereof will involve a violation of any
applicable federal or state securities law; or
(b) The exercise thereof will require registration under the
Securities Act of 1933, as amended, of the shares of stock or other securities
of the Company to be purchased by the Eligible Director pursuant to such
exercise.
6.2 The Company hereby agrees to make such reasonable efforts to comply
with any applicable state securities law as the Committee of the Company shall
determine are reasonably necessary but such efforts shall not subject the
Company to unreasonable expense or hardship.
- 35 -
<PAGE>
6.3 At the time of any exercise of the within option, the Eligible
Director shall represent to and agree with the Company in writing that he is
acquiring the shares in respect of which the option is being exercised for the
purpose of investment and not with a view of distribution.
6.4 The Eligible Director agrees that he will not sell or otherwise
dispose of any shares of stock or other securities of the Company purchased by
him pursuant to the exercise of all or any portion of the within option at any
time unless there is an effective Registration Statement in respect of such
shares or other securities under the provisions of the Securities Act of 1933,
as amended, or counsel for the Company is reasonably satisfied that an exemption
from such registration provisions is available to the Company and the Eligible
Director.
MISCELLANEOUS
-------------
7.1 This Agreement shall be binding upon and inure to the benefit of the
Company and its successors and the Eligible Director and his executors,
administrators or personal representatives provided that the within option shall
be non-transferable by the Eligible Director otherwise than by will or by the
laws of descent and distribution, and during the lifetime of the Eligible
Director the option shall be exercisable only by him.
7.2 In the event there are any changes in the capitalization of the
Company through merger, consolidation, recapitalization, stock dividend or other
change in the corporate or capital structure of the Company, appropriate
adjustments, as may seem equitable to the Committee shall be made in the number
of shares and the exercise price per share of the options to prevent dilution of
the rights granted hereunder.
7.3 This Agreement shall be deemed to be made under and shall be construed
in accordance with the laws of the State of Florida.
7.4 This Agreement shall become effective as of the date hereof and,
unless sooner terminated, shall remain in effect for a period of ten (10) years
from the date hereof. This Agreement may be terminated at any time by mutual
consent of the parties hereto, but no modification or amendment of this
Agreement shall become effective until such modification or amendment shall have
been approved by the Committee.
IN WITNESS WHEREOF, the Company has caused this Stock Option Agreement to
be executed by its President or Vice President and the Eligible Director has
executed this Agreement, the day and year first above written.
ORIOLE HOMES CORP.
By: /S/ RICHARD D. LEVY
-----------------------
Richard D. Levy
0Chief Executive Officer
/S/ GEORGE R. RICHARDS
----------------------
Eligible Director
- 36 -
<PAGE>
Exhibit 10.22
STOCK OPTION AGREEMENT
FOR
NONEMPLOYEE DIRECTORS
---------------------
AGREEMENT dated this 20th day of May, 1998, between Oriole Homes Corp., a
Florida corporation (hereinafter called the "Company"), and George R. Richards
(hereinafter called the "Eligible Director").
W I T N E S S E T H:
--------------------
WHEREAS, the Company's shareholders approved (on May 9, 1994) the adoption
of the 1994 Stock Option Plan for Nonemployee Directors (the "Plan") pursuant to
which each Eligible Director is entitled to receive a grant to purchase 1,200
Shares per year, up to a maximum of 6,000 Shares:
WHEREAS, the Executive Committee of the Board of Directors of the Company
(the "Committee") has this day granted to each Eligible Director an option to
purchase 1,200 shares of Class B Common Stock, par value $.10 per share, (the
"Shares") of the Company, and at the option price, all as hereinafter stated,
such option to be exercisable not more than ten (10) years after the date
hereof; and
WHEREAS, the Eligible Director is willing to accept said option and to be
bound by the terms and conditions thereof; and
WHEREAS, the execution and delivery of this Agreement has been duly
authorized by the Board of Directors of the Company;
NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants herein contained and other good and valuable considerations, the
receipt whereof is hereby acknowledged, the parties hereto, including to be
legally bound hereby, agree as follows:
GRANT OF OPTION: ADJUSTMENT
OF SHARES COVERED BY OPTION
---------------------------
1.1 The Company hereby grants to the Eligible Director an option to
purchase from the Company, upon the terms and conditions hereinafter set forth,
1,200 shares of Class B Common Stock, par value $.10 per share (the "Shares"),
for a cash consideration of $4.50 per share.
1.2 The number of Shares above stated, and the purchase price thereof, may
be subject to adjustment from time to time as provided herein.
VESTING
-------
2.1 This option shall vest and become nonforfeitable on the day of the
Annual Meeting following the date hereof if the Eligible Director continues to
serve as a Director.
- 37 -
<PAGE>
PAYMENTS FOR SHARES
-------------------
3.1 The option price of the shares to be purchased pursuant to each
exercise of the within option shall be paid to the Company by the Eligible
Director in full in cash or by bank certified, cashier's or personal check at
the time of exercise of the option.
EXERCISE OF OPTION
------------------
4.1 The within option may be exercised according to the following
schedule:
4.1.1 Fifty (50%) percent of the options granted become
exercisable on the date of the first Annual Meeting after the date hereof.
4.1.2 The remaining fifty (50%) percent of the options granted
become exercisable on the date of the second Annual Meeting after the date
hereof.
TERM OF OPTION
--------------
5.1 The options granted shall expire ten years from the date hereof, but
are subject to earlier termination as follows:
5.1.1 In the event of the termination of the optionee's service as
a Director, other than by reason of retirement, total and permanent disability,
or death, the options granted herein that have not been exercised shall
automatically expire on the effective date of termination.
5.1.2 In the event of termination of the optionee by reason of
retirement or total and permanent disability, all vested options shall become
exercisable to the full extent of the number of Shares remaining then
outstanding, regardless of whether such options were previously exercisable and
each such option shall expire four years after the date of such termination or
on the stated grant expiration date whichever is earlier.
5.1.3 In the event of the death of the optionee while he is still
a Director, vested options as per Section 2.1 hereof shall become exercisable,
to the full extent of Shares remaining covered by such options, regardless of
whether such options were previously exercisable and each such option shall
expire four years after the date of death of such optionee or on the stated
grant expiration, whichever is earlier.
RESTRICTIONS ON EXERCISE OF OPTION
AND SALE OF STOCK BY ELIGIBLE DIRECTOR
--------------------------------------
6.1 The within option shall not be exercisable if:
(a) The exercise thereof will involve a violation of any
applicable federal or state securities law; or
(b) The exercise thereof will require registration under the
Securities Act of 1933, as amended, of the shares of stock or other securities
of the Company to be purchased by the Eligible Director pursuant to such
exercise.
6.2 The Company hereby agrees to make such reasonable efforts to comply
with any applicable state securities law as the Committee of the Company shall
determine are reasonably necessary but such efforts shall not subject the
Company to unreasonable expense or hardship.
- 38 -
<PAGE>
6.3 At the time of any exercise of the within option, the Eligible
Director shall represent to and agree with the Company in writing that he is
acquiring the shares in respect of which the option is being exercised for the
purpose of investment and not with a view of distribution.
6.4 The Eligible Director agrees that he will not sell or otherwise
dispose of any shares of stock or other securities of the Company purchased by
him pursuant to the exercise of all or any portion of the within option at any
time unless there is an effective Registration Statement in respect of such
shares or other securities under the provisions of the Securities Act of 1933,
as amended, or counsel for the Company is reasonably satisfied that an exemption
from such registration provisions is available to the Company and the Eligible
Director.
MISCELLANEOUS
-------------
7.1 This Agreement shall be binding upon and inure to the benefit of the
Company and its successors and the Eligible Director and his executors,
administrators or personal representatives provided that the within option shall
be non-transferable by the Eligible Director otherwise than by will or by the
laws of descent and distribution, and during the lifetime of the Eligible
Director the option shall be exercisable only by him.
7.2 In the event there are any changes in the capitalization of the
Company through merger, consolidation, recapitalization, stock dividend or other
change in the corporate or capital structure of the Company, appropriate
adjustments, as may seem equitable to the Committee shall be made in the number
of shares and the exercise price per share of the options to prevent dilution of
the rights granted hereunder.
7.3 This Agreement shall be deemed to be made under and shall be construed
in accordance with the laws of the State of Florida.
7.4 This Agreement shall become effective as of the date hereof and,
unless sooner terminated, shall remain in effect for a period of ten (10) years
from the date hereof. This Agreement may be terminated at any time by mutual
consent of the parties hereto, but no modification or amendment of this
Agreement shall become effective until such modification or amendment shall have
been approved by the Committee.
IN WITNESS WHEREOF, the Company has caused this Stock Option Agreement to
be executed by its President or Vice President and the Eligible Director has
executed this Agreement, the day and year first above written.
ORIOLE HOMES CORP.
By: /S/ RICHARD D. LEVY
-----------------------
Richard D. Levy
Chief Executive Officer
/S/ GEORGE R. RICHARDS
----------------------
Eligible Director
- 39 -
<PAGE>
Exhibit 10.23
STOCK OPTION AGREEMENT
FOR
NONEMPLOYEE DIRECTORS
AGREEMENT dated this 9th day of May, 1994, between Oriole Homes Corp., a
Florida corporation (hereinafter called the "Company"), and Paul R. Lehrer
(hereinafter called the "Eligible Director").
W I T N E S S E T H:
--------------------
WHEREAS, the Company's shareholders approved (on May 9, 1994) the adoption
of the 1994 Stock Option Plan for Nonemployee Directors (the "Plan") pursuant to
which each Eligible Director is entitled to receive a grant to purchase 1,200
Shares per year, up to a maximum of 6,000 Shares:
WHEREAS, the Executive Committee of the Board of Directors of the Company
(the "Committee") has this day granted to each Eligible Director an option to
purchase 1,200 shares of Class B Common Stock, par value $.10 per share, (the
"Shares") of the Company, and at the option price, all as hereinafter stated,
such option to be exercisable not more than ten (10) years after the date
hereof; and
WHEREAS, the Eligible Director is willing to accept said option and to be
bound by the terms and conditions thereof; and
WHEREAS, the execution and delivery of this Agreement has been duly
authorized by the Board of Directors of the Company;
NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants herein contained and other good and valuable considerations, the
receipt whereof is hereby acknowledged, the parties hereto, including to be
legally bound hereby, agree as follows:
GRANT OF OPTION: ADJUSTMENT
OF SHARES COVERED BY OPTION
---------------------------
1.1 The Company hereby grants to the Eligible Director an option to
purchase from the Company, upon the terms and conditions hereinafter set forth,
1,200 shares of Class B Common Stock, par value $.10 per share (the "Shares"),
for a cash consideration of $8.62 per share.
1.2 The number of Shares above stated, and the purchase price thereof, may
be subject to adjustment from time to time as provided herein.
VESTING
-------
2.1 This option shall vest and become nonforfeitable on the day of the
Annual Meeting following the date hereof if the Eligible Director continues to
serve as a Director.
- 40 -
<PAGE>
PAYMENTS FOR SHARES
-------------------
3.1 The option price of the shares to be purchased pursuant to each
exercise of the within option shall be paid to the Company by the Eligible
Director in full in cash or by bank certified, cashier's or personal check at
the time of exercise of the option.
EXERCISE OF OPTION
------------------
4.1 The within option may be exercised according to the following
schedule:
4.1.1 Fifty (50%) percent of the options granted become
exercisable on the date of the first Annual Meeting after the date hereof.
4.1.2 The remaining fifty (50%) percent of the options granted
become exercisable on the date of the second Annual Meeting after the date
hereof.
TERM OF OPTION
--------------
5.1The options granted shall expire ten years from the date hereof, but
are subject to earlier termination as follows:
5.1.1 In the event of the termination of the optionee's service as
a Director, other than by reason of retirement, total and permanent disability,
or death, the options granted herein that have not been exercised shall
automatically expire on the effective date of termination.
5.1.2 In the event of termination of the optionee by reason of
retirement or total and permanent disability, all vested options shall become
exercisable to the full extent of the number of Shares remaining then
outstanding, regardless of whether such options were previously exercisable and
each such option shall expire four years after the date of such termination or
on the stated grant expiration date whichever is earlier.
5.1.3 In the event of the death of the optionee while he is still
a Director, vested options as per Section 2.1 hereof shall become exercisable,
to the full extent of Shares remaining covered by such options, regardless of
whether such options were previously exercisable and each such option shall
expire four years after the date of death of such optionee or on the stated
grant expiration, whichever is earlier.
RESTRICTIONS ON EXERCISE OF OPTION
AND SALE OF STOCK BY ELIGIBLE DIRECTOR
--------------------------------------
6.1 The within option shall not be exercisable if:
(a) The exercise thereof will involve a violation of any
applicable federal or state securities law; or
(b) The exercise thereof will require registration under the
Securities Act of 1933, as amended, of the shares of stock or other securities
of the Company to be purchased by the Eligible Director pursuant to such
exercise.
6.2 The Company hereby agrees to make such reasonable efforts to comply
with any applicable state securities law as the Committee of the Company shall
determine are reasonably necessary but such efforts shall not subject the
Company to unreasonable expense or hardship.
- 41 -
<PAGE>
6.3 At the time of any exercise of the within option, the Eligible
Director shall represent to and agree with the Company in writing that he is
acquiring the shares in respect of which the option is being exercised for the
purpose of investment and not with a view of distribution.
6.4 The Eligible Director agrees that he will not sell or otherwise
dispose of any shares of stock or other securities of the Company purchased by
him pursuant to the exercise of all or any portion of the within option at any
time unless there is an effective Registration Statement in respect of such
shares or other securities under the provisions of the Securities Act of 1933,
as amended, or counsel for the Company is reasonably satisfied that an exemption
from such registration provisions is available to the Company and the Eligible
Director.
MISCELLANEOUS
-------------
7.1 This Agreement shall be binding upon and inure to the benefit of the
Company and its successors and the Eligible Director and his executors,
administrators or personal representatives provided that the within option shall
be non-transferable by the Eligible Director otherwise than by will or by the
laws of descent and distribution, and during the lifetime of the Eligible
Director the option shall be exercisable only by him.
7.2 In the event there are any changes in the capitalization of the
Company through merger, consolidation, recapitalization, stock dividend or other
change in the corporate or capital structure of the Company, appropriate
adjustments, as may seem equitable to the Committee shall be made in the number
of shares and the exercise price per share of the options to prevent dilution of
the rights granted hereunder.
7.3 This Agreement shall be deemed to be made under and shall be construed
in accordance with the laws of the State of Florida.
7.4 This Agreement shall become effective as of the date hereof and,
unless sooner terminated, shall remain in effect for a period of ten (10) years
from the date hereof. This Agreement may be terminated at any time by mutual
consent of the parties hereto, but no modification or amendment of this
Agreement shall become effective until such modification or amendment shall have
been approved by the Committee.
IN WITNESS WHEREOF, the Company has caused this Stock Option Agreement to
be executed by its President or Vice President and the Eligible Director has
executed this Agreement, the day and year first above written.
ORIOLE HOMES CORP.
By: /S/ RICHARD D. LEVY
-----------------------
Richard D. Levy
Chief Executive Officer
/S/ PAUL R. LEHRER
------------------
Eligible Director
- 42 -
<PAGE>
Exhibit 10.24
STOCK OPTION AGREEMENT
FOR
NONEMPLOYEE DIRECTORS
---------------------
AGREEMENT dated this 15th day of May, 1995, between Oriole Homes Corp., a
Florida corporation (hereinafter called the "Company"), and Paul R. Lehrer
(hereinafter called the "Eligible Director").
W I T N E S S E T H:
--------------------
WHEREAS, the Company's shareholders approved (on May 9, 1994) the adoption
of the 1994 Stock Option Plan for Nonemployee Directors (the "Plan") pursuant to
which each Eligible Director is entitled to receive a grant to purchase 1,200
Shares per year, up to a maximum of 6,000 Shares:
WHEREAS, the Executive Committee of the Board of Directors of the Company
(the "Committee") has this day granted to each Eligible Director an option to
purchase 1,200 shares of Class B Common Stock, par value $.10 per share, (the
"Shares") of the Company, and at the option price, all as hereinafter stated,
such option to be exercisable not more than ten (10) years after the date
hereof; and
WHEREAS, the Eligible Director is willing to accept said option
and to be bound by the terms and conditions thereof; and
WHEREAS, the execution and delivery of this Agreement has been
duly authorized by the Board of Directors of the Company;
NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants herein contained and other good and valuable considerations, the
receipt whereof is hereby acknowledged, the parties hereto, including to be
legally bound hereby, agree as follows:
GRANT OF OPTION: ADJUSTMENT
OF SHARES COVERED BY OPTION
---------------------------
1.1 The Company hereby grants to the Eligible Director an option to
purchase from the Company, upon the terms and conditions hereinafter set forth,
1,200 shares of Class B Common Stock, par value $.10 per share (the "Shares"),
for a cash consideration of $7.50 per share.
1.2 The number of Shares above stated, and the purchase price thereof, may
be subject to adjustment from time to time as provided herein.
VESTING
-------
2.1 This option shall vest and become nonforfeitable on the day of the
Annual Meeting following the date hereof if the Eligible Director continues to
serve as a Director.
- 43 -
<PAGE>
PAYMENTS FOR SHARES
-------------------
3.1 The option price of the shares to be purchased pursuant to each
exercise of the within option shall be paid to the Company by the Eligible
Director in full in cash or by bank certified, cashier's or personal check at
the time of exercise of the option.
EXERCISE OF OPTION
------------------
4.1 The within option may be exercised according to the following
schedule:
4.1.1 Fifty (50%) percent of the options granted become
exercisable on the date of the first Annual Meeting after the date hereof.
4.1.2 The remaining fifty (50%) percent of the options granted
become exercisable on the date of the second Annual Meeting after the date
hereof.
TERM OF OPTION
--------------
5.1 The options granted shall expire ten years from the date hereof, but
are subject to earlier termination as follows:
5.1.1 In the event of the termination of the optionee's service as
a Director, other than by reason of retirement, total and permanent disability,
or death, the options granted herein that have not been exercised shall
automatically expire on the effective date of termination.
5.1.2 In the event of termination of the optionee by reason of
retirement or total and permanent disability, all vested options shall become
exercisable to the full extent of the number of Shares remaining then
outstanding, regardless of whether such options were previously exercisable and
each such option shall expire four years after the date of such termination or
on the stated grant expiration date whichever is earlier.
5.1.3 In the event of the death of the optionee while he is still
a Director, vested options as per Section 2.1 hereof shall become exercisable,
to the full extent of Shares remaining covered by such options, regardless of
whether such options were previously exercisable and each such option shall
expire four years after the date of death of such optionee or on the stated
grant expiration, whichever is earlier.
RESTRICTIONS ON EXERCISE OF OPTION
AND SALE OF STOCK BY ELIGIBLE DIRECTOR
--------------------------------------
6.1 The within option shall not be exercisable if:
(a) The exercise thereof will involve a violation of any
applicable federal or state securities law; or
(b) The exercise thereof will require registration under the
Securities Act of 1933, as amended, of the shares of stock or other securities
of the Company to be purchased by the Eligible Director pursuant to such
exercise.
6.2 The Company hereby agrees to make such reasonable efforts to comply
with any applicable state securities law as the Committee of the Company shall
determine are reasonably necessary but such efforts shall not subject the
Company to unreasonable expense or hardship.
- 44 -
<PAGE>
6.3 At the time of any exercise of the within option, the Eligible
Director shall represent to and agree with the Company in writing that he is
acquiring the shares in respect of which the option is being exercised for the
purpose of investment and not with a view of distribution.
6.4 The Eligible Director agrees that he will not sell or otherwise
dispose of any shares of stock or other securities of the Company purchased by
him pursuant to the exercise of all or any portion of the within option at any
time unless there is an effective Registration Statement in respect of such
shares or other securities under the provisions of the Securities Act of 1933,
as amended, or counsel for the Company is reasonably satisfied that an exemption
from such registration provisions is available to the Company and the Eligible
Director.
MISCELLANEOUS
-------------
7.1 This Agreement shall be binding upon and inure to the benefit of the
Company and its successors and the Eligible Director and his executors,
administrators or personal representatives provided that the within option shall
be non-transferable by the Eligible Director otherwise than by will or by the
laws of descent and distribution, and during the lifetime of the Eligible
Director the option shall be exercisable only by him.
7.2 In the event there are any changes in the capitalization of the
Company through merger, consolidation, recapitalization, stock dividend or other
change in the corporate or capital structure of the Company, appropriate
adjustments, as may seem equitable to the Committee shall be made in the number
of shares and the exercise price per share of the options to prevent dilution of
the rights granted hereunder.
7.3 This Agreement shall be deemed to be made under and shall be construed
in accordance with the laws of the State of Florida.
7.4 This Agreement shall become effective as of the date hereof and,
unless sooner terminated, shall remain in effect for a period of ten (10) years
from the date hereof. This Agreement may be terminated at any time by mutual
consent of the parties hereto, but no modification or amendment of this
Agreement shall become effective until such modification or amendment shall have
been approved by the Committee.
IN WITNESS WHEREOF, the Company has caused this Stock Option Agreement to
be executed by its President or Vice President and the Eligible Director has
executed this Agreement, the day and year first above written.
ORIOLE HOMES CORP.
By: /S/ RICHARD D. LEVY
-----------------------
Richard D. Levy
Chief Executive Officer
/S/ PAUL R. LEHRER
------------------
Eligible Director
- 45 -
<PAGE>
Exhibit 10.25
STOCK OPTION AGREEMENT
FOR
NONEMPLOYEE DIRECTORS
AGREEMENT dated this 16th day of May, 1996, between Oriole Homes Corp., a
Florida corporation (hereinafter called the "Company"), and Paul R. Lehrer
(hereinafter called the "Eligible Director").
W I T N E S S E T H:
--------------------
WHEREAS, the Company's shareholders approved (on May 9, 1994) the adoption
of the 1994 Stock Option Plan for Nonemployee Directors (the "Plan") pursuant to
which each Eligible Director is entitled to receive a grant to purchase 1,200
Shares per year, up to a maximum of 6,000 Shares:
WHEREAS, the Executive Committee of the Board of Directors of the Company
(the "Committee") has this day granted to each Eligible Director an option to
purchase 1,200 shares of Class B Common Stock, par value $.10 per share, (the
"Shares") of the Company, and at the option price, all as hereinafter stated,
such option to be exercisable not more than ten (10) years after the date
hereof; and
WHEREAS, the Eligible Director is willing to accept said option and to be
bound by the terms and conditions thereof; and
WHEREAS, the execution and delivery of this Agreement has been duly
authorized by the Board of Directors of the Company;
NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants herein contained and other good and valuable considerations, the
receipt whereof is hereby acknowledged, the parties hereto, including to be
legally bound hereby, agree as follows:
GRANT OF OPTION: ADJUSTMENT
OF SHARES COVERED BY OPTION
---------------------------
1.1 The Company hereby grants to the Eligible Director an option to
purchase from the Company, upon the terms and conditions hereinafter set forth,
1,200 shares of Class B Common Stock, par value $.10 per share (the "Shares"),
for a cash consideration of $7.625 per share.
1.2 The number of Shares above stated, and the purchase price thereof, may
be subject to adjustment from time to time as provided herein.
VESTING
-------
2.1 This option shall vest and become nonforfeitable on the day of the
Annual Meeting following the date hereof if the Eligible Director continues to
serve as a Director.
- 49 -
<PAGE>
PAYMENTS FOR SHARES
-------------------
3.1 The option price of the shares to be purchased pursuant to each
exercise of the within option shall be paid to the Company by the Eligible
Director in full in cash or by bank certified, cashier's or personal check at
the time of exercise of the option.
EXERCISE OF OPTION
------------------
4.1 The within option may be exercised according to the following
schedule:
4.1.1 Fifty (50%) percent of the options granted become
exercisable on the date of the first Annual Meeting after the date hereof.
4.1.2 The remaining fifty (50%) percent of the options granted
become exercisable on the date of the second Annual Meeting after the date
hereof.
TERM OF OPTION
--------------
5.1 The options granted shall expire ten years from the date hereof, but
are subject to earlier termination as follows:
5.1.1 In the event of the termination of the optionee's service as
a Director, other than by reason of retirement, total and permanent disability,
or death, the options granted herein that have not been exercised shall
automatically expire on the effective date of termination.
5.1.2 In the event of termination of the optionee by reason of
retirement or total and permanent disability, all vested options shall become
exercisable to the full extent of the number of Shares remaining then
outstanding, regardless of whether such options were previously exercisable and
each such option shall expire four years after the date of such termination or
on the stated grant expiration date whichever is earlier.
5.1.3 In the event of the death of the optionee while he is still
a Director, vested options as per Section 2.1 hereof shall become exercisable,
to the full extent of Shares remaining covered by such options, regardless of
whether such options were previously exercisable and each such option shall
expire four years after the date of death of such optionee or on the stated
grant expiration, whichever is earlier.
RESTRICTIONS ON EXERCISE OF OPTION
AND SALE OF STOCK BY ELIGIBLE DIRECTOR
--------------------------------------
6.1 The within option shall not be exercisable if:
(a) The exercise thereof will involve a violation of any
applicable federal or state securities law; or
(b) The exercise thereof will require registration under the
Securities Act of 1933, as amended, of the shares of stock or other securities
of the Company to be purchased by the Eligible Director pursuant to such
exercise.
6.2 The Company hereby agrees to make such reasonable efforts to comply
with any applicable state securities law as the Committee of the Company shall
determine are reasonably necessary but such efforts shall not subject the
Company to unreasonable expense or hardship.
- 50 -
<PAGE>
6.3 At the time of any exercise of the within option, the Eligible
Director shall represent to and agree with the Company in writing that he is
acquiring the shares in respect of which the option is being exercised for the
purpose of investment and not with a view of distribution.
6.4 The Eligible Director agrees that he will not sell or otherwise
dispose of any shares of stock or other securities of the Company purchased by
him pursuant to the exercise of all or any portion of the within option at any
time unless there is an effective Registration Statement in respect of such
shares or other securities under the provisions of the Securities Act of 1933,
as amended, or counsel for the Company is reasonably satisfied that an exemption
from such registration provisions is available to the Company and the Eligible
Director.
MISCELLANEOUS
-------------
7.1 This Agreement shall be binding upon and inure to the benefit of the
Company and its successors and the Eligible Director and his executors,
administrators or personal representatives provided that the within option shall
be non-transferable by the Eligible Director otherwise than by will or by the
laws of descent and distribution, and during the lifetime of the Eligible
Director the option shall be exercisable only by him.
7.2 In the event there are any changes in the capitalization of the
Company through merger, consolidation, recapitalization, stock dividend or other
change in the corporate or capital structure of the Company, appropriate
adjustments, as may seem equitable to the Committee shall be made in the number
of shares and the exercise price per share of the options to prevent dilution of
the rights granted hereunder.
7.3 This Agreement shall be deemed to be made under and shall be construed
in accordance with the laws of the State of Florida.
7.4 This Agreement shall become effective as of the date hereof and,
unless sooner terminated, shall remain in effect for a period of ten (10) years
from the date hereof. This Agreement may be terminated at any time by mutual
consent of the parties hereto, but no modification or amendment of this
Agreement shall become effective until such modification or amendment shall have
been approved by the Committee.
IN WITNESS WHEREOF, the Company has caused this Stock Option Agreement to
be executed by its President or Vice President and the Eligible Director has
executed this Agreement, the day and year first above written.
ORIOLE HOMES CORP.
By: /S/ RICHARD D. LEVY
-----------------------
Richard D. Levy
Chief Executive Officer
/S/ PAUL R. LEHRER
------------------
Eligible Director
- 51 -
<PAGE>
Exhibit 10.26
STOCK OPTION AGREEMENT
FOR
NONEMPLOYEE DIRECTORS
---------------------
AGREEMENT dated this 22nd day of May, 1997, between Oriole Homes Corp., a
Florida corporation (hereinafter called the "Company"), and Paul R. Lehrer
(hereinafter called the "Eligible Director").
W I T N E S S E T H:
--------------------
WHEREAS, the Company's shareholders approved (on May 9, 1994) the adoption
of the 1994 Stock Option Plan for Nonemployee Directors (the "Plan") pursuant to
which each Eligible Director is entitled to receive a grant to purchase 1,200
Shares per year, up to a maximum of 6,000 Shares:
WHEREAS, the Executive Committee of the Board of Directors of the Company
(the "Committee") has this day granted to each Eligible Director an option to
purchase 1,200 shares of Class B Common Stock, par value $.10 per share, (the
"Shares") of the Company, and at the option price, all as hereinafter stated,
such option to be exercisable not more than ten (10) years after the date
hereof; and
WHEREAS, the Eligible Director is willing to accept said option and to be
bound by the terms and conditions thereof; and
WHEREAS, the execution and delivery of this Agreement has been duly
authorized by the Board of Directors of the Company;
NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants herein contained and other good and valuable considerations, the
receipt whereof is hereby acknowledged, the parties hereto, including to be
legally bound hereby, agree as follows:
GRANT OF OPTION: ADJUSTMENT
OF SHARES COVERED BY OPTION
---------------------------
1.1 The Company hereby grants to the Eligible Director an option to
purchase from the Company, upon the terms and conditions hereinafter set forth,
1,200 shares of Class B Common Stock, par value $.10 per share (the "Shares"),
for a cash consideration of $7.375 per share.
1.2 The number of Shares above stated, and the purchase price thereof, may
be subject to adjustment from time to time as provided herein.
VESTING
-------
2.1 This option shall vest and become nonforfeitable on the day of the
Annual Meeting following the date hereof if the Eligible Director continues to
serve as a Director.
- 52 -
<PAGE>
PAYMENTS FOR SHARES
-------------------
3.1 The option price of the shares to be purchased pursuant to each
exercise of the within option shall be paid to the Company by the Eligible
Director in full in cash or by bank certified, cashier's or personal check at
the time of exercise of the option.
EXERCISE OF OPTION
------------------
4.1 The within option may be exercised according to the following
schedule:
4.1.1 Fifty (50%) percent of the options granted become
exercisable on the date of the first Annual Meeting after the date hereof.
4.1.2 The remaining fifty (50%) percent of the options granted
become exercisable on the date of the second Annual Meeting after the date
hereof.
TERM OF OPTION
--------------
5.1 The options granted shall expire ten years from the date hereof, but
are subject to earlier termination as follows:
5.1.1 In the event of the termination of the optionee's service as
a Director, other than by reason of retirement, total and permanent disability,
or death, the options granted herein that have not been exercised shall
automatically expire on the effective date of termination.
5.1.2 In the event of termination of the optionee by reason of
retirement or total and permanent disability, all vested options shall become
exercisable to the full extent of the number of Shares remaining then
outstanding, regardless of whether such options were previously exercisable and
each such option shall expire four years after the date of such termination or
on the stated grant expiration date whichever is earlier.
5.1.3 In the event of the death of the optionee while he is still
a Director, vested options as per Section 2.1 hereof shall become exercisable,
to the full extent of Shares remaining covered by such options, regardless of
whether such options were previously exercisable and each such option shall
expire four years after the date of death of such optionee or on the stated
grant expiration, whichever is earlier.
RESTRICTIONS ON EXERCISE OF OPTION
AND SALE OF STOCK BY ELIGIBLE DIRECTOR
--------------------------------------
6.1 The within option shall not be exercisable if:
(a) The exercise thereof will involve a violation of any
applicable federal or state securities law; or
(b) The exercise thereof will require registration under the
Securities Act of 1933, as amended, of the shares of stock or other securities
of the Company to be purchased by the Eligible Director pursuant to such
exercise.
6.2 The Company hereby agrees to make such reasonable efforts to comply
with any applicable state securities law as the Committee of the Company shall
determine are reasonably necessary but such efforts shall not subject the
Company to unreasonable expense or hardship.
- 53 -
<PAGE>
6.3 At the time of any exercise of the within option, the Eligible
Director shall represent to and agree with the Company in writing that he is
acquiring the shares in respect of which the option is being exercised for the
purpose of investment and not with a view of distribution.
6.4 The Eligible Director agrees that he will not sell or otherwise
dispose of any shares of stock or other securities of the Company purchased by
him pursuant to the exercise of all or any portion of the within option at any
time unless there is an effective Registration Statement in respect of such
shares or other securities under the provisions of the Securities Act of 1933,
as amended, or counsel for the Company is reasonably satisfied that an exemption
from such registration provisions is available to the Company and the Eligible
Director.
MISCELLANEOUS
-------------
7.1 This Agreement shall be binding upon and inure to the benefit of the
Company and its successors and the Eligible Director and his executors,
administrators or personal representatives provided that the within option shall
be non-transferable by the Eligible Director otherwise than by will or by the
laws of descent and distribution, and during the lifetime of the Eligible
Director the option shall be exercisable only by him.
7.2 In the event there are any changes in the capitalization of the
Company through merger, consolidation, recapitalization, stock dividend or other
change in the corporate or capital structure of the Company, appropriate
adjustments, as may seem equitable to the Committee shall be made in the number
of shares and the exercise price per share of the options to prevent dilution of
the rights granted hereunder.
7.3 This Agreement shall be deemed to be made under and shall be construed
in accordance with the laws of the State of Florida.
7.4 This Agreement shall become effective as of the date hereof and,
unless sooner terminated, shall remain in effect for a period of ten (10) years
from the date hereof. This Agreement may be terminated at any time by mutual
consent of the parties hereto, but no modification or amendment of this
Agreement shall become effective until such modification or amendment shall have
been approved by the Committee.
IN WITNESS WHEREOF, the Company has caused this Stock Option Agreement to
be executed by its President or Vice President and the Eligible Director has
executed this Agreement, the day and year first above written.
ORIOLE HOMES CORP.
By: /S/ RICHARD D. LEVY
-----------------------
Richard D. Levy
Chief Executive Officer
/S/ PAUL R. LEHRER
------------------
Eligible Director
- 54 -
<PAGE>
Exhibit 10.27
STOCK OPTION AGREEMENT
FOR
NONEMPLOYEE DIRECTORS
---------------------
AGREEMENT dated this 20th day of May, 1998, between Oriole Homes Corp., a
Florida corporation (hereinafter called the "Company"), and Paul R. Lehrer
(hereinafter called the "Eligible Director").
W I T N E S S E T H:
--------------------
WHEREAS, the Company's shareholders approved (on May 9, 1994) the adoption
of the 1994 Stock Option Plan for Nonemployee Directors (the "Plan") pursuant to
which each Eligible Director is entitled to receive a grant to purchase 1,200
Shares per year, up to a maximum of 6,000 Shares:
WHEREAS, the Executive Committee of the Board of Directors of the Company
(the "Committee") has this day granted to each Eligible Director an option to
purchase 1,200 shares of Class B Common Stock, par value $.10 per share, (the
"Shares") of the Company, and at the option price, all as hereinafter stated,
such option to be exercisable not more than ten (10) years after the date
hereof; and
WHEREAS, the Eligible Director is willing to accept said option and to be
bound by the terms and conditions thereof; and
WHEREAS, the execution and delivery of this Agreement has been duly
authorized by the Board of Directors of the Company;
NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants herein contained and other good and valuable considerations, the
receipt whereof is hereby acknowledged, the parties hereto, including to be
legally bound hereby, agree as follows:
GRANT OF OPTION: ADJUSTMENT
OF SHARES COVERED BY OPTION
---------------------------
1.1 The Company hereby grants to the Eligible Director an option to
purchase from the Company, upon the terms and conditions hereinafter set forth,
1,200 shares of Class B Common Stock, par value $.10 per share (the "Shares"),
for a cash consideration of $4.50 per share.
1.2 The number of Shares above stated, and the purchase price thereof, may
be subject to adjustment from time to time as provided herein.
VESTING
-------
2.1 This option shall vest and become nonforfeitable on the day of the
Annual Meeting following the date hereof if the Eligible Director continues to
serve as a Director.
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<PAGE>
PAYMENTS FOR SHARES
-------------------
3.1 The option price of the shares to be purchased pursuant to each
exercise of the within option shall be paid to the Company by the Eligible
Director in full in cash or by bank certified, cashier's or personal check at
the time of exercise of the option.
EXERCISE OF OPTION
------------------
4.1 The within option may be exercised according to the following
schedule:
4.1.1 Fifty (50%) percent of the options granted become
exercisable on the date of the first Annual Meeting after the date hereof.
4.1.2 The remaining fifty (50%) percent of the options granted
become exercisable on the date of the second Annual Meeting after the date
hereof.
TERM OF OPTION
--------------
5.1 The options granted shall expire ten years from the date hereof, but
are subject to earlier termination as follows:
5.1.1 In the event of the termination of the optionee's service as
a Director, other than by reason of retirement, total and permanent disability,
or death, the options granted herein that have not been exercised shall
automatically expire on the effective date of termination.
5.1.2 In the event of termination of the optionee by reason of
retirement or total and permanent disability, all vested options shall become
exercisable to the full extent of the number of Shares remaining then
outstanding, regardless of whether such options were previously exercisable and
each such option shall expire four years after the date of such termination or
on the stated grant expiration date whichever is earlier.
5.1.3 In the event of the death of the optionee while he is still
a Director, vested options as per Section 2.1 hereof shall become exercisable,
to the full extent of Shares remaining covered by such options, regardless of
whether such options were previously exercisable and each such option shall
expire four years after the date of death of such optionee or on the stated
grant expiration, whichever is earlier.
RESTRICTIONS ON EXERCISE OF OPTION
AND SALE OF STOCK BY ELIGIBLE DIRECTOR
--------------------------------------
6.1 The within option shall not be exercisable if:
(a) The exercise thereof will involve a violation of any
applicable federal or state securities law; or
(b) The exercise thereof will require registration under the
Securities Act of 1933, as amended, of the shares of stock or other securities
of the Company to be purchased by the Eligible Director pursuant to such
exercise.
6.2 The Company hereby agrees to make such reasonable efforts to comply
with any applicable state securities law as the Committee of the Company shall
determine are reasonably necessary but such efforts shall not subject the
Company to unreasonable expense or hardship.
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<PAGE>
6.3 At the time of any exercise of the within option, the Eligible
Director shall represent to and agree with the Company in writing that he is
acquiring the shares in respect of which the option is being exercised for the
purpose of investment and not with a view of distribution.
6.4 The Eligible Director agrees that he will not sell or otherwise
dispose of any shares of stock or other securities of the Company purchased by
him pursuant to the exercise of all or any portion of the within option at any
time unless there is an effective Registration Statement in respect of such
shares or other securities under the provisions of the Securities Act of 1933,
as amended, or counsel for the Company is reasonably satisfied that an exemption
from such registration provisions is available to the Company and the Eligible
Director.
MISCELLANEOUS
-------------
7.1 This Agreement shall be binding upon and inure to the benefit of the
Company and its successors and the Eligible Director and his executors,
administrators or personal representatives provided that the within option shall
be non-transferable by the Eligible Director otherwise than by will or by the
laws of descent and distribution, and during the lifetime of the Eligible
Director the option shall be exercisable only by him.
7.2 In the event there are any changes in the capitalization of the
Company through merger, consolidation, recapitalization, stock dividend or other
change in the corporate or capital structure of the Company, appropriate
adjustments, as may seem equitable to the Committee shall be made in the number
of shares and the exercise price per share of the options to prevent dilution of
the rights granted hereunder.
7.3 This Agreement shall be deemed to be made under and shall be construed
in accordance with the laws of the State of Florida.
7.4 This Agreement shall become effective as of the date hereof and,
unless sooner terminated, shall remain in effect for a period of ten (10) years
from the date hereof. This Agreement may be terminated at any time by mutual
consent of the parties hereto, but no modification or amendment of this
Agreement shall become effective until such modification or amendment shall have
been approved by the Committee.
IN WITNESS WHEREOF, the Company has caused this Stock Option Agreement to
be executed by its President or Vice President and the Eligible Director has
executed this Agreement, the day and year first above written.
ORIOLE HOMES CORP.
By: /S/ RICHARD D. LEVY
-----------------------
Richard D. Levy
Chief Executive Officer
/S/ PAUL R. LEHRER
------------------
Eligible Director
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<PAGE>
Exhibit 10.28
INCENTIVE STOCK OPTION AGREEMENT
OF
ORIOLE HOMES CORP.
AGREEMENT dated this 14th day of December, 1998, between Oriole Homes
Corp., a Florida corporation (hereinafter called the "Company"), and Joseph
Pivinski (hereinafter called the "Employee").
W I T N E S S E T H:
--------------------
WHEREAS, the Company desires to grant Employee a proprietary interest in
the Company in order to increase his/her efforts on its behalf; and
WHEREAS, the Company has this day granted to the Employee an option to
purchase the number of shares of Class B Common Stock, par value $.10 per share,
of the Company, and at the option price, all as hereinafter stated, such option
to be exercisable not more than five (5) years after the date hereof; and
WHEREAS, the Employee is willing to accept said option and to be bound by
the terms and conditions thereof; and
WHEREAS, the execution and delivery of this Agreement has been duly
authorized by the Board of Directors of the Company;
NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants herein contained and other good and valuable considerations, the
receipt whereof is hereby acknowledged, the parties hereto, intending to be
legally bound hereby, agree as follows:
GRANT OF OPTION; ADJUSTMENT
OF SHARES COVERED BY OPTION
---------------------------
1.1 The Company hereby grants to the Employee an option to purchase from
the Company, upon the terms and conditions hereinafter set forth, 3,500 shares
of Class B Common Stock, par value $.10 per share, of the Company, for a
consideration of $2.25 per share.
1.2 The number of shares of Common Stock above stated, and the purchase
price thereof, shall be subject to adjustment from time to time as provided
herein.
- 58 -
<PAGE>
PAYMENT FOR SHARES
2.1 The option price of the shares to be purchased pursuant to each
exercise of the within option shall be paid to the Company by the Employee in
full, in cash or check or in whole or in part by:
a. transfer to the Company of shares of Class A or Class B Common Stock
having a Fair Market Value equal to the option exercise price at the time of
such exercise; or
b. delivery of instructions to the Company to withhold from the option
shares that would otherwise be issued on the exercise that number of option
shares having a Fair Market Value equal to the option exercise price at the time
of such exercise. If the Fair Market Value of the number of whole shares
transferred or the number of whole option shares surrendered is less than the
total exercise price of the option, the shortfall must be made up in cash or
check.
EXERCISE OF OPTION
------------------
3.1 The within option may be exercised during the lifetime of the Employee
and in whole or in part at any time after December 14, 2000 and thereafter until
on or before December 14, 2003.
3.2 At least twenty days prior to the date upon which all or any portion
of the within option is to be exercised, the person entitled to exercise the
option shall deliver to the Company written notice of his/her election to
exercise all or part of the option, which notice shall specify the date and time
for the exercise of the option and the number of shares in respect to which the
option is to be exercised. The date specified in such notice shall be a business
day and the time specified shall be during the regular business hours of the
Company.
3.3 The person entitled to exercise the option shall, at the date and time
specified in such notice, pay to the Company the consideration set forth in
Section 2 hereof at the principal office of the Company, the option price of the
shares in respect of which the option is being exercised, and contemporaneously,
or as soon thereafter as is practical, the Company shall deliver to the person
entitled to exercise the option, registered in the name of such person,
certificates representing the number of shares of stock or other securities in
respect of which the option is being exercised.
- 59 -
<PAGE>
EMPLOYMENT OF EMPLOYEE
----------------------
4. If the services of Employee are terminated for any reason on or prior
to February 22, 2000, the Company has the right to redeem the shares that have
been acquired at the exercise price. If such right of redemption is not
exercised within thirty (30) days from the termination date, the Company's
rights of redemption shall have no further force or effect.
RESTRICTIONS ON EXERCISE OF OPTION
AND SALE OF STOCK BY EMPLOYEE
-----------------------------
5. Unless the option and shares acquired upon the exercise of the option
are registered under the Securities Act of 1933, as amended (the "Securities
Act"), the Employee hereby represents and warrants to the Company that any and
all shares of Class B Common Stock which shall be acquired pursuant to the
exercise of the option shall be acquired for the Employee's own account and not
for the account or beneficial interest of any other person or entity, that such
shares of Class B Common Stock shall be acquired for the Employee's own
investment and that the shares of Class B Common Stock shall not be acquired
with a view to or for resale in connection with the distribution of all or any
part thereof. Furthermore, the Employee agrees that any shares of Class B Common
Stock so acquired will bear an appropriate legend to signify their restriction
under the applicable securities laws and that "stop-transfer" instructions will
be given to the Company's transfer agent.
The Employee agrees to be subject to and bound by any other restrictions
imposed by, or which the Company believes to be necessary or advisable to comply
with, any Federal or State securities laws, including but not limited to
restrictions governing the time and circumstances or disposition of the shares
being acquired by exercise of such option.
- 60 -
<PAGE>
NO RIGHTS AS SHAREHOLDER
OR TO CONTINUED EMPLOYMENT
--------------------------
6. The Employee shall not have any rights as a shareholder of the Company
with respect to any shares of Class B Common Stock prior to the date of issuance
to the Employee of the certificate or certificates for such shares and the grant
of the option does not confer to the Employee any right to be employed by the
Company and will not interfere in any way with the right of the Company to
terminate the employment of the Employee.
NO SECURITIES ACT
REGISTRATION OBLIGATION
-----------------------
7. The Company shall have no obligation to the Employee to register the
Common Stock under the Securities Act.
MISCELLANEOUS
-------------
8.1 This Agreement shall be binding upon and inure to the benefit of the
Company and its successors and the Employee and his executors and/or
administrators, provided that the within option shall be nontransferable by the
Employee otherwise than by will or by the laws of descent and distribution, and
during the lifetime of the Employee the option shall be exercisable only by him.
8.2 In the event there are any changes in the Class B Common Stock of the
Company through merger, consolidation, recapitalization, stock dividend or other
change in the corporate or capital structure of the Company, appropriate
adjustments, as may seem equitable to the Board of Directors of the Company,
shall be made in the number of shares and the exercise price per share of the
options to prevent dilution of the rights granted hereunder.
8.3 For the purposes of this Agreement, a transfer of the Employee from
the Company to a subsidiary, or vice versa, or from one subsidiary to another,
shall not be deemed a termination of employment.
8.4 This Agreement shall be deemed to be made under and shall be construed
in accordance with the laws of the State of Florida.
- 61 -
<PAGE>
8.5 This Agreement shall become effective as of the date hereof and,
unless sooner terminated, shall remain in effect for a period of five (5) years
from the date hereof. This Agreement may be terminated at any time by mutual
consent of the parties hereto, but no modification or amendment of this
Agreement shall become effective until such modification or amendment shall have
been approved by the Board of Directors of the Company.
8.6 The terms and conditions of the 1994 Stock Option Plan of Oriole Homes
Corp., as approved by Shareholders on April 5, 1994 (the "Plan") are hereby
incorporated herein by reference and if there is any conflict between this
Agreement and the Plan the provisions of the Plan shall govern.
IN WITNESS WHEREOF, the Company has caused this Stock Option Agreement to
be executed by its President or Vice President and the Employee has executed
this Agreement, the day and year first above written.
ORIOLE HOMES CORP.
By: /S/ MARK A. LEVY
--------------------
Mark A. Levy, President
/S/ JOSEPH PIVINSKI
-------------------
Employee
- 62 -
<PAGE>
Exhibit 22.1
SUBSIDIARIES
Subsidiaries % Ownership State of Incorporation
------------ ----------- -----------------------
Alpha Title Company, Inc. (Division of OHC) 100 Florida
OHC Corp. 100 Florida
Oriole G & T Management Corp. 100 Florida
Oriole At Harbour Heights, Inc. 100 Florida
South Florida Residential Mortgage Co. 100 Florida
Oriole-Boca, Inc. 100 Florida
The Pier Club, Inc. 100 Florida
Oriole Limited, Inc. 100 Florida
Oriole Fairway Point, Inc. 100 Florida
Oriole Joint Venture, Ltd. 100 Florida
Oriole of Naples, Inc. 100 Florida
Oriole at Stonecrest, Inc. 100 Florida
Seabreeze Properties, Inc. 100 Maryland
- 63 -
Exhibit 23.1
CONSENT OF INDEPENDENT AUDITORS
We have issued our report dated February 12, 1999, accompanying the consolidated
financial statements and schedules incorporated by reference in the Annual
Report of Oriole Homes Corp. On Form 10-K for the years ended December 31, 1998
and 1997. We hereby consent to the incorporation by reference of said report in
the Registration Statement of Oriole Homes Corp. On Form S-8 (File No.
333-27321).
GRANT THORNTON LLP
Miami, Florida
February 12, 1999
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